UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2007
OR

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

For the transition period from _______ to _______

Commission file number 34-027228

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 (Address of principal executive offices)		33309 (Zip Code)

(954) 940-5000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. þ      YES            o      NO

Indicate by check mark whether the registrant 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.

Large accelerated filer þ		Accelerated filer o		Non-accelerated filer o

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

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

		Outstanding at
Title of Each Class		May 4, 2007
Class A Common Stock, par value $0.01 per share			55,240,604
Class B Common Stock, par value $0.01 per share			4,876,124

 

 

TABLE OF CONTENTS

Part I.		FINANCIAL INFORMATION
					Page
Reference
Item 1.		Financial Statements			1-15
		Consolidated Statements of Financial Condition — March 31, 2007 and December 31, 2006 — Unaudited			3
		Consolidated Statements of Operations — For the Three Months Ended March 31, 2007 and 2006 — Unaudited			4
		Consolidated Statements of Stockholders’ Equity and Comprehensive Income — For the Three Months Ended March 31, 2007 and 2006 — Unaudited			5
		Consolidated Statements of Cash Flows — For the Three Months Ended March 31, 2007 and 2006 — Unaudited			6
		Notes to Consolidated Financial Statements — Unaudited			7-15
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations			15-24
Item 3.		Quantitative and Qualitative Disclosures about Market Risk			24
Item 4.		Controls and Procedures			25
Part II.		OTHER INFORMATION
Item 1A.		Risk Factors			25
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds			25
Item 6.		Exhibits			26
		Signatures			27
EX-10.1 Executive VP Termination Agreement
EX-31.1 Section 302 Certification of CEO
EX-31.2 Section 302 Certification of CFO
EX-32.1 Section 906 Certification of CEO
EX-32.2 Section 906 Certification of CFO

BANKATLANTIC BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION - UNAUDITED

		March 31,				December 31,
(In thousands, except share data)		2007				2006
ASSETS
Cash and cash equivalents		$	130,184			$	138,904
Securities available for sale and financial instruments (at fair value)			675,544				651,316
Investment securities at cost (approximate fair value:
$270,617 and $209,020)			273,040				206,682
Tax certificates, net of allowance of $3,782 and $3,699			157,062				195,391
Federal Home Loan Bank stock, at cost			69,503				80,217
Loans receivable, net of allowance for loan losses of $50,373 and $43,602			4,616,549				4,586,607
Loans held for sale			6,235				9,313
Real estate held for development or sale			27,031				25,333
Real estate owned			23,135				21,747
Office properties and equipment, net			229,810				219,717
Deferred tax asset, net			17,387				13,593
Goodwill and other intangibles			76,937				77,324
Other assets			77,759				78,755
Discontinued operations assets held for sale			—				190,763
Total assets		$	6,380,176			$	6,495,662
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Deposits:
Non-interest bearing		$	1,031,628			$	995,920
Interest bearing			3,053,394				2,871,116
Total deposits			4,085,022				3,867,036
Advances from FHLB			1,297,055				1,517,058
Short term borrowings			123,462				133,958
Subordinated debentures and bonds payable			292,920				293,189
Other liabilities			66,740				64,193
Discontinued operations liabilities held for sale			—				95,246
Total liabilities			5,865,199				5,970,680
Commitments and contingencies
Stockholders’ equity:
Class A common stock, issued and outstanding 54,956,368 and 56,157,425 shares			550				562
Class B common stock, issued and outstanding 4,876,124 and 4,876,124 shares			49				49
Additional paid-in capital			247,756				260,460
Retained earnings			269,048				265,089
Total stockholders’ equity before accumulated other comprehensive loss			517,403				526,160
Accumulated other comprehensive loss			(2,426	)			(1,178	)
Total stockholders’ equity			514,977				524,982
Total liabilities and stockholders’ equity		$	6,380,176			$	6,495,662

See Notes to Consolidated Financial Statements - Unaudited

BANKATLANTIC BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED

		For the Three Months
(In thousands, except share and per share data)		Ended March 31,
		2007				2006
						(As adjusted)
Interest income:
Interest and fees on loans		$	79,587			$	75,386
Interest and dividends on taxable securities			10,157				8,681
Interest on tax exempt securities			3,796				3,806
Total interest income			93,540				87,873
Interest expense:
Interest on deposits			19,002				12,754
Interest on advances from FHLB			18,723				14,139
Interest on short term borrowings			2,555				2,575
Interest on secured borrowings			—				2,401
Interest on subordinated debentures and bonds payable			6,114				5,963
Capitalized interest on real estate development			—				(480	)
Total interest expense			46,394				37,352
Net interest income			47,146				50,521
Provision for loan losses			7,461				163
Net interest income after provision for loan losses			39,685				50,358
Non-interest income:
Service charges on deposits			24,595				19,099
Other service charges and fees			7,033				6,222
Securities activities, net			1,555				2,541
Other			3,569				2,498
Total non-interest income			36,752				30,360
Non-interest expense:
Employee compensation and benefits (including share-based compensation of $1,212 and $1,069)			41,090				35,836
Occupancy and equipment			15,944				12,614
Advertising and promotion			5,858				8,618
Professional fees			1,713				2,317
Check losses			1,857				1,246
Supplies and postage			1,853				1,661
Telecommunication			1,381				1,153
One-time termination benefits			2,553				—
Other			7,244				6,303
Total non-interest expense			79,493				69,748
(Loss) income from continuing operations before income taxes			(3,056	)			10,970
(Benefit) provision for income taxes			(852	)			2,948
(Loss) income from continuing operations			(2,204	)			8,022
Discontinued operations, (including applicable income tax benefits of $4,066 and $1,591)			7,920				(1,565	)
Net income		$	5,716			$	6,457
Earnings per share
Basic (loss) earnings per share from continuing operations		$	(0.04	)		$	0.13
Basic earnings (loss) per share from discontinued operations			0.13				(0.02	)
Basic earnings per share		$	0.09			$	0.11
Diluted (loss) earnings per share from continuing operations		$	(0.04	)		$	0.13
Diluted earnings (loss) per share from discontinued operations			0.13				(0.03	)
Diluted earnings per share		$	0.09			$	0.10
Basic weighted average number of common shares outstanding			60,635,001				61,005,408
Diluted weighted average number of common and common equivalent shares outstanding			60,635,001				62,761,078

See Notes to Consolidated Financial Statements - Unaudited

BANKATLANTIC BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND COMPREHENSIVE INCOME
For the Three Months Ended March 31, 2006 and 2007 - Unaudited

																		Unearned				Accumul-
																		Compen-				ated
										Addi-								sation				Other
		Compre-								tional								Restricted				Compre-
		hensive				Common				Paid-in				Retained				Stock				hensive
(In thousands)		Income				Stock				Capital				Earnings				Grants				loss				Total
BALANCE, DECEMBER 31, 2005						$	608			$	261,720			$	261,279			$	(936	)		$	(6,335	)		$	516,336
Cumulative effect adjustment upon adoption of Staff Accounting Bulletin No. 108 (“SAB No. 108”) (less tax benefit of $1,193)							—				—				(1,899	)			—				—				(1,899	)
Cumulative effect adjustment upon adoption of Statement of Financial Accounting Standards No. 123R							(1	)			(935	)			—				936				—				—
Net income		$	6,457				—				—				6,457				—				—				6,457
Other comprehensive loss, net of tax:
Unrealized gains on securities available for sale (less income tax expense of $373)			770
Reclassification adjustment for net gain included in net income (less income tax expense of $980)			(1,561	)
Other comprehensive loss			(791	)			—				—				—				—				(791	)			(791	)
Comprehensive income		$	5,666
Dividends on Class A common stock							—				—				(2,149	)			—				—				(2,149	)
Dividends on Class B common stock							—				—				(185	)			—				—				(185	)
Issuance of Class A common stock upon exercise of stock options							11				4,801				—				—				—				4,812
Tax effect relating to share-based compensation							—				2,980				—				—				—				2,980
Retirement of Class A common stock relating to exercise of stock options							(5	)			(7,009	)			—				—				—				(7,014	)
Share based compensation expense							—				1,069				—				—				—				1,069
BALANCE, MARCH 31, 2006						$	613			$	262,626			$	263,503			$	—			$	(7,126	)		$	519,616
BALANCE, DECEMBER 31, 2006						$	611			$	260,460			$	265,089			$	—			$	(1,178	)		$	524,982
Cumulative effect adjustment upon adoption of FASB Interpretation No. 48							—				—				700				—				—				700
Net income		$	5,716				—				—				5,716				—				—				5,716
Other comprehensive loss, net of tax:
Unrealized gains on securities available for sale (less income tax expense of $257)			493
Reclassification adjustment for net gain included in net income (less income tax expense of $897)			(1,741	)
Other comprehensive loss			(1,248	)			—				—				—				—				(1,248	)			(1,248	)
Comprehensive income		$	4,468
Dividends on Class A common stock							—				—				(2,258	)			—				—				(2,258	)
Dividends on Class B common stock							—				—				(199	)			—				—				(199	)
Issuance of Class A common stock upon exercise of stock options							1				697				—				—				—				698
Tax effect relating to share-based compensation							—				963				—				—				—				963
Purchase and retirement of Class A common stock							(13	)			(17,082	)															(17,095	)
Share based compensation expense							—				2,718				—				—				—				2,718
BALANCE, MARCH 31, 2007						$	599			$	247,756			$	269,048			$	—			$	(2,426	)		$	514,977

See Notes to Consolidated Financial Statements - Unaudited

BANKATLANTIC BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED

		For the Three Months
		Ended March 31,
(In thousands)		2007				2006
Net cash provided by (used in) operating activities		$	8,074			$	(16,665	)
Investing activities:
Proceeds from redemption and maturities of investment securities and tax certificates			47,633				42,104
Purchase of investment securities and tax certificates			(12,166	)			(20,054	)
Purchase of securities available for sale			(45,275	)			(23,983	)
Proceeds from sales and maturities of securities available for sale			64,631				29,001
Purchases of FHLB stock			(450	)			(2,250	)
Redemption of FHLB stock			11,164				11,381
Investments in unconsolidated subsidiaries			(2,455	)			(4,081	)
Distributions from unconsolidated subsidiaries			5,443				4,549
Net repayments (purchases and originations) of loans			(36,678	)			103,432
Additions to real estate owned			(1,407	)			—
Proceeds from sales of real estate owned			106				965
Net additions to office properties and equipment			(16,289	)			(20,509	)
Net cash proceeds from the sale of Ryan Beck Holdings, Inc.			2,628				—
Net cash provided by investing activities			16,885				120,555
Financing activities:
Net increase in deposits			217,986				208,090
Repayments of FHLB advances			(925,000	)			(477,570	)
Proceeds from FHLB advances			705,000				280,000
Decrease in securities sold under agreements to repurchase			(25,221	)			(58,279	)
Increase (decrease) in federal funds purchased			14,725				(21,591	)
Repayments of secured borrowings			—				(26,516	)
Repayment of notes and bonds payable			(269	)			(2,260	)
Proceeds from notes payable			—				5,000
Excess tax benefits from share-based compensation			963				2,980
Proceeds from issuance of Class A common stock			698				473
Payment of the minimum withholding tax upon the exercise of stock options			—				(2,675	)
Purchase and retirement of Class A common stock			(17,095	)			—
Common stock dividends			(2,457	)			(2,334	)
Net cash used in financing activities			(30,670	)			(94,682	)
(Decrease) increase in cash and cash equivalents			(5,711	)			9,208
Cash and cash equivalents in discontinued operations assets held for sale at beginning of period			3,285				—
Cash and cash equivalents in discontinued operations assets held for sale at disposal date			(6,294	)			—
Cash and cash equivalents at the beginning of period			138,904				170,260
Cash and cash equivalents at end of period		$	130,184			$	179,468

See Notes to Consolidated Financial Statements - Unaudited

BankAtlantic Bancorp, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

1. Presentation of Interim Financial Statements

     BankAtlantic Bancorp, Inc. (the “Company”) is a Florida-based diversified financial services holding company that offers a wide range of banking products and services through its wholly owned subsidiary, BankAtlantic. The Company has two reportable segments, BankAtlantic and the Parent Company. On February 28, 2007, the Company completed the sale to Stifel Financial Corp. (“Stifel”) of Ryan Beck Holdings, Inc. (“Ryan Beck”), a subsidiary engaged in retail and institutional brokerage and investment banking. As a consequence, the results of operations of Ryan Beck are presented as “Discontinued Operations” in the Consolidated Statement of Operations for all periods presented. The financial information of Ryan Beck is included in the Consolidated Statement of Financial Condition as of December 31, 2006, and in the Consolidated Statement of Stockholders’ Equity and Comprehensive Income and the Consolidated Statement of Cash Flows for all periods presented.

     BankAtlantic, a federal savings bank headquartered in Fort Lauderdale, Florida, provides traditional retail banking services and a wide range of commercial banking products and related financial services through a network of 93 branches or “stores” located in Florida.

     All significant inter-company balances and transactions have been eliminated in consolidation.

     In management’s opinion, the accompanying consolidated financial statements contain such adjustments as are necessary for a fair presentation of the Company’s consolidated financial condition at March 31, 2007 and December 31, 2006, the consolidated results of operations for the three months ended March 31, 2007 and 2006, the consolidated stockholders’ equity and comprehensive income and cash flows for the three months ended March 31, 2007 and 2006. The results of operations for the three months ended March 31, 2007 are not necessarily indicative of results of operations that may be expected for the year ended December 31, 2007. The consolidated financial statements and related notes are presented as permitted by Form 10-Q and should be read in conjunction with the notes to the consolidated financial statements appearing in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006.

     Certain amounts for prior periods have been reclassified to conform to the statement presentation for 2007.

     In September 2006, the Securities and Exchange Commission (“SEC”) issued Staff Accounting Bulletin No. 108, (“SAB 108”) which established an approach to quantify errors in financial statements. The Company applied the provisions of SAB 108 using the cumulative effect transition method in connection with the preparation of its financial statements for the year ended December 31, 2006. The impact of the application of SAB 108 on the Company’s Consolidated Statement of Operations for the three months ended March 31, 2006 was to adjust non-interest expenses from $69.3 million as originally reported to $69.7 million as adjusted. For further discussion on the implementation of SAB 108, see notes to the consolidated financial statements appearing in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006.

2. Discontinued Operations and Merger

     On February 28, 2007, Ryan Beck merged with Stifel. Under the terms of the merger, the Company and several employees of Ryan Beck who held options to acquire Ryan Beck common stock exchanged their entire interest in Ryan Beck common stock and options to acquire Ryan Beck common stock for an aggregate of 2,467,600 shares of Stifel common stock, cash of $2.7 million and, subject to the discussion which follows, five-year warrants to purchase an aggregate of 500,000 shares of Stifel common stock at an exercise price of $36.00 per share (the “Warrants”). The issuance of the Warrants is subject to Stifel shareholder approval. If the Stifel shareholders do not approve the issuance of Warrants, then Stifel will pay an additional $20 million in cash in lieu of the Warrants. Of the total merger consideration, the Company’s portion is 2,377,354 shares of Stifel common stock, cash of $2.6 million and Warrants to purchase an aggregate of 481,715 shares of Stifel common stock. Stifel has agreed to register the shares of Stifel common stock issuable in connection with the merger and to grant incidental “piggy-back” registration rights. The Company has agreed that, other than in private transactions, it will not, without Stifel’s consent, sell more than one-third of the shares of Stifel common stock received by it within the year following the initial registration of such securities nor more than two-thirds of the shares of Stifel common stock received by it within the two-year period following the initial registration of such securities. As of March 31, 2007, the Company owns approximately 16% of the issued and outstanding shares of Stifel common stock and does not have the ability to exercise significant influence over Stifel’s operations. As such, the Company’s investment in Stifel common stock is accounted for under the cost method of accounting. Stifel common stock that can be sold within one

BankAtlantic Bancorp, Inc. and Subsidiaries

year is accounted for as securities available for sale and Stifel common stock in which sale is restricted for more than one year is accounted for as investment securities at cost. The Warrants are accounted for as derivatives. Included in the Company’s Consolidated Statement of Financial Condition as of March 31, 2007 under “securities available for sale” and “investment securities at cost” are $31.2 million and $63.6 million, respectively of Stifel common stock and included in financial instruments at fair value is $8.8 million of Warrants.

     The Stifel agreement also provides for contingent earn-out payments, payable in cash or shares of Stifel common stock, at Stifel’s election, based on (a) defined Ryan Beck private client revenues during the two-year period immediately following the merger up to a maximum of $40,000,000 and (b) defined Ryan Beck investment banking revenues equal to 25% of the amount that such revenues exceed $25,000,000 during each of the two twelve-month periods immediately following the consummation of the transaction. The contingent earn-out payments, if any, will be accounted for upon receipt as additional proceeds from the exchange of Ryan Beck common stock with a corresponding increase in the Company’s investment in Stifel. The Company has entered into separate agreements with each individual Ryan Beck option holder in order to allocate the contingent earn-out payments.

     The gain on the sale of Ryan Beck included in the Consolidated Statement of Operations in “Discontinued operations” was as follows (in thousands):

Consideration received:
Stifel common stock and Warrants		$	107,445
Cash			2,628
Total consideration received			110,073
Net assets disposed:
Discontinued operations assets held for sale at disposal date			206,763
Discontinued operations liabilities held for sale at disposal date			(117,364	)
Net assets disposed			89,399
Transaction cost			2,543
Gain on disposal of Ryan Beck before income taxes			18,131
Provision for income taxes			1,650
Net gain on sale of Ryan Beck		$	16,481

     The loss from operations of Ryan Beck included in the Consolidated Statement of Operations in “Discontinued operations” was as follows (in thousands):

		For the Two months				For the Three months
		Ended February 28, 2007				Ended March 31, 2006
Investment banking revenue		$	37,836			$	58,800
Non-interest expense:
Employee compensation and benefits			27,532				44,355
Occupancy and equipment			2,984				3,871
Advertising and promotion			740				1,567
Merger related costs (1)			14,263				—
Professional fees			1,106				1,951
Communications			2,255				3,954
Floor broker and clearing fees			1,162				2,719
Interest expense			985				1,621
Other			1,086				1,918
Total non-interest expense			52,113				61,956
Loss from Ryan Beck discontinued operations before income taxes			(14,277	)			(3,156	)
Income tax benefit			(5,716	)			(1,591	)
Loss from Ryan Beck discontinued operations, net of tax		$	(8,561	)		$	(1,565	)

BankAtlantic Bancorp, Inc. and Subsidiaries

     (1) Merger related costs include $9.3 million of change in control payments, $3.5 million of one-time employee termination benefits and $1.5 million of share-based compensation.

3. One-time Termination Benefits

     During March 2007, the Company reduced its workforce by approximately 225 associates, or 8% in order to reduce operating expenses with a view to increasing future operating efficiencies. The reduction in the workforce impacted every operating segment and was completed on March 27, 2007. Included in the Company’s Consolidated Statement of Operations were $2.6 million of costs associated with one-time termination benefits. These benefits include $0.3 million of share-based compensation. The following is a reconciliation of the beginning and ending balance of the employee termination benefit liability (in thousands):

		Employee
		Termination
		Benefits
Balance at December 31, 2006		$	—
Expense incurred			2,317
Amounts paid			(53	)
Balance at March 31, 2007		$	2,264

4. Accounting for Income Taxes

     On January 1, 2007, the Company adopted Financial Accounting Standards Board Interpretation No. 48 “Accounting for Uncertainty in Income Taxes” (“FIN 48”). As a result of the adoption of FIN 48 the Company decreased the liability for unrecognized tax benefits by $700,000 and increased the beginning balance of retained earnings by a corresponding amount. This cumulative-effect adjustment amount is the difference between the net amount of assets and liabilities recognized in the Statement of Financial Condition prior to the application of FIN 48 and the net amount of assets and liabilities recognized as a result of applying the provision of FIN 48. As of the adoption date, the Company had gross tax affected unrecognized tax benefits of $185,000 and as of March 31, 2007 the Company’s gross tax affected unrecognized tax benefits were $207,000. The recognition of these tax benefits would not significantly affect the Company’s effective tax rate.

     The Company and its subsidiaries file a consolidated federal income tax return and separate company state income tax returns. The Company’s federal income tax returns for all years subsequent to the 2002 tax year are subject to examination. Various state jurisdiction tax years remain open to examination. The Company is not currently under examination by any taxing authority.

     The Company recognizes interest and penalties related to unrecognized tax benefits in its provision for income taxes. The Company had no interest or penalties accrued related to its unrecognized tax benefits at March 31, 2007 and December 31, 2006.

5. Defined Benefit Pension Plan

     At December 31, 1998, the Company froze its defined benefit pension plan (“Plan”). All participants in the Plan ceased accruing service benefits beyond that date. The Company is subject to future pension expense or income based on future actual plan returns and actuarial values of the Plan obligations to employees. Under the Plan, net periodic pension (benefit) expense incurred includes the following components (in thousands):

		For the Three Months
		Ended March 31,
		2007				2006
Service cost benefits earned during the period		$	—			$	—
Interest cost on projected benefit obligation			419				407
Expected return on plan assets			(598	)			(547	)
Amortization of unrecognized net gains and losses			136				237
Net periodic pension (benefit) expense		$	(43	)		$	97

BankAtlantic Bancorp, Inc. and Subsidiaries

     BankAtlantic did not contribute to the Plan during the three months ended March 31, 2007 and 2006. BankAtlantic is not required to contribute to the Plan for the year ending December 31, 2007.

6. Loans Receivable

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

		March 31,				December 31,
		2007				2006
Real estate loans:
Residential (1-4 family)		$	2,198,648			$	2,158,506
Construction and development			822,096				859,556
Commercial			1,023,383				1,063,352
Small business			191,666				186,833
Other loans:
Home equity			582,754				562,318
Commercial business			159,403				157,109
Small business — non-mortgage			99,852				98,225
Consumer loans			17,451				17,406
Deposit overdrafts			6,949				8,440
Total gross loans			5,102,202				5,111,745
Adjustments:
Undisbursed portion of loans in process			(437,235	)			(482,842	)
Premiums, discounts and net deferred fees			1,955				1,306
Allowance for loan losses			(50,373	)			(43,602	)
Loans receivable — net		$	4,616,549			$	4,586,607

Allowance for Loan Losses (in thousands):

		For the Three Months Ended
		March 31,
		2007				2006
Balance, beginning of period		$	43,602			$	41,192
Loans charged-off			(1,127	)			(366	)
Recoveries of loans previously charged-off			437				900
Net (charge-offs) recoveries			(690	)			534
Provision for loan losses			7,461				163
Balance, end of period		$	50,373			$	41,889

     The following summarizes impaired loans (in thousands):

		March 31, 2007								December 31, 2006
		Gross								Gross
		Recorded				Specific				Recorded				Specific
		Investment				Allowances				Investment				Allowances
Impaired loans with specific valuation allowances		$	12,957			$	5,856			$	325			$	162
Impaired loans without specific valuation allowances			20,577				—				10,319				—
Total		$	33,534			$	5,856			$	10,644			$	162

     Impaired loans without specific reserves at March 31, 2007 include $7.5 million of performing loans.

BankAtlantic Bancorp, Inc. and Subsidiaries

7. Related Parties

     The Company, Levitt Corporation (“Levitt”) and Bluegreen Corporation (“Bluegreen”) may be deemed to be affiliates. The controlling shareholder of the Company and Levitt is BFC Financial Corporation (“BFC”), and Levitt owns 31% of the outstanding common stock of Bluegreen. The majority of BFC’s voting common stock is owned or controlled by the Company’s Chairman and Chief Executive Officer, and the Company’s Vice Chairman, both of whom are also directors of the Company, executive officers and directors of BFC and Levitt, and directors of Bluegreen. The Company, BFC, Levitt and Bluegreen share various office premises and employee services, pursuant to the arrangements described below.

     The Company maintains service arrangements with BFC, pursuant to which the Company provides office facilities to BFC and its affiliates and the Company is compensated based on its costs. Effective January 1, 2006, certain of the Company’s human resources, risk management and investor relations employees were hired by BFC and BFC began providing the services and back-office support functions provided by these employees to the Company and Levitt.

     The table below shows the effect of service arrangements on the Company’s consolidated statement of operations: (in thousands):

		For the Three Month Ended
		March 31,
		2007				2006
Non-interest income:
Other — office facilities		$	40			$	97
Non-interest expense:
Share based compensation			(55	)			(63	)
Other — back-office support			(394	)			(237	)
Net decrease to income before income taxes of affiliate transactions		$	(409	)		$	(203	)

     The Company in prior periods issued options to acquire shares of the Company’s Class A common stock to employees of Levitt. Additionally, employees of the Company have transferred to affiliate 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 accounts for these options to former employees as employee stock options because these individuals were employees of the Company on the grant date. During the three months ended March 31, 2007 and 2006, certain of these former employees exercised 13,062 and 13,062 of options, respectively, to acquire Class A common stock at a weighted average exercise price of $8.56 and $2.97, respectively.

     Options outstanding to former employees, who are now employees of affiliate companies, consisted of the following as of March 31, 2007:

		Class A				Weighted
		Common				Average
		Stock				Price
Options outstanding			288,536			$	9.62
Options nonvested			154,587			$	12.32

     During the year ended December 31, 2006, the Company issued to BFC employees that perform services for the Company options to acquire 50,300 shares of the Company’s Class A common stock at an exercise price of $14.69. These options vest in five years and expire ten years from the grant date. The Company recognizes service provider expense on these stock options over the vesting period for these options based on the option fair value at each reporting period. The Company recorded $13,000 and $0 of service provider expenses for the three months ended March 31, 2007 and 2006, respectively.

     BankAtlantic entered into securities sold under agreements to repurchase transactions with Levitt and BFC in the aggregate of $3.9 million and $5.5 million as of March 31, 2007 and December 31, 2006, respectively. The Company recognized $51,000 and $152,000 of interest expense in connection with the above deposits during the three months ended March 31, 2007 and 2006, respectively. These transactions have similar terms as BankAtlantic repurchase agreements with unaffiliated third parties.

BankAtlantic Bancorp, Inc. and Subsidiaries

8. Segment Reporting

     Operating segments are defined as components of an enterprise about which separate financial information is available that is regularly reviewed by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Reportable segments consist of one or more operating segments with similar economic characteristics, products and services, production processes, type of customer, distribution system and regulatory environment. The information provided for Segment Reporting is based on internal reports utilized by management. Results of operations are reported through two reportable segments: BankAtlantic and the Parent Company. The Parent Company activities consist of equity and debt financings, capital management and acquisition related expenses.

     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, 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, 2006. Intersegment transactions are eliminated in consolidation.

     The Company evaluates segment performance based on segment net income from continuing operations after tax. The table below is segment information for segment net income from continuing operations for the three months ended March 31, 2007 and 2006 (in thousands):

										Adjusting and
						Parent				Elimination				Segment
		BankAtlantic				Company				Entries				Total
2007
Net interest income (expense)		$	52,070			$	(4,924	)		$	—			$	47,146
Provision for loan losses			(7,461	)			—				—				(7,461	)
Non-interest income			35,047				1,705				—				36,752
Non-interest expense			(78,770	)			(723	)			—				(79,493	)
Segments profits and losses before income taxes			886				(3,942	)			—				(3,056	)
(Provision) benefit for income taxes			(247	)			1,099				—				852
Segment net income (loss)		$	639			$	(2,843	)		$	—			$	(2,204	)
Total assets		$	6,175,709			$	782,753			$	(578,286	)		$	6,380,176
2006
Net interest income (expense)		$	55,139			$	(4,618	)		$	—			$	50,521
Provision for loan losses			(163	)			—				—				(163	)
Non-interest income			27,007				3,353				—				30,360
Non-interest expense			(67,798	)			(1,950	)			—				(69,748	)
Segments profits and losses before income taxes			14,185				(3,215	)			—				10,970
(Provision) benefit for income taxes			(4,022	)			1,074				—				(2,948	)
Segment net income (loss)		$	10,163			$	(2,141	)		$	—			$	8,022
Total assets		$	6,000,614			$	795,516			$	(438,015	)		$	6,358,115

BankAtlantic Bancorp, Inc. and Subsidiaries

9. Financial Instruments with Off-balance Sheet Risk

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

		March 31,				December 31,
		2007				2006
Commitments to sell fixed rate residential loans		$	29,228			$	30,696
Commitments to sell variable rate residential loans			2,049				2,921
Commitments to purchase variable rate residential loans			34,587				12,000
Commitments to purchase commercial loans			20,000				57,525
Commitments to originate loans held for sale			27,089				26,346
Commitments to originate loans held to maturity			316,067				223,060
Commitments to extend credit, including the undisbursed portion of loans in process			1,082,757				890,036
Commitments to purchase branch facilities land			5,100				11,180
Standby letters of credit			55,138				67,831
Commercial lines of credit			91,474				86,992

     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 $38.7 million at March 31, 2007. 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 $16.4 million at March 31, 2007. These guarantees are primarily issued to support public and private borrowing arrangements and have maturities of one year or less. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. BankAtlantic may hold certificates of deposit and residential and commercial liens as collateral for such commitments. Included in other liabilities at March 31, 2007 and December 31, 2006 was $29,000 and $44,000, respectively, of unearned guarantee fees. There were no obligations associated with these guarantees recorded in the financial statements.

BankAtlantic Bancorp, Inc. and Subsidiaries

10. Earnings per Share

     The following table reconciles the numerators and denominators of the basic and diluted earnings per share computation for the three months ended March 31, 2007 and 2006 (in thousands, except share data):

		For the Three Months Ended
		March 31,
		2007				2006
Basic earnings per share:
Numerator:
(Loss) income from continuing operations		$	(2,204	)		$	8,022
Discontinued operations			7,920				(1,565	)
Net income		$	5,716			$	6,457
Denominator:
Basic weighted average number of common shares outstanding			60,635,001				61,005,408
Basic (loss) earnings per share from:
Continuing operations			(0.04	)			0.13
Discontinued operations			0.13				(0.02	)
Basic earnings per share			0.09				0.11
Diluted earnings per share
Numerator:
(Loss) income from continuing operations		$	(2,204	)		$	8,022
Discontinued operations			7,920				(1,565	)
Net income		$	5,716			$	6,457
Denominator:
Basic weighted average number of common shares outstanding			60,635,001				61,005,408
Stock-based compensation			—				1,755,670
Diluted weighted average shares outstanding			60,635,001				62,761,078
Diluted earnings (loss) per share from:
Continuing operations		$	(0.04	)		$	0.13
Discontinued operations			0.13				(0.03	)
Diluted earnings per share		$	0.09			$	0.10
Cash dividends per share:
Class A share		$	0.04			$	0.04
Class B share		$	0.04			$	0.04

     During the three months ended March 31, 2007 and 2006, 4,984,302 and 1,580,271, respectively, of options to acquire shares of Class A common stock were anti-dilutive.

11. New Accounting Pronouncements

     In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”. The Statement defines fair value in generally accepted accounting principles (“GAAP”), establishes a framework for measuring fair value and expands disclosure about fair value measurements. The Statement will change key concepts in fair value measures including the establishment of a fair value hierarchy and the concept of the most advantageous or principal market. This Statement does not require any new fair value measurement. The Statement applies to financial statements issued for fiscal years beginning after November 15, 2007 with early application encouraged. The Company is required to implement this Statement on January 1, 2008. Management is currently evaluating the impact this Statement will have on its financial statements.

     In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities”, which permits entities to choose to measure eligible assets and liabilities at fair value on a contract by contract

BankAtlantic Bancorp, Inc. and Subsidiaries

basis (the fair value option). The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. SFAS No. 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007, with early adoption permitted. The Company expects to implement the Statement as of January 1, 2008 and management believes that the adoption of SFAS No. 159 will not have a significant impact on the Company’s consolidated 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 months ended March 31, 2007 and 2006, respectively. The principal assets of the Company consist of its ownership in BankAtlantic, a federal savings bank headquartered in Fort Lauderdale, Florida, and its subsidiaries (“BankAtlantic”).

     Except for historical information contained herein, the matters discussed in this document contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that involve substantial risks and uncertainties. When used in this document and in any documents incorporated by reference herein, the words “anticipate,” “believe,” “estimate,” “may,” “intend,” “expect” and similar expressions identify certain of such forward-looking statements. Actual results, performance, or achievements could differ materially from those contemplated, expressed, or implied by the forward-looking statements contained herein. These forward-looking statements are based largely on the expectations of the Company and are subject to a number of risks and uncertainties that are subject to change based on factors which are, in many instances, beyond the Company’s control. These include, but are not limited to, risks and uncertainties associated with: the impact of economic, competitive and other factors affecting the Company and its operations, markets, products and services; credit risks and loan losses, and the related sufficiency of the allowance for loan losses, including the impact on the credit quality of our loans, of changes in the real estate markets in our trade area, and where our collateral is located; the quality of our loans, including specifically residential land acquisition and development loans and other loans also secured by real estate in Florida and conditions specifically in that market sector; 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 capital markets and the impact of such conditions on our activities and the value of our assets; BankAtlantic’s seven-day banking initiatives and other growth, marketing or advertising initiatives not resulting in continued growth of core deposits or producing results which do not justify their costs; the success of our expenses discipline initiatives; any change in regulatory policy, specifically restrictions on transactions fees charged to customers; BankAtlantic’s new store expansion program, successfully opening the anticipated number of new stores in 2007 and achieving growth and profitability at the stores; and the impact of periodic testing of goodwill and other intangible assets for impairment. Past performance, actual or estimated new account openings and growth rate may not be indicative of future results. Additionally, we acquired a significant investment in Stifel Financial Corp (“Stifel”) equity securities in connection with the merger of Ryan Beck Holdings, Inc. with Stifel, subjecting us to the risk of fluctuations in the value of Stifel shares and warrants. 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. 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 statement of operations for the periods presented. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant change in subsequent periods relate to the determination of the allowance for loan losses, evaluation of goodwill and other intangible assets for impairment, the valuation of real estate acquired in connection with foreclosure or in satisfaction of loans, the valuation of the fair value of assets and liabilities in the application of the purchase method of accounting, 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 eight 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 goodwill and other

BankAtlantic Bancorp, Inc. and Subsidiaries

indefinite life intangible assets; (iv) impairment of long-lived assets; (v) accounting for business combinations (vi) accounting for uncertain tax positions; (vii) accounting for contingencies; and (viii) accounting for share-based compensation. For a more detailed discussion of these critical accounting policies other than the accounting for uncertain tax positions, which is described below, see “Critical Accounting Policies” appearing in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006.

Accounting for Uncertain Tax Positions

     The Company accounts for uncertain tax positions in accordance with FIN 48. An uncertain tax position as defined by FIN 48 as a position in a previously filed tax return or a position expected to be taken in a future tax return that is not based on clear and unambiguous tax law and which is reflected in measuring current or deferred income tax assets and liabilities for interim or annual periods. The application of income tax law is inherently complex. The Company is required to determine if an income tax position meets the criteria of more-likely-than-not to be realized based on the merits of the position under tax laws, in order to recognize an income tax benefit. This requires the Company to make many assumptions and judgments regarding merits of income tax positions and the application of income tax law. Additionally, if a tax position meets the recognition criteria of more-likely-than-not the Company is required to make judgments and assumptions to measure the amount of the tax benefits to recognize based on the probability of the amount of tax benefits that would be realized if the tax position was challenged by the taxing authorities. Interpretations and guidance surrounding income tax laws and regulations change over time. As a consequence, changes in assumptions and judgments can materially affect amounts recognized in the Consolidated Statements of Financial Condition and the Consolidated Statements of Operations.

Consolidated Results of Operations

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

		For the Three Months Ended March 31,
(In thousands)		2007				2006				Change
BankAtlantic		$	639			$	10,163			$	(9,524	)
Parent Company			(2,843	)			(2,141	)			(702	)
Net (loss) income		$	(2,204	)		$	8,022			$	(10,226	)

For the Three Months Ended March 31, 2007 Compared to the Same 2006 Period:

     Income from continuing operations decreased 127.5% to a $2.2 million net loss during the 2007 quarter, from net income of $8.0 million for the 2006 quarter. The decline in BankAtlantic’s earnings resulted from higher expenses associated with BankAtlantic’s store expansion initiatives and costs related to a reduction in personnel. BankAtlantic’s earnings were also negatively impacted by lower net interest income and an increase in the provision for loan losses, each of which reflects current economic conditions impacting us and financial institutions generally. The increase in the Parent Company’s net loss resulted from a $1.5 million loss associated with the change in value of warrants to acquire Stifel common stock acquired in connection with the Ryan Beck merger transaction and higher interest expense from junior subordinated debenture borrowings due to higher short-term interest rates during the 2007 quarter compared to the same 2006 quarter.

     BankAtlantic increased its provision for loan losses by $7.3 million during the 2007 quarter compared to the 2006 quarter. This increase primarily resulted from higher loan loss reserves required for residential land acquisition and development loans in our portfolio based upon the impact on the credit quality of those loans of the deteriorating residential real estate market in Florida. BankAtlantic’s net interest income declined by $3.1 million reflecting an increase in cost of funds due to growth in higher cost deposit products, lower levels of higher yielding earning assets and higher short-term interest rates. The increase in BankAtlantic non-interest expenses primarily resulted from BankAtlantic’s store expansion program and a $2.6 million charge due to a reduction in workforce in March 2007.

BankAtlantic Bancorp, Inc. and Subsidiaries

BankAtlantic Results of Operations

Net interest income

		Bank Operations Business Segment
		Average Balance Sheet - Yield / Rate Analysis
		For the Three Months Ended
		March 31, 2007												March 31, 2006
(In thousands)		Average				Revenue/				Yield/				Average				Revenue/				Yield/
		Balance				Expense				Rate				Balance				Expense				Rate
Total loans		$	4,650,519				79,587				6.85			$	4,610,055				75,386				6.54
Investments - tax exempt			396,374				5,802	(1)			5.85				393,159				5,731	(1)			5.83
Investments - taxable			619,614				9,696				6.26				588,072				8,233				5.60
Total interest earning assets			5,666,507				95,085				6.71	%			5,591,286				89,350				6.39	%
Goodwill and core deposit intangibles			77,138												78,693
Other non-interest earning assets			426,061												355,868
Total Assets		$	6,169,706											$	6,025,847
Deposits:
Savings		$	529,435				2,570				1.97	%		$	331,117				313				0.38	%
NOW			771,017				1,512				0.80				760,419				934				0.50
Money market			650,383				3,938				2.46				829,700				3,984				1.95
Certificates of deposit			961,716				10,982				4.63				843,866				7,523				3.62
Total interest bearing deposits			2,912,551				19,002				2.65				2,765,102				12,754				1.87
Short-term borrowed funds			203,984				2,633				5.23				245,326				2,643				4.37
Advances from FHLB			1,405,279				18,723				5.40				1,164,675				14,140				4.92
Secured borrowings			—				—				—				125,293				2,401				7.77
Long-term debt			29,634				626				8.57				37,819				748				8.02
Total interest bearing liabilities			4,551,448				40,984				3.65				4,338,215				32,686				3.06
Demand deposits			989,546												1,065,909
Non-interest bearing other liabilities			56,222												70,349
Total Liabilities			5,597,216												5,474,473
Stockholder’s equity			572,490												551,374
Total liabilities and stockholder’s equity		$	6,169,706											$	6,025,847
Net tax equivalent interest income/net interest spread							54,101				3.06	%							56,664				3.33	%
Tax equivalent adjustment							(2,031	)											(2,006	)
Capitalized interest from real estate operations							—												480
Net interest income							52,070												55,138
Margin
Interest income/interest earning assets											6.71	%											6.39	%
Interest expense/interest earning assets											2.93												2.37
Net interest margin (tax equivalent)											3.78	%											4.02	%
Net interest margin (tax equivalent) excluding secured borrowings											3.78	%											4.11	%