SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Quarter Ended March 31, 1998
Commission File Number
0-9811
BFC FINANCIAL CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Florida 59-2022148
- --------------------------------------- ---------------------------------------
(State of Organization) (I.R.S. Employer Identification Number)
1750 E. Sunrise Boulevard
Ft. Lauderdale, Florida 33304
- --------------------------------------- ---------------------------------------
(Address of Principal Executive Office) (Zip Code)
(954) 760-5200
Registrant's telephone number, including area code
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes [ X ] No [ ]
Indicate the number of shares outstanding for each of the Registrant's classes
of common stock, as of the latest practicable date:
Class A common stock of $.01 par value, 6,453,994 shares outstanding.
Class B common stock of $.01 par value, 2,350,407 shares outstanding.
<PAGE>
BFC Financial Corporation and Subsidiaries
Index to Consolidated Financial Statements
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Statements of Financial Condition as of March 31, 1998
and December 31, 1997 - Unaudited
Consolidated Statements of Operations for the three months ended March
31, 1998 and 1997 - Unaudited
Consolidated Statements of Stockholders' Equity for the three months
ended March 31, 1998 and 1997 Unaudited
Consolidated Statements of Cash Flows for the three months ended March
31, 1998 and 1997 - Unaudited
Notes to Unaudited Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
<PAGE>
BFC Financial Corporation and Subsidiaries
Consolidated Statements of Financial Condition
March 31, 1998 and December 31, 1997
(in thousands, except share data)
(Unaudited)
Assets
1998 1997
---- ----
Cash and cash equivalents $ 969 604
Securities available for sale 2,421 1,478
Investment in BankAtlantic Bancorp, Inc. ("BBC") 74,018 72,185
Mortgage notes and related receivables, net 1,824 1,859
Real estate acquired in debenture exchanges, net 9,585 9,700
Real estate held for development and sale, net 6,850 6,474
Escrow for redeemed debenture liability 2,876 5,033
Other assets 1,641 1,538
-------- ------
Total assets $100,184 98,871
======== ======
Liabilities and Stockholders' Equity
Exchange debentures, net 1,724 1,731
Deferred interest on the exchange debentures 2,219 2,106
Redeemed debenture liability 5,439 5,532
Mortgage payables and other borrowings 22,848 22,943
Other liabilities 725 706
Deferred income taxes 12,110 11,711
-------- ------
Total liabilities 45,065 44,729
Stockholders' equity:
Preferred stock of $.01 par value; authorized
10,000,000 shares; none issued -- --
Class A common stock of $.01 par value,
authorized 20,000,000 shares; issued and outstanding
6,453,994 shares in 1998 and 1997 58 58
Class B common stock, of $.01 par value; authorized
20,000,000 shares; issued and outstanding
2,347,907 in 1998 and 2,346,907 in 1997 21 21
Additional paid-in capital 23,669 23,525
Retained earnings 31,271 30,280
-------- ------
Total stockholders' equity before BBC
accumulated other comprehensive income 55,019 53,884
BBC accumulated other comprehensive income -
net unrealized appreciation on debt securities
available for sale, net of deferred income taxes 100 258
-------- ------
Total stockholders' equity 55,119 54,142
-------- ------
Total liabilities and stockholders' equity $100,184 98,871
======== ======
See accompanying notes to unaudited consolidated financial statements.
<PAGE>
BFC Financial Corporation and Subsidiaries
Consolidated Statements of Operations
For the three months ended March 31, 1998 and 1997
(in thousands, except per share data)
(Unaudited)
Three months ended
March 31,
---------
1998 1997
---- ----
Revenues:
Interest on mortgage notes and
related receivables $ 53 56
Interest and dividends on securities
available for sale and escrow accounts 71 158
Earnings on real estate rental operations, net 241 280
Sale of real estate -- 149
Net gain from sale of BBC common stock -- 221
Other income, net 11 186
----- -----
Total revenues 376 1,050
----- -----
Costs and expenses:
Interest on exchange debentures 128 247
Interest on mortgages payable
and other borrowings 452 514
Cost of sale of real estate -- 17
Expenses related to real estate held
for development and sale, net 41 37
Employee compensation and benefits 288 305
Occupancy and equipment 10 9
General and administrative, net 210 293
----- -----
Total cost and expenses 1,129 1,422
----- -----
Loss before equity in earnings
of BBC, income taxes and
extraordinary items (753) (372)
Equity in earnings of BBC 2,055 2,818
----- -----
Income before income taxes
and extraordinary items 1,302 2,446
Provision for income taxes 311 290
----- -----
Income before extraordinary items 991 2,156
Extraordinary items:
Gain on settlements of Exchange
litigation, net of income taxes of $ 70,000 -- 117
----- -----
Net income $ 991 2,273
===== =====
Basic earnings per share:
Before extraordinary items $ 0.13 0.27
Extraordinary items -- 0.01
----- -----
Net income $ 0.13 0.28
===== =====
Diluted earnings per share:
Before extraordinary items $ 0.11 0.25
Extraordinary items -- 0.01
----- -----
Net income $ 0.11 0.26
===== =====
Basic weighted average shares outstanding 7,949 7,906
===== =====
Diluted weighted average shares outstanding 9,252 8,513
===== =====
See accompanying notes to unaudited consolidated financial statements.
<PAGE>
BFC Financial Corporation and Subsidiaries
Consolidated Statements of Stockholders' Equity
For the three months ended March 31, 1998 and 1997
(in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Addi-
Compre- Class A Class B tional
hensive Common Common Paid-in Retained
income Stock Stock Capital Earnings Other Total
------ ----- ----- ------- -------- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at
December 31, 1996 -- 21 20,610 20,520 311 41,462
Comprehensive income
Net income $2,273 -- -- -- 2,273 -- 2,273
Other comprehensive income,
net of tax:
Unrealized loss on securities
available for sale (930)
Reclassification adjustment
for gains and losses included
in net income (17)
------
Other comprehensive income (947)
------
Comprehensive income $1,326
======
Net effect of other BBC
capital transactions -- -- (130) -- -- (130)
Change in BBC net unrealized
appreciation on securities
available for sale-net of
deferred income taxes -- -- -- -- (947) (947)
Exercise of stock options -- -- 156 -- -- 156
------ ------ ------ ------ ------ ------
Balance at
March 31, 1997 $ -- 21 20,636 22,793 (636) 42,814
====== ====== ====== ====== ====== ======
Balance at
December 31, 1997 58 21 23,525 30,280 258 54,142
Comprehensive income
Net income 991 -- -- -- 991 -- 991
Other comprehensive income,
net of tax:
Unrealized gain on securities
available for sale 11
Reclassification adjustment
for gains and losses included
in net income (169)
------
Other comprehensive income (158)
------
Comprehensive income $ 833
======
Net effect of other BBC
capital transactions, net of
deferred income taxes -- -- 140 -- -- 140
Change in BBC net unrealized
appreciation on securities
available for sale-net of
deferred income taxes -- -- -- -- (158) (158)
Exercise of stock options -- -- 4 -- -- 4
------ ------ ------ ------ ------ ------
Balance at
March 31, 1998 $ 58 21 23,669 31,271 100 55,119
====== ====== ====== ====== ====== ======
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
<PAGE>
BFC Financial Corporation and Subsidiaries
Consolidated Statements of Cash Flows
For the three months ended March 31, 1998 and 1997
(In thousands)
(Unaudited)
March 31,
---------
1998 1997
---- ----
Operating activities:
Income before extraordinary items $ 991 2,156
Adjustments to reconcile income before extraordinary
items to net cash provided by (used in)
operating activities:
Equity in earnings of BBC (2,055) (2,818)
Depreciation 157 170
Expenses related to real estate held for
development and sale, net 41 37
Increase in deferred income taxes 311 290
Amortization on exchange debentures and mortgages payable 3 4
Accretion of discount on loans receivable (12) (11)
Increase in real estate development cost (390) --
Gain on sale of real estate, net -- (132)
Net gain from sale of BBC common stock -- (221)
Fundings for litigation settlement -- (1,018)
Increase in the Exchange escrows
to fund settlement liability (20) (5,108)
Proceeds from Exchange escrow 2,100 --
Increase in deferred interest on the
exchange debentures 126 190
Accrued interest income on escrow accounts (38) (68)
Interest accrued regarding redeemed
debenture liability -- 52
Increase (decrease) in other liabilities 20 (57)
Decrease (increase) in other assets (106) 578
------- -------
Net cash provided by (used in) operating activities 1,128 (5,956)
------- -------
Investing activities:
Proceeds from the sales of real estate
acquired in debenture exchanges -- 132
Proceeds from the sale of BBC common stock -- 916
Common stock dividends received from BBC 291 227
Purchase of securities available for sale (3,011) (11,766)
Proceeds from redemption and maturities
of securities available for sale 2,067 16,198
Principal reduction on mortgage notes and
related receivables, net 47 45
Increase in real estate (31) (65)
Improvements to real estate acquired in
debenture exchanges (43) --
------- -------
Net cash provided by (used in) investing activities (680) 5,687
------- -------
Financing activities:
Issuance of common stock 4 92
Repayments of borrowings (87) (330)
------- -------
Net cash (used in)
financing activities (83) (238)
------- -------
Increase (decrease) in cash and cash equivalents 365 (507)
Cash and cash equivalents at beginning of period 604 1,796
------- -------
Cash and cash equivalents at end of period $ 969 1,289
======= =======
See accompanying notes to unaudited consolidated financial statements.
<PAGE>
BFC Financial Corporation and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
March 31, 1998
1. PRESENTATION OF INTERIM FINANCIAL STATEMENTS
The accompanying unaudited consolidated financial statements have been prepared
by BFC Financial Corporation (the "Company" or "BFC") in accordance with the
accounting policies described in its 1997 Annual Report and should be read in
conjunction with the notes to the consolidated financial statements which appear
in that report.
In the opinion of management, the accompanying financial statements contain such
adjustments as are necessary to present fairly the Company's unaudited
consolidated statements of financial condition at March 31, 1998, the unaudited
consolidated statements of operations for the three months ended March 31, 1998
and 1997, the unaudited consolidated statements of stockholders' equity for the
three months ended March 31, 1998 and 1997 and the unaudited consolidated
statements of cash flows for the three months ended March 31, 1998 and 1997.
Such adjustments consisted only of normal recurring items. The unaudited
consolidated financial statements and related notes are presented as permitted
by Form 10-Q and should be read in conjunction with the notes to consolidated
financial statements appearing in the Company's Annual Report on Form 10K for
the year ended December 31, 1997. Certain prior year balances have been
reclassified to conform with the 1998 presentation.
2. INVESTMENT IN BANKATLANTIC BANCORP, INC.
A reconciliation of the carrying value in BankAtlantic Bancorp, Inc. ("BBC") to
BBC stockholders' equity at March 31, 1998 and December 31, 1997 is as follows:
March 31, December 31,
1998 1997
---- ----
BBC stockholders' equity $ 217,043 207,171
Ownership percentage 34.72% 35.57%
--------- ---------
75,349 73,691
Purchase accounting adjustments (1,331) (1,506)
--------- ---------
Investment in BBC $ 74,018 72,185
========= =========
The Company owned 34.72% of all outstanding BBC common stock at March 31, 1998.
At March 31, 1998, the Company's ownership of BBC Class A and B common stock was
approximately 29% and 46%, respectively.
3. SECURITIES AVAILABLE FOR SALE
Included in securities available for sale at March 31, 1998 and December 31,
1997 was approximately $2.4 million and $1.5 million of U.S. Treasury Bills,
Commercial Paper and other investments, respectively. Included in the above
amounts of securities available for sale on March 31, 1998 and December 31,
1997, was an investment of $193,000 and $150,000 in Series B Convertible
Preferred Stock and Series A Preferred Stock, respectively, of an unaffiliated
entity. Market value at March 31, 1998 and December 31, 1997 approximated book
value.
4. CONSOLIDATED STATEMENTS OF CASH FLOWS
Other non-cash financing and investing activities and other supplemental cash
flow items for the three months ended March 31, 1998 and 1997 were as follows
(in thousands):
March 31,
1998 1997
---- ----
Change in stockholders' equity resulting
from the Company's proportionate share
of BBC's net unrealized appreciation
(depreciation) on securities available
for sale, less related deferred income taxes (158) (947)
====== ======
Transfers from escrow accounts to reflect
payments on the redeemed debenture liability 116 9,352
====== ======
Net effect of other BBC capital transactions 140 (130)
====== ======
Net gain associated with the settlements of the
Exchange litigation, net of deferred income taxes -- 117
====== ======
BBC's dividends on common stock
declared and received in subsequent period 291 227
====== ======
Increase in equity for the tax effect related to
the exercise of employee stock options -- 64
====== ======
Conversion of mortgage receivable to an
equity interest in an affiliated partnership -- 184
====== ======
Interest paid on borrowings 452 589
====== ======
5. COMPREHENSIVE INCOME
In June 1997, the Financial Accounting Standards Board ("FASB") issued FASB
Statement No. 130 ("FAS 130") "Reporting Comprehensive Income". The statement
became effective for the Company on January 1, 1998 with the reclassification of
earlier period financial statements for comparative purposes. Comprehensive
income is the change in equity of a business enterprise during a period from
transactions and other events and circumstances from nonowner sources. Some of
the items included in other comprehensive income are unrealized gains or losses
on securities available for sale, foreign currency translations, underfunded
pension obligations and employee stock options. Implementation of FAS 130
required additional disclosure in the Company's financial statements but had no
impact on the Company's Statement of Financial Condition or Statement of
Operations.
6. OTHER MATTERS
On October 6, 1997, the Board of Directors of the Company declared a five for
four stock split effected in the form of a 25% stock dividend, payable in shares
of the Company's newly authorized Class A Common Stock. The Class A Common Stock
was a newly authorized series of the Company's capital stock and no shares were
outstanding prior to the dividend. Pursuant to the Company's Articles of
Incorporation, the Company's then existing common stock was automatically
redesignated as Class B Common Stock without changing any of its rights and
preferences upon the authorization by the Board of the stock dividend. The Class
A Common Stock and the Class B Common Stock have substantially identical terms
except that (i) the Class B Common Stock is entitled to one vote per share while
the Class A Common Stock will have no voting rights other than those required by
Florida law and (ii) each share of Class B Common Stock is convertible at the
option of the holder thereof into one share of Class A Common Stock. On January
15, 1998, the Board of Directors of the Company declared a three for one stock
split effected in the form of a stock dividend of two shares of Class A common
stock for each share of outstanding Class A and Class B common stock. Due to
accounting and tax considerations, outstanding options to purchase Class B
common stock previously granted under the Company's stock option plans were
adjusted to reflect additional Class B stock options instead of options on Class
A common stock. Where appropriate, amounts throughout this report have been
adjusted to reflect the stock splits.
<PAGE>
BFC Financial Corporation and Subsidiaries
Management's Discussion and Analysis of Results
of Operations and Financial Condition
General
BFC Financial Corporation (the "Company" or "BFC") is a savings bank holding
company which owns approximately 34.72% of the outstanding common stock of
BankAtlantic Bancorp, Inc. ("BBC"). BBC was formed in April 1994 under the laws
of the state of Florida and is the holding company for BankAtlantic, A Federal
Savings Bank ("BankAtlantic").
Except for historical information contained herein, the matters discussed in
this report contain forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, that involve substantial risks and
uncertainties. When used in this report, the words "anticipate", "believe",
"estimate", "may", "intend", "expect" and similar expressions identify certain
of such forward-looking statements. Actual results could differ materially from
these forward-looking statements. These forward-looking statements are based
largely on the Company's expectations and are subject to a number of risks and
uncertainties, including but not limited to, economic factors (both generally
and particularly in areas where the Company or its subsidiaries operate or hold
assets), interest rates, competitive and other factors affecting the Company's
operations, markets, products and services, expansion strategies and other
factors discussed elsewhere in this report and the documents filed by the
Company with the Securities and Exchange Commission. Many of these factors are
beyond the Company's control.
Results of Operations
The Company's basic and diluted earnings per share were $0.13 and $0.11 for the
three month period ended March 31, 1998, compared to $0.28 and $0.26 for the
comparable period in 1997. The 1997 period included an extraordinary gain of
$0.01 basic and diluted earnings per share.
For the quarter ended March 31, 1998, the Company reported net income of
approximately $991,000 as compared to net income of approximately $2.3 million
for the comparable period in 1997. Operations for the quarter ended March 31,
1997 included an extraordinary gain of approximately $117,000. The 1997
extraordinary gain, net of deferred income taxes was due to changes in the
estimate of the amount of the settlement liability associated with the Exchange
litigation.
The decrease in revenues of approximately $674,000 for the quarter ended March
31, 1998, as compared to the comparable period in 1997 was primarily due to
decreases in (i) interest and dividends on securities available for sale and
escrow accounts of approximately $87,000, (ii) earnings on real estate rental
operations, net of approximately $39,000, (iii) sale of real estate of $221,000,
(iv) net gain on sale of BBC common stock of approximately $ 221,000 and (v)
other income, net of approximately $175,000.
Interest and dividends on securities available for sale and escrow accounts
decreased for the three months ended March 31, 1998, as compared with the same
period in 1997 primarily due to decreases in investable funds.
Earnings on real estate rental operations, net, decreased for the three months
ended March 31, 1998, as compared to the same period in 1997 primarily due to a
decrease in net operating income at a property acquired in the 1991 Exchange.
In February 1997, the Company sold 12.7 acres of land located in Birmingham,
Alabama to an unaffiliated third party for approximately $149,000 and the
company recognized a net gain on the sale of approximately $132,000.
During January 1997, the Company sold 137,305 shares of BankAtlantic Bancorp,
Inc. Class A common stock. Net proceeds received from these sales amounted to
approximately $920,000 and a net gain of approximately $221,000 was recognized
during the three months ended March 31, 1997.
Other income, decreased for the three months ended March 31, 1998 as compared to
the same period in 1997 primarily due to proceeds received during the 1997
period relating to a loan from an affiliate which was written-off in prior
years.
The decrease in cost and expenses of approximately $293,000 for the quarter
ended March 31, 1998 as compared to same period in 1997 was primarily due to
decreases in (i) interest on Exchange debentures of approximately $119,000, (ii)
interest on mortgage payable and other borrowings of approximately $62,000,
(iii) the cost of sale of real estate of approximately $17,000, (iv) employee
compensation and benefits of approximately $17,000 and (v) general and
administrative, net of approximately $83,000.
Interest on Exchange debentures decreased for the three months ended March 31,
1998 as compared to the same period in 1997 as a result of the accrual of
interest during 1997 on the delayed funding of the 1989 Exchange settlement
liability and the reduction in the amount payable on the Exchange debentures.
Interest on mortgage payables and other borrowings decreased for three months
ended March 31, 1998 as compared to the same period in 1997 primarily due to a
reduction in borrowings.
Employee compensation and benefits decreased for the quarter ended March 31,
1998 as compared to the same period in 1997 primarily due to bonus accruals in
1997.
General and administrative, net decreased for the three months ended March 31,
1998 as compared to the same period in 1997 primarily due to decreased legal
fees.
BBC's net income applicable to common shareholders for the three months ended
March 31, 1998 and 1997 was $5.3 million and $6.3 million, respectively. The
Company's equity in BBC's net income for the three months ended March 31, 1998
and 1997 was $2.1 million and $2.8 million, respectively. The decrease in equity
in earnings of BBC was due to a decrease in earnings by BBC and the Company's
decreased ownership percentage in BBC. The Company's ownership in BBC at March
31, 1998 and 1997 was 34.72% and 40.59%, respectively, of all outstanding BBC
common stock. The decrease in ownership was attributable to BBC's issuance of
Class A common stock in a public offering on November 25, 1997 and the sale of
shares of BBC Class A common stock by the Company during 1997. This decrease was
partially offset by changes in BBC's outstanding common stock primarily due to
BBC's repurchases of its shares. At March 31, 1998, the Company's ownership of
BBC Class A and B common stock was approximately 29.4% and 45.6%, respectively.
Financial Condition
BFC's total assets at March 31, 1998 and at December 31, 1997 were $100.2
million and $98.9 million, respectively. The majority of the difference at March
31, 1998 as compared to December 31, 1997 was due to increases in (i) securities
available for sale, (ii) real estate held for development and sale, net and
(iii) investment in BBC. These increases were offset with a decrease in escrow
for redeemed debenture liability.
Securities available for sale increased due to the availability of funds
provided from the release of the Meador (1989 Exchange) settlement escrow.
Real estate held for development and sale, net increased primarily due to
advances for development costs at the Company's Center Port property.
Investment in BBC increased by $1.8 million due to equity in earnings of BBC of
approximately $2.1 million. This increase was offset in part by dividends of
approximately $0.3 million in 1998 and the net effect of other BBC capital
transactions.
Escrow for redeemed debenture liability decreased due to the release of
approximately $2.1 million that had been placed in an escrow account related to
the Meador litigation settlement and payments made in accordance with the terms
of the Exchange litigation settlements. The settlement agreement provided for a
release from escrow of any balances remaining at the end of a specified period
and accordingly, approximately $2.1 million was released from escrow in January
1998.
Market Risk
Market risk is defined as the risk of loss arising from adverse changes in
market valuation which arise from interest rate risk, foreign currency exchange
rate risk, commodity price risk and equity price risk. The Company's primary
market risk is equity risk and through its investment in BBC, interest rate
risk.
Below is an analysis of BBC's interest rate risk at March 31, 1998 as calculated
utilizing BBC's model. The table measures changes in net portfolio value for
instantaneous and parallel shifts in the yield curve in 100 basis point
increments up or down.
Changes Net Portfolio Dollar
in Rate Value Amount Change
------- ------------ ------
(dollars in thousands)
+200 bp 368,147 (16,023)
+100 bp 387,963 3,793
0 bp 384,170 0
(100) bp 339,061 (45,109)
(200) bp 294,241 (85,929)
Certain assumptions by BBC in assessing the interest rate risk were utilized in
preparing the preceding table. These assumptions relate to interest rates, loan
prepayment rates, deposit decay rates, and market values of certain assets under
various interest rate scenarios. It was also assumed that delinquency rates will
not change as a result of changes in interest rates although there can no
assurance that this will be the case. Even if interest rates change in the
designated increments, there can be no assurance that BBC's assets and
liabilities would perform as indicated in the table above. In addition, a change
in U.S. Treasury rates in the designated amounts, accompanied by a change in the
shape of the yield curve could cause significantly different changes to the fair
values than indicated above. Furthermore, the result of the calculations in the
preceding table are subject to significant deviations based upon actual future
events, including anticipatory and reactive measures which BBC may take in the
future.
Liquidity and Capital Resources
Numerous lawsuits were filed against the Company in connection with both the
1989 and 1991 Exchange offers. Settlement of these lawsuits occurred during
1994. A description of these settlements is contained in the Company's 1997
Annual Report. In connection with the settlements, the Company deposited $35.7
million into settlement escrow accounts. All of the funding required in
connection with the Exchange settlement escrow accounts had been provided for as
of March 31, 1997. The settlement agreements provided for a release from escrow
any balances remaining at the end of a specified period and accordingly,
approximately $3.0 million was released from escrow in June 1996, and $2.1
million was released from escrow in January 1998. At March 31, 1998, the
redeemed debenture liability for the 1989 and 1991 Exchange litigation was
approximately $5.4 million.
As a result of the Exchange litigation settlements, the Company's obligation to
pay interest on debentures is limited to only those debentures held by persons
that acquired debentures in an arms length transaction prior to the date on
which the settlements were reached ("Holders in Due Course"), or debentures held
by persons that opted out of the litigation. Pursuant to the terms of the
debentures issued in the 1989 Exchange and the 1991 Exchange, the Company may
elect to defer interest payments on its subordinated debentures if management of
the Company determines in its discretion that the payment of interest would
impair the operations of the Company. Items considered in the decision to defer
the interest payment would include, among other items, the ability to identify
which debentures are held by Holders in Due Course and current operating
expenses. Since December 31, 1991, the Company has deferred interest payments on
its subordinated debentures.
As previously indicated, the Company holds approximately 34.72% of all BBC's
outstanding common stock. Presently, BBC has paid a regular quarterly dividend
since its formation and management of BBC has indicated that it currently
anticipates that it will pay regular quarterly cash dividends on its common
stock. The Company's cash position and its ability to meet its obligations will
in part be dependent on the financial condition of BBC and the payment by BBC of
dividends to its shareholders, including the Company.
At March 31, 1998, BankAtlantic's core, Tier 1 risk-based and total risk-based
capital ratios were 9.81%, 14.93% and 16.18%, respectively. Based on these
capital ratios, BankAtlantic meets the definition of a well-capitalized
institution.
Cash Flows
A summary of the Company's consolidated cash flows is as follows (in thousands):
Three months ended
March 31,
---------
Net cash provided (used) by: 1998 1997
---- ----
Operating activities $ 1,128 (5,956)
Investing activities (680) 5,687
Financing activities (83) (238)
------- -------
Increase (decrease) in
cash and cash equivalents $ 365 (507)
======= =======
The primary sources of funds to the Company for the three months ended March 31,
1998 are proceeds from Exchange escrow, principal reduction on loan receivables,
proceeds from redemption and maturities of securities available for sale,
revenues from property operations, and dividends from BBC. These funds were
primarily utilized to reduce mortgage payables and other borrowings, to fund
development costs at the Center Port property, to purchase securities available
for sale, and to fund operating expenses and general and administrative
expenses.
PART II - OTHER INFORMATION
Item 1 through 5.
Not applicable
Item 6. Exhibits and Reports on Form 8-K
a) Index to Exhibits:
11 Statement re: Computation of Per Share Earnings. - Attached as Exhibit
11
27.1 Financial Data Schedule for the quarter ended March 31, 1998. -
Attached as Exhibit 27.1
27.2 Restated Financial Data Schedule for the quarter ended March 31, 1997.
- Attached as Exhibit 27.2
b) No report on Form 8-K was filed during the quarter ended March 31, 1998.
<PAGE>
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.
BFC FINANCIAL CORPORATION
Date: May 8, 1998 By: /s/ Alan B. Levan
-------------------------------
Alan B. Levan, President
Date: May 8, 1998 By: /s/ Glen R. Gilbert
-------------------------------
Glen R. Gilbert, Executive Vice President
and Chief Financial Officer
EXHIBIT 11
BFC Financial Corporation
Statement re: Computation of Per Share Earnings
The following table reconciles the numerators and denominators of the basic and
diluted earnings per share computations for the three months ended March 31,
1998 and 1997 (in thousands, except per share data):
1998 1997
---- ----
Basic Numerator:
Net income available for common
shareholders $ 991 2,273
====== ======
Basic Denominator
Weighted average shares outstanding 7,949 7,906
====== ======
Basic earnings per share $ 0.13 0.28
====== ======
Diluted Numerator:
Dilutive net income available to
common shareholders $ 991 2,273
====== ======
Diluted Denominator
Basic weighted average shares outstanding 7,949 7,906
Options 1,303 607
----- ------
Diluted weighted average shares
outstanding 9,252 8,513
====== ======
Diluted earnings per share $ 0.11 0.26
====== ======
The Company has two classes of common stock outstanding, the two-class method is
not presented because the company's capital structure does not provide for
different dividend rates or other preferences, other than voting rights, between
the two classes.
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MARCH
31, 1998 FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 969
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 2,421
<INVESTMENTS-CARRYING> 2,421
<INVESTMENTS-MARKET> 2,421
<LOANS> 2,596
<ALLOWANCE> 772
<TOTAL-ASSETS> 100,184
<DEPOSITS> 0
<SHORT-TERM> 7,237
<LIABILITIES-OTHER> 725
<LONG-TERM> 17,335
0
0
<COMMON> 79
<OTHER-SE> 55,119
<TOTAL-LIABILITIES-AND-EQUITY> 100,184
<INTEREST-LOAN> 53
<INTEREST-INVEST> 71
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 124
<INTEREST-DEPOSIT> 0
<INTEREST-EXPENSE> 580
<INTEREST-INCOME-NET> (456)
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 549
<INCOME-PRETAX> 1,302
<INCOME-PRE-EXTRAORDINARY> 991
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 991
<EPS-PRIMARY> 0.13
<EPS-DILUTED> 0.11
<YIELD-ACTUAL> 0
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 772
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 772
<ALLOWANCE-DOMESTIC> 772
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MARCH
31, 1997 FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 1,289
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 2,385
<INVESTMENTS-CARRYING> 2,385
<INVESTMENTS-MARKET> 2,385
<LOANS> 2,734
<ALLOWANCE> 772
<TOTAL-ASSETS> 89,741
<DEPOSITS> 0
<SHORT-TERM> 0
<LIABILITIES-OTHER> 3,517
<LONG-TERM> 28,001
0
0
<COMMON> 22
<OTHER-SE> 42,814
<TOTAL-LIABILITIES-AND-EQUITY> 89,741
<INTEREST-LOAN> 56
<INTEREST-INVEST> 158
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 214
<INTEREST-DEPOSIT> 0
<INTEREST-EXPENSE> 761
<INTEREST-INCOME-NET> (547)
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 221
<EXPENSE-OTHER> 644
<INCOME-PRETAX> 2,446
<INCOME-PRE-EXTRAORDINARY> 2,156
<EXTRAORDINARY> 117
<CHANGES> 0
<NET-INCOME> 2,273
<EPS-PRIMARY> 0.28
<EPS-DILUTED> 0.26
<YIELD-ACTUAL> 0
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 772
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 772
<ALLOWANCE-DOMESTIC> 772
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
<FN>
1 EPS-Primary and EPS-Diluted has been restated for application of
Financial Accounting Standards Board Statement No. 128, Earnings per
Share.
</FN>
</TABLE>
