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 June 30, 2000
Commission File Number
000-09811
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, 6,454,494 shares outstanding.
Class B Common Stock of $.01 par value, 2,354,907 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 June 30,
2000 and December 31, 1999 - Unaudited
Consolidated Statements of Operations for the six and three month
periods ended June 30, 2000 and 1999 - Unaudited
Consolidated Statements of Stockholders' Equity and Comprehensive
Income for the six months ended June 30, 2000 and 1999 -
Unaudited
Consolidated Statements of Cash Flows for the six months ended
June 30, 2000 and 1999 - Unaudited
Notes to Unaudited Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition
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
June 30, 2000 and December 31, 1999
(In thousands, except share data)
(Unaudited)
Assets
2000 1999
---- ----
Cash and cash equivalents $ 2,221 1,545
Securities available for sale 264 255
Investment in BankAtlantic Bancorp, Inc. ("BBC") 78,372 73,764
Venture capital investments held for partnerships
to be formed 3,062 6,715
Venture capital investments held for sale 2,993 1,693
Mortgage notes and related receivables, net 1,269 1,325
Investment real estate, net 5,683 5,803
Real estate held for development and sale 1,830 1,840
Other assets 1,429 3,805
-------- --------
Total assets $ 97,123 96,745
======== ========
Liabilities and Stockholders' Equity
Mortgage payables and other borrowings 13,113 18,253
Other liabilities 5,770 5,933
Deferred income taxes 15,587 13,594
-------- --------
Total liabilities 34,470 37,780
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 6,454,494 in 2000 and 1999 58 58
Class B common stock, of $.01 par value; authorized
20,000,000 shares; issued and outstanding
2,354,907 in 2000 and 1999 21 21
Additional paid-in capital 25,481 25,890
Retained earnings 41,036 38,086
-------- --------
Total stockholders' equity before
accumulated other comprehensive loss 66,596 64,055
Accumulated other comprehensive loss - net
unrealized depreciation on securities
available for sale of the Company and BBC,
net of deferred income taxes (3,943) (5,090)
-------- --------
Total stockholders' equity 62,653 58,965
-------- --------
Total liabilities and stockholders' equity $ 97,123 96,745
======== ========
See accompanying notes to unaudited consolidated financial statements.
<PAGE>
BFC Financial Corporation and Subsidiaries
Consolidated Statements of Operations
For the six and three month periods ended June 30, 2000 and 1999
(In thousands, except per share data)
(Unaudited)
Six months ended Three months ended
June 30, June 30,
-------- --------
2000 1999 2000 1999
---- ---- ---- ----
Revenues:
Interest on mortgage notes and
related receivables $ 857 173 247 60
Interest and dividends on securities
available for sale and escrow accounts 98 107 49 51
Sale of real estate 4,809 1,072 2,729 243
Earnings on real estate rental
operations, net 445 587 208 265
Earnings from real estate limited
partnerships -- 847 -- 87
Income related to real estate held
for development and sale, net 74 12 52 1
Equity in earnings of BBC 4,060 5,926 1,672 3,181
Other income 189 168 72 166
------- ------- ------- -------
Total revenues 10,532 8,892 5,029 4,054
------- ------- ------- -------
Costs and expenses:
Interest on subordinated debentures -- 247 -- 125
Interest on mortgages payable
and other borrowings 750 479 326 240
Cost of sale of real estate 4,014 748 2,218 169
Allowance for loss on mortgage notes -- 150 -- 75
Employee compensation and benefits 664 589 340 290
Occupancy and equipment 23 30 15 14
General and administrative, net 596 395 227 183
------- ------- ------- -------
Total cost and expenses 6,047 2,638 3,126 1,096
------- ------- ------- -------
Income before income taxes 4,485 6,254 1,903 2,958
Provision for income taxes 1,535 2,391 537 1,015
------- ------- ------- -------
Net income $ 2,950 3,863 1,366 1,943
======= ======= ======= =======
Basic earnings per share $ 0.37 0.49 0.17 0.24
======= ======= ======= =======
Diluted earnings per share $ 0.35 0.43 0.16 0.22
======= ======= ======= =======
Basic weighted average shares outstanding 7,957 7,957 7,957 7,957
======= ======= ======= =======
Diluted weighted average shares outstanding 8,516 8,894 8,506 8,853
======= ======= ======= =======
See accompanying notes to unaudited consolidated financial statements.
<PAGE>
BFC Financial Corporation and Subsidiaries
Consolidated Statements of Stockholders' Equity and Comprehensive Income
For the six months ended June 30, 2000 and 1999
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Accumulated
Other
Addi- Compre-
Compre- Class A Class B tional hensive
hensive Common Common Paid-in Retained Income
income Stock Stock Capital Earnings (Loss) Total
------ ----- ----- ------- -------- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance,
December 31, 1998 $ 58 21 26,095 30,660 797 57,631
Comprehensive income
Net income $ 3,863 -- -- -- 3,863 -- 3,863
Other comprehensive income,
net of tax:
Unrealized losses on securities
available for sale (2,854) -- -- -- -- -- --
Reclassification adjustment
for net losses included
in net income 246 -- -- -- -- -- --
------
Other comprehensive loss (2,608) -- -- -- -- -- --
------
Comprehensive income $ 1,255 -- -- -- -- -- --
======
Net effect of BBC capital
transactions, net of
deferred income taxes -- -- (202) -- -- (202)
Change in net unrealized
depreciation on securities
available for sale-net of
deferred income taxes -- -- -- -- (2,608) (2,608)
-------- -------- -------- -------- -------- --------
Balance at June 30, 1999 $ 58 21 25,893 34,523 (1,811) 58,684
======== ======== ======== ======== ======== ========
Balance at
December 31, 1999 $ 58 21 25,890 38,086 (5,090) 58,965
Net income $ 2,950 -- -- -- 2,950 -- 2,950
Other comprehensive income,
net of tax:
Unrealized gain on securities
available for sale 1,359 -- -- -- -- -- --
Reclassification adjustment
for net gain included
in net income (212) -- -- -- -- -- --
------
Other comprehensive income 1,147 -- -- -- -- -- --
------
Comprehensive income $ 4,097 -- -- -- -- -- --
======
Net effect of BBC capital
transactions, net of
deferred income taxes -- -- (409) -- -- (409)
Change in net unrealized
appreciation on securities
available for sale-net of
deferred income taxes -- -- -- -- 1,147 1,147
-------- -------- -------- -------- -------- --------
Balance at June 30, 2000 $ 58 21 25,481 41,036 (3,943) 62,653
======== ======== ======== ======== ======== ========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
<PAGE>
BFC Financial Corporation and Subsidiaries
Consolidated Statements of Cash Flows
For the six months ended June 30, 2000 and 1999
(In thousands)
(Unaudited)
June 30,
--------
2000 1999
---- ----
Operating activities:
Net income $ 2,950 3,863
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation 269 250
Gain on sale of real estate, net (795) (324)
Earnings from real estate limited partnership -- (847)
Equity in earnings of BBC (4,060) (5,926)
Income related to real estate held
for development and sale, net (74) (12)
Provision for deferred income taxes 1,530 2,377
Allowance for loss on mortgage notes -- 150
Amortization on subordinated debentures -- 5
Accretion of discount on loans receivable (18) (17)
Increase in real estate development
and construction costs (113) (1,765)
Proceeds from escrow for called
debenture liability 2,455 --
Increase in deferred interest on the
subordinated debentures -- 242
Accrued interest income on escrow accounts -- (62)
Transfer of venture capital investments at cost
to affiliated partnership 6,715 --
Purchase of venture capital investments held
for partnerships to be formed (3,062) --
(Decrease) increase in other liabilities (80) 41
Increase in other assets (167) (415)
------- -------
Net cash provided by (used in) operating activities 5,550 (2,440)
------- -------
Investing activities:
Proceeds from sales of real estate -- 847
Common stock dividends received from BBC 644 606
Purchase of venture capital investments
held for sale (1,300) (1,250)
Proceeds from redemption and maturities
of securities available for sale -- 8
Principal reduction on mortgage notes and
related receivables 74 71
Decrease in real estate held for development and sale 933 1,031
Improvements to investment real estate (110) (94)
Other 25 40
------- -------
Net cash provided by investing activities 266 1,259
------- -------
Financing activities:
Borrowings -- 2,500
Repayments of borrowings (5,140) (131)
------- -------
Net cash (used in) provided by financing activities (5,140) 2,369
------- -------
Increase in cash and cash equivalents 676 1,188
Cash and cash equivalents at beginning of period 1,545 2,523
------- -------
Cash and cash equivalents at end of period $ 2,221 3,711
======= =======
See accompanying notes to unaudited consolidated financial statements.
<PAGE>
BFC Financial Corporation and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
June 30, 2000
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 1999 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 June 30, 2000 and December 31,
1999, the unaudited consolidated statements of operations for the six and three
month periods ended June 30, 2000 and 1999, the unaudited consolidated
statements of stockholders' equity and comprehensive income for the six months
ended June 30, 2000 and 1999 and the unaudited consolidated statements of cash
flows for the six months ended June 30, 2000 and 1999. 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 10-K for the year ended
December 31, 1999. Certain prior year balances have been reclassified to conform
with the 2000 presentation.
2. INVESTMENT IN BANKATLANTIC BANCORP, INC.
--------------------------------------------
A reconciliation of the carrying value in BankAtlantic Bancorp, Inc. ("BBC") to
BBC stockholders' equity at June 30, 2000 and December 31, 1999 is as follows
(dollars in thousands):
June 30, December 31,
2000 1999
---- ----
BBC stockholders' equity $246,794 235,886
Ownership percentage 31.8% 31.3%
-------- --------
78,372 73,913
Purchase accounting adjustments -- (149)
-------- --------
Investment in BBC $ 78,372 73,764
======== ========
At June 30, 2000, the Company owned 8,296,891 shares of BBC Class A Common Stock
and 4,876,124 shares of BBC Class B Common Stock representing 31.8% of all
outstanding BBC Common Stock. At June 30, 2000, the Company's ownership of BBC
Class A and Class B Common Stock was approximately 26.2% and 49.8%,
respectively. The aggregate market value of the Company's investment in BBC at
June 30, 2000 was approximately $59.8 million or approximately $18.6 million
less than the carrying value in the financial statements. Management does not
believe that there is any permanent impairment in the value of the investment in
BBC.
The following are equity transactions of BBC that impact or could impact the
Company's ownership percentage of BBC
On August 17, 2000, BBC's Class A and Class B shareholders will consider
and vote on a transaction which, if approved, would result in the
redemption and retirement of all outstanding shares of Class B common
stock, other than shares held by the Company, at a price of $6.00 per share
payable in cash. The Class B common stock represents 100% of the voting
rights of BBC. As a result of the transaction, which is structured as a
merger, BFC Financial Corporation would be the sole holder of the Class B
common stock. BBC's Class A common stock will be unaffected by the
transaction and will remain outstanding. Outstanding options to purchase
BBC's Class A common stock will remain exercisable for the same number of
shares of BBC's Class A common stock in the surviving corporation for the
same exercise price and upon the same terms as in effect before the merger.
Likewise, BBC's 6-3/4% Convertible Subordinated Debentures due 2006 and
5-5/8% Convertible Subordinated Debentures due 2007 will remain convertible
into the same number of shares of BBC's Class A common stock in the
surviving corporation at the same conversion price and upon the same terms
as in effect before the merger. All outstanding options to acquire BBC's
Class B common stock will automatically be exchanged for options to acquire
BBC's Class A common stock on a basis which preserves the intrinsic value
of the option on the effective date of the BBC's corporate transaction. The
options will otherwise be on substantially the same terms and conditions as
the former options to purchase shares of BBC's Class B common stock,
including vesting and term. The proposed transaction is subject to approval
of BBC's Class A and Class B shareholders, receipt of all required
regulatory approvals, and obtaining financing for the transaction.
On March 1, 2000, 749,533 restricted shares of BBC's Class A common stock
issued to key employees of Ryan Beck & Co., Inc. ("Ryan Beck") in
connection with the acquisition of Ryan Beck were retired in exchange for
the establishment of interests in the BankAtlantic Bancorp-Ryan Beck
Deferred Compensation Plan ("Plan") in the aggregate amount of $7.8
million. As a result of the exchange, BBC's stockholders' equity declined
by $3.2 million with a corresponding increase in other liabilities. BFC's
ownership percentage of BBC, as of December 31, 1999, assumed that the
shares of restricted Class A Common Stock were not outstanding.
On May 2, 2000, BBC's Board of Directors granted, pursuant to the
BankAtlantic Bancorp 1999 stock option plan, incentive stock options and
non-qualifying stock options to purchase 317,500 shares of BBC's Class A
common stock to selected officers and directors of BBC. The options vest in
five years and expire ten years after the grant date except for options
issued to non-officer directors that vested immediately and 34,064 options
that vest 66 months from the grant date. The exercise price for all of the
above option grants was equal to the market value of the underlying common
stock at the date of grant ($3.688) except for 90,000 options that were
issued at 110% of the fair market value at the date of the grant.
On June 1, 2000 and 1999, pursuant to the February 1998 acquisition
agreement under which Ryan Beck acquired Cumberland Advisors, BBC issued
55,239 and 40,968 shares of Class A common stock and made a cash payment of
$210,000 and $266,000, respectively, to the former Cumberland Advisors
partners. Such additional consideration was considered an adjustment to the
purchase price of Cumberland Advisors and not compensation for services
subsequent to the acquisition date. BBC's Class A common stock is subject
to restrictions prohibiting transfers for two years.
On July 14, 1999, BBC's Board of Directors approved the repurchase on the
open market of up to 3.5 million shares of BBC's common stock. BBC's Board
authorized the repurchase of common stock on a "time-to-time" basis,
depending upon market conditions and subject to compliance with applicable
securities laws. Pursuant to the above repurchase plan BBC paid $596,000
and $3.9 million to repurchase and retire 100,000 and 651,000 shares of
Class B common stock during the three and six months ended June 30, 2000,
respectively. Pursuant to a previously announced plan to repurchase shares
of common stock, BBC paid $8.4 million to repurchase and retire 1,149,655
shares of Class A common stock during the six months ended June 30, 1999.
There were no shares of Class A common stock repurchased during the three
months ended June 30, 1999.
During the three and six months ended June 30, 2000, 69,450 and 186,080
shares of BBC's Class B incentive and non-qualifying stock options were
exercised resulting in a $299,000 and $788,000 increase in BBC's
stockholders' equity.
During the three months ended June 30, 1999, 32,340 and 18,673 of BBC's
Class A and Class B incentive and non-qualifying stock options,
respectively, were exercised resulting in a $260,000 increase in BBC's
stockholders' equity. During the six months ended June 30, 1999, 40,954 and
22,770 of BBC's Class A and Class B incentive and non-qualifying stock
options, respectively, were exercised resulting in a $328,000 increase in
BBC's stockholders' equity.
3. VENTURE CAPITAL INVESTMENTS HELD FOR PARTNERSHIPS TO BE FORMED
------------------------------------------------------------------
The Company currently intends to sponsor future limited partnerships that will
provide venture capital to unaffiliated third parties. As the Company identifies
an investment that it believes may be suitable for one of these partnerships, it
may make an investment with the view towards placing the investment in a future
partnership. Through 1999, the Company made investments of approximately $6.7
million in five unaffiliated technology entities for this purpose. During 2000,
the ownership in the technology entities was transferred at the Company's cost
therein to a specified asset limited partnership managed by a subsidiary. In
March 2000, a total of $8.0 million in interests, including interests retained
by the Company and affiliates, were sold by such partnership to accredited
investors in a private offering. In April 2000, the Company received
approximately $5.8 million from the partnership representing repayment of the
amounts advanced plus $303,000 of interest on the advances net of the Company's
$1.3 million retained investment in the partnership. The Company also received
an administrative services fee and out-of pocket expenses from the partnership.
In addition to the amount invested by the Company, officers, directors and
affiliates of the Company invested approximately $3.9 million in the
Partnership.
During the six months ended June 30, 2000, the Company made additional advances
to a subsidiary of approximately $3.1 million to acquire venture capital
investments in entities in the technology industry. These advances will be
repaid, with interest, when the partnerships are funded. The Company's venture
investments have been made in entities whose interests are not publicly traded
and therefore there is no liquidity in the investments and no available quoted
market value for the investments. Accordingly, the investments are carried at
the Company's cost, which is believed to approximate market value.
4. VENTURE CAPITAL INVESTMENTS HELD FOR SALE
---------------------------------------------
Through 1999, the Company invested approximately $1.7 million in three entities
in the retail sector. In March 2000, the Company invested $1.3 million in an
affiliated limited partnership. (See Note 3.) It is anticipated that the Company
will make additional investments in partnerships that it sponsors. The Company's
venture investments have been made in entities whose interests are not publicly
traded and therefore there is no liquidity in the investments and no available
quoted market value for the investments. Accordingly, the investments are
carried at the Company's cost, which is believed to approximate market value
5. CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------
Other non-cash financing and investing activities and other supplemental cash
flow items for the six months ended June 30, 2000 and 1999 were as follows (in
thousands):
June 30,
--------
2000 1999
---- ----
The change in stockholders' equity
resulting from the Company's proportionate
share of BBC's net unrealized appreciation
(depreciation) on securities available for
sale, net of deferred income taxes $ 1,142 (2,755)
======= =======
Net effect of BBC capital transactions,
net of income taxes $ (409) (202)
======= =======
Change in stockholders' equity resulting
from the Company's net unrealized
appreciation on securities available for sale,
net of deferred income taxes $ 5 147
======= =======
Transfers from escrow accounts to reflect
payments on subordinated debentures $ 82 149
======= =======
Allowance for loss on mortgage notes $ -- 150
======= =======
BBC's dividends on common stock
declared and received in subsequent period $ -- 303
======= =======
Interest paid on borrowings $ 775 479
======= =======
Income taxes paid $ 62 --
======= =======
6. OTHER ASSETS AND OTHER LIABILITIES
-------------------------------------
Included in other liabilities at June 30, 2000 and December 31, 1999 is
approximately $5.1 million of amounts owed to third parties pursuant to an
agreement entered into in connection with the settlement of litigation. Such
amounts owed do not bear interest. Included in other assets at December 31, 1999
was approximately $2.5 million held in escrow accounts relating to payments
associated with a portion of the settlement. In January 2000, pursuant to the
terms of the escrow agreement, approximately $2.5 million remaining in escrow
was released to the Company and any future payments to the claimants would be
paid directly by the Company. Payments are due when a claimant presents for
cancellation a subordinated debenture that was cancelled upon settlements of the
litigation.
7. AFFILIATED TRANSACTIONS
---------------------------
The Company received (paid) the following fees and compensation from (to)
affiliated entities during the six and three months ended June 30, 2000 and
1999:
Six months ended Three Months ended
June 30, June 30,
-------- --------
2000 1999 2000 1999
---- ---- ---- ----
Affiliated limited partnerships:
Administrative services $ 23,261 $ 18,616 $ 14,278 $ 8,903
Management fees $ 50,904 $ 1,085 $ 50,723 $ 542
Organization fees $ 80,000 $ -- $ -- $ --
Interest on advances $ 302,511 $ -- $ -- $ --
Levitt Corporation:
Administrative services $ 40,000 $ 77,500 $ 20,000 $ 77,500
BankAtlantic:
Rent $ (13,361) $ (13,361) $ (6,681) $ (6,681)
Administrative services $ (18,000) $ (18,000) $ (9,000) $ (9,000)
BankAtlantic is a wholly owned subsidiary of BankAtlantic Bancorp, Inc. and
Levitt Corporation is a wholly owned subsidiary of BankAtlantic.
8. SEGMENT REPORTING
---------------------
The Company utilizes three reportable segments:
o Investment in BBC
o Real estate operations
o Other
Investment in BBC consists of the Company's ownership interest in the common
stock of BBC. The Company's ownership position is carried on the equity method
and the Company's ownership in BBC as of June 30, 2000 and 1999 was
approximately 31.8% and 31.9% of all of the outstanding BBC Common Stock. In
addition to its investment in BBC, the Company owns and manages real estate,
included in the Consolidated Statements of Financial Condition as investment
real estate, net and real estate held for development and sale. Investment real
estate, net includes the BMOC property and a 50% interest in the Delray
property. The real estate held for development and sale is the Center Port
property, part of which is being developed and the remainder of which is being
held for sale. Real estate operations also include mortgage notes receivable
that relate to the sale of properties previously owned by the Company. Other
includes venture capital investments, securities available for sale and other
miscellaneous activities. The Company evaluates segment performance based on its
operating profit before tax and overhead allocations.
The accounting policies of the segments are the same as those described in the
summary of significant accounting policies described in its 1999 Annual Report.
The tables below provide segment information for the six and three month periods
ended June 30, 2000 and 1999 (in thousands):
Six months ended June 30, 2000
Real
Investment Estate Consol-
in BBC Operations Other idated
------ ---------- ----- ------
Total revenues $ 4,060 5,827 645 10,532
======== ===== ===== ======
Operating profit $ 4,060 1,353 517 5,930
======== ===== =====
Interest on mortgages payable
and other borrowings (295)
Employee compensation and benefits (664)
Occupancy and equipment (23)
General and administrative, net (463)
------
Income before income taxes $ 4,485
======
Total assets at June 30, 2000 $ 78,372 9,822 8,929 97,123
======== ===== ===== ======
Six months ended June 30, 1999
Real
Investment Estate Consol-
in BBC Operations Other idated
------ ---------- ----- ------
Total revenues $ 5,926 2,718 248 8,892
======== ======== ======== ========
Operating profit $ 5,926 1,356 248 7,530
======== ===== =====
Interest on subordinated
debentures (247)
Interest on mortgages payable
and other borrowings (15)
Employee compensation and benefits (589)
Occupancy and equipment (30)
General and administrative, net (395)
--------
Income before income taxes $ 6,254
========
Total assets at June 30, 1999 $ 75,078 11,645 8,700 95,423
======== ======== ======== ========
Three months ended June 30, 2000
Real
Investment Estate Consol-
in BBC Operations Other idated
------ ---------- ----- ------
Total revenues $ 1,672 3,199 158 5,029
======== ======== ======== ========
Operating profit $ 1,672 749 30 2,451
======== ===== =====
Interest on mortgages payable
and other borrowings (99)
Employee compensation and benefits (340)
Occupancy and equipment (15)
General and administrative, net (94)
--------
Income before income taxes $ 1,903
========
Total assets at June 30, 2000 $ 78,372 9,822 8,929 97,123
======== ======== ======== ========
Three months ended June 30, 1999
Real
Investment Estate Consol-
in BBC Operations Other idated
------ ---------- ----- ------
Total revenues $ 3,181 708 165 4,054
======== ======== ======== ========
Operating profit $ 3,181 231 165 3,577
======== ===== =====
Interest on subordinated
debentures (125)
Interest on mortgages payable
and other borrowings (7)
Employee compensation and benefits (290)
Occupancy and equipment (14)
General and administrative, net (183)
--------
Income before income taxes $ 2,958
========
Total assets at June 30, 1999 $ 75,078 11,645 8,700 95,423
======== ======== ======== ========
9. EARNINGS PER SHARE
---------------------
The following table reconciles the numerators and denominators of the basic and
diluted earnings per share computations for the six and three month periods
ended June 30, 2000 and 1999 (in thousands, except per share data):
Six months ended Three months ended
June 30, June 30,
-------- --------
2000 1999 2000 1999
------ ------ ------ ------
Basic Numerator:
Net income available
for common shareholders $2,950 3,863 1,366 1,943
====== ====== ====== ======
Basic Denominator
Weighted average shares
outstanding 7,957 7,957 7,957 7,957
====== ====== ====== ======
Basic earnings per share $ .37 .49 .17 .24
====== ====== ====== ======
Diluted Numerator:
Dilutive net income available
to common shareholders $2,950 3,863 1,366 1,943
====== ====== ====== ======
Diluted Denominator
Basic weighted average shares
outstanding 7,957 7,957 7,957 7,957
Options 559 937 549 896
------ ------ ------ ------
Diluted weighted average shares
outstanding 8,516 8,894 8,506 8,853
====== ====== ====== ======
Diluted earnings per share $ .35 .43 .16 .22
====== ====== ====== ======
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.
<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 that owns in the aggregate approximately 31.8% of the outstanding
BankAtlantic Bancorp, Inc. ("BBC") common stock. BBC is the holding company for
BankAtlantic, A Federal Savings Bank ("BankAtlantic") by virtue of its ownership
of 100% of the outstanding BankAtlantic common stock.
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 operations,
markets, products and services, and expansion strategies of the Company and its
subsidiaries including BBC and BankAtlantic, the success of its venture capital
investments and the other factors discussed elsewhere in this report and in 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 $0.17 and $0.16 for the
quarter ended June 30, 2000, compared to basic and diluted earnings per share of
$0.24 and $0.22 for the comparable period in 1999.
The Company's basic and diluted earnings per share were $0.37 and $0.35 for the
six months ended June 30, 2000, compared to $0.49 and $0.43 for the comparable
period in 1999.
For the three months ended June 30, 2000, the Company reported net income of
approximately $1.4 million as compared to net income of approximately $1.9
million for the comparable period in 1999.
For the six months ended June 30, 2000, the Company reported net income of
approximately $2.9 million as compared to net income of approximately $3.9
million for the comparable period in 1999.
Increases (decreases) in revenues for the six and three month periods ended June
30, 2000, as compared to the comparable periods in 1999 were as follows (in
thousands):
<TABLE>
<CAPTION>
Six months ended June 30, Three months ended June 30,
------------------------- ---------------------------
2000 1999 Change 2000 1999 Change
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Interest on mortgage notes and
related receivables $ 857 173 684 247 60 187
Interest and dividends on securities
available for sale and escrow accounts 98 107 (9) 49 51 (2)
Sale of real estate 4,809 1,072 3,737 2,729 243 2,486
Earnings on real estate rental
operations, net 445 587 (142) 208 265 (57)
Earnings from real estate
limited partnerships -- 847 (847) -- 87 (87)
Income related to real estate held
for development and sale, net 74 12 62 52 1 51
Equity in earnings of BBC 4,060 5,926 (1,866) 1,672 3,181 (1,509)
Other income 189 168 21 72 166 (94)
------- ------- ------- ------- ------- -------
$10,532 8,892 1,640 5,029 4,054 975
======= ======= ======= ======= ======= =======
</TABLE>
Interest on mortgage notes and related receivables increased for the six months
ended June 30, 2000 as compared to the same period in 1999 primarily due to an
increase in interest earned of approximately $383,000 relating to real estate
held for development and sale and approximately $303,000 of interest received
from an affiliate in connection with amounts advanced for venture capital
investments acquired for partnerships from the date they were made until
contributed to an affiliated limited partnership in March 2000. Interest on
mortgage notes and related receivables increased for the three months ended June
30, 2000 as compared to the same period in 1999 due to an increase in interest
earned of approximately $187,000 relating to real estate held for development
and sale.
During the six months ended June 30, 2000, the Company sold two buildings that
it had constructed on approximately 2 acres and approximately 11 acres at the
Center Port property to unaffiliated third parties for approximately $4.8
million. The Company recognized a net gain from the sale of real estate of
approximately $795,000. During the quarter ended June 30, 2000, the Company sold
11 acres at the Center Port property to unaffiliated third parties for
approximately $2.7 million. The Company recognized a net gain from the sale of
real estate of approximately $511,000. During the six months ended June 30,
1999, the Company sold approximately 5 acres of the Center Port property to an
unaffiliated third party for approximately $1.1 million. The Company recognized
a net gain from the sale of the real estate of approximately $324,000. During
the quarter ended June 30, 1999, the Company sold approximately 1 acre of the
Center Port property to an unaffiliated third party for approximately $243,000.
The Company recognized a net gain from the sale of the real estate of
approximately $74,000.
Earnings on real estate rental operations, net decreased for the six and three
month periods ended June 30, 2000 as compared to the same periods in 1999
primarily due to a 1999 payment received for the cancellation of a lease and an
increase in 2000 of repair and maintenance expenses at the Company's Burlington
Manufacturers Outlet Center.
During the six and three months ended June 30, 1999, the Company received a
distribution of approximately $501,000 and $87,000, respectively, from a real
estate limited partnership in which the Company holds an interest. The limited
partnership sold 30 of 34 convenience stores that it owned during the first
quarter of 1999. The limited Partnership sold another store in the second
quarter of 1999. The Company has a 49.5% interest in this partnership and had
written off its investment of approximately $441,000 in 1990 due to the
bankruptcy of the entity leasing the real estate. The $501,000 and $87,000 has
been included in earnings from real estate limited partnerships.
In March 1996, as part of the sale of the Company's Cypress Creek property in
Fort Lauderdale, Florida, the Company received a 4.5% limited partnership
interest in the partnership that acquired the property. In January 1999, the
Company received a distribution of approximately $259,000 from the liquidation
of this partnership. The $259,000 has been included in earnings from real estate
limited partnerships.
BBC's net income available for common shareholders for the six and three month
periods ended June 30, 2000 and 1999 are summarized below (in thousands):
For the six months For the three months
ended June 30, ended June 30,
-------------- --------------
2000 1999 2000 1999
---- ---- ---- ----
Income from continuing
operations $ 8,684 16,800 5,003 8,629
Income from discontinued
operations net of income taxes 259 801 259 801
Extraordinary item 3,466 -- -- --
------- ------- ------- -------
Net income $12,409 17,601 5,262 9,430
======= ======= ======= =======
The Company's equity in the earnings of BBC for the six and three month periods
ended June 30, 2000 and 1999 was approximately $4.1 million and $5.9 million,
respectively. The Company's equity in earnings of BBC for the quarter ended June
30, 2000 and 1999 was approximately $1.7 million and $3.2 million, respectively.
The decrease in equity in earnings of BBC for the six and three month periods
ended June 30, 2000 as compared to the same periods in 1999 was primarily due to
a decrease in earnings by BBC. BBC's net income from continuing operations
decreased by 48% and 42% during the six and three month periods ended June 30,
2000 as compared to the same periods in 1999, respectively. The primary reasons
for BBC's decline were related to the following items:
o higher compensation expense from expanded investment banking
operations, the acquisition of Levitt and Sons and new banking
products,
o a significant increase in other real estate expenses resulting from
Levitt and Sons during 2000 which were not included during 1999,
o increased occupancy expenses associated with repairs and maintenance
on bank branches, data processing services and maintenance contracts
associated with ATM operations,
o lower gains on sales of securities available for sale net of
write-downs,
o an unrealized loss on syndication loan,
o lower gains on the sale of property and equipment resulting from a
$1.5 million gain on the sale of a branch facility during 1999,
o a decline in income from foreclosed asset activity, net reflecting the
sale of a REO property during 1999 for a $1.4 million gain,
o a substantial increase in advertising costs due to the acquisition of
Levitt and Sons and promotions of new deposit and loan products,
o higher other expenses excluding Ryan Beck and real estate operations
primarily associated with consulting fees related to technology
investments and
o a decrease in net interest income due to a decline in the net interest
margin reflecting a rising interest rate environment which began in
July 1999.
The above reductions in BBC's income from continued operations were partially
offset by:
o an improvement in the provision for loan losses resulting from a
decline in small business and indirect consumer loan charge-offs,
o a significant increase in Ryan Beck non-interest income,
o an increase in gains on sales of real estate held for sale due to the
Levitt and Sons acquisition, and
o a $651,000 decline in the deferred tax asset valuation allowance due
to gains on the sale of real estate from Levitt Corporation and the
related decrease in the provision for income taxes.
The decline in BBC's income from continuing operations for the six months ended
June 30, 2000 were related to the items discussed above along with an increase
in the provision for loan losses attributed to charge-offs and delinquency
trends in the small business and indirect consumer loan portfolios.
BBC's income from discontinued operations for the three and six months ended
June 30, 2000 was $259,000 compared to $801,000, net of income taxes,
respectively for the same 1999 periods. BBC's income from discontinued
operations during the three and six months ended June 30, 2000 resulted from the
sale of a building used in the mortgage servicing operations. BBC's income from
discontinued operations during the three and six months ended June 30, 1999
resulted primarily from slower loan repayments than originally estimated which
were the result of rising residential loan interest rates during the period.
BBC's extraordinary item resulted from the early extinguishment of debt. On
February 29, 2000, BBC repurchased $25 million aggregate principal amount of its
5 5/8% convertible subordinated debentures for $18.75 million. Included in BBC's
extraordinary item was $250,000 of offering costs and a $673,000 writeoff of
unamortized issuance costs.
The Company's ownership in BBC at June 30, 2000 and 1999 was approximately 31.8%
and 31.9%, respectively, of all outstanding BBC Common Stock. The following
table provides information regarding the Company's ownership interest in BBC at
the dates indicated:
BBC BBC
Class A Class B
Common Common Total
Stock Stock Outstanding
----- ----- -----------
June 30, 1999 25.8% 47.0% 31.9%
June 30, 2000 26.2% 49.8% 31.8%
Other income decreased for the three months ended June 30, 2000 as compared to
the same period in 1999 primarily as a consequence of proceeds received during
the 1999 quarter relating to advances due from an affiliate which were
written-off in prior years.
Increases (decreases) in the Company's expenses for the six and three month
periods ended June 30, 2000, as compared to the comparable periods in 1999 were
as follows (in thousands):
<TABLE>
<CAPTION>
Six months ended June 30, Three months ended June 30,
------------------------- ---------------------------
2000 1999 Change 2000 1999 Change
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Interest on subordinated debentures $ -- 247 (247) -- 125 (125)
Interest on mortgages payable
and other borrowings 750 479 271 326 240 86
Cost of sale of real estate 4,014 748 3,266 2,218 169 2,049
Allowance for loss on mortgage notes -- 150 (150) -- 75 (75)
Employee compensation and benefits 664 589 75 340 290 50
Occupancy and equipment 23 30 (7) 15 14 1
General and administrative, net 596 395 201 227 183 44
------ ------ ------ ------ ------ ------
$6,047 2,638 3,409 3,126 1,096 2,030
====== ====== ====== ====== ====== ======
</TABLE>
No interest was paid on subordinated debentures in 2000 due the redemption in
November 1999 of the Company's outstanding Subordinated Debentures at a price
equal to 100% of the principal amount plus accrued interest.
Interest on mortgage payables and other borrowings increased for the six and
three month periods ended June 30, 2000 as compared to the same periods in 1999
primarily due to an increase in average borrowings outstanding.
The Company recorded an allowance for loss on mortgage notes due from affiliated
limited partnerships of approximately $75,000 for each of the quarters ended
June 30, 1999 and March 31, 1999. This allowance for mortgage notes was based
upon management's determination regarding the net carrying value of the loans
and the estimated fair value of the underlying loan collateral.
Employee compensation and benefits increased for the six and three month periods
ended June 30, 2000 as compared to the same periods in 1999 primarily due to an
increase in levels of compensation.
General and administrative, net increased for the six and three month periods
ended June 30, 2000 as compared to the same periods in 1999 primarily due to an
increase in venture expenses and legal fees associated with the ABC litigation.
This increase was partially offset with a decrease in intangible taxes.
Financial Condition
The Company's total assets at June 30, 2000 and December 31, 1999 were $97.1
million and $96.7 million, respectively. The majority of the difference at June
30, 2000 as compared to December 31, 1999 was due to an increase in the
investment in BBC. This increase was offset in part by decreases in venture
capital investments and other assets.
Investment in BBC increased by $4.6 million due to equity in earnings of BBC of
approximately $4.1 million and a decrease in net unrealized depreciation on
securities available for sale of approximately $1.9 million. This increase was
offset in part by the net effect of BBC capital transactions of approximately
$667,000 and dividends of approximately $644,000.
The decrease in other assets of approximately $2.4 million was primarily
attributable to the release to the Company of funds previously held in escrow
relating to the Subordinated Debentures. In January 2000, in accordance with the
terms of the escrow agreement, approximately $2.5 million remaining in escrow
was released to the Company.
Through 1999, the Company made investments of approximately $6.7 million in five
unaffiliated technology entities for this purpose. During 2000, the ownership in
the technology entities was transferred at the Company's cost therein to a
specified asset limited partnership managed by a subsidiary. In March 2000, a
total of $8.0 million in interests, including interests retained by the Company
and affiliates, were sold by such partnership to accredited investors in a
private offering. In April 2000, the Company received approximately $5.8 million
from the partnership representing repayment of the amounts advanced plus
$303,000 of interest on the advances net of the Company's $1.3 million retained
investment in the partnership. The Company also received an administrative
services fee and out-of pocket expenses from the partnership. In addition to the
amount invested by the Company, officers, directors and affiliates of the
Company invested approximately $3.9 million in the Partnership.
During the six months ended June 30, 2000, the Company made additional advances
to a subsidiary of approximately $3.1 million to acquire venture capital
investments in entities in the technology industry. These advances will be
repaid, with interest, when the partnerships are funded.
The Company's total liabilities at June 30, 2000 and December 31, 1999 were
$34.5 million and $37.8 million, respectively. The decrease of approximately
$3.3 in total liabilities at June 30, 2000 as compared to December 31, 1999
primarily resulted from a decrease in mortgage payables and other borrowings of
approximately $5.1 million. This decrease was offset in part with an increase in
deferred income taxes of approximately $2.0 million.
Market Risk
Market risk is defined as the risk of loss arising from adverse changes in
market valuation that 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 through its investment in BBC. The Company also bears
a market risk in its venture capital investments.
Equity Price Risk
The Company's primary equity investment is its investment in BBC. This
investment was entered into for purposes other than trading purposes. Since this
investment is carried using the equity method of accounting, changes in the
market price of BBC stock would not have a direct impact on the Company's
financial statements, however, a change in the market price could likely have an
impact on the investment community's view of the Company. The following table
shows changes in the market value of the Company's investment in BBC at June 30,
2000 based on percentage changes in market price. Actual future price changes
may be different from the changes identified in the table below (in thousands):
Percent
Change In Market
Market Price Value
------------ -----
20.00% $71,713
10.00% 65,737
0.00% 59,761
(10.00)% 53,785
(20.00)% 47,809
The Company has made venture capital investments in various entities and has
invested in an affiliated partnership which holds investments in various
entities with the anticipation that it will be able to achieve a return on its
investment when these entities are either acquired by other companies or sell
their stock in public offerings. It is possible that the products being
developed by these entities will not gain market acceptance or that the public
markets will not support a pricing of these entities that would provide the
Company with a return on or recoupment of its investments in these entities.
Management does not believe that market risk on other equity instruments would
have a significant impact on the financial condition of the Company.
BBC maintains a portfolio of trading and available for sale securities which
subjects BBC to equity pricing risks. The change in fair values of equity
securities represents instantaneous changes in all equity prices segregated by
trading securities, securities sold not yet purchased and available for sale
securities. The following are hypothetical changes in the fair value of BBC's
securities sold not yet purchased, trading and available for sale securities at
June 30, 2000 based on percentage changes in fair value. Actual future price
appreciation or depreciation may be different from the changes identified in the
table below.
Available Securities Total
Percent Trading for Sale Sold Not Dollar
Change in Securities Securities Yet Change from
Fair Value Fair Value Fair Value Purchased 0%
---------- ---------- ---------- --------- -------
20 % $20,155 $31,622 $ 460 $ 8,726
10 % 18,476 28,987 421 4,363
- % 16,796 26,352 383 0
(10)% 15,116 23,717 345 (4,353)
(20)% 13,437 21,082 306 (8,706)
Ryan Beck is a market maker in equity securities that could from time to time
require them to hold securities during declining markets. BBC attempts to manage
its equity price risk by maintaining a relatively small portfolio of securities
and evaluating equity securities as part of BBC's overall asset and liability
management process.
Interest Rate Risk
The majority of BBC's assets and liabilities are monetary in nature subjecting
BBC to significant interest rate risk. During 1998, BBC began trading government
securities which are generally bought and sold on the same day. During the
second quarter of 1999, BBC's trading activities were expanded beyond trading in
government securities to trading in options and futures on Eurodollar time
deposits which expire in six months or less. Eurodollar time deposits are
indexed to the LIBOR. During the six months ended June 30, 2000 BBC has entered
into interest rate swap contracts to change fixed rate time deposits to floating
rate borrowings.
BBC has developed a model using vendor software to quantify its interest rate
risk. A sensitivity analysis was performed measuring BBC's potential gains and
losses in net portfolio fair values of interest rate sensitive instruments at
June 30, 2000 resulting from a change in interest rates. Interest rate sensitive
instruments included in the model were BBC's:
o loan portfolio,
o debt securities available for sale,
o investment securities,
o FHLB stock,
o Federal Funds sold,
o government securities,
o Eurodollar time deposit options and futures
o deposits, including brokered deposits and public funds,
o advances from FHLB,
o securities sold under agreements to repurchase,
o Federal Funds purchased,
o Notes and Bonds payable
o Subordinated Debentures and investment notes,
o Trust Preferred Securities,
o Interest rate swaps, and
o Off-balance sheet loan commitments.
BBC has fixed rate loan commitments aggregating $40.1 million at June 30, 2000.
The model calculates the net potential gains and losses in net portfolio fair
value by:
(i) discounting anticipated cash flows from existing assets,
liabilities and off-balance sheet contracts at market rates to
determine fair values at June 30, 2000,
(ii) discounting the above expected cash flows based on instantaneous
and parallel shifts in the yield curve to determine fair values,
and
(iii) the difference between the fair value calculated in (i) and (ii)
is the potential gain or loss in net portfolio fair values.
BBC's management has made estimates of fair value discount rates that it
believes to be reasonable. However, because there is no quoted market for many
of these financial instruments, BBC's management has no basis to determine
whether the fair value presented would be indicative of the value negotiated in
an actual sale. BankAtlantic'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.
Presented below is an analysis of BBC's interest rate risk at June 30, 2000 as
calculated utilizing the 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.
Net Portfolio
Changes Value Dollar
in Rate Amount Change
------- ------ ------
(In thousands)
--------------
+200 bp $ 133,991 $(101,641)
+100 bp $ 188,910 $ (46,722)
0 bp $ 235,632 $ 0
(100) bp $ 280,058 $ 44,426
(200) bp $ 272,897 $ 37,265
In preparing the above table, BBC makes various assumptions to determine the net
portfolio value at the assumed changes in interest rate. These assumptions
include:
o loan prepayment rates,
o deposit decay rates,
o market values of certain assets under the representative interest rate
scenarios, and
o repricing of certain deposits and borrowings.
It was also assumed that delinquency rates would not change as a result of
changes in interest rates although there can be no assurance that this would be
the case. Even if interest rates change in the designated increments, there can
be no assurance that BBC's assets and liabilities would be impacted 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
The primary sources of funds to the Company for the six months ended June 30,
2000 were return of amounts previously held in escrow for called Subordinated
Debentures, interest received on advances to an affiliate in connection with
real estate held for development and sale, revenues from property operations,
principal reduction on loan receivables and dividends from BBC and fees and
interest received upon formation of an affiliated partnership. These funds were
primarily utilized to invest in venture capital technology entities, reduce
mortgage payable and other borrowings and to fund operating expenses and general
and administrative expenses.
In January 2000, in accordance with the terms of the escrow agreement entered
into in connection with litigation settlements, approximately $2.5 million
remaining in escrow to fund future payments associated with the called
Subordinated Debenture was released to the Company. Any future payments
associated with these settlements will be paid from the Company's working
capital. Payments are made only when a claimant presents for cancellation the
subordinated debenture that was cancelled upon settlements of litigation. At
June 30, 2000, there was approximately $5.1 million remaining that could be
presented for payment. The Company is not obligated to pay interest on this
amount.
As previously indicated the Company holds approximately 31.8% of all outstanding
BBC Common Stock. The payment of dividends by BBC is subject to declaration by
BBC's Board of Directors and will depend upon, among other things, the results
of operations, financial condition and cash requirements of BBC and the ability
of BankAtlantic to pay dividends or otherwise advance funds to BBC, which in
turn is subject to OTS regulation and is based upon BankAtlantic's regulatory
capital levels and net income. Currently, BBC pays a quarterly dividend of
$.0253 and $.023 per share for Class A and Class B Common Stock, respectively.
At June 30, 2000, BankAtlantic's core, Tier 1 risk-based and total risk-based
capital ratios were 7.47%, 10.98% and 12.24%, 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):
Six months ended
June 30,
--------
Net cash provided by (used in) : 2000 1999
---- ----
Operating activities $ 5,550 (2,440)
Investing activities 266 1,259
Financing activities (5,140) 2,369
------- -------
Increase in cash and cash equivalents $ 676 1,188
======= =======
Impact of Inflation - The financial statements and related financial data and
notes presented herein have been prepared in accordance with GAAP, which require
the measurement of financial position and operating results in terms of
historical dollars, without considering changes in the relative purchasing power
of money over time due to inflation. BFC does not believe that inflation has had
any material impact on the Company. Inflation could also have an effect on the
market value of the Company's ownership in its BBC Common Stock. Virtually all
of the assets and liabilities of BBC are monetary in nature. As a result,
interest rates have a more significant impact on BBC's performance than the
effects of general price levels. Although interest rates generally move in the
same direction as inflation, the magnitude of such changes varies.
<PAGE>
PART II - OTHER INFORMATION
Item 1 through 5. - Not applicable.
Item 6. - Exhibits and Reports on Form 8-K
a) Index to Exhibits:
27. Financial data schedule for the six months ended June 30, 2000.
b) No report on Form 8-K was filed during the three months ended June 30,
2000.
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: August 7, 2000 By: /s/ Alan B. Levan
-----------------------------------------
Alan B. Levan, President
Date: August 7, 2000 By: /s/ Glen R. Gilbert
-----------------------------------------
Glen R. Gilbert, Executive Vice President
Chief Accounting Officer and
Chief Financial Officer
