XNYS:BBX BBX Capital Corp Class A Quarterly Report 10-Q Filing - 6/30/2012

Effective Date 6/30/2012

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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

FORM 10-Q

 

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

For the quarterly period ended June 30, 2012

OR

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

For the transition period from _______ to _______

 

Commission files number     001-13133

BBX CAPITAL CORPORATION

(Exact name of registrant as specified in its charter)

 

 

 

Florida(State or other jurisdiction of

incorporation or organization)

65-0507804

(I.R.S. Employer

Identification No.)

2100 West Cypress Creek Road

Fort Lauderdale, Florida

(Address of principal executive offices)

33309

(Zip Code)

 

(954) 940-5000

(Registrant's telephone number, including area code)

BankAtlantic Bancorp, Inc.

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

 

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

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   [X] YES  [    ] NO

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

 

 

 

Large accelerated filer [    ]

Accelerated filer [    ]

Non-accelerated filer [    ]

Small reporting company [X]

 

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

 

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

 

 

Title of Each Class

Outstanding at August 10, 2012

Class A Common Stock, par value $0.01 per share

15,505,064

Class B Common Stock, par value $0.01 per share

195,045

 


 

 

 

 

 

 

 

 

 

TABLE OF CONTENTS

 

 

Page

Part I.

FINANCIAL INFORMATION

 

 

 

 

Reference

 

 

 

 

 

Item 1.

Financial Statements

3-45

 

 

 

 

Consolidated Statements of Financial Condition - June 30, 2012 and December 31, 2011 - Unaudited

 

 

 

 

Consolidated Statements of Operations - For the Three and Six Months Ended June 30, 2012 and 2011 - Unaudited

4-5

 

 

 

 

Consolidated Statements of Comprehensive (Loss) Income - For the Three and Six Months Ended June 30, 2012 and 2011 - Unaudited

 

 

 

 

Consolidated Statements of (Deficit) Equity - For the Three and Six Months Ended June 30, 2012 and 2011 - Unaudited

 

 

 

 

Consolidated Statements of Cash Flows - For the Six Months Ended June 30, 2012 and 2011

 

 

 

 

Noted to Consolidated Financial Statements - Unaudited

8-45

 

 

 

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

46-62

 

 

 

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

63 

 

 

 

Item 4.

Controls and Procedures

63 

 

 

 

Part II.

OTHER INFORMATION

 

 

 

 

Item 1A.

Risk Factors

64 

 

 

 

Item 6.

Exhibits

65 

 

 

 

 

Signatures

66 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

BBX CAPITAL CORPORATION AND SUBSIDARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION - UNAUDITED

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

December 31,

(In thousands, except share data)

 

2012

 

2011

ASSETS

 

 

 

 

Cash and interest bearing deposits in other banks

$

1,193,958 

 

770,292 

Securities available for sale, at fair value

 

26 

 

46,435 

Tax certificates, net of allowance of $3,519 and $7,488

 

5,293 

 

46,488 

Loans held for sale

 

47,029 

 

55,601 

Loans receivable, net of allowance for loan losses of

 

 

 

 

  $7,153  and $129,887 

 

355,794 

 

2,448,203 

Accrued interest receivable

 

1,862 

 

18,432 

Real estate owned

 

86,195 

 

87,174 

Investments in unconsolidated companies

 

10,345 

 

10,106 

Office properties and equipment, net

 

2,127 

 

139,165 

Other assets

 

645 

 

8,221 

Assets held for sale 

 

2,126,282 

 

 -

Federal Home Loan Bank ("FHLB") stock, 

 

 

 

 

  at cost which approximates fair value

 

 -

 

18,308 

Real estate held for sale

 

2,374 

 

3,898 

Goodwill 

 

 -

 

13,081 

Prepaid FDIC deposit insurance assessment

 

 -

 

12,715 

        Total assets

$

3,831,930 

 

3,678,119 

LIABILITIES AND (DEFICIT) EQUITY

 

 

 

 

Liabilities:

 

 

 

 

Deposits

 

 

 

 

 Interest bearing deposits

$

 -

 

2,433,226 

 Non-interest bearing deposits

 

 -

 

846,857 

 Deposits held for sale

 

3,450,529 

 

 -

   Total deposits

 

3,450,529 

 

3,280,083 

Subordinated debentures

 

 -

 

22,000 

Junior subordinated debentures

 

345,092 

 

337,114 

Other liabilities

 

21,718 

 

55,848 

Other liabilities held for sale

 

58,347 

 

 -

        Total liabilities

 

3,875,686 

 

3,695,045 

Commitments and contingencies (Note 10)

 

 

 

 

(Deficit) Equity:

 

 

 

 

 Preferred stock, $.01 par value, 10,000,000 shares authorized;

 

 

 

 

   none issued and outstanding 

 

 -

 

 -

 Class A common stock, $.01 par value, authorized 25,000,000

 

 

 

 

   shares; issued and outstanding 15,505,064 and 15,434,564 shares

 

155 

 

154 

 Class B common stock, $.01 par value, authorized 1,800,000

 

 

 

 

   shares; issued and outstanding 195,045 and 195,045 shares

 

 

 Additional paid-in capital

 

330,263 

 

329,995 

 Accumulated deficit

 

(353,207)

 

(326,692)

 Accumulated other comprehensive loss

 

(20,969)

 

(20,385)

Total deficit

 

(43,756)

 

(16,926)

        Total liabilities and deficit

$

3,831,930 

 

3,678,119 

 

 

 

 

 

See Notes to Consolidated Financial Statements - Unaudited

3

 


 

 

 

 

 

 

 

BBX CAPITAL CORPORATION AND SUBSIDARIES

CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands, except share and per share data)

 

For the Three Months

 

For the Six Months

 

 

Ended June 30,

 

Ended June 30,

Interest income:

 

2012

 

2011

 

2012

 

2011

Interest and fees on loans

$

7,287 

 

11,166 

 

15,622 

 

22,968 

Interest and dividends on taxable securities

 

 -

 

 

 -

 

37 

       Total interest income

 

7,287 

 

11,167 

 

15,622 

 

23,005 

Interest on subordinated debentures

 

4,126 

 

3,854 

 

8,293 

 

7,638 

Net interest income  

 

3,161 

 

7,313 

 

7,329 

 

15,367 

(Recovery from) provision for  loan losses

 

(627)

 

4,313 

 

(1,392)

 

11,140 

Net interest income after

 

 

 

 

 

 

 

 

   provision for loan losses

 

3,788 

 

3,000 

 

8,721 

 

4,227 

Non-interest income:

 

 

 

 

 

 

 

 

Income from unconsolidated companies

 

119 

 

432 

 

239 

 

813 

Securities activities, net

 

 -

 

(1,500)

 

 -

 

(1,500)

Gain (loss) on sale of loans

 

 -

 

10 

 

 

(89)

Other

 

12 

 

 

96 

 

19 

       Total non-interest income

 

131 

 

(1,052)

 

338 

 

(757)

Non-interest expense:

 

 

 

 

 

 

 

 

Employee compensation and benefits

 

4,269 

 

6,303 

 

9,528 

 

11,826 

Occupancy and equipment

 

1,691 

 

2,692 

 

3,859 

 

5,736 

Advertising and promotion

 

130 

 

145 

 

283 

 

258 

Professional fees

 

3,239 

 

658 

 

9,436 

 

2,786 

(Recoveries) on assets held for sale

 

(1,165)

 

 -

 

(1,165)

 

 -

Impairments on loans held for sale

 

196 

 

754 

 

459 

 

1,382 

Impairment of real estate owned

 

1,793 

 

5,826 

 

3,534 

 

7,514 

Other

 

2,126 

 

3,276 

 

4,656 

 

5,874 

       Total non-interest expense

 

12,279 

 

19,654 

 

30,590 

 

35,376 

Loss from continuing operations

 

 

 

 

 

 

 

 

 before income taxes

 

(8,360)

 

(17,706)

 

(21,531)

 

(31,906)

Provision for income taxes

 

 -

 

 -

 

 -

 

 -

Loss from continuing operations

 

(8,360)

 

(17,706)

 

(21,531)

 

(31,906)

(Loss) income from discontinued operations

 

(3,947)

 

41,107 

 

(4,984)

 

32,420 

Net (loss) income

 

(12,307)

 

23,401 

 

(26,515)

 

514 

Less: net income attributable to

 

 

 

 

 

 

 

 

non-controlling interest

 

 -

 

(290)

 

 -

 

(585)

Net (loss) income attributable to

 

 

 

 

 

 

 

 

 BBX Captial Corporation

$

(12,307)

 

23,111 

 

(26,515)

 

(71)

Basic loss per share

 

 

 

 

 

 

 

 

4

 


 

 

 Continuing operations

$

(0.53)

 

(1.38)

 

(1.37)

 

(2.54)

 Discontinued operations

 

(0.25)

 

3.15 

 

(0.32)

 

2.53 

Basic loss per share

$

(0.78)

 

1.77 

 

(1.69)

 

(0.01)

Diluted loss per share

 

 

 

 

 

 

 

 

 Continuing operations

$

(0.53)

 

(1.38)

 

(1.37)

 

(2.54)

 Discontinued operations

 

(0.25)

 

3.15 

 

(0.32)

 

2.53 

Diluted loss per share

$

(0.78)

 

1.77 

 

(1.69)

 

(0.01)

Basic weighted average number

 

 

 

 

 

 

 

 

 of common shares outstanding

 

15,700,108 

 

13,059,344 

 

15,679,683 

 

12,803,498 

Diluted weighted average number

 

 

 

 

 

 

 

 

 of common and common

 

 

 

 

 

 

 

 

 equivalent shares outstanding

 

15,700,108 

 

13,059,344 

 

15,679,683 

 

12,803,498 

 

 

 

 

 

 

 

 

 

See Notes to Consolidated Financial Statements - Unaudited

 

 

 

BBX CAPITAL CORPORATION AND SUBSIDARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - UNAUDITED

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months

 

For the Six Months

 

 

Ended June 30,

 

Ended June 30,

(In thousands, except share and per share data)

 

2012

 

2011

 

2012

 

2011

Net (loss) income

$

(12,307)

 

23,401 

 

(26,515)

 

514 

Other comprehensive (loss) income, net of tax:

 

 

 

 

 

 

 

 

Unrealized (loss) gain on securities available for sale

 

(60)

 

461 

 

(584)

 

(258)

Provision for income taxes

 

 -

 

 -

 

 -

 

 -

Unrealized (loss) gain on securities available for sale, net of tax

 

(60)

 

461 

 

(584)

 

(258)

Reclassification adjustments:

 

 

 

 

 

 

 

 

Net realized (loss) gain on securities available for sale

 

 -

 

 -

 

 -

 

 -

Reclassification adjustments

 

 -

 

 -

 

 -

 

 -

Other comprehensive (loss) income, net of tax

 

(60)

 

461 

 

(584)

 

(258)

Comprehensive (loss) income

 

(12,367)

 

23,862 

 

(27,099)

 

256 

Less: comprehensive (loss) income attributable to

 

 

 

 

 

 

 

 

  noncontrolling interest

 

 -

 

290 

 

 -

 

585 

Total comprehensive (loss) income attributable to

 

 

 

 

 

 

 

 

 BBX Capital Corporation

$

(12,367)

 

23,572 

 

(27,099)

 

(329)

 

 

 

 

 

 

 

 

 

See Notes to Consolidated Financial Statements - Unaudited

 

5

 


 

 

 

 

 

 

 

 

 

 

 

 

 

BBX CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF (DEFICIT) EQUITY

FOR THE SIX MONTHS ENDED JUNE 30, 2012 AND 2011 - UNAUDITED

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

BBX Capital

 

 

 

 

 

Additional

 

Other

Corporation

Non-

Total

 

 

Common

Paid-in

(Accumulated

Comprehensive

(Deficit) 

Controlling

(Deficit) 

(In thousands)

 

Stock

Capital

Deficit)

Loss

Equity

Interest

Equity

BALANCE, DECEMBER 31, 2010

$

125 
317,863 
(297,615)
(6,088)
14,285 
458 
14,743 

Net loss

 

 -

 -

(71)

 -

(71)
585 
514 

Change in other comprehensive loss

 

 -

 -

 -

(258)
(258)

 -

(258)

Non-controlling interest distributions

 

 -

 -

 -

 -

 -

(516)
(516)

Issuance of Class A Common Stock

 

32 
10,969 

 -

 -

11,001 

 -

11,001 

Share based compensation expense

 

 -

751 

 -

 -

751 

 -

751 

BALANCE, JUNE 30, 2011

$

157 
329,583 
(297,686)
(6,346)
25,708 
527 
26,235 

BALANCE, DECEMBER 31, 2011

$

156 
329,995 
(326,692)
(20,385)
(16,926)

 -

(16,926)

Net loss

 

 -

 -

(26,515)

 -

(26,515)

 -

(26,515)

Change in other comprehensive loss

 

 -

 -

 -

(584)
(584)

 -

(584)

Share based compensation expense

 

268 

 -

 -

269 

 -

269 

BALANCE, JUNE 30, 2012

$

157 
330,263 
(353,207)
(20,969)
(43,756)

 -

(43,756)

 

 

 

 

 

 

 

 

 

See Notes to Consolidated Financial Statements - Unaudited

 

6

 


 

 

 

 

BBX CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Six Months

 

 

Ended June 30,

(In thousands)

 

2012

 

2011

Net cash provided by operating activities

$

14,856 

 

44,240 

Investing activities:

 

 

 

 

Proceeds from redemption of tax certificates

 

22,526 

 

40,259 

Purchase of investment securities and  tax certificates

 

(765)

 

(18,567)

Proceeds from maturities of securities available for sale

 

12,287 

 

107,036 

Proceeds from maturities of interest bearing deposits

 

5,655 

 

25,283 

Redemptions of FHLB stock

 

9,980 

 

11,943 

Net repayments of loans

 

230,632 

 

232,518 

Proceeds from the sales of loans

 

 

 

 

 transferred to held for sale

 

1,000 

 

27,793 

Proceeds from sales of real estate owned

 

20,553 

 

10,197 

Purchases of office property and equipment

 

(81)

 

(1,467)

Proceeds from the sale of office properties

 

 

 

 

 and equipment

 

1,168 

 

1,247 

Net cash outflow from sale of Tampa branches

 

 -

 

(257,221)

Net cash provided by investing activities

 

302,955 

 

179,021 

Financing activities:

 

 

 

 

Net increase (decrease) in deposits

 

170,446 

 

(145,280)

Net repayments of FHLB advances

 

 -

 

(170,020)

Net decrease in securities sold under

 

 

 

 

agreements to repurchase

 

 -

 

(21,524)

Decrease in short-term borrowings

 

 -

 

(220)

Net proceed from the issuance of Class A common stock

 

 -

 

11,001 

Noncontrolling interest distributions

 

 -

 

(516)

Net cash provided by (used in) financing activities

 

170,446 

 

(326,559)

Increase (decrease) in cash and cash equivalents

 

488,257 

 

(103,298)

Cash and cash equivalents at the beginning of period

 

764,636 

 

507,908 

Change in cash and cash equivalents held for sale

 

(59,431)

 

5,850 

Cash and cash equivalents at end of period

$

1,193,462 

 

410,460 

 

 

 

 

 

Cash paid (received) for:

 

 

 

 

Interest on borrowings and deposits

$

6,583 

 

9,365 

Supplementary disclosure of non-cash investing and

 

 

 

 

 financing activities:

 

 

 

 

Loans and tax certificates transferred to REO

 

21,887 

 

25,074 

Loans receivable transferred to loans held-for-sale

 

16,140 

 

55,966 

 

 

 

 

 

See Notes to Consolidated Financial Statements - Unaudited

 

 

7

 


 

BBX Capital Corporation

 

 

 

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

 

1.  Presentation of Interim Financial Statements

 

Basis of Financial Statement Presentation  BBX Capital Corporation (formerly BankAtlantic Bancorp, Inc.) and its subsidiaries may also be referred to as “the Company”, “we”, “us,” or “our” in the notes to the consolidated financial statements. BBX Capital Corporation (the “Parent Company” or “BBX”) was organized under the laws of the State of Florida in 1994. BBX’s principal asset until July 31, 2012 was its investment in BankAtlantic and its subsidiaries (BankAtlantic”).  BankAtlantic, a federal savings bank headquartered in Fort Lauderdale, Florida, provided traditional retail banking services and a wide range of commercial banking products and related financial services through a broad network of community branches located in Florida.  On July 31, 2012, BBX completed its previously announced sale to BB&T Corporation (“BB&T”) of all of the issued and outstanding shares of capital stock of BankAtlantic (the stock sale and related transactions described herein are collectively referred to as the “Transaction”).  In connection with the closing of the Transaction with BB&T, BBX has requested from the Federal Reserve deregistration as a savings and loan holding company and pending approval by the Federal Reserve, BBX expects upon such deregistration to no longer be subject to regulation by the Federal Reserve or to be subject to restrictions applicable to a savings and loan holding company. 

 

On November 1, 2011, the Company entered into a definitive agreement to sell BankAtlantic to BB&T, which agreement was amended on March 13, 2012 (“the Agreement”).  The Agreement was amended to, among other things, provide for the assumption by BB&T of the Company’s $285.4 million in principal amount of outstanding trust preferred securities (“TruPS”) obligations.  At the closing of the Transaction, BB&T assumed the obligations with respect to the Company’s outstanding TruPS, and the Company paid BB&T approximately $51.3 million, representing all accrued and unpaid interest on the TruPS through closing.  The Company also paid approximately $2.3 million for certain legal fees and expenses with respect to the now resolved TruPS-related litigation brought in the Delaware Chancery Court against the Company by holders of the TruPS and certain trustees.    The Company funded the TruPS accrued interest and the TruPS related legal fees and expenses from proceeds received in the Transaction.    

 

Under the terms of the Agreement, prior to the closing of the Transaction, BankAtlantic formed two subsidiaries, BBX Capital Asset Management, LLC (“CAM”) and Florida Asset Resolution Group, LLC (“FAR”).  BankAtlantic contributed to FAR certain performing and non-performing loans, tax certificates and real estate owned that had an aggregate carrying value on BankAtlantic’s balance sheet of approximately $358 million as of June 30, 2012.  FAR assumed all liabilities related to these assets.  BankAtlantic also contributed approximately $37 million in cash to FAR and thereafter distributed all of the membership interests in FAR to the Company.  At the closing of the Transaction, the Company transferred to BB&T 95% of the outstanding preferred membership interests in FAR in connection with BB&T’s assumption of the Company’s outstanding TruPS obligations, as described in further detail below. The Company continues to hold the remaining 5% of FAR’s preferred membership interests. Under the terms of the Amended and Restated Limited Liability Company agreement of FAR, which was entered into by the Company and BB&T at the closing, BB&T will hold its 95% preferred interest in the net cash flows of FAR until such time as it has recovered $285 million in preference amount plus a priority return of LIBOR + 200 basis points per annum on any unpaid preference amount. At that time, BB&T’s interest in FAR will terminate, and the Company will thereafter be entitled to any and all residual proceeds from FAR through its ownership of FAR’s Class R units. It is expected that the assets (other than cash) contributed to FAR will be monetized over a period of seven years, or longer provided BB&T’s preference amount is repaid within such seven-year period. The Company entered into an incremental $35 million guarantee in BB&T’s favor to further assure BB&T’s recovery of the $285 million preference amount within seven years.

 

Prior to the closing of the Transaction, BankAtlantic also contributed to CAM, certain non-performing commercial loans, commercial real estate owned and previously written-off assets that had an aggregate carrying value on BankAtlantic’s balance sheet of $126 million as of June 30, 2012.  CAM assumed all liabilities related to these assets.  BankAtlantic also contributed approximately $81 million in cash to CAM.  Prior to the closing of the Transaction, BankAtlantic distributed all of the membership interests in CAM to the Company.  CAM remains a wholly-owned subsidiary of the Company.

 

 

8

 


 

BBX Capital Corporation

 

Pursuant to the Agreement, the cash consideration exchanged by the parties at the closing of the Transaction in connection with the sale of BankAtlantic’s stock was based on the deposit premium and the net asset value of BankAtlantic, in each case as calculated pursuant to the terms of the Agreement, including, with respect to the net asset value of BankAtlantic, after giving effect to the asset contributions and membership interest distributions by BankAtlantic.  Based on financial information as of June 30, 2012 and the preliminary calculations of the deposit premium (which was estimated to be $315.9 million) and the net asset value of BankAtlantic, the Company received from BB&T a cash payment related to the sale of BankAtlantic’s stock of approximately $6.4 million. However, the deposit premium and net asset value of BankAtlantic as well as the resulting cash payment made to the Company are all estimates based on available financial information as of June 30, 2012. Under the terms of the Agreement, these amounts are subject to adjustment post-closing as all relevant financial information is reviewed and approved by the parties, and the cash payment made to the Company may be less than the amount indicated above or the Company may be required to make a net cash payment to BB&T. The Company expects to recognize a $307 million gain in connection with the Transaction, subject to adjustment based on the final balance sheet reconciliation procedures described in the preceding sentence.

 

Based on the probable sale of BankAtlantic to BB&T, the Company transferred the assets and liabilities anticipated to be transferred to BB&T to “Assets held for sale”, “Deposits held for sale” and “Other liabilities held for sale” as of March 31, 2012.  As such, the Company presented the assets and liabilities transferred to BB&T, consisting of all of BankAtlantic’s assets and liabilities less the assets and liabilities to be retained in CAM and FAR, as “Assets held for sale” and “Liabilities held for sale” in its unaudited Consolidated Statement of Financial Condition as of June  30, 2012.   While the majority of cash and interest bearing deposits in other banks were transferred to BB&T upon closing of the Transaction, with the exception of cash at BankAtlantic’s branches and automated teller machines, the cash and interest bearing deposits transferred to BB&T are not presented as “Assets held for sale” as of June  30, 2012. The assets and liabilities transferred to BB&T were measured as of June 30, 2012 on a combined basis as a single disposal group at the lower of cost or fair value less costs to sell. Accordingly, the assets and liabilities held for sale are presented in the Company’s unaudited Consolidated Statement of Financial Condition as of June  30, 2012 based on their carrying value as the Company recorded a gain associated with the Transaction.    

 

BankAtlantic’s community banking, investment, capital services and tax certificate reporting units are reflected as “Discontinued Operations” in the Company’s unaudited Consolidated Statements of Operations for all periods presented.  The Company is continuing to service and manage and may originate commercial loans following the sale of BankAtlantic to BB&T and as a result, the results of operations for the Commercial Lending reporting unit are included in the Company’s unaudited Consolidated Statement of Operations as continuing operations for all periods presented.  The assets and liabilities transferred to BB&T were not reclassified to assets and liabilities held for sale in the Company’s Consolidated Statement of Financial Condition as of December 31, 2011.  The Consolidated Statement of Stockholders’ (Deficit) Equity, Consolidated Statements of Comprehensive (Loss) income and Consolidated Statement of Cash Flows remain unchanged from prior period historical presentation for all periods presented.  Additionally, pursuant to the Agreement, the Company agreed to sell to BB&T certain assets and liabilities associated with its Commercial Lending reporting unit and these assets and liabilities are included in assets and liabilities held for sale in the Company’s Statement of Financial Condition as of June  30, 2012.  Similarly, the Company will retain certain assets and liabilities associated with the disposed reporting units and these assets and liabilities are included in the Company’s Consolidated Statement of Financial Condition in their respective line items as of June  30, 2012.

 

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

 

Included in cash and due from banks in the Company’s Consolidated Statement of Financial Condition as of June 30, 2012 and December 31, 2011 was $0.5 million and $5.7 million, respectively, of time deposits with other banks. These time deposits had original maturities of greater than 90 days and are not considered cash equivalents.    

 

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

 

In management's opinion, the accompanying unaudited consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) as are necessary for a fair statement of the Company's consolidated financial condition at June  30, 2012, the consolidated results of operations and consolidated statement of comprehensive (loss) income for the three and six months ended June  30, 2012 and 2011, and the consolidated stockholders' (deficit) equity and cash flows for the six months ended June  30, 2012 and 2011.  The results of operations for the three and six months ended June  30, 2012 are not necessarily indicative of results of operations that may be expected for the year ended

9

 


 

BBX Capital Corporation

 

December 31, 2012.  The consolidated financial statements and related notes are presented as permitted by Form 10-Q and should be read in conjunction with the consolidated financial statements appearing in the Company's Annual Report on Form 10-K for the year ended December 31, 2011.

 

Certain amounts for prior years have been reclassified to conform to the revised financial statement presentation for 2012.    

 

2.  Assets and Liabilities Held For Sale

 

The assets and liabilities transferred to BB&T included in the Company’s Consolidated Statement of Financial Condition consisted of the following (in thousands):

 

 

 

 

 

 

 

 

 

June 30,

 

 

2012

Cash and due from banks

 $

59,431 

Securities available for sale, at fair value

 

33,550 

Tax certificates

 

17,736 

Federal Home Loan Bank stock

 

8,328 

Loans receivable

 

1,833,738 

Accrued interest receivable

 

11,347 

Office properties and equipment

 

129,734 

Goodwill

 

13,081 

Other assets

 

19,337 

        Total assets held for sale

 $

2,126,282 

Deposits

 

 

Interest free checking

 $

928,527 

Insured money fund savings

 

699,179 

Now accounts

 

1,114,360 

Savings accounts

 

424,848 

Total non-certificate accounts

 

3,166,914 

Certificate accounts

 

283,615 

Total deposits held for sale

$

3,450,529 

Subordinated debentures

$

22,000 

Other liabilities

 

36,347 

       Total other liabilities held for sale

$

58,347 

        Total liabilities held for sale

$

3,508,876 

 

10

 


 

BBX Capital Corporation

 

 

 

The majority of the cash and interest bearing deposits in other banks on the Company’s Consolidated Statement of Financial Position were also transferred to BB&T in the Transaction.

 

BankAtlantic’s five reporting units each reflect a component of the BankAtlantic entity and each is the lowest level for which cash flows can be clearly distinguished, operationally and for financial reporting purposes.  These five components are Community Banking, Commercial Lending, Tax Certificates, Investments, and Capital Services.   Based on the Agreement with BB&T, the Company determined that its Community Banking, Investments, Capital Services and Tax Certificates reporting units should be treated as discontinued operations.  The Company sold all operations and the majority of the assets and liabilities of these discontinued reporting units to BB&T on July 31, 2012.  Management does not intend to continue in any material respect any activities of or have any continuing involvement with these reporting units.  The Company intends to continue Commercial Lending reporting unit activities after the closing of the Transaction.  Therefore, although certain assets of this reporting unit will be sold to BB&T and are presented as assets and liabilities held for sale in the Consolidated Statement of Financial Condition as of June  30, 2012, the Commercial Lending reporting unit was not reported as discontinued operations.

 

Pursuant to the Agreement, FAR will retain in addition to certain assets associated with the Company’s continuing Commercial Lending reporting unit, certain assets and liabilities that were associated with the Company’s disposed reporting units (Community Banking, Tax Certificates, Investments, and Capital Services reporting units). The Company determined that the ongoing cash flows of the disposed reporting units were not significant relative to the historical cash flows from the activities of each reporting unit; therefore, the income and expenses associated with the disposed reporting units are reported  in discontinued operations for each period presented.  The carrying value of the disposed reporting units’ net assets anticipated to be included in FAR’s total assets discussed above was $120 million as of June  30, 2012.    The assets held by FAR are expected to be monetized in accordance with the terms of such assets or through orderly transactions over a seven year period.  Ninety-five percent of the cash flows from these assets net of operating expenses and a stated preferred return will be applied toward the ongoing repayment of BB&T’s preferred interest in FAR. 

11

 


 

BBX Capital Corporation

 

 

The (loss) income from Community Banking, Investments, Capital Services and Tax Certificates reporting units included in discontinued operations in the Company’s Statement of Operations was as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months

 

For the Six Months

 

 

Ended June 30,

 

Ended June 30,

 

 

2012

 

2011

 

2012

 

2011

Total interest income

 $

17,924 

 

26,113 

 

38,651 

 

53,780 

Total interest expense

 

3,248 

 

4,242 

 

6,502 

 

8,954 

Net interest income  

 

14,676 

 

21,871 

 

32,149 

 

44,826 

Provision for loan losses

 

7,301 

 

6,396 

 

16,518 

 

27,381 

Net interest income after

 

 

 

 

 

 

 

 

 provision for loan losses

 

7,375 

 

15,475 

 

15,631 

 

17,445 

Non-interest income:

 

 

 

 

 

 

 

 

Service charges on deposits

 

7,491 

 

11,226 

 

15,342 

 

23,258 

Other service charges and fees

 

5,958 

 

6,886 

 

11,896 

 

14,077 

Securities activities, net

 

(99)

 

 -

 

(99)

 

(24)

Gain on sale of Tampa branches

 

 -

 

38,656 

 

 -

 

38,656 

Other

 

1,383 

 

2,878 

 

5,118 

 

6,172 

       Total non-interest income

 

14,733 

 

59,646 

 

32,257 

 

82,139 

Non-interest expense (1):

 

 

 

 

 

 

 

 

Employee compensation and benefits

 

10,456 

 

13,428 

 

22,146 

 

27,195 

Occupancy and equipment

 

7,159 

 

8,380 

 

14,431 

 

17,502 

Advertising and promotion

 

919 

 

1,378 

 

1,935 

 

2,961 

Professional fees

 

395 

 

637 

 

2,218 

 

1,869 

Other

 

7,126 

 

10,191 

 

12,141 

 

17,636 

       Total non-interest expense

 

26,055 

 

34,014 

 

52,871 

 

67,163 

(Loss) income  from 

 

 

 

 

 

 

 

 

 discontinued operations

 

(3,947)

 

41,107 

 

(4,983)

 

32,421 

Provision for income taxes

 

 -

 

 -

 

 

Net (loss) income  from

 

 

 

 

 

 

 

 

 discontinued operations

 $

(3,947)

 

41,107 

 

(4,984)

 

32,420 

 

(1) Pursuant to applicable accounting rules, all general corporate overhead was allocated to continuing operations.

 

3.  Liquidity Considerations

 

BBX had cash of $4.0 million and current liabilities of $5.8 million as of June 30, 2012.  In connection with the consummation of the Transaction on July 31, 2012, BBX received net cash proceeds of approximately $29.0 million, consisting of a $6.4 million cash payment from BB&T and approximately $22.5 million of cash held in its wholly-owned subsidiary, CAM, net of transaction costs, trustee fees and costs associated with the TruPS related litigation and payments to BB&T of accrued and unpaid TruPS interest.  BBX liquidity is primarily dependent upon the repayments of loans, sales of real estate, and obtaining funds from its 5% preferred interest in FAR.  Based on the current and expected liquidity needs and sources, the Company expects to be able to meet its liquidity needs over the next 12 months.

 

 

12

 


 

BBX Capital Corporation

 

 

4.  Fair Value Measurement

 

The following tables present major categories of the Company’s assets measured at fair value on a recurring basis as of December 31, 2011 (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements  Using

 

 

 

Quoted prices in

 

 

 

 

 

Active Markets

Significant Other

Significant

 

 

As of

for Identical

Observable

Unobservable

 

 

December 31,

Assets

Inputs

Inputs

Description

 

2011

(Level 1)

(Level 2)

(Level 3)

Mortgage-backed securities

$

13,418 

 -

13,418 

 -

REMICS

 

31,690 

 -

31,690 

 -

Equity securities

 

1,327 
827 
500 

 -

Total

$

46,435 
827 
45,608 

 -

 

The Company had $26,000 of equity securities measured at fair value as of June 30, 2012 based on Level 1 inputs.

 

There were no recurring liabilities measured at fair value in the Company’s financial statements as of June  30, 2012 or December 31, 2011.

 

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

 

The fair values of mortgage-backed and real estate mortgage conduit securities (“REMICS”) are estimated using independent pricing sources and matrix pricing. Matrix pricing uses a market approach valuation technique and Level 2 valuation inputs as quoted market prices are not available for the specific securities that the Company owns. The independent pricing sources value these securities using observable market inputs including:  benchmark yields, reported trades, broker/dealer quotes, issuer spreads and other reference data in the secondary institutional market, which is the principal market for these types of assets. To validate fair values obtained from the pricing sources, the Company reviews fair value estimates obtained from brokers, investment advisors and others to determine the reasonableness of the fair values obtained from independent pricing sources. The Company reviews any price that it determines may not be reasonable and requires the pricing sources to explain the differences in fair value or re-evaluate its estimated fair value.

 

Equity securities are generally fair valued using the market approach and quoted market prices (Level 1) or matrix pricing (Level 2) with inputs obtained from independent pricing sources, if available.  We also obtain non-binding broker quotes to validate fair values obtained from matrix pricing. We also invest in private limited partnerships that do not have readily determinable fair values.  We use the net asset value per share as provided by the partnership to estimate the fair value of these investments.  The net asset value of the partnership is a Level 2 input since we have the ability to require the redemption of our investment at its net asset value.

 

13

 


 

BBX Capital Corporation

 

 

The following table presents major categories of assets measured at fair value on a non-recurring basis as of June 30, 2012 (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements Using

 

 

 

 

Quoted prices in

 

 

 

 

 

 

Active Markets

Significant

Significant

Total

 

 

 

for Identical

Other Observable

Unobservable

Impairments (1)

 

 

June 30,

Assets

Inputs

Inputs

For the Six

Description

 

2012

(Level 1)

(Level 2)

(Level 3)

Months Ended

Impaired  real estate owned

$

27,288 

 -

 -

27,288 
3,534 

Impaired loans held for sale

 

9,397 

 -

 -

9,397 
459 

Total

$

36,685 

 -

 -

36,685 
3,993 

 

 

(1)

Total impairments represent the amount recognized during the six months ended June 30, 2012 on assets that were held and measured at fair value as of June 30, 2012.

 

Quantitative information about significant unobservable inputs within Level 3 non-recurring major categories of assets is as follows (dollars in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of June 30, 2012

 

Fair

Valuation

Unobservable

 

 

Description

 

Value

Technique

Inputs

Range (Average) (1)

 

Impaired  real estate owned

$

27,288 

Fair Value of Property

Appraisal

$0.4 -6.5 million (3.0 million)

 

Impaired loans held for sale

 

9,397 

Fair Value of Collateral

Appraisal

$0.9 -3.6 million (1.9 million)

 

Total

$

36,685 

 

 

 

 

 

(1)  Range and average appraised values were reduced by costs to sell.

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements Using

 

 

 

 

Quoted prices in

 

 

 

 

 

 

Active Markets

Significant

Significant

Total

 

 

 

for Identical

Other Observable

Unobservable

Impairments (1)

 

 

June 30,

Assets

Inputs

Inputs

For the Six

Description

 

2011

(Level 1)

(Level 2)

(Level 3)

Months Ended

Loans measured for

 

 

 

 

 

 

 impairment using the fair value

 

 

 

 

 

 

 of the underlying collateral

$

265,245 

 -

                          -

265,245 
24,624 

Impaired loans held for sale

 

27,463 

                          -

                          -

27,463 
6,335 

Impaired  real estate owned

 

36,044 

                          -

                          -

36,044 
8,830 

Total

$

328,752 

 -

 -

328,752 
39,789 

 

14

 


 

BBX Capital Corporation

 

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

 

There were no material liabilities measured at fair value on a non-recurring basis in the Company’s financial statements as of June 30, 2012 and December 31, 2011.

 

Loans Measured For Impairment

 

Impaired loans are generally valued based on the fair value of the underlying collateral less cost to sell. The Company primarily uses third party appraisals to assist in measuring non-homogenous impaired loans. These appraisals generally use the market or income approach valuation technique and use market observable data to formulate an opinion of the fair value of the loan’s collateral. However, the appraiser uses professional judgment in determining the fair value of the collateral or properties, and we may also adjust these values for changes in market conditions subsequent to the appraisal date. When current appraisals are not available for certain loans, we use our judgment on market conditions to adjust the most current appraisal. The sales prices may reflect prices of sales contracts not closed, and the amount of time required to sell out the real estate project may be derived from current appraisals of similar projects. As a consequence, the calculation of the fair value of the collateral are considered Level 3 inputs. The Company generally recognizes impairment losses based on third party broker price opinions or automated valuation services to obtain the fair value of the collateral less cost to sell when impaired homogenous loans become 120 days delinquent. These third party valuations from real estate professionals also use Level 3 inputs in determining fair values. The observable market inputs used to fair value loans include comparable property sales, rent rolls, market capitalization rates on income producing properties, risk adjusted discounts rates and foreclosure period and exposure periods.  The fair value of our loans may significantly increase or decrease based on property values as our loans are primarily real estate loans.

 

Impaired Real Estate Owned

 

Real estate is generally valued using third party appraisals or broker price opinions. These appraisals generally use the market approach valuation technique and use market observable data to formulate an opinion of the fair value of the properties.  The market observable data was generally comparable property sales, rent rolls, market capitalization rates on income producing properties and risk adjusted discount rates. However, the appraisers or brokers use professional judgments in determining the fair value of the properties and we may also adjust these values for changes in market conditions subsequent to the valuation date. As a consequence of using appraisals, broker price opinions and adjustments to appraisals, the fair values of the properties are considered Level 3 inputs.

 

Loans Held for Sale

 

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

15

 


 

BBX Capital Corporation

 

 

 

Financial Disclosures about Fair Value of Financial Instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements Using

 

 

Carrying

 

Quoted prices in

 

 

 

 

Amount

 

Active Markets

Significant

Significant

 

 

As of

As of

for Identical

Other Observable

Unobservable

(in thousands)

 

June 30,

June 30,

Assets

Inputs

Inputs

Description

 

2012

2012

(Level 1)

(Level 2)

(Level 3)

Financial assets:

 

 

 

 

 

 

Cash and interest bearing

 

 

 

 

 

 

 deposits in other banks

$

1,193,958 
1,193,958 
1,193,958 

                         -

                     -

 Securities available for sale

 

26 
26 
26 

 

 

 Tax certificates

 

5,293 
5,346 

                                  -

                         -

5,346 

 Loans receivable including loans

 

 

 

 

 

 

   held for sale, net

 

402,823 
405,300 

                                  -

                         -

405,300 

Financial liabilities:

 

 

 

 

 

 

 Junior subordinated debentures

 

345,092 
307,625 

                                  -

307,625 

                     -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2011

 

 

Carrying

 

Fair

(in thousands)

 

Amount

 

Value

Financial assets:

 

 

 

 

Cash and interest bearing

 

 

 

 

  deposits in other banks

$

770,292 

 

770,292 

 Securities available for sale

 

46,435 

 

46,435 

 Tax certificates

 

46,488 

 

45,562 

 Federal home loan bank stock

 

18,308 

 

18,308 

 Loans receivable including loans

 

 

 

 

   held for sale, net

 

2,503,804 

 

2,317,144 

Financial liabilities:

 

 

 

 

 Deposits

 

3,280,083 

 

3,279,562 

 Subordinated debentures

 

22,000 

 

21,989 

 Junior subordinated debentures

 

337,114 

 

226,991 

 

 

 

 

Management has made estimates of fair value that it believes to be reasonable. However, because there is no active market for many of these financial instruments and management has derived the fair value of the majority of these financial instruments using the income approach technique with Level 3 unobservable inputs, the Company may not receive the estimated value upon sale or disposition of the asset or pay the estimated value upon disposition of the liability in advance of its scheduled maturity. Management estimates used in its net present value financial models rely on assumptions and judgments regarding issues where the outcome is unknown and actual results or values may differ significantly from these

16

 


 

BBX Capital Corporation

 

estimates. The Company’s fair value estimates do not consider the tax effect that would be associated with the disposition of the assets or liabilities at their fair value estimates.

 

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

 

The fair value of performing loans is calculated by using an income approach with Level 3 inputs.  The fair value of performing loans is estimated by discounting forecasted cash flows through the estimated maturity using estimated market discount rates that reflect the interest rate risk inherent in the loan portfolio. The estimate of average maturity is based on BankAtlantic's historical experience with prepayments for each loan classification, modified as required, by an estimate of the effect of current economic and lending conditions. Management assigns a credit risk premium and an illiquidity adjustment to these loans based on risk grades and delinquency status.  The fair value of non-performing collateral dependent loans is estimated using an income approach with Level 3 inputs. The fair value of non-performing loans utilizes the fair value of the collateral adjusted for operating and selling expenses and discounted over the estimated holding period based on the market risk inherent in the property.  

 

The fair value of tax certificates is calculated using the income approach with Level 3 inputs.  The fair value is based on discounted expected cash flows using discount rates that take into account the risk of the cash flows of tax certificates relative to alternative investments.    

 

The fair value of FHLB stock is its carrying amount as the FHLB redeems its stock at par.

 

As permitted by applicable accounting guidance, the fair value of deposits with no stated maturity, such as non-interest bearing demand deposits, savings and NOW accounts, and money market and checking accounts, is shown in the above table at book value. The fair value of certificates of deposit is based on an income approach with Level 3 inputs.  The fair value is calculated by the discounted value of contractual cash flows with the discount rate estimated using current rates offered by BankAtlantic for similar remaining maturities. 

 

The fair value of BankAtlantic’s subordinated debentures was based on discounted values of contractual cash flows at a market discount rate adjusted for non-performance risk (Level 3 inputs).

 

In determining the fair value of all of the Company’s junior subordinated debentures, the Company used NASDAQ price quotes available with respect to its $76.6 million of publicly traded trust preferred securities related to its junior subordinated debentures (“public debentures”). However, $268.5 million of the outstanding trust preferred securities related to its junior subordinated debentures are not traded, but are privately held in pools (“private debentures”) and with no liquidity or readily determinable source for valuation. We have deferred the payment of interest with respect to all of our junior subordinated debentures as permitted by the terms of these securities.  Based on the deferral status and the lack of liquidity and ability of a holder to actively sell such private debentures, the fair value of these private debentures may be subject to a greater discount to par and have a lower fair value than indicated by the public debenture price quotes.  However, due to their private nature and the lack of a trading market, fair value of the private debentures was not readily determinable at June 30, 2012 and December 31, 2011, and as a practical alternative, management used the NASDAQ price quotes of the public debentures to value all of the outstanding junior subordinated debentures whether privately held or public traded.  As such, the private debentures were valued using Level 2 inputs.

17

 


 

BBX Capital Corporation

 

 

5.   Securities Available for Sale

 

The following table summarizes securities available for sale (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 2011

 

 

 

 

Gross

 

Gross

 

 

 

 

Amortized

 

Unrealized

 

Unrealized

 

Estimated

 

 

Cost

 

Gains

 

Losses

 

Fair Value

Government agency securities:

 

 

 

 

 

 

 

 

Mortgage-backed securities

$

12,533 

 

885 

 

 -

 

13,418 

Real estate mortgage investment conduits

 

30,561 

 

1,129 

 

 -

 

31,690 

    Total

 

43,094 

 

2,014 

 

 -

 

45,108 

Equity securities

 

1,260 

 

67 

 

 -

 

1,327 

         Total

$

44,354 

 

2,081 

 

 -

 

46,435 

 

 

The Company had equity securities available for sale with a cost of $10,000 and a fair value of $26,000 as of June 30, 2012.

18

 


 

BBX Capital Corporation

 

 

 

6.  Loans Receivable

 

The loan disclosures in this note as of June 30, 2012 includes loans in the Company’s asset workout subsidiary and only those loans which were to be transferred to FAR or CAM in connection with the Transaction and excludes $1.8 billion of loans to be transferred to BB&T under the terms of the Agreement.  The loans transferred to BB&T are included in assets held for sale as of June 30, 2012

 

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

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

December 31,

 

 

2012

 

2011

Commercial non-real estate

$

28,167 

 

118,145 

Commercial real estate:

 

 

 

 

 Residential

 

60,894 

 

104,593 

 Land

 

3,496 

 

24,202 

 Owner occupied

 

8,100 

 

86,809 

 Other

 

161,180 

 

464,902 

Small Business:

 

 

 

 

 Real estate

 

19,963 

 

184,919 

 Non-real estate

 

11,755 

 

99,835 

Consumer:

 

 

 

 

 Consumer - home equity

 

19,958 

 

545,908 

 Consumer other

 

30 

 

10,704 

 Deposit overdrafts

 

 -

 

1,971 

Residential:

 

 

 

 

 Residential-interest only

 

18,077 

 

375,498 

 Residential-amortizing

 

31,065 

 

558,026 

         Total gross loans

 

362,685 

 

2,575,512 

Adjustments:

 

 

 

 

 Premiums, discounts and net deferred fees

 

262 

 

2,578 

 Allowance for loan  losses

 

(7,153)

 

(129,887)

         Loans receivable -- net

$

355,794 

 

2,448,203 

         Loans held for sale

$

47,029 

 

55,601 

 

 

Loans held for sale - Loans held for sale as of June 30, 2012 consisted of $30.9 million of commercial real estate loans and $16.1 million of residential loans.  Loans held for sale as of December 31, 2011 consisted of $35.8 million of commercial real estate loans and $19.8 million of residential loans. The Company transfers loans to held-for-sale when, based on the current economic environment and related market conditions, it does not have the intent to hold those loans for the foreseeable future.    

19

 


 

BBX Capital Corporation

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

December 31,

Loan Class

 

2012

 

2011

Commercial non-real estate

$

5,607 

 

19,172 

Commercial real estate:

 

 

 

 Residential

 

63,381 

 

71,719 

 Land

 

12,888 

 

14,839 

 Owner occupied

3,140 

 

4,168 

 Other

 

91,590 

 

123,396 

Small business:

 

 

 

 

 Real estate

 

4,887 

 

10,265 

 Non-real estate

1,380 

 

1,751 

Consumer

 

8,261 

 

14,134 

Residential:

 

 

 

 

  Interest only

22,085 

 

33,202 

  Amortizing

 

35,005 

 

52,653 

Total nonaccrual loans

$

248,224 

 

345,299 

 

 

20

 


 

BBX Capital Corporation

 

An age analysis of the past due recorded investment in loans receivable and loans held for sale as of June 30, 2012 and December 31, 2011 was as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

31-59 Days

 

60-89 Days

 

90 Days

 

Total

 

 

 

Loans

June 30, 2012

 

Past Due

 

Past Due

 

or More

 

Past Due

 

Current

 

Receivable

Commercial non-real estate

$

2,500 

 

1,093 

 

1,381 

 

4,974 

 

23,193 

 

28,167 

Commercial real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 Residential

 

 -

 

 -

 

46,328 

 

46,328 

 

18,590 

 

64,918 

 Land

 

 -

 

 -

 

12,888 

 

12,888 

 

 -

 

12,888 

 Owner occupied

 

 -

 

138 

 

3,002 

 

3,140 

 

6,242 

 

9,382 

 Other

 

 -

 

 -

 

42,149 

 

42,149 

 

135,085 

 

177,234 

Small business:

 

 

 

 

 

 

 

 

 

 

 

 

 Real estate

 

893 

 

 -

 

4,127 

 

5,020 

 

15,092 

 

20,112 

 Non-real estate

 

20 

 

 -

 

 -

 

20 

 

11,735 

 

11,755 

Consumer

 

719 

 

1,134 

 

8,261 

 

10,114 

 

10,003 

 

20,117 

Residential:

 

 

 

 

 

 

 

 

 

 

 

 

Residential-interest only

 

397 

 

 -

 

21,779 

 

22,176 

 

1,286 

 

23,462 

Residential-amortizing

 

1,358 

 

779 

 

32,292 

 

34,429 

 

7,512 

 

41,941 

Total

$

5,887 

 

3,144 

 

172,207 

 

181,238 

 

228,738 

 

409,976 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

31-59 Days

 

60-89 Days

 

90 Days

 

Total

 

 

 

Loans

December 31, 2011

 

Past Due

 

Past Due

 

or More (1)

 

Past Due

 

Current

 

Receivable

Commercial non-real estate

$

 -

 

2,248 

 

13,292 

 

15,540 

 

102,605 

 

118,145 

Commercial real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 Residential

 

 -

 

 -

 

44,633 

 

44,633 

 

64,134 

 

108,767 

 Land

 

681 

 

 -

 

14,839 

 

15,520 

 

18,070 

 

33,590 

 Owner occupied

 

2,008 

 

 -

 

4,031 

 

6,039 

 

82,102 

 

88,141 

 Other

 

 -

 

5,467 

 

47,841 

 

53,308 

 

431,399 

 

484,707 

Small business:

 

 

 

 

 

 

 

 

 

 

 

 

 Real estate

 

2,089 

 

372 

 

9,449 

 

11,910 

 

173,009 

 

184,919 

 Non-real estate

 

 -

 

462 

 

76 

 

538 

 

99,187 

 

99,725 

Consumer

 

5,339 

 

3,996 

 

14,134 

 

23,469 

 

538,569 

 

562,038 

Residential:

 

 

 

 

 

 

 

 

 

 

 

 

Residential-interest only

 

2,656 

 

3,488 

 

32,317 

 

38,461 

 

343,958 

 

382,419 

Residential-amortizing

 

3,968 

 

4,513 

 

48,189 

 

56,670 

 

514,570 

 

571,240 

Total

$

16,741 

 

20,546 

 

228,801 

 

266,088 

 

2,367,603 

 

2,633,691 

 

(1)  Includes an $80,000 commercial loan that was past due greater than 90 days and still accruing.

 

 

21

 


 

BBX Capital Corporation

 

 

 

The activity in the allowance for loan losses by portfolio segment for the three months ended June 30, 2012 was as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

Commercial

Real

Small

 

 

 

 

 

Non-Real Estate

Estate

Business

Consumer

Residential

Total

Allowance for Loan Losses:

 

 

 

 

 

 

Beginning balance

$

1,359 
4,212 
1,020 
366 
210 
7,167 

    Charge-off :

 

 -

(1,778)
(748)
(849)
(1,547)
(4,922)

     Recoveries :

 

386 
1,631 
128 
236 
281 
2,662 

     Provision :

 

(945)
318 

-

-

-

(627)

     Discontinued operations

 

 

 

 

 

 

 

        provision:

 

 -

 -

926 
654 
1,293 
2,873 

Transfer to assets held for sale:

 

 -

 -

 -

 -

 -

 -

Ending balance

$

800 
4,383 
1,326 
407 
237 
7,153 

Ending balance individually

 

 

 

 

 

 

 

 evaluated for impairment

$

237 
1,265 
790 

                -

                   -

2,292 

Ending balance collectively

 

 

 

 

 

 

 

 evaluated for impairment

 

563 
3,118 
536 
407 
237 
4,861 

Total

$

800 
4,383 
1,326 
407 
237 
7,153 

Loans receivable:

 

 

 

 

 

 

 

Ending balance individually

 

 

 

 

 

 

 

 evaluated for impairment

$

7,361 
194,168 
957 
7,907 
40,331 
250,724 

Ending balance collectively

 

 

 

 

 

 

 

 evaluated for impairment

$

20,806 
39,502 
30,761 
12,081 
8,811 
111,961 

Total

$

28,167 
233,670 
31,718 
19,988 
49,142 
362,685 

Purchases of loans

$

                          -

                         -

                 -

                -

                   -

                   -

Proceeds from loan sales

$

                          -

 -

                 -

                -

                   -

 -

Transfer to loans held for sale

$

                          -

 -

                 -

                -

                   -

 -

 

22

 


 

BBX Capital Corporation

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

 

 

 

Commercial

Real

Small

 

 

 

 

 

Non-Real Estate

Estate

Business

Consumer