The objective of the following discussion is to provide an understanding of the financial condition and results of operations of BBX Capital Corporation (formerly BankAtlantic Bancorp, Inc.) (the "Parent Company" or "BBX") and subsidiaries (BBX, together with its subsidiaries, the "Company", which may also be referred to as "we," "us," or "our") for the three and six months ended June 30, 2012. On November 1, 2011, BBX entered into a definitive agreement to sell BankAtlantic to BB&T Corporation ("BB&T"), which agreement was amended on March 13, 2012 ("Agreement"). Due to the Agreement and completion on July 31, 2012 of the sale of BankAtlantic to BB&T under the Agreement (the sale and related transactions, the "Transaction"), the financial statements reflect BankAtlantic's Community Banking, Investments, Tax Certificates and Capital Services reporting units as discontinued operations for the three and six months ended June 30, 2012 and 2011, respectively. The Company expects to continue commercial lending activities subsequent to the Transaction resulting in the inclusion of BankAtlantic's Commercial Lending reporting unit ("CLRU") in continuing operations for the three and six months ended June 30, 2012 and 2011. See Note 1 - "Basis of Financial Statement Presentation" to the Notes to the Company's Consolidated Financial Statements for a further discussion of the presentation of the Company's results of operations and Note 2 - "Assets and Liabilities Held for Sale" to the Notes to the Company's Consolidated Financial Statements for a further discussion of the presentation of assets and liabilities in the Company's Statement of Condition.

This document contains forward-looking statements based on current expectations that involve a number of risks and uncertainties. All opinions, forecasts, projections, future plans or other statements, other than statements of historical fact, are forward-looking statements and include words or phrases such as "plans," "believes," "will," "expects," "anticipates," "intends," "estimates," "our view," "we see," "would" and words and phrases of similar import. The forward looking statements in this document are also forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and involve substantial risks and uncertainties. We can give no assurance that such expectations will prove to have been correct. Future results could differ materially as a result of a variety of risks and uncertainties, many of which are outside of the control of management. These risks and uncertainties include, but are not limited to the impact of economic, competitive and other factors affecting the Company and its markets, products and services, including the impact of the changing regulatory environment, a continued or deepening recession, decreases in real estate values, and increased unemployment or sustained high unemployment rates on our business generally, the ability of our borrowers to service their obligations and the value of collateral securing our loans; credit risks and loan losses, and the related sufficiency of the allowance for loan losses, including the impact of the economy and real estate market values on our assets and the credit quality of our loans; the risk that loan losses will continue and the risks of additional charge-offs, impairments and required increases in our allowance for loan losses; the impact of and expenses associated with litigation including but not limited to litigation brought by the SEC; adverse conditions in the stock market, the public debt market and other financial and credit markets and the impact of such conditions on our activities and the risks associated with the impact of periodic valuation of our assets for impairment. Past performance and perceived trends may not be indicative of future results. In addition, this document contains forward looking statements relating to the sale of BankAtlantic to BB&T, which involve a number of risks and uncertainties including, but not limited to, that BBX's shareholders may not realize the anticipated benefits of the Transaction; that BBX's future business plans may not be realized as anticipated, if at all; that the Company's Class A Common Stock may not meet the requirements for continued listing on the NYSE; and that the assets retained by BBX directly or through subsidiaries may not be monetized at the values currently ascribed to them. In addition to the risks and factors identified above, reference is also made to other risks and factors detailed in reports filed by the Company with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the year ended December 31, 2011 and the Quarterly Report on Form 10-Q for the quarter ended March 31, 2012. The Company cautions that the foregoing factors are not exclusive.

Critical Accounting Policies

Management views critical accounting policies as accounting policies that are important to the understanding of our financial statements and also involve estimates and judgments about inherently uncertain matters. In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the Consolidated Statements of Financial Condition and assumptions that affect the recognition of income and expenses on the Consolidated Statements of Operations for the periods presented. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant change in subsequent periods relate to the determination of the allowance for loan losses, evaluation of assets for impairment, including the valuation of real estate acquired in connection with foreclosure or

BBX Capital Corporation

in satisfaction of loans and the measuring of loans for impairment, the amount of the deferred tax asset valuation allowance, accounting for uncertain tax positions, and accounting for contingencies. The two accounting policies that we have identified as critical accounting policies are allowance for loan losses and impairment of long-lived assets. For a more detailed discussion of these critical accounting policies see "Critical Accounting Policies" appearing in the Company's Annual Report on Form 10-K for the year ended December 31, 2011.

Consolidated Results of Operations

CLRU consists of the results of operations of BankAtlantic's Commercial Lending reporting unit which includes the interest income and impairments associated with $378.2 million of commercial loans included in assets held for sale as of June 30, 2012 that were transferred to BB&T upon the consummation of the Transaction on July 31, 2012. The CLRU results of operations also includes BankAtlantic's general corporate overhead.

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

For the Three Months Ended June 30, 2012 2011 Change

CLRU $ (1,688) (10,138) 8,450

Parent Company (6,672) (7,568) 896 Loss from continuing operations $ (8,360) (17,706) 9,346

For the Three Months Ended June 30, 2012 Compared to the Same 2011 Period:

The improvement in CLRU's net loss during the 2012 quarter compared to the 2011 quarter was primarily the result of lower operating expenses and a decrease in the provision for loan losses partially offset by a decline in net interest income.

The decrease in operating expenses reflects a reduction in real estate owned impairments as well as lower compensation and occupancy expenses. During the three months ended June 30, 2011, a $5.2 million valuation allowance was established on one real estate owned property due to an updated valuation compared to $1.2 million of valuation allowances established during the 2012 quarter. The decline in employee compensation resulted primarily from workforce reductions and the corresponding reduction in payroll taxes and employee benefits. The lower occupancy expense reflects the consolidation of back-office facilities during prior periods. The decrease in the provision for loan losses primarily reflects a significant reduction in charge-offs and the slowing in the amount of commercial loans migrating to a delinquency or non-accrual status compared to prior periods. This reduction resulted in improved historical loss experience ratios during 2012 compared to 2011 with corresponding declines in the allowance for loan losses. The lower net interest income resulted primarily from a significant reduction in commercial loan average balances and secondarily from lower average loan yields.

The decrease in the Parent Company's loss for the 2012 quarter compared to the same 2011 quarter resulted primarily from a $1.5 million impairment on an equity security during the 2011 quarter with no security impairments during the same 2012 period. Also contributing to the reduced 2012 Parent Company loss was a $0.5 million decline in the provision for loan losses and $0.4 million of lower expenses partially offset by an increase in interest expense on junior subordinated debentures. The decrease in the provision for loan losses primarily reflects lower charge-offs during the 2012 quarter compared to the 2011 quarter. The decrease in non-interest expense was mainly the result of lower impairments on real estate owned. The increase in interest expense resulted from higher average balances on junior subordinated debentures during the 2012 quarter compared to the 2011 quarter reflecting the deferral of interest on junior subordinated debentures during prior periods.

BBX Capital Corporation

For the Six Months Ended June 30, 2012 Compared to the Same 2011 Period:

For the Six Months Ended June 30,
2012 2011 Change

CLRU $ (5,630) (17,817) 12,187

Parent Company (15,901) (14,089) (1,812) Loss from continuing operations $ (21,531) (31,906) 10,375

The improvement in CLRU's net loss during the six months ended June 30, 2012 compared to the same 2011 period resulted primarily from the items discussed above for the three months ended June 30, 2012 compared to the same 2011 period.

The increase in the Parent Company's loss for the six months ended June 30, 2012 resulted primarily from higher professional fees due to TruPS related litigation in Delaware associated with the BB&T Transaction.

Results of Discontinued Operations

The (loss) income from the Company's discontinued operations was as follows (in thousands):

     For the Three Months      For the Six Months
        Ended June 30,           Ended June 30,
     2012   2011   Change      2012   2011  Change


Net interest income $ 14,676  21,871  (7,195)   32,149  44,826  (12,677)


Provision for loan losses     (7,301)  (6,396)    (905)   (16,518) (27,381)  10,863
Non-interest income           14,733   59,646  (44,913)    32,257   82,139  (49,882)
Non-interest expense         (26,055) (34,014)   7,959    (52,871) (67,163)  14,292
Provision for income taxes          -        -        -        (1)      (1)        -
(Loss) income from
 discontinued operations   $  (3,947)  41,107  (45,054)    (4,984)  32,420  (37,404)

For the Three Months Ended June 30, 2012 Compared to the Same 2011 Period:

The significant decline in earnings from discontinued operations during the three months ended June 30, 2012 compared to the same 2011 period primarily resulted from the sale during the 2011 period of 19 Tampa branches and related facilities to an unrelated financial institution for a net gain of $38.7 million. The remaining earnings decline during the 2012 quarter compared to the 2011 quarter reflects lower net interest income and deposit service fee income. The decline in net interest income resulted primarily from a significant reduction in earning assets and an increasing proportion of investments in low yielding cash balance, at the Federal Reserve Bank. The decline in deposit fee income primarily reflects fewer deposit accounts as a result of the sale of the Tampa branches and lower overdraft fees. We believe that the decline in overdraft fees reflects higher customer balances, regulatory initiatives and changes in our overdraft policies, as well as changes in customer behavior. The above reductions in net interest income and non-interest income during the three months ended June 30, 2012 compared to the same 2011 period were partially offset by lower operating expenses. The decrease in operating expenses reflects lower compensation and occupancy expenses associated with the consolidation of back-office facilities, workforce reductions, normal attrition and elimination of expenses associated with BankAtlantic's Tampa operations as a result of the completion of the Tampa branch sale on June 3, 2011.

BBX Capital Corporation

For the Six Months Ended June, 2012 Compared to the Same 2011 Period:

The significant decline in earnings from discontinued operations during the six months ended June 30, 2012 compared to the same 2011 period primarily was the result of the items discussed above for the three months ended June 30, 2012 compared to the same 2011 period. The improvement in the provision for loan losses resulted primarily from a significant decline in charge-offs and reductions in the allowance for loan losses associated with improved charge-off trends during the 2012 six month period compared to the same 2011 period.

CLRU Results of Operations

The following table is a condensed income statement summarizing the results of operations of the Commercial Lending Reporting Unit ("CLRU") (in thousands):

For the Three Months For the Six Months Ended June 30, Ended June 30, 2012 2011 Change 2012 2011 Change

Interest income $ 7,242 11,109 (3,867) 15,401 22,862 (7,461)

Provision for loan losses 625 (3,799) 4,424 1,386 (10,646) 12,032

Net interest income after

provision for loan losses 7,867 7,310 557 16,787 12,216 4,571 Non-interest income - 12 (12) 70 13 57 Non-interest expense (9,555) (17,460) 7,905 (22,487) (30,046) 7,559

CLRU loss before income taxes (1,688) (10,138) 8,450 (5,630) (17,817) 12,187

Provision for income taxes - - - - - - CLRU net loss $ (1,688) (10,138) 8,450 (5,630) (17,817) 12,187

Interest Income

The average balance and average yield of CLRU's commercial loans during the three months ended June 30, 2012 were $672.7 million and 4.31%, respectively, compared to $945.3 million and 4.70%, respectively, during the same 2011 period. The average balance and average yield of CLRU's commercial loans during the six months ended June 30, 2012 were $728.2 million and 4.23%, respectively, compared to $976.8 million and 4.68%, respectively, during the same 2011 period. The reduction in average balances reflects loan repayments, migration of loans to real estate owned and loan sales as well as a substantial decline in loan originations. The lower yields reflect the repayment of loans with higher yields than the existing loan portfolio.

Asset Quality

The loans and real estate owned and related data presented below as of June 30, 2012 and for the three and six months ended June 30, 2012 excludes loans and real estate owned transferred to BB&T under the terms of the Agreement as these loans are included in assets held for sale.

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

BBX Capital Corporation

     June 30, 2012          December 31, 2011


      ALL   Loans       ALL   Loans


             to gross      by                 to gross      by
      ALL     loans     category       ALL     loans     category
       by    in each    to gross        by    in each    to gross

Commercial non-real estate $ 800 3.29 % 6.01 % $ 16,408 13.89 % 4.6 %

Commercial real estate            4,383  1.67     64.93       66,269  9.84    26.23
Small business                    1,326  4.16      7.89        7,168  2.52    11.09
Residential real estate             237  0.36     16.19       16,704  1.79    36.34
Consumer                            407  2.02      4.98       22,554  4.04    21.74
Total allowance for loan losses $ 7,153  1.77  % 100.00  % $ 129,103  5.03  %   100  %

Included in the allowance for loan losses as of June 30, 2012 and December 31, 2011 were specific valuation allowances by loan type as follows (in thousands):

                                June 30,   December 31,
                                  2012         2011


                    Commercial non-real estate $ 237    15,408


                     Commercial real estate   1,265    51,798
                     Small business             790       861
                     Consumer                      -    1,454
                     Residential                   -    6,942
                     Total                  $ 2,292    76,463

The decrease in the allowance for loan losses at June 30, 2012 compared to December 31, 2011 resulted primarily from the charge-off of specific valuation allowances on collateral dependent loans as well as from the transfer of loans to assets held for sale. In connection with the BB&T Transaction, BankAtlantic transferred $1.8 billion of loans and $46.1 million of allowance for loan losses to assets held for sale. The reduction in allowance for loan losses to gross loans in each category reflects the charge-off of $65.7 million of the specific valuation allowances discussed in the following paragraph and the fact that a higher percent of the loans which were not transferred to assets held for sale (because they were not transferred to BB&T in the Transaction) are non-performing and/or collateral dependent. An allowance for loan losses was not established for those collateral dependent loans as these loans were instead charged-down to the fair value of the collateral less cost to sell. The specific valuation allowance as of June 30, 2012 reflects impaired loans measured based on present value of expected cash flows discounted at the loan's effective interest rate or appraisal adjustments on collateral dependent impaired loans.

As part of the transition of the regulation of OTS savings associations to the OCC, the OCC provided guidance to thrifts related to their transition to OCC regulatory reporting, which was to be implemented no later than March 31, 2012, including guidance surrounding specific valuation allowances on collateral dependent loans. Under OCC guidance, where the appraised value of collateral on a collateral dependent loan is less than the recorded investment of the loan, a charge-off of the amount of the deficiency rather than a specific valuation allowance is now generally required. Management considered the appraisals on its impaired collateral dependent loans, including appraised values and appraisal dates and, during the first quarter of 2012, the Company charged down the recorded investment of loans by $66.5 million to the fair value of the collateral less cost to sell. This charge down consisted entirely of the charging-off of existing specific valuation allowances. As a specific valuation allowance was previously established for these loans, the charge-offs did not impact the provision for loan losses or the net loss during the three months ended March 31, 2012, but did reduce the Company's allowance for loan losses and recorded investment in the loans. Further, these charge-offs of specific valuation allowances

BBX Capital Corporation

did not impact the estimation of the allowance for loan losses as the change in the specific valuation allowances was always a factor in the overall estimation of BankAtlantic's allowance for loan losses.

The activity in CLRU's allowance for loan losses was as follows (in thousands):

                                For the Three Months      For the Six Months
                                   Ended June 30,           Ended June 30,
Allowance for Loan Losses:       2012          2011        2012        2011
Balance, beginning of period $    5,571        89,036      82,676     93,816
Charge-offs :
 Commercial real estate          (1,778)      (13,546)    (52,501)   (26,214)
 Commercial non-real estate            -         (124)    (14,614)      (588)

Total Charge-offs (1,778) (13,670) (67,115) (26,802)

Recoveries of loans
previously charged-off 2,017 132 2,071 1,637

Net (charge-offs) 239 (13,538) (65,044) (25,165)

(Recovery from) provision

 for loan losses             (625)    3,799     (1,386)   10,646
Transfer to assets
 held for sale                   -         -   (11,061)         -
Balance, end of period    $ 5,185    79,297      5,185    79,297

Commercial real estate charge-offs during the three months ended June 30, 2012 primarily represent declines in collateral values on collateral dependent non-accrual loans based on updated property valuations. Management believes that the significant decline in commercial real estate charge-offs during the 2012 quarter compared to the 2011 quarter reflects the stabilization of commercial property values resulting in lower loss severity impairments from updated valuations.

The commercial loan recoveries during the three and six months ended June 30, 2012 primarily resulted from loan short sales at amounts higher than the loan's carrying value and cash settlements with borrowers in connection with obtaining deeds in lieu of foreclosure.

Commercial real estate loan charge-offs during the six months ended June 30, 2012 included $46.7 million of charge-offs related to previously established specific valuation allowances as discussed above. Excluding these specific valuation allowance charge-offs, commercial real estate charge-offs declined from $26.2 million during the six months ended June 30, 2011 to $5.9 million for the same 2012 period. Commercial real estate loan charge-offs during the 2012 six month period included $4.0 million related to one $16.3 million commercial residential loan transferred to loans held for sale. During the six months ended June 30, 2011, commercial real estate loan charge-offs included $12.6 million of charge-offs related to commercial other loans, $5.1 million of charge-offs related to commercial residential loans and $0.2 million of charge-offs related to owner occupied loans.

Commercial non-real estate charge-offs during the six months ended June 30, 2012 included $12.5 million of charge-offs related to previously established specific valuation allowances. The remaining $2.1 million of charge-offs during the 2012 period related to one asset backed lending relationship. The commercial non-real estate loan charge-offs during the six months ended June 30, 2011 primarily related to one $0.5 million business loan in the real estate brokerage industry.

The improvement in the provision for loan losses for the three and six months ended June 30, 2012 compared to the same 2011 period reflects declining commercial real estate loan balances, improved historical loss experience during 2012 compared to 2011, and a decline in loans migrating to non-accrual status.

Pursuant to the Agreement with BB&T, commercial loans with a recorded investment of $378.2 million as of March 31, 2012 were transferred to assets held for sale as these loans were anticipated to be transferred to BB&T in the

BBX Capital Corporation

Transaction. The allowance for loan losses associated with these commercial loans as of March 31, 2012, which were included in the above table for the six months ended June 30, 2012, was $11.1 million.

At the indicated dates, CLRU's non-performing assets, loans contractually past due 90 days or more and still accruing, performing impaired loans and troubled debt restructured loans as of June 30, 2012 (amounts at June 30, 2012 exclude loans included in assets held for sale), and as of December 31, 2011 were as follows (in thousands):

                                           As of
                             June 30, 2012   December 31, 2011
NON-PERFORMING ASSETS
Tax certificates           $        5,338               3,094
Residential (1)                    57,090              85,855
Commercial real estate (2)        167,278             206,038
Commercial non-real estate          5,607              19,172
Small business                      6,267              12,016
Consumer                            8,261              14,134


Total non-accrual assets (3)   249,841    340,309


REPOSSESSED ASSETS:
Tax certificates                707       800
Residential real estate       5,663     9,592
Commercial real estate       67,447    63,091
Small business real estate    3,515     3,883
Consumer real estate            477       671


Total repossessed assets   77,809    78,037


Total non-performing assets      $  327,650    418,346
OTHER ACCRUING IMPAIRED
 LOANS
Contractually past due 90 days
 or more (4)                      $        -        80
Troubled debt restructured loans     75,428    116,954
TOTAL OTHER ACCRUING
 IMPAIRED LOANS                   $  75,428    117,034

(1) Includes $22.1 million and $33.2 million of interest-only residential loans as of June 30, 2012 and December 31, 2011, respectively.

(2) Excluded from the above table as of June 30, 2012 and December 31, 2011 were $3.7 million and $8.1 million, respectively, of commercial residential loans that were transferred to a work-out subsidiary of the Parent Company in March 2008.

(3)Includes $75.4 million and $124.8 million of troubled debt restructured loans as of June 30, 2012 and December 31, 2011, respectively.

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

The decline in non-performing assets at June 30, 2012 compared to December 31, 2011 reflects the charge-off of $66.5 million of collateral dependent loans, payoffs and loan short sales.

. . .