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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



Form 10-Q



(Mark One)



|x |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- |  | ---------------------------------------------------------------------------------------



For the quarterly period ended March 31, 2005



or



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



Commission File No. 1-13921



BankUnited Financial Corporation

(Exact name of registrant as specified in its charter)



|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|Florida                                                        |  | 65-0377773                             
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification Number)



255 Alhambra Circle,
Coral Gables, Florida 33134

(Address of principal executive offices) (Zip Code)



(305) 569-2000

(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 by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange
Act).    Yes  x    No ̈



The number of shares outstanding of the registrants common stock at the
close of business on April 30, 2005 was 29,818,339 shares of Class A Common Stock, $.01 par value, and 431,562 shares of Class B Common Stock, $.01 par value.



This Form 10-Q contains 40 pages.

The
Index to Exhibits appears on page 41.



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##### Table of Contents

BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



FORM 10-Q REPORT FOR THE QUARTER ENDED MARCH 31, 2005



TABLE OF CONTENTS



|                             |  |                                                                                                              |  |         
|---------------------------- |  | ------------------------------------------------------------------------------------------------------------ |  | --------
|                             |  |                                                                                                              |  | Page No.
|PART IFINANCIAL INFORMATION |  |                                                                                                             
|                             |  |                                                                                                             
|Item 1.                      |  | Financial Statements                                                                                         |  |         
|                             |  |                                                                                                             
|                             |  | Consolidated Statements of Financial Condition as of March 31, 2005 and September 30, 2004 (unaudited)       |  | 3       
|                             |  |                                                                                                             
|                             |  | Consolidated Statements of Income (unaudited) for the Three and Six Months EndedMarch 31, 2005 and 2004      |  | 4       
|                             |  |                                                                                                             
|                             |  | Consolidated Statements of Stockholders Equity (unaudited) for the Six Months Ended March 31, 2005 and 2004 |  | 5       
|                             |  |                                                                                                             
|                             |  | Condensed Consolidated Statements of Cash Flows (unaudited) for the Six Months Ended March 31, 2005 and 2004 |  | 6       
|                             |  |                                                                                                             
|                             |  | Condensed Notes to Consolidated Financial Statements (unaudited)                                             |  | 7       
|                             |  |                                                                                                             
|Item 2.                      |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                        |  | 20      
|                             |  |                                                                                                             
|Item 3.                      |  | Quantitative and Qualitative Disclosures About Market Risk                                                   |  | 36      
|                             |  |                                                                                                             
|Item 4.                      |  | Controls and Procedures                                                                                      |  | 37      
|                             | 
|PART IIOTHER INFORMATION    |  |                                                                                                             
|                             |  |                                                                                                             
|Item 2. (C)                  |  | Purchase of BankUnited Securities                                                                            |  | 38      
|                             |  |                                                                                                             
|Item 4.                      |  | Submission of Matters to a Vote of Security Holders                                                          |  | 38      
|                             |  |                                                                                                             
|Item 6.                      |  | Exhibits                                                                                                     |  | 39      



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##### Table of Contents

BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION



|                                                                                                                                                   |  |                                          |           |   |                   |   |           |  
|-------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------- | --------- | - | ----------------- | - | --------- | -
|                                                                                                                                                   |  | March 31,2005                            |           |   | September 30,2004 |  
|                                                                                                                                                   |  | (Dollars in thousands, exceptshare data) |          
|ASSETS                                                                                                                                             |  |                                          |           |   |                   |   |           |  
|Cash                                                                                                                                               |  | $                                        | 45,037    |   |                   | $ | 31,062    |  
|Federal Home Loan Bank overnight deposits                                                                                                          |  |                                          | 17,846    |   |                   |   | 148,647   |  
|Federal funds sold                                                                                                                                 |  |                                          | 1,295     |   |                   |   | 2,185     |  
|Investments securities available for sale, at fair value                                                                                           |  |                                          | 304,840   |   |                   |   | 333,939   |  
|Mortgage-backed securities available for sale, at fair value                                                                                       |  |                                          | 1,670,556 |   |                   |   | 2,068,180 |  
|Mortgage loans held for sale, at fair value                                                                                                        |  |                                          | 16,945    |   |                   |   | 28,786    |  
|Loans held in portfolio                                                                                                                            |  |                                          | 6,746,640 |   |                   |   | 5,684,887 |  
|Add: Unearned discounts, premiums and deferred fees, net                                                                                           |  |                                          | 91,145    |   |                   |   | 65,992    |  
|Less: Allowance for loan losses                                                                                                                    |  |                                          | (24,777   | ) |                   |   | (24,079   | )
|                                                                                                                                                   |  |                                          |           |   |                   |   |           |  
|Loans held in portfolio, net                                                                                                                       |  |                                          | 6,813,008 |   |                   |   | 5,726,800 |  
|                                                                                                                                                   |  |                                          |           |   |                   |   |           |  
|FHLB stock and other earning assets                                                                                                                |  |                                          | 158,989   |   |                   |   | 156,166   |  
|Office properties and equipment, net                                                                                                               |  |                                          | 33,717    |   |                   |   | 26,417    |  
|Real estate owned                                                                                                                                  |  |                                          | 1,355     |   |                   |   | 1,611     |  
|Interest receivable                                                                                                                                |  |                                          | 35,360    |   |                   |   | 32,195    |  
|Mortgage servicing rights                                                                                                                          |  |                                          | 15,242    |   |                   |   | 15,414    |  
|Goodwill                                                                                                                                           |  |                                          | 28,353    |   |                   |   | 28,353    |  
|Bank-owned life insurance                                                                                                                          |  |                                          | 90,163    |   |                   |   | 88,210    |  
|Prepaid expenses and other assets                                                                                                                  |  |                                          | 27,954    |   |                   |   | 22,480    |  
|                                                                                                                                                   |  |                                          |           |   |                   |   |           |  
|Total assets                                                                                                                                       |  | $                                        | 9,260,660 |   |                   | $ | 8,710,445 |  
|                                                                                                                                                   |  |                                          |           |   |                   |   |           |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                               |  |                                          |           |   |                   |   |           |  
|Liabilities                                                                                                                                        |  |                                          |           |   |                   |   |           |  
|Interest bearing deposits                                                                                                                          |  | $                                        | 3,733,979 |   |                   | $ | 3,281,108 |  
|Non-interest bearing deposits                                                                                                                      |  |                                          | 309,923   |   |                   |   | 247,154   |  
|                                                                                                                                                   |  |                                          |           |   |                   |   |           |  
|Total deposits                                                                                                                                     |  |                                          | 4,043,902 |   |                   |   | 3,528,262 |  
|                                                                                                                                                   |  |                                          |           |   |                   |   |           |  
|Securities sold under agreements to repurchase                                                                                                     |  |                                          | 1,184,466 |   |                   |   | 1,182,237 |  
|Advances from Federal Home Loan Bank                                                                                                               |  |                                          | 3,127,373 |   |                   |   | 3,115,428 |  
|Convertible senior notes                                                                                                                           |  |                                          | 120,000   |   |                   |   | 120,000   |  
|Trust preferred securities and subordinated debentures                                                                                             |  |                                          | 195,482   |   |                   |   | 164,979   |  
|Interest payable                                                                                                                                   |  |                                          | 16,755    |   |                   |   | 14,051    |  
|Advance payments by borrowers for taxes and insurance                                                                                              |  |                                          | 39,627    |   |                   |   | 59,971    |  
|Accrued expenses and other liabilities                                                                                                             |  |                                          | 29,273    |   |                   |   | 32,860    |  
|                                                                                                                                                   |  |                                          |           |   |                   |   |           |  
|Total liabilities                                                                                                                                  |  |                                          | 8,756,878 |   |                   |   | 8,217,788 |  
|                                                                                                                                                   |  |                                          |           |   |                   |   |           |  
|Commitments and Contingencies (See notes 4, 8 and 9)                                                                                               |  |                                          |           |   |                   |   |           |  
|Stockholders Equity                                                                                                                               |  |                                          |           |   |                   |   |           |  
|Preferred Stock, $0.01 par value                                                                                                                   |  |                                          | 9         |   |                   |   | 8         |  
|Authorized shares10,000,000Issued shares853,405 and 803,405Outstanding shares826,685 and
776,685Treasury shares26,720                          |  |                                          | (528      | ) |                   |   | (528      | )
|Class A common stock, $0.01 par value                                                                                                              |  |                                          | 301       |   |                   |   | 299       |  
|Authorized shares60,000,000Issued shares30,172,762 and 29,866,275Outstanding
shares29,817,533 and 29,522,546Treasury shares355,229 and 343,729 |  |                                          | (3,342    | ) |                   |   | (3,008    | )
|Class B common stock, $0.1 par value                                                                                                               |  |                                          | 6         |   |                   |   | 6         |  
|Authorized shares3,000,000Issued shares565,262 and 622,762Outstanding shares431,562 and
536,562Treasury shares133,700 and 86,200               |  |                                          | (1,501    | ) |                   |   | (1,011    | )
|Additional paid-in capital                                                                                                                         |  |                                          | 338,805   |   |                   |   | 336,258   |  
|Retained earnings                                                                                                                                  |  |                                          | 194,438   |   |                   |   | 166,713   |  
|Deferred compensation                                                                                                                              |  |                                          | 1,463     |   |                   |   | 1,216     |  
|Accumulated other comprehensive loss                                                                                                               |  |                                          | (25,869   | ) |                   |   | (7,296    | )
|                                                                                                                                                   |  |                                          |           |   |                   |   |           |  
|Total stockholders equity                                                                                                                         |  |                                          | 503,782   |   |                   |   | 492,657   |  
|                                                                                                                                                   |  |                                          |           |   |                   |   |           |  
|Total liabilities and stockholders equity                                                                                                         |  | $                                        | 9,260,660 |   |                   | $ | 8,710,445 |  
|                                                                                                                                                   |  |                                          |           |   |                   |   |           |  



See accompanying
condensed notes to consolidated financial statements



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##### Table of Contents

BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONSOLIDATED STATEMENTS OF INCOME



|                                                                        |  |                                                          |         |   |                                    |   |        |      |  |   |         |   |  |   |         |  
|----------------------------------------------------------------------- |  | -------------------------------------------------------- | ------- | - | ---------------------------------- | - | ------ | ---- |  | - | ------- | - |  | - | ------- | -
|                                                                        |  | For the Three Months Ended March 31,                     |         |   | For the Six Months Ended March 31, |  
|                                                                        |  | 2005                                                     |         |   | 2004                               |   |        | 2005 |  |   | 2004    |  
|                                                                        |  | (Dollars and shares in thousands, except per share data) |        
|Interest income:                                                        |  |                                                          |         |   |                                    |   |        |      |  |   |         |   |  |   |         |  
|Interest and fees on loans                                              |  | $                                                        | 78,404  |   |                                    | $ | 55,095 |      |  | $ | 148,507 |   |  | $ | 109,456 |  
|Interest on mortgage-backed securities                                  |  |                                                          | 16,884  |   |                                    |   | 20,189 |      |  |   | 35,120  |   |  |   | 39,986  |  
|Interest and dividends on investments and other interest-earning assets |  |                                                          | 5,657   |   |                                    |   | 5,055  |      |  |   | 11,000  |   |  |   | 9,598   |  
|                                                                        |  |                                                          |         |   |                                    |   |        |      |  |   |         |   |  |   |         |  
|Total interest income                                                   |  |                                                          | 100,945 |   |                                    |   | 80,339 |      |  |   | 194,627 |   |  |   | 159,040 |  
|                                                                        |  |                                                          |         |   |                                    |   |        |      |  |   |         |   |  |   |         |  
|Interest expense:                                                       |  |                                                          |         |   |                                    |   |        |      |  |   |         |   |  |   |         |  
|Interest on deposits                                                    |  |                                                          | 21,901  |   |                                    |   | 17,902 |      |  |   | 40,997  |   |  |   | 36,172  |  
|Interest on borrowings                                                  |  |                                                          | 37,099  |   |                                    |   | 25,151 |      |  |   | 70,615  |   |  |   | 51,151  |  
|Preferred dividends of subsidiary trusts                                |  |                                                          | 3,141   |   |                                    |   | 2,322  |      |  |   | 5,930   |   |  |   | 4,674   |  
|                                                                        |  |                                                          |         |   |                                    |   |        |      |  |   |         |   |  |   |         |  
|Total interest expense                                                  |  |                                                          | 62,141  |   |                                    |   | 45,375 |      |  |   | 117,542 |   |  |   | 91,997  |  
|                                                                        |  |                                                          |         |   |                                    |   |        |      |  |   |         |   |  |   |         |  
|Net interest income before provision for loan losses                    |  |                                                          | 38,804  |   |                                    |   | 34,964 |      |  |   | 77,085  |   |  |   | 67,043  |  
|Provision for loan losses                                               |  |                                                          | 1,050   |   |                                    |   | 1,200  |      |  |   | 2,200   |   |  |   | 2,175   |  
|                                                                        |  |                                                          |         |   |                                    |   |        |      |  |   |         |   |  |   |         |  
|Net interest income after provision for loan losses                     |  |                                                          | 37,754  |   |                                    |   | 33,764 |      |  |   | 74,885  |   |  |   | 64,868  |  
|                                                                        |  |                                                          |         |   |                                    |   |        |      |  |   |         |   |  |   |         |  
|Non-interest income:                                                    |  |                                                          |         |   |                                    |   |        |      |  |   |         |   |  |   |         |  
|Loan servicing fees                                                     |  |                                                          | 837     |   |                                    |   | 776    |      |  |   | 1,707   |   |  |   | 1,514   |  
|Amortization of mortgage servicing rights                               |  |                                                          | (799    | ) |                                    |   | (1,093 | )    |  |   | (1,581  | ) |  |   | (2,604  | )
|Impairment of mortgage servicing rights                                 |  |                                                          |        |   |                                    |   | (1,200 | )    |  |   |        |   |  |   | (1,200  | )
|Loan fees                                                               |  |                                                          | 1,336   |   |                                    |   | 994    |      |  |   | 2,490   |   |  |   | 1,933   |  
|Deposit fees                                                            |  |                                                          | 1,010   |   |                                    |   | 1,044  |      |  |   | 2,116   |   |  |   | 2,163   |  
|Other fees                                                              |  |                                                          | 517     |   |                                    |   | 459    |      |  |   | 1,035   |   |  |   | 939     |  
|Net gain (loss) on sale of investments and mortgage-backed securities   |  |                                                          | 705     |   |                                    |   | 333    |      |  |   | 2,186   |   |  |   | (262    | )
|Net gain on sale of loans and other assets                              |  |                                                          | 1,860   |   |                                    |   | 1,528  |      |  |   | 2,382   |   |  |   | 3,280   |  
|Income from insurance and investment services                           |  |                                                          | 1,252   |   |                                    |   | 1,184  |      |  |   | 2,215   |   |  |   | 2,126   |  
|Other                                                                   |  |                                                          | 1,118   |   |                                    |   | 1,084  |      |  |   | 2,233   |   |  |   | 2,282   |  
|                                                                        |  |                                                          |         |   |                                    |   |        |      |  |   |         |   |  |   |         |  
|Total non-interest income                                               |  |                                                          | 7,836   |   |                                    |   | 5,109  |      |  |   | 14,783  |   |  |   | 10,171  |  
|                                                                        |  |                                                          |         |   |                                    |   |        |      |  |   |         |   |  |   |         |  
|Non-interest expenses:                                                  |  |                                                          |         |   |                                    |   |        |      |  |   |         |   |  |   |         |  
|Employee compensation and benefits                                      |  |                                                          | 12,843  |   |                                    |   | 10,676 |      |  |   | 24,039  |   |  |   | 21,480  |  
|Occupancy and equipment                                                 |  |                                                          | 5,391   |   |                                    |   | 4,332  |      |  |   | 10,392  |   |  |   | 8,036   |  
|Telecommunications and data processing                                  |  |                                                          | 1,527   |   |                                    |   | 1,409  |      |  |   | 3,146   |   |  |   | 2,793   |  
|Advertising and promotion expense                                       |  |                                                          | 1,375   |   |                                    |   | 1,287  |      |  |   | 2,819   |   |  |   | 2,438   |  
|Professional fees-legal and accounting                                  |  |                                                          | 1,307   |   |                                    |   | 1,024  |      |  |   | 2,155   |   |  |   | 2,344   |  
|Insurance                                                               |  |                                                          | 381     |   |                                    |   | 370    |      |  |   | 763     |   |  |   | 727     |  
|Other                                                                   |  |                                                          | 2,811   |   |                                    |   | 2,104  |      |  |   | 5,043   |   |  |   | 2,497   |  
|                                                                        |  |                                                          |         |   |                                    |   |        |      |  |   |         |   |  |   |         |  
|Total non-interest expenses                                             |  |                                                          | 25,635  |   |                                    |   | 21,202 |      |  |   | 48,357  |   |  |   | 40,315  |  
|                                                                        |  |                                                          |         |   |                                    |   |        |      |  |   |         |   |  |   |         |  
|Income before income taxes                                              |  |                                                          | 19,955  |   |                                    |   | 17,671 |      |  |   | 41,311  |   |  |   | 34,724  |  
|Provision for income taxes                                              |  |                                                          | 6,399   |   |                                    |   | 5,633  |      |  |   | 13,230  |   |  |   | 11,136  |  
|                                                                        |  |                                                          |         |   |                                    |   |        |      |  |   |         |   |  |   |         |  
|Net income                                                              |  | $                                                        | 13,556  |   |                                    | $ | 12,038 |      |  | $ | 28,081  |   |  | $ | 23,588  |  
|                                                                        |  |                                                          |         |   |                                    |   |        |      |  |   |         |   |  |   |         |  
|                                                                        |  |                                                          |         |  
|Earnings Per Share:                                                     |  |                                                          |         |   |                                    |   |        |      |  |   |         |   |  |   |         |  
|Basic                                                                   |  | $                                                        | 0.45    |   |                                    | $ | 0.40   |      |  | $ | 0.93    |   |  | $ | 0.79    |  
|                                                                        |  |                                                          |         |   |                                    |   |        |      |  |   |         |   |  |   |         |  
|Diluted                                                                 |  | $                                                        | 0.42    |   |                                    | $ | 0.37   |      |  | $ | 0.87    |   |  | $ | 0.72    |  
|                                                                        |  |                                                          |         |   |                                    |   |        |      |  |   |         |   |  |   |         |  
|Weighted average number of common shares outstanding:                   |  |                                                          |         |   |                                    |   |        |      |  |   |         |   |  |   |         |  
|Basic                                                                   |  |                                                          | 30,116  |   |                                    |   | 29,835 |      |  |   | 30,053  |   |  |   | 29,760  |  
|Diluted                                                                 |  |                                                          | 32,432  |   |                                    |   | 32,683 |      |  |   | 32,415  |   |  |   | 32,553  |  
|                                                                        |  |                                                          |         |  
|Dividends declared per share on common stock                            |  | $                                                        | .005    |   |                                    |   |       |      |  | $ | .005    |   |  |   |        |  



See accompanying
condensed notes to consolidated financial statements



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##### Table of Contents

BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY



|                                                           |  |                                                  |   |              |   |                 |  |                   |         |  |               |         |   |                      |   |                                               |   |  |                          |       |  |   |         |   |  |   |         |  
|---------------------------------------------------------- |  | ------------------------------------------------ | - | ------------ | - | --------------- |  | ----------------- | ------- |  | ------------- | ------- | - | -------------------- | - | --------------------------------------------- | - |  | ------------------------ | ----- |  | - | ------- | - |  | - | ------- | -
|                                                           |  | For the Six Months Ended March 31, 2005 and 2004 |  
|                                                           |  | Preferred Stock                                  |   | Common Stock |   | Paid-inCapital  |  | Retained Earnings |         |  | TreasuryStock |         |   | DeferredCompensation |   | AccumulatedOtherComprehensiveLoss Net of Tax  |   |  | TotalStockholdersEquity |      
|                                                           |  | (In thousands)                                   |  
|Balance at September 30, 2004                              |  | $                                                | 8 |              | $ | 305             |  | $                 | 336,258 |  | $             | 166,713 |   |                      | $ | (4,547                                        | ) |  | $                        | 1,216 |  | $ | (7,296  | ) |  | $ | 492,657 |  
|Comprehensive income:                                      |  |                                                  |   |              |   |                 |  |                   |         |  |               |         |   |                      |   |                                               |   |  |                          |       |  |   |         |   |  |   |         |  
|Net income for the six months ended March 31, 2005         |  |                                                  |  |              |   |                |  |                   |        |  |               | 28,081  |   |                      |   |                                              |   |  |                          |      |  |   |        |   |  |   | 28,081  |  
|Other comprehensive loss, net of tax                       |  |                                                  |  |              |   |                |  |                   |        |  |               |        |   |                      |   |                                              |   |  |                          |      |  |   | (18,573 | ) |  |   | (18,573 | )
|                                                           |  |                                                  |   |              |   |                 |  |                   |         |  |               |         |   |                      |   |                                               |   |  |                          |       |  |   |         |   |  |   |         |  
|Total comprehensive income                                 |  |                                                  |  |              |   |                |  |                   |        |  |               |        |   |                      |   |                                              |   |  |                          |      |  |   |        |   |  |   | 9,508   |  
|Payment of preferred stock dividends                       |  |                                                  |  |              |   |                |  |                   |        |  |               | (207    | ) |                      |   |                                              |   |  |                          |      |  |   |        |   |  |   | (207    | )
|Deferral of compensation                                   |  |                                                  |  |              |   |                |  |                   |        |  |               |        |   |                      |   |                                              |   |  |                          | 247   |  |   |        |   |  |   | 247     |  
|Declaration of common stock dividends                      |  |                                                  |  |              |   |                |  |                   |        |  |               | (149    | ) |                      |   |                                              |   |  |                          |      |  |   |        |   |  |   | (149    | )
|Purchase of stock                                          |  |                                                  |  |              |   |                |  |                   |        |  |               |        |   |                      |   | (334                                          | ) |  |                          |      |  |   |        |   |  |   | (334    | )
|Shares acquired through deferred compensation arrangements |  |                                                  |  |              |   |                |  |                   |        |  |               |        |   |                      |   | (490                                          | ) |  |                          |      |  |   |        |   |  |   | (490    | )
|Stock option exercises and restricted stock                |  |                                                  | 1 |              |   | 2               |  |                   | 2,547   |  |               |        |   |                      |   |                                              |   |  |                          |      |  |   |        |   |  |   | 2,550   |  
|                                                           |  |                                                  |   |              |   |                 |  |                   |         |  |               |         |   |                      |   |                                               |   |  |                          |       |  |   |         |   |  |   |         |  
|Balance at March 31, 2005                                  |  | $                                                | 9 |              | $ | 307             |  | $                 | 338,805 |  | $             | 194,438 |   |                      | $ | (5,371                                        | ) |  | $                        | 1,463 |  | $ | (25,869 | ) |  | $ | 503,782 |  
|                                                           |  |                                                  |   |              |   |                 |  |                   |         |  |               |         |   |                      |   |                                               |   |  |                          |       |  |   |         |   |  |   |         |  
|                                                           |  |                                                  |   |              |   |                 |  |                  
|                                                           |  | Preferred Stock                                  |   | Common Stock |   | Paid-in Capital |  | RetainedEarnings  |         |  | TreasuryStock |         |   | DeferredCompensation |   | AccumulatedOtherComprehensiveIncome Net ofTax |   |  | TotalStockholdersEquity |      
|                                                           |  | (In thousands)                                   |  
|Balance at September 30, 2003                              |  | $                                                | 7 |              | $ | 301             |  | $                 | 328,017 |  | $             | 116,370 |   |                      | $ | (3,904                                        | ) |  | $                        | 794   |  | $ | 5,788   |   |  | $ | 447,373 |  
|Comprehensive income:                                      |  |                                                  |   |              |   |                 |  |                   |         |  |               |         |   |                      |   |                                               |   |  |                          |       |  |   |         |   |  |   |         |  
|Net income for the six months ended March 31, 2004         |  |                                                  |  |              |   |                |  |                   |        |  |               | 23,588  |   |                      |   |                                              |   |  |                          |      |  |   |        |   |  |   | 23,588  |  
|Other comprehensive income, net of tax                     |  |                                                  |  |              |   |                |  |                   |        |  |               |        |   |                      |   |                                              |   |  |                          |      |  |   | 3,794   |   |  |   | 3,794   |  
|                                                           |  |                                                  |   |              |   |                 |  |                   |         |  |               |         |   |                      |   |                                               |   |  |                          |       |  |   |         |   |  |   |         |  
|Total comprehensive income                                 |  |                                                  |  |              |   |                |  |                   |        |  |               |        |   |                      |   |                                              |   |  |                          |      |  |   |        |   |  |   | 27,382  |  
|Payment of preferred stock dividends                       |  |                                                  |  |              |   |                |  |                   |        |  |               | (180    | ) |                      |   |                                              |   |  |                          |      |  |   |        |   |  |   | (180    | )
|Deferral of compensation                                   |  |                                                  |  |              |   |                |  |                   |        |  |               |        |   |                      |   |                                              |   |  |                          | 245   |  |   |        |   |  |   | 245     |  
|Shares acquired through deferred compensation arrangements |  |                                                  |  |              |   |                |  |                   |        |  |               |        |   |                      |   | (525                                          | ) |  |                          |      |  |   |        |   |  |   | (525    | )
|Stock option exercises and restricted stock                |  |                                                  | 1 |              |   | 2               |  |                   | 3,778   |  |               |        |   |                      |   |                                              |   |  |                          |      |  |   |        |   |  |   | 3,781   |  
|                                                           |  |                                                  |   |              |   |                 |  |                   |         |  |               |         |   |                      |   |                                               |   |  |                          |       |  |   |         |   |  |   |         |  
|Balance at March 31, 2004                                  |  | $                                                | 8 |              | $ | 303             |  | $                 | 331,795 |  | $             | 139,778 |   |                      | $ | (4,429                                        | ) |  | $                        | 1,039 |  | $ | 9,582   |   |  | $ | 478,076 |  
|                                                           |  |                                                  |   |              |   |                 |  |                   |         |  |               |         |   |                      |   |                                               |   |  |                          |       |  |   |         |   |  |   |         |  



See accompanying
condensed notes to consolidated financial statements



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##### Table of Contents

BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



|                                                                                                |  |                                   |            |   |      |   |          |  
|----------------------------------------------------------------------------------------------- |  | --------------------------------- | ---------- | - | ---- | - | -------- | -
|                                                                                                |  | For the Six Months EndedMarch 31, |           
|                                                                                                |  | 2005                              |            |   | 2004 |  
|                                                                                                |  | (In thousands)                    |           
|Cash flows used in operating activities                                                         |  | $                                 | (14,397    | ) |      | $ | (58,056  | )
|Cash flows from investing activities:                                                           |  |                                   |            |   |      |   |          |  
|Net increase in loans held in portfolio                                                         |  |                                   | (1,092,549 | ) |      |   | (577,036 | )
|Purchase of investment securities available for sale                                            |  |                                   | (57,155    | ) |      |   | (51,347  | )
|Purchase of mortgage-backed securities available for sale                                       |  |                                   | (715       | ) |      |   | (663,746 | )
|Purchase of other earning assets                                                                |  |                                   | (47,498    | ) |      |   | (56,049  | )
|Purchase of office properties and equipment                                                     |  |                                   | (10,205    | ) |      |   | (4,075   | )
|Proceeds from repayments of investment securities available for sale                            |  |                                   | 25         |   |      |   | 33       |  
|Proceeds from repayments of mortgage-backed securities available for sale                       |  |                                   | 320,046    |   |      |   | 403,370  |  
|Proceeds from repayments of other earning assets                                                |  |                                   | 44,675     |   |      |   | 48,350   |  
|Proceeds from sale of investment securities available for sale                                  |  |                                   | 78,874     |   |      |   | 11,044   |  
|Proceeds from sale of mortgage-backed securities available for sale                             |  |                                   | 114,465    |   |      |   | 297,194  |  
|Proceeds from sale of real estate owned and other assets                                        |  |                                   | 1,794      |   |      |   | 4,198    |  
|Proceeds from sale of office properties and equipment                                           |  |                                   | 14         |   |      |   |         |  
|                                                                                                |  |                                   |            |   |      |   |          |  
|Net cash used in investing activities                                                           |  |                                   | (648,229   | ) |      |   | (588,064 | )
|                                                                                                |  |                                   |            |   |      |   |          |  
|Cash flows from financing activities:                                                           |  |                                   |            |   |      |   |          |  
|Net increase in deposits                                                                        |  |                                   | 515,640    |   |      |   | 190,138  |  
|Net increase in Federal Home Loan Bank advances                                                 |  |                                   | 15,966     |   |      |   | 154,028  |  
|Net increase in securities sold under agreements to repurchase                                  |  |                                   | 2,229      |   |      |   | 221,270  |  
|Net proceeds from issuance of convertible debt                                                  |  |                                   |           |   |      |   | 116,661  |  
|Net proceeds from issuance of Subordinated Debentures                                           |  |                                   | 30,928     |   |      |   |         |  
|Net proceeds from issuance of stock                                                             |  |                                   | 1,032      |   |      |   | 2,463    |  
|Purchase of stock                                                                               |  |                                   | (334       | ) |      |   |         |  
|Maturity of senior notes                                                                        |  |                                   |           |   |      |   | (200,000 | )
|Dividends paid on preferred stock                                                               |  |                                   | (207       | ) |      |   | (180     | )
|Decrease in advances from borrowers for taxes and insurance                                     |  |                                   | (20,344    | ) |      |   | (20,081  | )
|                                                                                                |  |                                   |            |   |      |   |          |  
|Net cash provided by financing activities                                                       |  |                                   | 544,910    |   |      |   | 464,299  |  
|                                                                                                |  |                                   |            |   |      |   |          |  
|Decrease in cash and cash equivalents                                                           |  |                                   | (117,716   | ) |      |   | (181,821 | )
|Cash and cash equivalents at beginning of period                                                |  |                                   | 181,894    |   |      |   | 226,898  |  
|                                                                                                |  |                                   |            |   |      |   |          |  
|Cash and cash equivalents at end of period                                                      |  | $                                 | 64,178     |   |      | $ | 45,077   |  
|                                                                                                |  |                                   |            |   |      |   |          |  
|Supplemental disclosure of non-cash investing and financing activities:                         |  |                                   |            |   |      |   |          |  
|Exchange of loans for mortgage-backed securities in loan sales transactions with FNMA and FHLMC |  | $                                 | 60,966     |   |      | $ | 177,051  |  
|Transfer of loans held for sale to portfolio                                                    |  |                                   |           |   |      | $ | 70,760   |  
|Securities purchased pending settlement                                                         |  |                                   |           |   |      | $ | 25,359   |  
|Declaration of dividend on common stock                                                         |  | $                                 | 149        |   |      |   |         |  





See accompanying condensed notes to consolidated financial statements



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



1.    Principles of Consolidation and Basis of Presentation



The accompanying unaudited consolidated financial statements include the accounts of BankUnited Financial Corporation (BankUnited) and its
subsidiaries, including BankUnited, FSB (the Bank), with the exception of certain BankUnited trust subsidiaries which do not meet the criteria for consolidation under Financial Accounting Standards Board (FASB) Interpretation
No. 46, as revised by FASB Interpretation No. 46R. All significant intercompany transactions and balances associated with consolidated subsidiaries have been eliminated.



The unaudited consolidated financial statements have been prepared in conformity with Rule 10-01 of Regulation S-X of the
Securities and Exchange Commission and therefore do not include information or footnotes necessary for a complete presentation of financial position, results of operations and cash flows in conformity with generally accepted accounting principles.
However, all adjustments (consisting of normal recurring accruals), which, in the opinion of management, are necessary for a fair presentation of the financial statements, have been included. Operating results for the three and six-month periods
ended March 31, 2005 are not necessarily indicative of the results that may be expected for the year ending September 30, 2005. These condensed notes should be read in conjunction with the Consolidated Financial Statements and Notes thereto included
in BankUniteds Annual Report on Form 10-K for the fiscal year ended September 30, 2004.



Certain prior period amounts have been reclassified to conform to the March 31, 2005 consolidated financial statements presentation.



2.    Impact of Certain Accounting Pronouncements



SFAS No. 148



In December 2002, the FASB issued Statement of Financial Accounting Standards (SFAS) No. 148, Accounting for Stock Based
CompensationTransition and Disclosure. Under SFAS No. 148, alternative methods of transition are provided for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, SFAS No.
148 amends the disclosure requirements of SFAS 123, Accounting for Stock Based Compensation to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee
compensation and the effect of the method used on reported results.



As permitted by an amendment to the compliance dates of SFAS No. 123R by the Securities and Exchange Commission effective April 21, 2005, BankUnited intends to follow the intrinsic value method of accounting for stock-based compensation
under the provisions of Accounting Principles Board (APB) No. 25, Accounting for Stock Issued to Employees through September 30, 2005. Accordingly, the alternative methods of transition for the fair value based method of
accounting for stock-based employee compensation provided by SFAS No. 148 do not apply to BankUnited. BankUnited is required under the provisions of SFAS No. 148 amending SFAS 123 and APB No. 28, Interim Financial Reporting, to provide
additional disclosures in both annual and interim financial statements.



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



The disclosure requirements under SFAS No. 148 for interim financial statements are effective and
were adopted by BankUnited on January 1, 2003. The following table provides the required disclosures for the three and six month periods ended March 31, 2005 compared to the same period in the prior year:



|                                                                                                                                                             |  |                                     |        |   |                                   |   |        |      |  |   |        |   |  |   |        |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ----------------------------------- | ------ | - | --------------------------------- | - | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                                                                                                                                             |  | For the Three MonthsEnded March 31, |        |   | For the Six MonthsEnded March 31, |  
|                                                                                                                                                             |  | 2005                                |        |   | 2004                              |   |        | 2005 |  |   | 2004   |  
|                                                                                                                                                             |  | (Dollars in thousands)              |       
|Net income, as reported                                                                                                                                      |  | $                                   | 13,556 |   |                                   | $ | 12,038 |      |  | $ | 28,081 |   |  | $ | 23,588 |  
|Add: Total stock-based employee and director compensation expense included in net income, net of related tax effects                                         |  |                                     | 425    |   |                                   |   | 474    |      |  |   | 829    |   |  |   | 674    |  
|Deduct: Total stock-based employee and director compensation expense determined under the fair value based method for all awards, net of
related tax effects |  |                                     | (2,144 | ) |                                   |   | (962   | )    |  |   | (2,916 | ) |  |   | (1,520 | )
|                                                                                                                                                             |  |                                     |        |   |                                   |   |        |      |  |   |        |   |  |   |        |  
|Pro forma net income                                                                                                                                         |  | $                                   | 11,837 |   |                                   | $ | 11,550 |      |  | $ | 25,994 |   |  | $ | 22,742 |  
|                                                                                                                                                             |  |                                     |        |   |                                   |   |        |      |  |   |        |   |  |   |        |  
|Earnings per share:                                                                                                                                          |  |                                     |        |   |                                   |   |        |      |  |   |        |   |  |   |        |  
|Basic  as reported                                                                                                                                          |  | $                                   | 0.45   |   |                                   | $ | 0.40   |      |  | $ | 0.93   |   |  | $ | 0.79   |  
|                                                                                                                                                             |  |                                     |        |   |                                   |   |        |      |  |   |        |   |  |   |        |  
|Basic  pro forma                                                                                                                                            |  | $                                   | 0.39   |   |                                   | $ | 0.38   |      |  | $ | 0.86   |   |  | $ | 0.76   |  
|                                                                                                                                                             |  |                                     |        |   |                                   |   |        |      |  |   |        |   |  |   |        |  
|Diluted  as reported                                                                                                                                        |  | $                                   | 0.42   |   |                                   | $ | 0.37   |      |  | $ | 0.87   |   |  | $ | 0.72   |  
|                                                                                                                                                             |  |                                     |        |   |                                   |   |        |      |  |   |        |   |  |   |        |  
|Diluted  pro forma                                                                                                                                          |  | $                                   | 0.37   |   |                                   | $ | 0.35   |      |  | $ | 0.80   |   |  | $ | 0.70   |  
|                                                                                                                                                             |  |                                     |        |   |                                   |   |        |      |  |   |        |   |  |   |        |  
|Assumptions for weighted average grant-date fair value of options granted during the period using the Black Scholes option pricing model are
as follows:     |  |                                     |        |   |                                   |   |        |      |  |   |        |   |  |   |        |  
|Dividend yield                                                                                                                                               |  |                                     |       |   |                                   |   |       |      |  |   |       |   |  |   |       |  
|Expected volatility                                                                                                                                          |  |                                     | 28.0   | % |                                   |   | 36.0   | %    |  |   | 28.0   | % |  |   | 36.8   | %
|Risk free interest rate                                                                                                                                      |  |                                     | 3.84   | % |                                   |   | 3.04   | %    |  |   | 3.40   | % |  |   | 3.23   | %
|Expected life (years)                                                                                                                                        |  |                                     | 3.9    |   |                                   |   | 5.2    |      |  |   | 4.7    |   |  |   | 5.2    |  



SFAS No. 123R



In March 2004, the FASB issued a statement to revise SFAS No. 123 and SFAS
No. 95, Share-Based Payment, that addresses the accounting for share-based payment transactions in which an enterprise receives employee services in exchange for (a) equity instruments of the enterprise or (b) liabilities that are based
on the fair value of the enterprises equity instruments or that may be settled by the issuance of such equity instruments. The Statement will eliminate the ability to account for share-based compensation transactions using APB Opinion No. 25,
Accounting for Stock Issued to Employees, and will require instead that such transactions be accounted for using a fair-value-based method. The FASB had indicated that the statement would be effective for any interim or annual period
beginning after June 15, 2005, meaning that an entity should apply the statement to all employee awards of share-based payment granted, modified, or settled in any interim or annual period beginning after June 15, 2005. On April 14, 2005, the
Securities and Exchange Commission announced the adoption of a new rule that amends the compliance dates for SFAS No. 123R. The Commissions new rule allows companies to implement Statement No. 123R at the beginning of their next fiscal year,
instead of the next reporting period, that begins after June 15, 2005. Management has not yet determined the impact that this statement will have on BankUniteds consolidated financial condition and results of operations once implemented
beginning October 1, 2005. See Note 11, Stock Based Compensation, for information on the acceleration of vesting periods for two stock option grants.



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



EITF Issue No. 04-8



The Emerging Issues Task Force of the FASB reached a consensus position Issue No. 04-8, Accounting Issues Related to Certain Features of
Contingently Convertible Debt and the Effect of Diluted Earnings Per Share, which could have required that the dilutive effect of contingently convertible debt instruments such as BankUniteds 3.125% Convertible Senior Notes (the
Notes), be reflected in BankUniteds calculation of diluted earnings per share for reporting periods ending after December 15, 2004. Previous accounting rules provided for the exclusion of the effect of the contingently convertible
instruments until the contingency had been satisfied.



In
December, 2004, BankUnited entered into a First Supplemental Indenture (the First Supplemental Indenture), in respect of its $120 million aggregate principal amount of the Notes. The First Supplemental Indenture amends the indenture
governing the Notes dated as of February 27, 2004 (the Indenture), between BankUnited and the Trustee.



Under the original terms of the Indenture, the Notes were convertible by holders, under certain circumstances described in the Indenture, into shares of
BankUniteds Class A Common Stock, cash in lieu of shares of Class A Common Stock, or a combination of cash and shares of Class A Common Stock. Under the terms of the First Supplemental Indenture, BankUnited has irrevocably elected and agreed
to pay only cash in settlement of the principal amount of the Notes in respect of its conversion obligations. BankUnited has retained the right to elect to settle any and all conversion obligations in excess of the principal amount of the Notes in
cash or shares of Class A Common Stock or a combination of cash and shares of Class A Common Stock.



As a result of the amendment effected by the First Supplemental Indenture, BankUnited does not expect that the Notes will have an effect on the
calculation of BankUniteds diluted average shares outstanding until the market price for BankUniteds Class A Common Stock exceeds the conversion price.



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



3.    Investment and Mortgage-backed Securities Available for Sale



Investment Securities Available for Sale



Presented below is an analysis of investments designated as available for
sale as of the following dates:



|                                                                                                                               |  |                          |         |                      |   |                         |  |   |            |   |  |   |        
|------------------------------------------------------------------------------------------------------------------------------ |  | ------------------------ | ------- | -------------------- | - | ----------------------- |  | - | ---------- | - |  | - | -------
|                                                                                                                               |  | As of March 31, 2005    
|                                                                                                                               |  | AmortizedCost            |         | GrossUnrealizedGains |   | Gross Unrealized Losses |  |   | Fair Value
|                                                                                                                               |  | (In thousands)          
|U.S. government agency and sponsored entity securities                                                                         |  | $                        | 72,661  |                      | $ |                        |  | $ | (1,134     | ) |  | $ | 71,527 
|Preferred stock of the Federal Home Loan Mortgage Corporation (FHLMC) and the Federal National Mortgage Association
(FNMA) |  |                          | 96,086  |                      |   | 10                      |  |   | (5,787     | ) |  |   | 90,309 
|Trust preferred securities of other issuers                                                                                    |  |                          | 46,653  |                      |   | 1,628                   |  |   | (143       | ) |  |   | 48,138 
|Mutual funds and other bonds (1)                                                                                               |  |                          | 96,834  |                      |   | 28                      |  |   | (2,996     | ) |  |   | 93,866 
|Other equity securities                                                                                                        |  |                          | 932     |                      |   | 68                      |  |   |           |   |  |   | 1,000  
|                                                                                                                               |  |                          |         |                      |   |                         |  |   |            |   |  |   |        
|Total                                                                                                                          |  | $                        | 313,166 |                      | $ | 1,734                   |  | $ | (10,060    | ) |  | $ | 304,840
|                                                                                                                               |  |                          |         |                      |   |                         |  |   |            |   |  |   |        
|                                                                                                                              
|(1) Underlying assets of mutual funds consist primarily of mortgage-backed securities.                                        
|                                                                                                                               | 
|                                                                                                                               |  | As of September 30, 2004
|                                                                                                                               |  | AmortizedCost            |         | GrossUnrealizedGains |   | GrossUnrealizedLosses   |  |   | Fair Value
|                                                                                                                               |  | (In thousands)          
|U.S. government agency and sponsored entity securities                                                                         |  | $                        | 52,038  |                      | $ | 539                     |  | $ |           |   |  | $ | 52,577 
|Preferred stock of FHLMC and FNMA                                                                                              |  |                          | 96,089  |                      |   | 436                     |  |   | (2,028     | ) |  |   | 94,497 
|Trust preferred securities of other issuers                                                                                    |  |                          | 88,567  |                      |   | 4,072                   |  |   | (250       | ) |  |   | 92,389 
|Mutual funds and other bonds (1)                                                                                               |  |                          | 95,186  |                      |   | 34                      |  |   | (1,706     | ) |  |   | 93,514 
|Other equity securities                                                                                                        |  |                          | 932     |                      |   | 30                      |  |   |           |   |  |   | 962    
|                                                                                                                               |  |                          |         |                      |   |                         |  |   |            |   |  |   |        
|Total                                                                                                                          |  | $                        | 332,812 |                      | $ | 5,111                   |  | $ | (3,984     | ) |  | $ | 333,939
|                                                                                                                               |  |                          |         |                      |   |                         |  |   |            |   |  |   |        



|                                                                                       |  | 
|-------------------------------------------------------------------------------------- |  | 
|(1) Underlying assets of mutual funds consist primarily of mortgage-backed securities. |  | 



The following table
provides ranges of contractual maturities as of March 31, 2005, for investment securities available for sale which have contractual maturities.



|                                       |  |                      |         |            |   |        
|-------------------------------------- |  | -------------------- | ------- | ---------- | - | -------
|                                       |  | As of March 31, 2005
|                                       |  | AmortizedCost        |         | Fair Value
|                                       |  | (In thousands)      
|Due in one year or less                |  | $                    | 6,701   |            | $ | 6,686  
|Due after one year through five years  |  |                      | 79,078  |            |   | 77,852 
|Due after five years through ten years |  |                      | 1,108   |            |   | 1,103  
|Due after ten years                    |  |                      | 62,021  |            |   | 63,095 
|                                       |  |                      |         |            |   |        
|Total                                  |  | $                    | 148,908 |            | $ | 148,736
|                                       |  |                      |         |            |   |        



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



Mortgage-Backed Securities Available for Sale



Presented below is an analysis of mortgage-backed securities designated as
available for sale.



|                                    |  |                          |           |                      |   |                       |  |   |            |   |  |   |          
|----------------------------------- |  | ------------------------ | --------- | -------------------- | - | --------------------- |  | - | ---------- | - |  | - | ---------
|                                    |  | As of March 31, 2005    
|                                    |  | AmortizedCost            |           | GrossUnrealizedGains |   | GrossUnrealizedLosses |  |   | Fair Value
|                                    |  | (In thousands)          
|FNMA mortgage-backed securities     |  | $                        | 306,511   |                      | $ | 224                   |  | $ | (7,431     | ) |  | $ | 299,304  
|FHLMC mortgage-backed securities    |  |                          | 92,186    |                      |   | 88                    |  |   | (1,889     | ) |  |   | 90,385   
|Collateralized mortgage obligations |  |                          | 2,723     |                      |   |                      |  |   | (26        | ) |  |   | 2,697    
|Mortgage pass-through certificates  |  |                          | 1,300,758 |                      |   | 336                   |  |   | (22,924    | ) |  |   | 1,278,170
|                                    |  |                          |           |                      |   |                       |  |   |            |   |  |   |          
|Total                               |  | $                        | 1,702,178 |                      | $ | 648                   |  | $ | (32,270    | ) |  | $ | 1,670,556
|                                    |  |                          |           |                      |   |                       |  |   |            |   |  |   |          
|                                    | 
|                                    |  | As of September 30, 2004
|                                    |  | AmortizedCost            |           | GrossUnrealizedGains |   | GrossUnrealizedLosses |  |   | Fair Value
|                                    |  | (In thousands)          
|FNMA mortgage-backed securities     |  | $                        | 361,326   |                      | $ | 640                   |  | $ | (3,714     | ) |  | $ | 358,252  
|FHLMC mortgage-backed securities    |  |                          | 114,869   |                      |   | 72                    |  |   | (1,355     | ) |  |   | 113,586  
|Collateralized mortgage obligations |  |                          | 4,648     |                      |   |                      |  |   | (34        | ) |  |   | 4,614    
|Mortgage pass-through certificates  |  |                          | 1,598,498 |                      |   | 3,624                 |  |   | (10,394    | ) |  |   | 1,591,728
|                                    |  |                          |           |                      |   |                       |  |   |            |   |  |   |          
|Total                               |  | $                        | 2,079,341 |                      | $ | 4,336                 |  | $ | (15,497    | ) |  | $ | 2,068,180
|                                    |  |                          |           |                      |   |                       |  |   |            |   |  |   |          



Mortgage-backed
securities available for sale as of March 31, 2005, by contractual maturity and adjusted for anticipated prepayments, are shown below.



|                                       |  |                      |           |            |   |          
|-------------------------------------- |  | -------------------- | --------- | ---------- | - | ---------
|                                       |  | As of March 31, 2005
|                                       |  | AmortizedCost        |           | Fair Value
|                                       |  | (In thousands)      
|Due in one year or less                |  | $                    | 482,732   |            | $ | 472,464  
|Due after one year through five years  |  |                      | 1,086,178 |            |   | 1,067,157
|Due after five years through ten years |  |                      | 109,327   |            |   | 107,413  
|Due after ten years                    |  |                      | 23,941    |            |   | 23,522   
|                                       |  |                      |           |            |   |          
|Total                                  |  | $                    | 1,702,178 |            | $ | 1,670,556
|                                       |  |                      |           |            |   |          



Based on the internal
model used by BankUnited, estimated average duration of the mortgage-backed securities portfolio as of March 31, 2005 was 2.06 years. This duration extends to 2.20 years in a hypothetical scenario which adds 100 basis points to market interest
rates. The model used by BankUnited is based on assumptions which may differ from the eventual outcome.



11



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##### Table of Contents

BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



The following tables provide information on unrealized losses for investments and mortgage-backed
securities available for sale as of March 31, 2005 and September 30, 2004.



|                                                                                                                                                       |  |                          |                     |  |   |                  |                      |  |   |           |       |   |                      |   |  |   |            |  |   |                  |  
|------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------------ | ------------------- |  | - | ---------------- | -------------------- |  | - | --------- | ----- | - | -------------------- | - |  | - | ---------- |  | - | ---------------- | -
|                                                                                                                                                       |  | As of March 31, 2005     |                    
|                                                                                                                                                       |  |                          | Less than 12 Months |  |   |                  | 12 Months or Greater |  |   |           | Total |  
|                                                                                                                                                       |  |                          | Fair Value          |  |   | UnrealizedLosses |                      |  |   | FairValue |       |   | UnrealizedLosses (1) |   |  |   | Fair Value |  |   | UnrealizedLosses |  
|                                                                                                                                                       |  |                          | (In thousands)      | 
|Available for sale securities                                                                                                                          |  |                          |                     |  |   |                  |                      |  |   |           |       |   |                      |   |  |   |            |  |   |                  |  
|                                                                                                                                                       |  |                          |                     |  |   |                 
|Investment securities:                                                                                                                                 |  |                          |                     |  |   |                  |                      |  |   |           |       |   |                      |   |  |   |            |  |   |                  |  
|U.S. government agency and sponsored entity securities                                                                                                 |  | $                        | 71,528              |  | $ | (1,134           | )                    |  | $ |          |       | $ |                     |   |  | $ | 71,528     |  | $ | (1,134           | )
|Preferred stock of FHLMC and FNMA                                                                                                                      |  |                          | 47,830              |  |   | (3,407           | )                    |  |   | 22,544    |       |   | (2,380               | ) |  |   | 70,374     |  |   | (5,787           | )
|Trust preferred securities of other issuers                                                                                                            |  |                          | 7,985               |  |   | (35              | )                    |  |   | 3,892     |       |   | (108                 | ) |  |   | 11,877     |  |   | (143             | )
|Mutual funds and other bonds (2)                                                                                                                       |  |                          | 19,821              |  |   | (123             | )                    |  |   | 73,525    |       |   | (2,873               | ) |  |   | 93,346     |  |   | (2,996           | )
|Other equity securities                                                                                                                                |  |                          |                    |  |   |                 |                      |  |   |          |       |   |                     |   |  |   |           |  |   |                 |  
|                                                                                                                                                       |  |                          |                     |  |   |                  |                      |  |   |           |       |   |                      |   |  |   |            |  |   |                  |  
|Total investment securities                                                                                                                            |  | $                        | 147,164             |  | $ | (4,699           | )                    |  | $ | 99,961    |       | $ | (5,361               | ) |  | $ | 247,125    |  | $ | (10,060          | )
|                                                                                                                                                       |  |                          |                     |  |   |                  |                      |  |   |           |       |   |                      |   |  |   |            |  |   |                  |  
|Mortgage-backed securities:                                                                                                                            |  |                          |                     |  |   |                  |                      |  |   |           |       |   |                      |   |  |   |            |  |   |                  |  
|FNMA mortgage-backed securities                                                                                                                        |  | $                        | 77,179              |  | $ | (1,611           | )                    |  | $ | 209,529   |       | $ | (5,820               | ) |  | $ | 286,708    |  |   | (7,431           | )
|FHLMC mortgage-backed securities                                                                                                                       |  |                          | 14,998              |  |   | (299             | )                    |  |   | 70,862    |       |   | (1,590               | ) |  |   | 85,860     |  |   | (1,889           | )
|Collateralized mortgage obligations                                                                                                                    |  |                          | 2,697               |  |   | (26              | )                    |  |   |          |       |   |                     |   |  |   | 2,697      |  |   | (26              | )
|Mortgage pass-through certificates                                                                                                                     |  |                          | 581,997             |  |   | (8,024           | )                    |  |   | 612,586   |       |   | (14,900              | ) |  |   | 1,194,582  |  |   | (22,924          | )
|                                                                                                                                                       |  |                          |                     |  |   |                  |                      |  |   |           |       |   |                      |   |  |   |            |  |   |                  |  
|Total mortgage-backed securities                                                                                                                       |  | $                        | 676,872             |  | $ | (9,960           | )                    |  | $ | 892,977   |       | $ | (22,310              | ) |  | $ | 1,569,846  |  | $ | (32,270          | )
|                                                                                                                                                       |  |                          |                     |  |   |                  |                      |  |   |           |       |   |                      |   |  |   |            |  |   |                  |  
|(1)BankUnited considers these unrealized losses to be temporary. (2)Underlying assets of mutual funds consist primarily of mortgage-backed securities. | 
|                                                                                                                                                       |  |                          |                     | 
|                                                                                                                                                       |  | As of September 30, 2004 |                    
|                                                                                                                                                       |  |                          | Less than 12 Months |  |   |                  | 12 Months or Greater |  |   |           | Total |  
|                                                                                                                                                       |  |                          | Fair Value          |  |   | UnrealizedLosses |                      |  |   | FairValue |       |   | UnrealizedLosses (1) |   |  |   | Fair Value |  |   | UnrealizedLosses |  
|                                                                                                                                                       |  |                          | (In thousands)      | 
|Available for sale securities                                                                                                                          |  |                          |                     |  |   |                  |                      |  |   |           |       |   |                      |   |  |   |            |  |   |                  |  
|                                                                                                                                                       |  |                          |                     |  |   |                 
|Investment securities:                                                                                                                                 |  |                          |                     |  |   |                  |                      |  |   |           |       |   |                      |   |  |   |            |  |   |                  |  
|Preferred stock of FHLMC and FNMA                                                                                                                      |  | $                        | 69,048              |  | $ | (2,028           | )                    |  | $ |          |       | $ |                     |   |  | $ | 69,048     |  | $ | (2,028           | )
|Trust preferred securities of other issuers                                                                                                            |  |                          | 7,427               |  |   | (84              | )                    |  |   | 3,834     |       |   | (166                 | ) |  |   | 11,261     |  |   | (250             | )
|Mutual funds and other bonds (2)                                                                                                                       |  |                          | 19,780              |  |   | (60              | )                    |  |   | 73,194    |       |   | (1,646               | ) |  |   | 92,974     |  |   | (1,706           | )
|                                                                                                                                                       |  |                          |                     |  |   |                  |                      |  |   |           |       |   |                      |   |  |   |            |  |   |                  |  
|Total investment securities                                                                                                                            |  | $                        | 96,255              |  | $ | (2,172           | )                    |  | $ | 77,028    |       | $ | (1,812               | ) |  | $ | 173,283    |  | $ | (3,984           | )
|                                                                                                                                                       |  |                          |                     |  |   |                  |                      |  |   |           |       |   |                      |   |  |   |            |  |   |                  |  
|                                                                                                                                                       |  |                          |                     |  |   |                 
|Mortgage-backed securities:                                                                                                                            |  |                          |                     |  |   |                  |                      |  |   |           |       |   |                      |   |  |   |            |  |   |                  |  
|FNMA mortgage-backed securities                                                                                                                        |  | $                        | 69,222              |  | $ | (253             | )                    |  | $ | 212,095   |       | $ | (3,461               | ) |  | $ | 281,317    |  | $ | (3,714           | )
|FHLMC mortgage-backed securities                                                                                                                       |  |                          | 107,432             |  |   | (1,355           | )                    |  |   |          |       |   |                     |   |  |   | 107,432    |  |   | (1,355           | )
|Collateralized mortgage obligations                                                                                                                    |  |                          | 4,018               |  |   | (21              | )                    |  |   | 595       |       |   | (13                  | ) |  |   | 4,613      |  |   | (34              | )
|Mortgage pass-through certificates                                                                                                                     |  |                          | 844,874             |  |   | (7,085           | )                    |  |   | 245,018   |       |   | (3,309               | ) |  |   | 1,089,892  |  |   | (10,394          | )
|                                                                                                                                                       |  |                          |                     |  |   |                  |                      |  |   |           |       |   |                      |   |  |   |            |  |   |                  |  
|Total mortgage-backed securities                                                                                                                       |  | $                        | 1,025,546           |  | $ | (8,714           | )                    |  | $ | 457,708   |       | $ | (6,783               | ) |  | $ | 1,483,254  |  | $ | (15,497          | )
|                                                                                                                                                       |  |                          |                     |  |   |                  |                      |  |   |           |       |   |                      |   |  |   |            |  |   |                  |  

|(1) |  | BankUnited considers these unrealized losses to be temporary.
|--- |  | -------------------------------------------------------------

|(2) |  | Underlying assets of mutual funds consist primarily of mortgage-backed securities.
|--- |  | ----------------------------------------------------------------------------------



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##### Table of Contents

4.    Convertible Senior Notes



BankUniteds 3.125% Convertible Senior Notes (the Notes) are convertible by holders into cash and shares of
BankUniteds Class A Common Stock at an initial conversion rate of 26.2771 shares of Class A Common Stock per $1,000 principal amount of notes, which is equivalent to an initial conversion price of $38.06 per share of Class A Common Stock
(subject to adjustment in certain events), only under the following circumstances: (1) during any fiscal quarter after the first fiscal quarter ended March 31, 2004 if the closing sale price of BankUniteds Class A Common Stock exceeds 125% of
the then current conversion price for at least 20 consecutive trading days in the 30 consecutive trading-day period ending on the last trading day of the immediately preceding fiscal quarter, (2) during prescribed periods, upon the occurrence of
specified corporate transactions, or (3) if we have called the notes for redemption.



As indicated in the discussion of EITF Issue No. 04-8 in Note 2. Impact of Certain Accounting Pronouncements, BankUnited entered into a supplemental Indenture agreement on December 28, 2004 to irrevocably elect and
agree that it will pay only cash in settlement of the principal amount of its outstanding Notes in respect of its conversion obligations. As a result, BankUnited will reflect the effects of the Notes in diluted earnings per share using the treasury
stock method. Under current accounting rules, until the market price of the Class A Common Stock exceeds the conversion price, no additional earnings dilution will take place. As the price of Class A Common Stock exceeds the conversion price, an
increasing number of shares would be included in diluted earnings per share.



The Notes will mature on March 1, 2034. BankUnited may redeem for cash some or all of the Notes at any time on or after March 1, 2011 at 100% of the principal amount of the Notes plus any accrued and unpaid interest,
contingent interest and additional amounts, if any.



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##### Table of Contents

BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



5.    Earnings Per Share



The following tables reconcile basic and diluted earnings per share for the three and six months ended March 31, 2005 and
2004.



|                                                    |  |                                                          |        |                                   |   |        |  |      |        |  |   |       
|--------------------------------------------------- |  | -------------------------------------------------------- | ------ | --------------------------------- | - | ------ |  | ---- | ------ |  | - | ------
|                                                    |  | For the Three MonthsEnded March 31,                      |        | For the Six MonthsEnded March 31,
|                                                    |  | 2005                                                     |        | 2004                              |   | 2005   |  | 2004
|                                                    |  | (Dollars and shares in thousands, except per share data)
|Basic earnings per share:                           |  |                                                          |        |                                   |   |        |  |      |        |  |   |       
|Numerator:                                          |  |                                                          |        |                                   |   |        |  |      |        |  |   |       
|Net income                                          |  | $                                                        | 13,556 |                                   | $ | 12,038 |  | $    | 28,081 |  | $ | 23,588
|Preferred stock dividends                           |  |                                                          | 103    |                                   |   | 99     |  |      | 207    |  |   | 180   
|                                                    |  |                                                          |        |                                   |   |        |  |      |        |  |   |       
|Net income available to common stockholders         |  | $                                                        | 13,453 |                                   | $ | 11,939 |  | $    | 27,874 |  | $ | 23,408
|                                                    |  |                                                          |        |                                   |   |        |  |      |        |  |   |       
|Denominator:                                        |  |                                                          |        |                                   |   |        |  |      |        |  |   |       
|Weighted average common shares outstanding          |  |                                                          | 30,116 |                                   |   | 29,835 |  |      | 30,053 |  |   | 29,760
|                                                    |  |                                                          |        |                                   |   |        |  |      |        |  |   |       
|Basic earnings per share                            |  | $                                                        | 0.45   |                                   | $ | 0.40   |  | $    | 0.93   |  | $ | 0.79  
|                                                    |  |                                                          |        |                                   |   |        |  |      |        |  |   |       
|Diluted earnings per share:                         |  |                                                          |        |                                   |   |        |  |      |        |  |   |       
|Numerator:                                          |  |                                                          |        |                                   |   |        |  |      |        |  |   |       
|Net income available to common stockholders         |  | $                                                        | 13,453 |                                   | $ | 11,939 |  | $    | 27,874 |  | $ | 23,408
|Plus:                                               |  |                                                          |        |                                   |   |        |  |      |        |  |   |       
|Convertible preferred stock dividends               |  |                                                          | 103    |                                   |   | 99     |  |      | 207    |  |   | 180   
|                                                    |  |                                                          |        |                                   |   |        |  |      |        |  |   |       
|Diluted net income available to common stockholders |  | $                                                        | 13,556 |                                   | $ | 12,038 |  | $    | 28,081 |  | $ | 23,588
|                                                    |  |                                                          |        |                                   |   |        |  |      |        |  |   |       
|Denominator:                                        |  |                                                          |        |                                   |   |        |  |      |        |  |   |       
|Weighted average common shares outstanding          |  |                                                          | 30,116 |                                   |   | 29,835 |  |      | 30,053 |  |   | 29,760
|Plus:                                               |  |                                                          |        |                                   |   |        |  |      |        |  |   |       
|Stock options and restricted stock                  |  |                                                          | 1,516  |                                   |   | 2,090  |  |      | 1,562  |  |   | 2,035 
|Convertible preferred stock                         |  |                                                          | 800    |                                   |   | 758    |  |      | 800    |  |   | 758   
|                                                    |  |                                                          |        |                                   |   |        |  |      |        |  |   |       
|Diluted weighted average shares outstanding         |  |                                                          | 32,432 |                                   |   | 32,683 |  |      | 32,415 |  |   | 32,553
|                                                    |  |                                                          |        |                                   |   |        |  |      |        |  |   |       
|Diluted earnings per share(1)                       |  | $                                                        | 0.42   |                                   | $ | 0.37   |  | $    | 0.87   |  | $ | 0.72  
|                                                    |  |                                                          |        |                                   |   |        |  |      |        |  |   |       

---

|(1) |  | Options to purchase an additional 92,750 and 21,900 shares of common stock for the three-month periods ended March 31, 2005 and 2004, respectively, and 46,625 and 20,325 shares of
common stock for the six-month periods ended March 31, 2005 and 2004, respectively, were outstanding, but were not included in the computation of diluted earnings per share because their inclusion would have had an antidilutive effect.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Basic earnings per share is calculated by
dividing net income, adjusted for dividends declared on preferred stock, by the weighted number of shares of common stock outstanding.



Diluted earnings per share is calculated under the treasury stock method by dividing net income by the weighted average number of shares of common stock
outstanding, assuming conversion of outstanding convertible preferred stock from the beginning of the period, the exercise of stock options, and unvested restricted stock. Such adjustments to net income and the weighted average number of shares of
common stock are made only when such adjustments dilute earnings per share; antidilutive effects related to convertible debt, stock options, and restricted stock awards are not considered in the computation of dilutive earnings per share.



14



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##### Table of Contents

BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



6.    Regulatory Capital



The Banks regulatory capital levels as of March 31, 2005 and September 30, 2004 were as follows:



|                                        |  |                        |         |   |                         |   |         |  
|--------------------------------------- |  | ---------------------- | ------- | - | ----------------------- | - | ------- | -
|                                        |  | As of March 31,2005    |         |   | As of September 30,2004 |  
|                                        |  | (Dollars in thousands) |        
|Tier 1 Leverage Capital                 |  |                        |         |   |                         |   |         |  
|Amount                                  |  | $                      | 694,600 |   |                         | $ | 622,328 |  
|Actual Ratio                            |  |                        | 7.6     | % |                         |   | 7.3     | %
|Well-Capitalized Minimum Ratio(1)       |  |                        | 5.0     | % |                         |   | 5.0     | %
|Adequately Capitalized Minimum Ratio(1) |  |                        | 4.0     | % |                         |   | 4.0     | %
|                                        |  |                       
|Tier 1 Risk-Based Capital               |  |                        |         |   |                         |   |         |  
|Amount                                  |  | $                      | 694,600 |   |                         | $ | 622,328 |  
|Actual Ratio                            |  |                        | 15.1    | % |                         |   | 15.1    | %
|Well-Capitalized Minimum Ratio(1)       |  |                        | 6.0     | % |                         |   | 6.0     | %
|Adequately Capitalized Minimum Ratio(1) |  |                        | 4.0     | % |                         |   | 4.0     | %
|                                        |  |                       
|Total Risk-Based Capital                |  |                        |         |   |                         |   |         |  
|Amount                                  |  | $                      | 717,398 |   |                         | $ | 644,060 |  
|Actual Ratio                            |  |                        | 15.6    | % |                         |   | 15.6    | %
|Well-Capitalized Minimum Ratio(1)       |  |                        | 10.0    | % |                         |   | 10.0    | %
|Adequately Capitalized Minimum Ratio(1) |  |                        | 8.0     | % |                         |   | 8.0     | %

---

|(1) |  | Based on Office of Thrift Supervision regulations.
|--- |  | --------------------------------------------------



In March 2005, BankUnited Financial Corporation contributed $42 million in additional capital to the Bank. In April and September of 2004, BankUnited
Financial Corporation contributed $30 million and $20 million, respectively, in additional capital to the Bank. These contributions were funded by proceeds BankUnited Financial Corporation received from the issuance of $120 million of convertible
senior notes in February and March 2004.



15



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



7.    Comprehensive Income



BankUniteds comprehensive income includes all items which comprise net income, plus other comprehensive (loss) income.
For the three and six months ended March 31, 2005 and 2004 BankUniteds comprehensive income was as follows:



|                                                                                                                                                                                                                                                               |  |                                     |         |   |                                   |   |        |      |  |   |         |   |  |   |        |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------- | ------- | - | --------------------------------- | - | ------ | ---- |  | - | ------- | - |  | - | ------ | -
|                                                                                                                                                                                                                                                               |  | For the Three MonthsEnded March 31, |         |   | For the Six MonthsEnded March 31, |  
|                                                                                                                                                                                                                                                               |  | 2005                                |         |   | 2004                              |   |        | 2005 |  |   | 2004    |  
|                                                                                                                                                                                                                                                               |  | (In thousands)                      |        
|Net income                                                                                                                                                                                                                                                     |  | $                                   | 13,556  |   |                                   | $ | 12,038 |      |  | $ | 28,081  |   |  | $ | 23,588 |  
|Other comprehensive (loss) income, net of tax:                                                                                                                                                                                                                 |  |                                     |         |   |                                   |   |        |      |  |   |         |   |  |   |        |  
|Unrealized (loss) gain arising during the period on securities, net of tax (benefit) expense of $(6,550) and $5,586 for the three months ended
March 31, 2005 and 2004, and $(9,573) and $1,898 for the six months ended March 31, 2005 and 2004, respectively |  |                                     | (12,164 | ) |                                   |   | 10,374 |      |  |   | (17,779 | ) |  |   | 3,526  |  
|Unrealized gain on cash flow hedges, net of tax of $286 and $368 for the three months ended March 31, 2005 and 2004, respectively, and of $352
and $222 for the six months ended March 31, 2005 and 2004, respectively                                         |  |                                     | 531     |   |                                   |   | 682    |      |  |   | 654     |   |  |   | 411    |  
|Less reclassification adjustment for:                                                                                                                                                                                                                          |  |                                     |         |   |                                   |   |        |      |  |   |         |   |  |   |        |  
|Realized gain on securities sold included in net income, net of tax of $308 and $263 for the three months ended March 31, 2005 and 2004,
respectively, and $871 and $254 for the six months ended March 31, 2005 and 2004, respectively                        |  |                                     | 571     |   |                                   |   | 488    |      |  |   | 1,617   |   |  |   | 472    |  
|Realized loss on cash flow hedges, net of tax benefit of $33 and $86 for the three months ended March 31, 2005 and 2004, and $91 and $177 for
the six months ended March 31, 2005 and 2004, respectively                                                       |  |                                     | (61     | ) |                                   |   | (161   | )    |  |   | (169    | ) |  |   | (329   | )
|                                                                                                                                                                                                                                                               |  |                                     |         |   |                                   |   |        |      |  |   |         |   |  |   |        |  
|Total other comprehensive (loss) income, net of tax                                                                                                                                                                                                            |  |                                     | (12,143 | ) |                                   |   | 10,729 |      |  |   | (18,573 | ) |  |   | 3,794  |  
|                                                                                                                                                                                                                                                               |  |                                     |         |   |                                   |   |        |      |  |   |         |   |  |   |        |  
|Comprehensive income                                                                                                                                                                                                                                           |  | $                                   | 1,413   |   |                                   | $ | 22,767 |      |  | $ | 9,508   |   |  | $ | 27,382 |  
|                                                                                                                                                                                                                                                               |  |                                     |         |   |                                   |   |        |      |  |   |         |   |  |   |        |  



8.    Accounting For Derivatives and Hedging Activities



Loan Commitments



BankUnited commits to originate one-to-four family residential mortgage loans with potential borrowers at specified interest rates for short periods of time, usually thirty days. If potential borrowers meet underwriting standards, these
loan commitments obligate BankUnited to fund the loans, but do not obligate the potential borrowers to accept the loans. If the borrowers do not allow the commitments to expire, the loans are funded, and either placed into BankUniteds loan
portfolio or held for sale. Based on historical experience, the interest rate environment, and the underlying loan characteristics, BankUnited estimates the amount of commitments that will ultimately become loans held for sale and accounts for those
as derivatives during the commitment period. As derivatives, the changes in the fair value of the commitments are recorded in current earnings under other non-interest expense with an offset to the consolidated statement of financial condition in
other liabilities. Fair values are based solely on the relationship of observable market interest rates and are determined by third parties.



Forward Sales Contracts



BankUnited enters into forward sales contracts in order to economically hedge fair value exposure of loan commitments to a change in interest rates. Since
both the loan commitments and forward sales contracts are



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##### Table of Contents

BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



derivatives, this hedging relationship does not qualify for hedge accounting under SFAS No. 133. Accordingly, the fair value changes of forward sales
contracts, related to loan commitments, are also recorded in earnings under non-interest expense with an offset in other liabilities on the balance sheet.



These forward contracts extend beyond the loan commitment period and are also used to offset fair value exposure of loans held for sale to a change in
interest rates. This relationship exists until either the loan is sold or until the forward contract expires. These forward contracts may be allocated to loans held for sale in a relationship that qualifies for hedge accounting, in which case any
ineffectiveness is charged to earnings under non-interest expense with an offset to the balance sheet in other liabilities. They may also be allocated to loans held for sale that are accounted for under the lower of cost or market method, in which
case their changes in fair value are recorded in earnings under non-interest expense with an offset in other liabilities on the balance sheet.



Interest Rate Swaps and Caps



BankUnited enters into interest rate swap and cap contracts as fair value and cash flow hedges (hedge) for the purpose of hedging long-term
fixed and variable rate debt (hedged item). All terms of the hedge contracts, with the exception of the right to defer interest payments, are the same as those of the hedged item. BankUnited expects these hedge contracts to be highly
effective in offsetting fair value changes for fair value hedges and cash flow changes for cash flow hedges of its long-term debt, and therefore applies hedge accounting treatment. Hedges designated by BankUnited to change the fixed interest rate to
variable on fixed long-term debt are treated as qualifying fair value hedges. The accounting treatment for fair value hedges is to record the change in fair value during the period of both the hedge instrument and the hedged item into current
earnings. Hedges designated by BankUnited to change the variable interest rate to fixed on variable long-term debt are treated as qualifying cash flow hedges. The accounting treatment for cash flow hedges is to record the effective portion of the
gain or loss on the hedge instrument as a component of other comprehensive income, net of tax, with an offsetting amount recorded in either other assets or other liabilities. The amounts recorded in other accumulated comprehensive income will be
reclassified into current earnings in the same period in which the hedged item affects earnings.



The following table summarizes certain information with respect to the use of derivatives and their impact on BankUniteds statements of income
during the three and six months ended March 31, 2005 and 2004:



|                                                            |  |                                     |     |   |                                   |   |      |      |  |      |    |  |   |    
|----------------------------------------------------------- |  | ----------------------------------- | --- | - | --------------------------------- | - | ---- | ---- |  | ---- | -- |  | - | ---
|                                                            |  | For the Three MonthsEnded March 31, |     |   | For the Six MonthsEnded March 31,
|                                                            |  | 2005                                |     |   | 2004                              |   |      | 2005 |  | 2004
|                                                            |  | (In thousands)                     
|Fair Value Hedges                                           |  |                                     |     |   |                                   |   |      |      |  |      |    |  |   |    
|Net (loss) gain recorded in earnings due to ineffectiveness |  | $                                   | (26 | ) |                                   | $ | (79  | )    |  | $    | 11 |  | $ | 1  
|                                                            |  |                                     |     |  
|Other Derivatives (1)                                       |  |                                     |     |   |                                   |   |      |      |  |      |    |  |   |    
|Net gain (loss) recorded in earnings                        |  |                                     | 44  |   |                                   |   | (147 | )    |  |      | 8  |  |   | 741
|                                                            |  |                                     |     |   |                                   |   |      |      |  |      |    |  |   |    
|Total                                                       |  | $                                   | 18  |   |                                   | $ | (226 | )    |  | $    | 19 |  | $ | 742
|                                                            |  |                                     |     |   |                                   |   |      |      |  |      |    |  |   |    

---

|Note: |  | There was no ineffectiveness related to cash flow hedges during the three and six months ended March 31, 2005 and 2004. Within the next 12 months, BankUnited estimates that $341
thousand will be reclassified out of comprehensive income as a charge to earnings.
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(1) |  | These derivatives are used by BankUnited to hedge interest rate risk, but do not qualify for hedge accounting treatment.
|--- |  | ------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



9.    Commitments and Contingencies



Standby letters of credit are off balance sheet instruments which represent
conditional commitments issued by BankUnited to guarantee the performance of a customer to a third party. BankUnited had outstanding standby and commercial letters of credit, in the amount of $40.6 million and $53.5 million as of March 31, 2005 and
September 30, 2004, respectively. Fees collected on standby letters of credit and risk participations represent the fair value of these commitments and are deferred and amortized over their term, which is typically one year or less.



BankUnited is a party to certain claims and litigation arising in the
ordinary course of business. In the opinion of management, the resolution of such claims and litigation will not materially affect BankUniteds consolidated financial position or results of operations.



10.    Related Party Transactions



In November 2004, the Bank entered into a sublease agreement with the law
firm of Camner, Lipsitz and Poller, P.A. (CLP) whereby the Bank would sublease a portion of the premises it leases for executive office space located at 255 Alhambra Circle, Coral Gables, Florida to CLP. The portion of the premises leased to CLP
consists of approximately 2,223 square feet. The term of the sublease commenced on December 1, 2004 and will extend through January 31, 2014 with the option to extend the term for four successive five-year terms. Lease payments due from CLP are
approximately $61 thousand per year. Additional incremental costs may be passed to CLP under the master lease, based on the pro-rata square feet occupied by CLP.



11.    Stock Based Compensation



Acceleration of Vesting



On January 24, 2005, the Compensation Committee of the Board of Directors of BankUnited determined to accelerate the vesting of two stock options which
were granted to Alfred Camner, BankUniteds Chief Executive Officer, and Ramiro Ortiz, BankUniteds President and Chief Operating Officer, under BankUniteds 2002 Stock Award and Incentive Plan (the 2002 Plan) on September
30, 2004. The acceleration of vesting was approved to become effective automatically if, and at such time, that the market price of BankUniteds Class A Common Stock closed below $29.15 per share. The exercise prices of both options were based
on the fair market value of BankUniteds Class A Common Stock on the date of grant, which was $29.15. On January 25, 2005 the price of BankUniteds Class A Common Stock closed at $29.04 per share. The acceleration of the vesting period for
the options granted to the CEO and COO met the criteria for variable accounting under FASB Interpretation No. 44, however, because the vesting of these options was accelerated at a time when the exercise price was higher than the market price of the
underlying stock, the acceleration did not result in a charge to earnings for compensation expense. As a result of the acceleration, the option granted to the CEO for the purchase of 75,000 shares of BankUniteds Noncumulative Convertible
Preferred Stock, Series B, and the option granted to the President and COO for the purchase of 50,000 shares of BankUniteds Class A Common Stock, became immediately vested and exercisable on January 25, 2005, instead of vesting in five equal
installments commencing on the first anniversary of the date of grant.



The 2002 Plan permits the Compensation Committee to adjust the terms and conditions of awards granted under that plan in response to changes in accounting principles, among other reasons, subject to certain restrictions. The Compensation
Committee determined to accelerate the vesting of these options as a result of the issuance by the FASB of SFAS No. 123R, which BankUnited expects to adopt effective October 1, 2005. BankUnited anticipates that, by accelerating the vesting of these
options at a time when their exercise price was



18



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##### Table of Contents

BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



higher than the market price, BankUnited will not be required to recognize compensation expense on the options. The
value of these options are reflected in the footnote disclosures to BankUniteds financial statements for the quarter ended March 31, 2005, as required by SFAS No. 148. BankUnited projects that, if the vesting of these options had not been
accelerated, then SFAS 123R would have required BankUnited to recognize approximately $1.4 million in compensation expense from these options over their remaining vesting terms, in quarters beginning after September 30, 2005.



In exchange for the benefits conferred on the CEO by the accelerated vesting
of his option, the Compensation Committee and the CEO agreed that the term of such option shall be shortened from ten years to eight years. The Committee agreed with the President and COO that the term of his employment agreement, which would
otherwise expire on September 30, 2007, shall be extended by one additional year, subject to such other terms and conditions specified therein. See discussions on SFAS No. 148 and SFAS No. 123R in Note 1 Impact of Certain Accounting
Pronouncements.



12.    Purchase of BankUnited Class A
Common Stock



On January 28, 2005, BankUnited purchased
11,500 shares of its Class A Common Stock in the open market at a price of $29.03 per share for a total of $333,840. This represents a purchase of stock under a stock purchase plan authorized by BankUniteds Board of Directors to purchase up to
1,000,000 shares of its Class A Common Stock in open market transactions. This stock purchase plan was announced by BankUnited on October 24, 2002.



19



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##### Table of Contents

|Item 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|------- | -------------------------------------------------------------------------------------



As used in this Form 10-Q, BankUnited, we, us and our refers to BankUnited
and its subsidiaries on a consolidated basis. The following discussion and analysis and the related financial data present a review of BankUniteds consolidated operating results for the three and six month periods ended March 31, 2005 and 2004
and consolidated financial condition as of March 31, 2005. This discussion and analysis should be read in conjunction with the Consolidated Financial Statements and Notes thereto contained in BankUniteds Annual Report on Form 10-K for the year
ended September 30, 2004.



This Quarterly Report on Form 10-Q
contains forward-looking statements. Such forward-looking statements are within the meaning of that term in 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). Words and phrases such as: will likely result, expect, will continue, anticipate, estimate, project, believe,
intend, should, may, can, plan, target and similar expressions are intended to identify forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements may include, but are not limited to, discussions concerning:



| |  |  | Projections of revenues, expenses, income, earnings per share, margin, asset growth, loan production, deposit growth, and other performance measures;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Expansion of operations, including branch openings, entrance into new markets, development of products and services and plans for new marketing strategies; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Discussions on the outlook of the economy.
| | - |  | ------------------------------------------



BankUnited cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made, and are not
historical facts. Actual results may differ materially from the results discussed in these forward-looking statements due to the following factors, among other things: general business and economic conditions, either nationally or regionally;
changes or fluctuations in interest rates; a deterioration in credit quality and/or a reduced demand for credit; reduced deposit flows and loan demand; competition from other financial services companies in our markets; legislative or regulatory
changes, including changes in accounting standards, guidelines and policies; changes in the regulation of financial services companies; fiscal and monetary policies; the issuance or redemption of additional equity or debt securities; the
concentration of operations in Florida, if the Florida economy or real estate values decline; volatility in the market price of its common stock, the threat and impact of war and terrorism, reliance on other companies for products and services; and
other economic, competitive, servicing capacity, governmental, regulatory and technological factors affecting the companys operations, pricing, products and delivery of services. BankUnited cautions that the foregoing factors are not
exclusive. BankUnited does not undertake, and specifically disclaims, any obligations to publicly release the result of any updates which might be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated
events or circumstances after the date of such statements.



Overview



BankUniteds results of operations are dependent
primarily on its net interest income, which is the difference between the interest earned on its assets, primarily its loan and securities portfolios, and its cost of funds, which consists of the interest paid on its deposits and borrowings.
BankUniteds results of operations are also affected by its provision for loan losses as well as non-interest income, non-interest expenses and income tax expense. Non-interest expenses consist of employee compensation and benefits, occupancy
and equipment, insurance, professional fees, telecommunications and data processing, loan servicing expense, and other operating expenses. Results of operations are also dependent on the dollar volume and asset quality of BankUniteds loans and
investments.



20



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##### Table of Contents

In addition to the foregoing, results of BankUniteds operations, like those of other financial
institution holding companies, are affected by BankUniteds asset and liability management policies, as well as factors beyond BankUniteds control, such as general economic conditions and the monetary and fiscal policies of the federal
government. Lending activities are affected by the demand for mortgage financing and other types of loans, and are thus influenced by interest rates and other factors affecting the supply of housing and the availability of funds. Deposit flows and
costs of funds are influenced by yields available on competing investments and by general market rates of interest.



In evaluating BankUniteds financial condition and operating performance, management focuses on increasing loan originations to residential mortgage,
commercial and commercial real estate customers, increasing total and core deposit balances, improving BankUniteds net interest margin, maintaining high credit standards, low levels of non-performing assets and adequate loan loss reserves,
managing interest rate risk, controlling expenses, and ensuring adequate funding for ongoing growth. Based on these factors, highlights of BankUniteds performance and financial condition for second quarter of fiscal 2005 include:



| |  |  | Loan production for the second quarter of fiscal 2005 improved by 38% compared to the same quarter in fiscal 2004, to reach $1.1 billion.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Total loans, net increased to $6.8 billion, up 19% compared to $5.8 billion at September 30, 2004.
| | - |  | --------------------------------------------------------------------------------------------------



| |  |  | Total assets of $9.3 billion, up 6.3% compared to $8.7 billion at September 30, 2004.
| | - |  | -------------------------------------------------------------------------------------



| |  |  | Total deposits of $4.0 billion, up 15% compared to $3.5 billion at September 30, 2004.
| | - |  | --------------------------------------------------------------------------------------



| |  |  | Net interest margin decreased to 1.72% for the quarter ended March 31, 2005, compared to 1.99% for the same period in 2004.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------



| |  |  | Non-interest bearing deposits increased by 25% to $310 million as of March 31, 2005 compared to September 30th of 2004.
| | - |  | -----------------------------------------------------------------------------------------------------------------------



| |  |  | Net income of $13.6 million, up 13% over the same quarter last year.
| | - |  | --------------------------------------------------------------------



| |  |  | Branch network increased to 53 with three new branch openings during the quarter ended March 31, 2005.
| | - |  | ------------------------------------------------------------------------------------------------------



See discussion in RESULTS OF OPERATIONSand FINANCIAL CONDITIONfor more information on BankUniteds
operating performance during the three and six months ended March 31, 2005 compared to the same period in 2004, and changes in financial condition from September 30, 2004.



Fiscal 2005 Developments



As of May 1, 2005, BankUnited was operating 54 full-service banking offices and six loan production offices. During fiscal 2005 through May 1, 2005,
BankUnited opened four new full-service banking offices in Florida and one new loan production office in Arizona. BankUnited plans to open between eight to ten additional full-service banking offices and at least one new production office through
the end of the calendar year 2005.



On January 28, 2005,
BankUnited purchased 11,500 shares of its Class A Common Stock in the open market at a price of $29.03 per share for a total of $333,840. This represents a purchase of stock under a stock purchase plan authorized by BankUniteds Board of
Directors to purchase up to 1,000,000 shares of its Class A Common Stock in open market transactions. This stock purchase plan was announced by BankUnited on October 24, 2002.



On March 29, 2005, BankUniteds board of directors declared a cash dividend of one-half cent ($0.005) per share to be
paid on April 29, 2005, to stockholders of record as of April 15, 2005. BankUnited anticipates that it will continue to declare and pay such dividends on a quarterly basis subject to termination at any time at the sole discretion of the board.



21



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##### Table of Contents

Critical Accounting Policies



BankUniteds financial position and results of operations are impacted by managements application of accounting
policies involving judgments made to arrive at the carrying value of certain assets. In implementing its policies, management must make estimates and assumptions about the effect of matters that are inherently less than certain. Actual results could
differ significantly from these estimates which could materially affect the amounts of our assets, liabilities, income and expenses. Critical accounting policies applied by BankUnited include the allowance for loan losses and the valuation of
mortgage servicing rights pertaining to the sale or securitization of mortgage loans. Estimates impacting the carrying value of the loan portfolio include the amount of the allowance for loan losses and the valuation of loans held for sale. On a
periodic basis, management obtains a valuation of mortgage servicing rights prepared by independent third parties.



For a more detailed discussion on these critical accounting policies, see Critical Accounting Policies on page 20 of BankUniteds Annual
Report on Form 10-K for the year ended September 30, 2004.



Accounting
Pronouncements Issued and Not Yet Adopted



BankUnited
expects to implement Statement of Financial Accounting Standards No. 123 Revised Accounting for Stock Based Compensation, (SFAS No. 123R) in the first quarter of its 2006 fiscal year. See Note 2. Impact of Certain
Accounting Pronouncements  SFAS No. 123Rin the condensed notes to consolidated financial statements. Management has already taken measures to reduce the impact that share-based compensation arrangements will have on earnings upon the
adoption of SFAS No. 123R (See Note 11. Stock Based Compensation Acceleration of Vesting in the condensed notes to consolidated financial statements). Management is evaluating the overall impact that the new rules for
share-based compensation arrangements will have on earnings upon the adoption of SFAS No. 123R.



RESULTS OF OPERATIONS



For the Three
Months Ended March 31, 2005 Compared to the Same Period in 2004



General



Net income for the three months ended
March 31, 2005 was $13.6 million, up 13% from $12.0 million for the same quarter last year. Basic and diluted earnings were $0.45 and $0.42 per share, respectively, for the quarter, up from $0.40 and $0.37 per share, respectively, for the same
quarter last year. The net increase in net income of $1.6 million includes an increase in net interest income before provision for loan losses of $3.8 million, an increase in non-interest income of $2.7 million, and an increase in non-interest
expense of $4.4 million, and an increase in tax provision of $0.8 million.



Analysis of Net Interest Income



Yields
Earned and Rates Paid.    The following table sets forth certain information relating to the categories of BankUniteds interest-earning assets and interest-bearing liabilities for the periods indicated. All yield and
rate information is calculated on an annualized basis by dividing the income or expense item for the period by the average balances during the period for the appropriate balance sheet item. Net interest margin is calculated by dividing net interest
income by average interest-earning assets. Net interest spread is the difference between the yield earned on average interest earning assets and the rate paid on average interest bearing liabilities. Non-accrual loans are included for the
appropriate periods, whereas recognition of interest on such loans is discontinued and any remaining accrued interest receivable is reversed, in conformity with generally accepted accounting principles and federal regulations. The yields and net
interest margins appearing in the following table have been calculated on a pre-tax basis.



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##### Table of Contents

Yields Earned and Rates Paid



|                                                                    |  |                                      |           |   |          |   |            |  |      |                |  |   |           |   |            |   |        |  |      |  
|------------------------------------------------------------------- |  | ------------------------------------ | --------- | - | -------- | - | ---------- |  | ---- | -------------- |  | - | --------- | - | ---------- | - | ------ |  | ---- | -
|                                                                    |  | For the Three Months Ended March 31, |          
|                                                                    |  | 2005                                 |           |   | 2004     |  
|                                                                    |  | AverageBalance                       |           |   | Interest |   | Yield/Rate |  |      | AverageBalance |  |   | Interest  |   | Yield/Rate |  
|                                                                    |  | (Dollars in thousands)               |          
|Interest-earning assets:                                            |  |                                      |           |   |          |   |            |  |      |                |  |   |           |   |            |   |        |  |      |  
|Loan portfolio, net(1)                                              |  | $                                    | 6,623,050 |   |          | $ | 78,182     |  | 4.72 | %              |  | $ | 4,354,161 |   |            | $ | 53,295 |  | 4.90 | %
|Loans held for sale                                                 |  |                                      | 15,405    |   |          |   | 222        |  | 5.77 | %              |  |   | 133,363   |   |            |   | 1,800  |  | 5.40 | %
|Mortgage-backed securities                                          |  |                                      | 1,763,429 |   |          |   | 16,884     |  | 3.83 | %              |  |   | 2,111,979 |   |            |   | 20,189 |  | 3.82 | %
|Short-term investments(2)                                           |  |                                      | 20,119    |   |          |   | 229        |  | 4.54 | %              |  |   | 17,214    |   |            |   | 123    |  | 2.84 | %
|Investment securities and FHLB stock                                |  |                                      | 495,675   |   |          |   | 5,428      |  | 4.40 | %              |  |   | 455,803   |   |            |   | 4,932  |  | 4.33 | %
|                                                                    |  |                                      |           |   |          |   |            |  |      |                |  |   |           |   |            |   |        |  |      |  
|Total interest-earning assets                                       |  |                                      | 8,917,678 |   |          |   | 100,945    |  | 4.54 | %              |  |   | 7,072,520 |   |            |   | 80,339 |  | 4.55 | %
|                                                                    |  |                                      |           |   |          |   |            |  |      |                |  |   |           |   |            |   |        |  |      |  
|Interest-bearing liabilities:                                       |  |                                      |           |   |          |   |            |  |      |                |  |   |           |   |            |   |        |  |      |  
|Transaction and money market                                        |  |                                      | 400,189   |   |          |   | 1,311      |  | 1.33 | %              |  |   | 368,318   |   |            |   | 971    |  | 1.06 | %
|Savings                                                             |  |                                      | 966,708   |   |          |   | 4,827      |  | 2.02 | %              |  |   | 962,222   |   |            |   | 4,037  |  | 1.69 | %
|Certificates of deposits                                            |  |                                      | 2,199,218 |   |          |   | 15,763     |  | 2.91 | %              |  |   | 1,781,477 |   |            |   | 12,894 |  | 2.91 | %
|Trust preferred securities and subordinated debentures(3)           |  |                                      | 195,805   |   |          |   | 3,141      |  | 6.42 | %              |  |   | 165,864   |   |            |   | 2,322  |  | 5.60 | %
|Senior notes(4)                                                     |  |                                      | 120,000   |   |          |   | 1,070      |  | 3.57 | %              |  |   | 113,846   |   |            |   | 1,203  |  | 4.23 | %
|FHLB advances and other borrowings(3)                               |  |                                      | 4,435,180 |   |          |   | 36,029     |  | 3.29 | %              |  |   | 3,171,399 |   |            |   | 23,948 |  | 2.99 | %
|                                                                    |  |                                      |           |   |          |   |            |  |      |                |  |   |           |   |            |   |        |  |      |  
|Total interest-bearing liabilities                                  |  | $                                    | 8,317,100 |   |          | $ | 62,141     |  | 3.03 | %              |  | $ | 6,563,116 |   |            | $ | 45,375 |  | 2.78 | %
|                                                                    |  |                                      |           |   |          |   |            |  |      |                |  |   |           |   |            |   |        |  |      |  
|Excess of interest-earning assets over interest-bearing liabilities |  | $                                    | 600,578   |   |          |   |            |  |      |                |  | $ | 509,404   |   |            |   |        |  |      |  
|                                                                    |  |                                      |           |   |          |   |            |  |      |                |  |   |           |   |            |   |        |  |      |  
|Net interest income                                                 |  |                                      |           |   |          | $ | 38,804     |  |      |                |  |   |           |   |            | $ | 34,964 |  |      |  
|                                                                    |  |                                      |           |   |          |   |            |  |      |                |  |   |           |   |            |   |        |  |      |  
|Interest rate spread                                                |  |                                      |           |   |          |   |            |  | 1.51 | %              |  |   |           |   |            |   |        |  | 1.77 | %
|Effect of non-interest bearing sources                              |  |                                      |           |   |          |   |            |  | 0.21 | %              |  |   |           |   |            |   |        |  | 0.22 | %
|                                                                    |  |                                      |           |   |          |   |            |  |      |                |  |   |           |   |            |   |        |  |      |  
|Net interest margin                                                 |  |                                      |           |   |          |   |            |  | 1.72 | %              |  |   |           |   |            |   |        |  | 1.99 | %
|                                                                    |  |                                      |           |   |          |   |            |  |      |                |  |   |           |   |            |   |        |  |      |  
|Ratio of interest-earning assets to interest-bearing liabilities    |  |                                      | 107.22    | % |          |   |            |  |      |                |  |   | 107.76    | % |            |   |        |  |      |  
|                                                                    |  |                                      |           |   |          |   |            |  |      |                |  |   |           |   |            |   |        |  |      |  

---

|Note: |  | The yields and rates along with the corresponding interest rate spread and net interest margin represent the yields earned and rates paid on BankUniteds interest-earning
assets and interest-bearing liabilities, respectively, for the periods presented. The yields are annualized and are not calculated on a tax equivalent basis.
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(1) |  | Includes average non-accruing loans of $20 million and $25 million for the three months ended March 31, 2005 and 2004, respectively.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------

|(2) |  | Short-term investments include FHLB overnight deposits, federal funds sold, and certificates of deposit.
|--- |  | --------------------------------------------------------------------------------------------------------

|(3) |  | Includes the effect of interest rate swaps. For more information on interest rate swaps see Note 8 of the accompanying condensed notes to consolidated financial statements.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) |  | Includes convertible senior notes issued in February and March of 2004, and senior notes up until February 2004, when the notes matured.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------



The net interest margin decreased this quarter to 1.72%, down from 1.99% for
the same quarter last year. This decrease resulted primarily due to the following three factors:



First, the lagging effect on the re-pricing of the adjustable rate mortgage loans as short-term interest rates has increased since 2004. BankUniteds
one-to-four family residential loans as of March 31, 2005 were comprised of approximately $4.7 billion, or 83%, of adjustable rate mortgages loans and $1.0 billion, or 17%, of fixed rate mortgage loans. Included in the $4.7 billion of adjustable
rate mortgage loans were approximately $3.1 billion of loans indexed to the Monthly Treasury Average (MTA). The MTA index is the twelve month average of the monthly average yields on U.S. Treasury securities adjusted to a constant maturity of one
year. The $3.1 billion of MTA loans included $2.7 billion of loans that re-price monthly (one month MTA). The twelve month look back period and averaging nature of this index results in a slower reaction to changes in short term interest



23



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##### Table of Contents

rates on assets indexed to the MTA than on liabilities priced at the short term market rates. This lag can produce volatility in the net interest margin. In
a rising interest rate environment, this lagging effect tends to reduce the net interest margin with improvement as short-term interest rates level off or declines. The magnitude of the impact on margin is a function of the size of the interest rate
movement and frequency of change while the timing of the lag is driven by the twelve month averaging. (See Lag Riskin Item 7A. of BankUniteds Annual Report on Form 10-K for the fiscal year ended September 30, 2004).



Second, actions by the Federal Reserve Board to increase short-term interest
rates, since June 2004, have increased BankUniteds cost of funds. This resulted in a 30 basis point rise in the cost of FHLB advances and other borrowings while the overall yield on BankUniteds earning assets remained level. Competitive
deposit pricing pressure also impacted the cost of savings and interest bearing transaction accounts.



Third, prepayments of BankUniteds mortgage loans increased to $243 million for the quarter ended March 31, 2005, compared to $188 million for
the same quarter in 2004. As the loans prepay, net interest income is reduced by the amount of unamortized premiums and other deferred origination costs, which are written off. Changes in the level of prepayments could affect the net interest margin
in the future. The impact of prepayments on net interest income may be offset by prepayment penalties received that are reflected in other income.



Net interest income before provision for loan losses was $39 million for the quarter ended March 31, 2005, a $3.8 million, or 11% increase over $35
million for the same period in 2004. The total net increase of $3.8 million is due to two overall factors: a net increase of $10.3 million due to changes in volume of average interest earning assets and interest-bearing liabilities, and a net
decrease of $6.4 million due to changes in yields earned on interest-earning assets and rates paid on interest-bearing liabilities (see the Rate/Volume Analysis table).



Rate/Volume Analysis



The following table presents, for the periods indicated, the changes in interest income and the changes in interest expense
attributable to the changes in interest rates and the changes in the volume of interest-earning assets and interest-bearing liabilities. Changes attributable to: (i) changes in volume (change in volume multiplied by prior year rate); (ii) changes in
rate (change in rate multiplied by prior year volume); and (iii) changes in rate/volume (change in rate multiplied by change in volume, which were allocated to the changes in rate), were as follows:



|                                                          |  |                                                          |        |   |                |   |        |                          |  |   |        |  
|--------------------------------------------------------- |  | -------------------------------------------------------- | ------ | - | -------------- | - | ------ | ------------------------ |  | - | ------ | -
|                                                          |  | For the Three Month Period Ended March 31, 2005 vs. 2004 |       
|                                                          |  | Increase (Decrease)Due to                                |        |   |                |  
|                                                          |  | Changes inVolume                                         |        |   | Changesin Rate |   |        | TotalIncrease/(Decrease) | 
|                                                          |  | (Dollars in thousands)                                   |       
|Interest income attributable to:                          |  |                                                          |        |   |                |   |        |                          |  |   |        |  
|Loan portfolio, net                                       |  | $                                                        | 27,794 |   |                | $ | (2,907 | )                        |  | $ | 24,887 |  
|Loans held for sale                                       |  |                                                          | (1,592 | ) |                |   | 14     |                          |  |   | (1,578 | )
|Mortgage-backed securities                                |  |                                                          | (3,329 | ) |                |   | 24     |                          |  |   | (3,305 | )
|Short-term investments(1)                                 |  |                                                          | 21     |   |                |   | 85     |                          |  |   | 106    |  
|Investment securities and FHLB stock                      |  |                                                          | 432    |   |                |   | 64     |                          |  |   | 496    |  
|                                                          |  |                                                          |        |   |                |   |        |                          |  |   |        |  
|Total interest-earning assets                             |  |                                                          | 23,326 |   |                |   | (2,720 | )                        |  |   | 20,606 |  
|                                                          |  |                                                          |        |   |                |   |        |                          |  |   |        |  
|Interest expense attributable to:                         |  |                                                          |        |   |                |   |        |                          |  |   |        |  
|Transaction and money market                              |  |                                                          | 84     |   |                |   | 256    |                          |  |   | 340    |  
|Savings                                                   |  |                                                          | 19     |   |                |   | 771    |                          |  |   | 790    |  
|Certificates of deposit                                   |  |                                                          | 3,039  |   |                |   | (170   | )                        |  |   | 2,869  |  
|Trust Preferred Securities and subordinated debentures(2) |  |                                                          | 419    |   |                |   | 400    |                          |  |   | 819    |  
|Senior notes(3)                                           |  |                                                          | 65     |   |                |   | (198   | )                        |  |   | (133   | )
|FHLB advances and other borrowings                        |  |                                                          | 9,447  |   |                |   | 2,634  |                          |  |   | 12,081 |  
|                                                          |  |                                                          |        |   |                |   |        |                          |  |   |        |  
|Total interest-bearing liabilities                        |  |                                                          | 13,073 |   |                |   | 3,693  |                          |  |   | 16,766 |  
|                                                          |  |                                                          |        |   |                |   |        |                          |  |   |        |  
|Increase (decrease) in net interest income                |  | $                                                        | 10,253 |   |                | $ | (6,413 | )                        |  | $ | 3,840  |  
|                                                          |  |                                                          |        |   |                |   |        |                          |  |   |        |  



24



---

##### Table of Contents

---

|(1) |  | Short-term investments include FHLB overnight deposits, federal funds sold, and certificates of deposit.
|--- |  | --------------------------------------------------------------------------------------------------------

|(2) |  | Includes the effect of interest rate swaps. See Note 8 of the accompanying condensed notes to consolidated financial statements for more information on interest rate swaps.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) |  | Includes interest expense on convertible senior notes issued in February and March of 2004, and interest expense on senior notes up until February 2004, when the senior notes
matured.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Interest
Income.    Interest income increased by $20.6 million for the three months ended March 31, 2005, compared to the same period in 2004. An increase of $2.3 billion in average portfolio loans outstanding during the three months
ended March 31, 2005 compared to the same period in 2004, increased interest income by $27.8 million, offset by a decrease of $2.9 million due to a reduction in yield of 18 basis points on those loans. The reduction in yield was caused by the
lagging effect MTA loans as they re-priced in a rising rate environment and the increased level of prepayments. A decrease of $118 million in average loans held for sale outstanding during the three months ended March 31, 2005, compared to the same
period in 2004, decreased interest expense by $1.5 million. In addition, there was a reduction in the average mortgage-backed securities outstanding during the three months ended March 31, 2005 compared to the same period in 2004, which decreased
interest income by $3.3 million.



Interest
Expense.    Interest expense increased by $16.8 million for the three months ended March 31, 2005, compared to the same period in 2004. This change is primarily the result of increases in interest expense of $13 million due
to changes in volume. The growth in loans was funded by an increase of $1.3 billion in average FHLB advances and other borrowings, and an increase of $418 million of time deposits outstanding during the three months ended March 31, 2005,
respectively, compared to the same period in 2004. This resulted in increased interest expense of $9.4 million and $3.0 million, respectively.



In addition interest expense rose by $3.7 million due to changes in rates paid on liabilities. An increase in the cost of FHLB advances and other
borrowings account for $2.6 million of this amount. The overall cost of interest bearing liabilities increased by 25 basis points during the three months ended March 31, 2005, compared to the same period in 2004.



BankUnited continued to benefit from non-interest bearing liabilities and
equity capital, which rose on average by $91 million since March 31, 2004.



Provision for Loan Losses.    BankUnited records a provision for loan losses as a charge to income in amounts necessary to adjust the allowance for loan losses as determined by management
through its review of asset quality. The provision for loan losses of $1.1 million for three months ended March 31, 2005 represents a decrease compared to $1.2 million for the same period in 2004. Net charge-offs for the three months ended March 31,
2005 were $720 thousand, or 0.05% as a percentage of average total loans, compared to $660 thousand, or 0.05%, for the same period in 2004. See Asset Qualityfor information on BankUniteds allowance for loan losses.



25



---

##### Table of Contents

Analysis of Non-Interest Income and Expenses



|                                                              |  |                                    |       |   |      |   |        |                     |  |   |       |   |  |       |  
|------------------------------------------------------------- |  | ---------------------------------- | ----- | - | ---- | - | ------ | ------------------- |  | - | ----- | - |  | ----- | -
|                                                              |  | For the Three MonthsEndedMarch 31, |       |   |      |  
|                                                              |  | 2005                               |       |   | 2004 |   |        | Increase/(Decrease) | 
|                                                              |  | (Dollars in thousands)             |      
|Non-interest income:                                          |  |                                    |       |   |      |   |        |                     |  |   |       |   |  |       |  
|Loan servicing fees                                           |  | $                                  | 837   |   |      | $ | 776    |                     |  | $ | 61    |   |  | 7.9   | %
|Amortization of mortgage servicing rights                     |  |                                    | (799  | ) |      |   | (1,093 | )                   |  |   | 294   |   |  | 26.9  |  
|Impairment of mortgage servicing rights                       |  |                                    |      |   |      |   | (1,200 | )                   |  |   | 1,200 |   |  | 100.0 |  
|Loan fees                                                     |  |                                    | 1,336 |   |      |   | 994    |                     |  |   | 342   |   |  | 34.4  |  
|Deposit fees                                                  |  |                                    | 1,010 |   |      |   | 1,044  |                     |  |   | (34   | ) |  | (3.3  | )
|Other fees                                                    |  |                                    | 517   |   |      |   | 459    |                     |  |   | 58    |   |  | 12.6  |  
|Net gain on sale of investment and mortgage-backed securities |  |                                    | 705   |   |      |   | 333    |                     |  |   | 372   |   |  | 111.7 |  
|Net gain on sale of loans and other assets                    |  |                                    | 1,860 |   |      |   | 1,528  |                     |  |   | 332   |   |  | 21.7  |  
|Income from insurance and investment services                 |  |                                    | 1,252 |   |      |   | 1,184  |                     |  |   | 68    |   |  | 5.7   |  
|Other                                                         |  |                                    | 1,118 |   |      |   | 1,084  |                     |  |   | 34    |   |  | 3.1   |  
|                                                              |  |                                    |       |   |      |   |        |                     |  |   |       |   |  |       |  
|Total non-interest income                                     |  | $                                  | 7,836 |   |      | $ | 5,109  |                     |  | $ | 2,727 |   |  | 53.4  | %
|                                                              |  |                                    |       |   |      |   |        |                     |  |   |       |   |  |       |  



Total non-interest
income reached $7.8 million for the quarter, up 53% over the same quarter last year. Non-interest income included net gains from the sale of investments and mortgage-backed securities of $0.7 million for the quarter ended March 31, 2005, as compared
to $0.3 million for the same quarter last year, and net gains from the sale of loans and other assets of $1.9 million for the quarter ended March 31, 2005, as compared to $1.5 million for the same quarter in 2004. Approximately $130 million out
of $188 million in loans sold during the quarter ended March 31, 2005 were sold on a servicing released basis. These sales may reoccur should the high demand in the secondary market continue. During the same period in 2004, BankUnited sold $77
million of loans on a serviced retained basis.



BankUniteds portfolio of residential loans serviced for others was $1.3 billion at March 31, 2005, compared to $1.1 billion as of March 31, 2004. BankUnited earned $0.8 million in fees on loans serviced for others during the three
months ended March 31, 2005, offset by a like amount of amortization. BankUnited earned $0.8 million in fees on loans serviced for others during the three months ended March 31, 2004, offset by $1.1 million of amortization. During the three months
ended March 31, 2005, BankUnited did not record an impairment charge on its mortgage servicing rights. During the three months ended March 31, 2004, recorded an impairment charge of $1.2 million on its mortgage servicing rights



Fee income, which includes loan fees, deposit fees and other fees (excluding
loan servicing fees), was $2.9 million for the second quarter ended March 31, 2005, up 15% compared to the same quarter last year. The increase of 34%, or $0.3 million, in loan fees was generated mostly by prepayment fees on loans.



Income from insurance and investment services for the quarter was $1.3
million, up 6% over the same quarter last year.



|                                         |  |                                    |        |      |   |                     |  |   |       |  |      |  
|---------------------------------------- |  | ---------------------------------- | ------ | ---- | - | ------------------- |  | - | ----- |  | ---- | -
|                                         |  | For the Three MonthsEndedMarch 31, |        |      |  
|                                         |  | 2005                               |        | 2004 |   | Increase/(Decrease) | 
|                                         |  | (Dollars in thousands)             |       
|Non-interest expenses:                   |  |                                    |        |      |   |                     |  |   |       |  |      |  
|Employee compensation and benefits       |  | $                                  | 12,843 |      | $ | 10,676              |  | $ | 2,167 |  | 20.3 | %
|Occupancy and equipment                  |  |                                    | 5,391  |      |   | 4,332               |  |   | 1,059 |  | 24.4 |  
|Telecommunications and data processing   |  |                                    | 1,527  |      |   | 1,409               |  |   | 118   |  | 8.4  |  
|Advertising and promotion expense        |  |                                    | 1,375  |      |   | 1,287               |  |   | 88    |  | 6.8  |  
|Professional fees  legal and accounting |  |                                    | 1,307  |      |   | 1,024               |  |   | 283   |  | 27.6 |  
|Insurance                                |  |                                    | 381    |      |   | 370                 |  |   | 11    |  | 3.0  |  
|Other operating expenses                 |  |                                    | 2,811  |      |   | 2,104               |  |   | 707   |  | 33.6 |  
|                                         |  |                                    |        |      |   |                     |  |   |       |  |      |  
|Total non-interest expenses              |  | $                                  | 25,635 |      | $ | 21,202              |  | $ | 4,443 |  | 20.9 | %
|                                         |  |                                    |        |      |   |                     |  |   |       |  |      |  





26



---

##### Table of Contents

Non-interest expense increased $4.4 million for the quarter, or 21%, from the same quarter in the prior
fiscal year. The increase of $4.4 million is centered in personnel and expansion of facilities.



For the Six Months Ended March 31, 2005 Compared to the Same Period in 2004



General



Net income for the six months ended March 31, 2005 was $28.1 million, up 19% from $23.6 million for the same quarter last year. Basic and diluted earnings were $0.93 and $0.87 per share, respectively, for the quarter,
up from $0.79 and $0.72 per share, respectively, for the same quarter last year. The increase in net income of $4.5 million includes an increase in net interest income before provision for loan losses of $10.0 million, an increase in non-interest
income of $4.6 million, offset by increases in non-interest expenses of $8.0 million, and an increase in the tax provision of $2.1 million. The provision for loan losses remained relatively level at $2.2 million for both six-month periods ended
March 31, 2005 and 2004.



Analysis of Net Interest Income



Yields Earned and Rates Paid.    The following
table sets forth certain information relating to the categories of BankUniteds interest-earning assets and interest-bearing liabilities for the periods indicated. All yield and rate information is calculated on an annualized basis by dividing
the income or expense item for the period by the average balances during the period for the appropriate balance sheet item. Net interest margin is calculated by dividing net interest income by average interest-earning assets. Net interest spread is
the difference between the yield earned on average interest earning assets and the rate paid on average interest bearing liabilities. Non-accrual loans are included for the appropriate periods, whereas recognition of interest on such loans is
discontinued and any remaining accrued interest receivable is reversed, in conformity with generally accepted accounting principles and federal regulations. The yields and net interest margins appearing in the following table have been calculated on
a pre-tax basis.



27



---

##### Table of Contents

Yields Earned and Rates Paid



|                                                                    |  |                                    |           |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|------------------------------------------------------------------- |  | ---------------------------------- | --------- | - | -------- | - | ---------- |  | ---- | -------------- |  | - | --------- | - | ---------- | - | ------- |  | ---- | -
|                                                                    |  | For the Six Months Ended March 31, |          
|                                                                    |  | 2005                               |           |   | 2004     |  
|                                                                    |  | AverageBalance                     |           |   | Interest |   | Yield/Rate |  |      | AverageBalance |  |   | Interest  |   | Yield/Rate |  
|                                                                    |  | (Dollars in thousands)             |          
|Interest-earning assets:                                            |  |                                    |           |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Loan portfolio, net(1)                                              |  | $                                  | 6,309,143 |   |          | $ | 147,937    |  | 4.69 | %              |  | $ | 4,210,674 |   |            | $ | 104,597 |  | 4.97 | %
|Loans held for sale                                                 |  |                                    | 19,494    |   |          |   | 570        |  | 5.84 | %              |  |   | 175,816   |   |            |   | 4,859   |  | 5.53 | %
|Mortgage-backed securities                                          |  |                                    | 1,860,348 |   |          |   | 35,120     |  | 3.78 | %              |  |   | 2,106,686 |   |            |   | 39,986  |  | 3.80 | %
|Short-term investments(2)                                           |  |                                    | 19,289    |   |          |   | 391        |  | 4.01 | %              |  |   | 16,993    |   |            |   | 215     |  | 2.49 | %
|Investment securities and FHLB stock                                |  |                                    | 493,239   |   |          |   | 10,609     |  | 4.31 | %              |  |   | 438,255   |   |            |   | 9,383   |  | 4.28 | %
|                                                                    |  |                                    |           |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Total interest-earning assets                                       |  |                                    | 8,701,513 |   |          |   | 194,627    |  | 4.48 | %              |  |   | 6,948,424 |   |            |   | 159,040 |  | 4.58 | %
|                                                                    |  |                                    |           |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Interest-bearing liabilities:                                       |  |                                    |           |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Transaction and money market                                        |  |                                    | 399,017   |   |          |   | 2,510      |  | 1.26 | %              |  |   | 368,181   |   |            |   | 1,930   |  | 1.05 | %
|Savings                                                             |  |                                    | 969,569   |   |          |   | 9,224      |  | 1.91 | %              |  |   | 915,182   |   |            |   | 7,635   |  | 1.67 | %
|Certificates of deposits                                            |  |                                    | 2,076,520 |   |          |   | 29,263     |  | 2.83 | %              |  |   | 1,798,060 |   |            |   | 26,607  |  | 2.96 | %
|Trust preferred securities and subordinated debentures(3)           |  |                                    | 185,643   |   |          |   | 5,930      |  | 6.39 | %              |  |   | 165,167   |   |            |   | 4,674   |  | 5.66 | %
|Senior notes(4)                                                     |  |                                    | 120,000   |   |          |   | 2,139      |  | 3.57 | %              |  |   | 157,158   |   |            |   | 4,639   |  | 5.90 | %
|FHLB advances and other borrowings(3)                               |  |                                    | 4,348,183 |   |          |   | 68,476     |  | 3.16 | %              |  |   | 3,036,245 |   |            |   | 46,512  |  | 3.01 | %
|                                                                    |  |                                    |           |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Total interest-bearing liabilities                                  |  | $                                  | 8,098,932 |   |          | $ | 117,542    |  | 2.91 | %              |  | $ | 6,439,993 |   |            | $ | 91,997  |  | 2.83 | %
|                                                                    |  |                                    |           |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Excess of interest-earning assets over interest-bearing liabilities |  | $                                  | 602,581   |   |          |   |            |  |      |                |  | $ | 508,431   |   |            |   |         |  |      |  
|                                                                    |  |                                    |           |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Net interest income                                                 |  |                                    |           |   |          | $ | 77,085     |  |      |                |  |   |           |   |            | $ | 67,043  |  |      |  
|                                                                    |  |                                    |           |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Interest rate spread                                                |  |                                    |           |   |          |   |            |  | 1.57 | %              |  |   |           |   |            |   |         |  | 1.75 | %
|Effect of non-interest bearing sources                              |  |                                    |           |   |          |   |            |  | 0.20 | %              |  |   |           |   |            |   |         |  | 0.20 | %
|                                                                    |  |                                    |           |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Net interest margin                                                 |  |                                    |           |   |          |   |            |  | 1.77 | %              |  |   |           |   |            |   |         |  | 1.95 | %
|                                                                    |  |                                    |           |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Ratio of interest-earning assets to interest-bearing liabilities    |  |                                    | 107.44    | % |          |   |            |  |      |                |  |   | 107.89    | % |            |   |         |  |      |  
|                                                                    |  |                                    |           |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  

---

|Note: |  | The yields and rates along with the corresponding interest rate spread and net interest margin represent the yields earned and rates paid on BankUniteds interest-earning
assets and interest-bearing liabilities, respectively, for the periods presented. The yields are annualized and are not calculated on a tax equivalent basis.
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(1) |  | Includes average non-accruing loans of $18 million and $29 million for the six months ended March 31, 2005 and 2004, respectively.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------

|(2) |  | Short-term investments include FHLB overnight deposits, federal funds sold, and certificates of deposit.
|--- |  | --------------------------------------------------------------------------------------------------------

|(3) |  | Includes the effect of interest rate swaps. For more information on interest rate swaps see Note 8 of the accompanying condensed notes to consolidated financial statements.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) |  | Includes convertible senior notes issued in February and March of 2004, and senior notes up until February 2004, when the notes matured.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------



28



---

##### Table of Contents

The net interest margin decreased for the six months ended March 31, 2005 to 1.77%, down from 1.95% for
the same period last year. This decrease resulted primarily from the lagging effect on the re-pricing of the adjustable rate mortgage loans as short-term interest rates increased during the quarter. Approximately 39% of BankUniteds loan
portfolio as of March 31, 2005, consisted of adjustable rate mortgages indexed to the MTA. In addition, margin was also adversely affected by an increase in BankUniteds cost of funds and the level of prepayments during the six months ended
March 31, 2005.



Net interest income before provision for loan
losses was $77 million for the six months ended March 31, 2005, a $10 million, or 15%, increase over $67 million for the same period in 2004. The total net increase of $10 million is due to two overall factors: a net increase of $20 million due to
changes in volume of average interest earning assets and interest-bearing liabilities, and a net decrease of $10 million due to changes in yields earned on interest-earning assets and rates paid on interest-bearing liabilities (see the Rate/Volume
Analysis table).



Rate/Volume Analysis



The following table presents, for the periods indicated, the
changes in interest income and the changes in interest expense attributable to the changes in interest rates and the changes in the volume of interest-earning assets and interest-bearing liabilities. Changes attributable to: (i) changes in volume
(change in volume multiplied by prior year rate); (ii) changes in rate (change in rate multiplied by prior year volume); and (iii) changes in rate/volume (change in rate multiplied by change in volume, which were allocated to the changes in rate),
were as follows:



|                                                          |  |                                                       |        |   |                |   |         |                          |  |   |        |  
|--------------------------------------------------------- |  | ----------------------------------------------------- | ------ | - | -------------- | - | ------- | ------------------------ |  | - | ------ | -
|                                                          |  | For the Six Month Period EndedMarch 31, 2005 vs. 2004 |       
|                                                          |  | Increase (Decrease)Due to                             |        |   |                |  
|                                                          |  | Changesin Volume                                      |        |   | Changesin Rate |   |         | TotalIncrease/(Decrease) | 
|                                                          |  | (Dollars in thousands)                                |       
|Interest income attributable to:                          |  |                                                       |        |   |                |   |         |                          |  |   |        |  
|Loan portfolio, net                                       |  | $                                                     | 52,147 |   |                | $ | (8,807  | )                        |  | $ | 43,340 |  
|Loans held for sale                                       |  |                                                       | (4,322 | ) |                |   | 33      |                          |  |   | (4,289 | )
|Mortgage-backed securities                                |  |                                                       | (4,680 | ) |                |   | (186    | )                        |  |   | (4,866 | )
|Short-term investments(1)                                 |  |                                                       | 29     |   |                |   | 147     |                          |  |   | 176    |  
|Investment securities and FHLB stock                      |  |                                                       | 1,177  |   |                |   | 49      |                          |  |   | 1,226  |  
|                                                          |  |                                                       |        |   |                |   |         |                          |  |   |        |  
|Total interest-earning assets                             |  |                                                       | 44,351 |   |                |   | (8,764  | )                        |  |   | 35,587 |  
|                                                          |  |                                                       |        |   |                |   |         |                          |  |   |        |  
|Interest expense attributable to:                         |  |                                                       |        |   |                |   |         |                          |  |   |        |  
|Transaction and money market                              |  |                                                       | 162    |   |                |   | 418     |                          |  |   | 580    |  
|Savings                                                   |  |                                                       | 454    |   |                |   | 1,135   |                          |  |   | 1,589  |  
|Certificates of deposit                                   |  |                                                       | 4,121  |   |                |   | (1,465  | )                        |  |   | 2,656  |  
|Trust Preferred Securities and subordinated debentures(2) |  |                                                       | 579    |   |                |   | 677     |                          |  |   | 1,256  |  
|Senior notes(3)                                           |  |                                                       | (1,096 | ) |                |   | (1,404  | )                        |  |   | (2,500 | )
|FHLB advances and other borrowings                        |  |                                                       | 19,745 |   |                |   | 2,219   |                          |  |   | 21,964 |  
|                                                          |  |                                                       |        |   |                |   |         |                          |  |   |        |  
|Total interest-bearing liabilities                        |  |                                                       | 23,965 |   |                |   | 1,580   |                          |  |   | 25,545 |  
|                                                          |  |                                                       |        |   |                |   |         |                          |  |   |        |  
|Increase (decrease) in net interest income                |  | $                                                     | 20,386 |   |                | $ | (10,344 | )                        |  | $ | 10,042 |  
|                                                          |  |                                                       |        |   |                |   |         |                          |  |   |        |  

---

|(1) |  | Short-term investments include FHLB overnight deposits, federal funds sold, securities purchased under agreements to resell, and certificates of deposit.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) |  | Includes the effect of interest rate swaps. See Note 8 of the accompanying condensed notes to consolidated financial statements for more information on interest rate swaps.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) |  | Includes interest expense on convertible senior notes issued in February and March of 2004, and interest expense on senior notes up until February 2004, when the senior notes
matured.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Interest
Income.    Interest income increased by $36 million for the six months ended March 31, 2005, compared to the same period in 2004. This improvement was generated mostly by an increase of $2.1 billion in



29



---

##### Table of Contents

average portfolio loans outstanding during the six months ended March 31, 2005, compared to the same period in 2004, which increased interest income by $52
million, offset by decreases of $8.8 million due to a reduction in yield of 31 basis points on those loans. A decrease of $156 million in average loans held for sale outstanding during the six months ended March 31, 2005, compared to the same period
in 2004, decreased interest income by $4.3 million. In addition, there was a reduction in interest income of $4.7 million as a result of a reduction of $247 million in average mortgage-backed securities outstanding during the six months ended March
31, 2005, compared to the same period in 2004.



The overall
yield on interest earning assets decreased by 10 basis points during the six months ended March 31, 2005 compared to the same period in 2004.



Interest Expense.    Interest expense increased by approximately $26 million for the six months ended March 31, 2005, compared
to the same period in 2004. This net change includes an increase in interest expense of $24 million due to changes in volume. The growth in loans was funded by an increase of $1.3 billion in average FHLB advances and other borrowings, and an
increase of $278 million in the average balance of time deposits outstanding during the six months ended March 31, 2005, respectively, compared to the same period in 2004. This resulted in increased interest expense of $19.7 million and $4.1
million, respectively.



Interest expense increased for the six
months ended March 31, 2005 compared to the same period in 2004 by $1.6 million from an increase in rates paid overall on interest bearing liabilities. The overall rates paid on interest bearing liabilities increased by 8 basis points during the six
months ended March 31, 2005 compared to the same period in 2004. There was an increase of $2.2 million due to a rate increase of 15 basis points paid on FHLB advances and other borrowings between the two periods. In February 2004, $200 million in
senior notes were repaid and replaced with $120 million of convertible senior notes during the same quarter of that year. The interest rate on senior debt declined from 5.90% for the six months ended March 31, 2004 to 3.57% for the same period in
2005. The combined volume and rate changes reduced senior note expense by $2.5 million.



Provision for Loan Losses.    BankUnited records a provision for loan losses as a charge to income in amounts necessary to adjust the allowance for loan losses as determined by management
through its review of asset quality. The provision for loan losses was $2.2 million for both six-month periods ended March 31, 2005 and 2004. Net charge-offs for the six months ended March 31, 2005 were $1.5 million compared to $1.2 million for the
same period in 2004. See Asset Qualityfor information on BankUniteds allowance for loan losses.



Analysis of Non-Interest Income and Expenses



|                                                                     |  |                                   |        |   |      |   |        |                     |  |   |       |   |  |       |  
|-------------------------------------------------------------------- |  | --------------------------------- | ------ | - | ---- | - | ------ | ------------------- |  | - | ----- | - |  | ----- | -
|                                                                     |  | For the Six MonthsEnded March 31, |        |   |      |  
|                                                                     |  | 2005                              |        |   | 2004 |   |        | Increase/(Decrease) | 
|                                                                     |  | (Dollars in thousands)            |       
|Non-interest income:                                                 |  |                                   |        |   |      |   |        |                     |  |   |       |   |  |       |  
|Loan servicing fees                                                  |  | $                                 | 1,707  |   |      | $ | 1,514  |                     |  | $ | 193   |   |  | 12.7  | %
|Amortization of mortgage servicing rights                            |  |                                   | (1,581 | ) |      |   | (2,604 | )                   |  |   | 1,023 |   |  | 39.3  |  
|Impairment of mortgage servicing rights                              |  |                                   |       |   |      |   | (1,200 | )                   |  |   | 1,200 |   |  | 100.0 |  
|Loan fees                                                            |  |                                   | 2,490  |   |      |   | 1,933  |                     |  |   | 557   |   |  | 28.8  |  
|Deposit fees                                                         |  |                                   | 2,116  |   |      |   | 2,163  |                     |  |   | (47   | ) |  | (2.2  | )
|Other fees                                                           |  |                                   | 1,035  |   |      |   | 939    |                     |  |   | 96    |   |  | 10.2  |  
|Net gain (loss) on sale of investment and mortgage-backed securities |  |                                   | 2,186  |   |      |   | (262   | )                   |  |   | 2,448 |   |  | 934.4 |  
|Net gain on sale of loans and other assets                           |  |                                   | 2,382  |   |      |   | 3,280  |                     |  |   | (898  | ) |  | (27.4 | )
|Income from insurance and investment services                        |  |                                   | 2,215  |   |      |   | 2,126  |                     |  |   | 89    |   |  | 4.2   |  
|Other                                                                |  |                                   | 2,233  |   |      |   | 2,282  |                     |  |   | (49   | ) |  | (2.1  | )
|                                                                     |  |                                   |        |   |      |   |        |                     |  |   |       |   |  |       |  
|Total non-interest income                                            |  | $                                 | 14,783 |   |      | $ | 10,171 |                     |  | $ | 4,612 |   |  | 45.3  | %
|                                                                     |  |                                   |        |   |      |   |        |                     |  |   |       |   |  |       |  



30



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##### Table of Contents

Total non-interest income reached $15 million for the six months ended March 31, 2005, up 45% over the
same period last year. Non-interest income included net gains from the sale of investments and mortgage-backed securities of $2.2 million for the six months ended March 31, 2005, as compared to a net loss of $0.3 million for the same period in 2004.
BankUnited recorded gains of $2.4 million and $3.3 million from the sale of loans and other assets during the six months ended March 31, 2005 and 2004, respectively. A large portion of the loans sold by BankUnited during the six months ended March
31, 2005 was sold on a servicing released basis while loans sold during the six months ended March 31, 2004 were sold on a servicing retained basis.



BankUniteds portfolio of residential loans serviced for others was $1.3 billion at March 31, 2005. BankUnited earned $1.7 million in fees on loans
serviced for others during the six months ended March 31, 2005, offset by $1.6 million of amortization. BankUnited earned $1.5 million in fees on loans serviced for others during the six months ended March 31, 2004, offset by $2.6 million of
amortization. During the six months ended March 31, 2004, BankUnited recorded an impairment charge on its mortgage servicing rights of $1.2 million; there was no impairment during the same period in 2005. The amortization of $2.6 million and asset
impairment charge $1.2 million recorded during the six months ended March 31, 2004 were the result of the refinancing boom and high level of prepayments experienced in the portfolio of loans serviced for others during that period.



Fee income, which includes loan fees, deposit fees and other fees (excluding
loan servicing fees), was $5.6 million for the six months ended March 31, 2005, up 12% compared to the same period last year. The increase of 29%, or $557 thousand in loan fees was generated mostly by prepayment fees on loans.



Income from insurance and investment services for the six months ended March
31, 2005 was 2.2 million, up 4.2% over the same period last year.



|                                         |  |                                   |        |      |   |                     |  |   |       |   |  |       |  
|---------------------------------------- |  | --------------------------------- | ------ | ---- | - | ------------------- |  | - | ----- | - |  | ----- | -
|                                         |  | For the Six MonthsEnded March 31, |        |      |   |                     |  |  
|                                         |  | 2005                              |        | 2004 |   | Increase/(Decrease) | 
|                                         |  | (Dollars in thousands)            |       
|Non-interest expenses:                   |  |                                   |        |      |   |                     |  |   |       |   |  |       |  
|Employee compensation and benefits       |  | $                                 | 24,039 |      | $ | 21,480              |  | $ | 2,559 |   |  | 11.9  | %
|Occupancy and equipment                  |  |                                   | 10,392 |      |   | 8,036               |  |   | 2,356 |   |  | 29.3  |  
|Telecommunications and data processing   |  |                                   | 3,146  |      |   | 2,793               |  |   | 353   |   |  | 12.6  |  
|Advertising and promotion expense        |  |                                   | 2,819  |      |   | 2,438               |  |   | 381   |   |  | 15.6  |  
|Professional fees  legal and accounting |  |                                   | 2,155  |      |   | 2,344               |  |   | (189  | ) |  | (8.1  | )
|Insurance                                |  |                                   | 763    |      |   | 727                 |  |   | 36    |   |  | 5.0   |  
|Other operating expenses                 |  |                                   | 5,043  |      |   | 2,497               |  |   | 2,546 |   |  | 102.0 |  
|                                         |  |                                   |        |      |   |                     |  |   |       |   |  |       |  
|Total non-interest expenses              |  | $                                 | 48,357 |      | $ | 40,315              |  | $ | 8,042 |   |  | 19.9  | %
|                                         |  |                                   |        |      |   |                     |  |   |       |   |  |       |  



Non-interest expense
increased $8.0 million for the six months ended March 31, 2005, or 20%, from the same period in the prior year. This increase is centered in personnel and expansion of facilities. Other operating expenses increased by $2.5 million during the six
months ended March 31, 2005 compared to the same period in 2004 in part due to a $1.3 million gain recorded during the six months ended March 31, 2004 from fair value adjustments to derivatives reflected as a credit in other operating expenses.



LIQUIDITY



Liquidity management is the process of allocating assets and structuring
liabilities to provide sufficient cash or cash equivalents to meet an entitys daily operating needs on an ongoing basis. It is the policy of BankUnited to manage its funds so that there is no need to make unplanned sales of assets or to borrow
funds under emergency conditions. Sources of liquidity include: cash and cash equivalents, retail deposit growth, FHLB advances, loan repayments, investment portfolio run-off, liquidation of investments and mortgage-backed securities, and overnight
and term reverse repurchase agreements.



31



---

##### Table of Contents

BankUniteds objective in managing liquidity is to maintain sufficient resources of available cash
to address both short and long-term business funding needs such as loan demand, investment purchases, deposit fluctuations, and debt service requirements. In doing so, BankUnited maintains an overall liquidity position that has an aggregate amount
of readily accessible and marketable assets, cash flow and borrowing capacity to meet unexpected deposit outflows and/or increases in loan demand. Cash levels may vary but are maintained at levels required by regulation and necessary to meet the
projected anticipated needs for business operations. BankUnited is not aware of any events, or uncertainties, which may impede liquidity in the short or long-term.



As of March 31, 2005, BankUnited had $1.3 billion in investments and mortgage-backed securities pledged against securities
sold under agreements to repurchase with an outstanding balance of $1.2 billion, of which approximately $103 million mature overnight.



As of March 31, 2005, BankUnited had $3.1 billion of FHLB advances outstanding, including approximately $445 million which matured within 30 days. These
advances were secured by loans with a market value of approximately $4.2 billion as of March 31, 2005. As of March 31, 2005, BankUnited had approximately $405 million available on its credit line with the FHLB of Atlanta. In addition, BankUnited had
$85 million available as of March 31, 2005 under credit facilities entered into with other financial institutions to purchase overnight Federal Funds on a short-term basis.



Discussion of Cash Flows



Please refer to the Consolidated Statement of Cash Flows when reading the following discussion.



Significant Sources of Funds



During the six months ended March 31, 2005 and 2004, BankUnited received
$1.3 billion and $1.1 billion, respectively in payments on loans. Proceeds from the repayment of mortgage-backed securities for the six months March 31, 2005 was $320 million compared to $403 million for the same period in 2004. BankUnited sold $188
million of loans during the six months ended March 31, 2005 compared to $77 million for the same period in 2004. BankUnited sold $193 million of investments and mortgage-backed securities during the six months ended March 31, 2005 compared to $308
million for the same period in 2004. BankUnited raised $516 million in additional deposits during the six months ended March 31, 2005 compared to $190 million during the same period during 2004. BankUnited received $16 million and $154 million of
FHLB advances during the six months ended March 31, 2005 and 2004, respectively. BankUnited received funds of $2.2 million and $221 million during the six months ended March 31, 2005 and 2004, respectively from additional repurchase agreements.
During the six months ended March 31, 2004, BankUnited raised $120 million from the issuance of convertible debt; none during the same period in 2005. During the six months ended March 31, 2005, BankUnited raised $31 million from the issuance of
subordinated debentures to two of its non-consolidated trust subsidiaries; none during the same period in 2004.



Significant Uses of Funds



During the six months ended March 31, 2005, BankUnited funded $2.6 billion of loans as compared to $1.8 billion during the same period of 2004. In
addition, BankUnited purchased $58 million of investment and mortgage-backed securities during the six months ended March 31, 2005 compared to $715 million during the same period of 2004. BankUnited used $20 million during the six months ended March
31, 2005 and 2004 to make escrow related tax payments on behalf of borrowers. BankUnited paid $200 million in maturing senior notes during the six months ended March 31, 2004; there were no such payments during the same period in 2005.



FINANCIAL CONDITION



The following is a discussion of significant changes from September 30, 2004 to March 31, 2005 in the Statement of Financial
Condition. For a discussion of changes in cash and cash equivalents, see LIQUIDITY.



32



---

##### Table of Contents

Assets



Investment securities available for sale.    The balance of investment securities available for sale was $305 million as of
March 31, 2005, which is a net decrease of $29 million, or 8.7%, compared to $334 million as of September 30, 2004. The net decrease of $29 million is predominantly the result of sales of $79 million, and a $9 million market value adjustment, offset
by an increase from purchases of $57 million. (See Note 3. of the accompanying condensed notes to consolidated financial statements for additional information on investment securities).



Mortgage-backed securities available for sale.    The balance of mortgage-backed securities
available for sale was $1.7 billion as of March 31, 2005, which is a net decrease of $398 million, or 19.2% compared to $2.1 billion as of September 30, 2004. The net decrease of $398 million is predominantly the result of repayments of $321
million, sales of $114 million, a $20 million market value adjustment, and a $4.1 million reduction from premium amortization, offset by an increase from securitizations of $61 million. (See Note 3. of the accompanying condensed notes to
consolidated financial statements for additional information on mortgage-backed securities).



Loans.    Loans receivable, net (including loans held for sale) increased by $1.0 billion, or 16% from $5.8 billion at September 30, 2004 to $6.8 billion at March 31, 2005. The portfolio is
centered in first mortgage residential loans which account for 84% of the portfolio with an additional 12% in other real estate secured loans. There has not been a significant change in loan portfolio mix during the six months ended March 31, 2005.



The majority of the growth in loans was in one-to-four family
residential, which had a net increase of $959 million. BankUniteds MTA loans increased by $980 million during the six months ended March 31, 2005. MTA loans represented 54% of total one-to-four family residential loans as of March 31, 2005
compared to 44% as of September 30, 2004.



Loans receivable
consist of the following:



|                                                    |  |                        |           |   |                         |       |   |        |   |           |                 |  |       |  
|--------------------------------------------------- |  | ---------------------- | --------- | - | ----------------------- | ----- | - | ------ | - | --------- | --------------- |  | ----- | -
|                                                    |  | As of March 31,2005    |           |   | As of September 30,2004 |      
|                                                    |  | Amount                 |           |   | Percent ofTotal         |       |   | Amount |   |           | Percent ofTotal | 
|                                                    |  | (Dollars in thousands) |          
|Real estate loans:                                  |  |                        |           |   |                         |       |   |        |   |           |                 |  |       |  
|One-to-four family residential:                     |  |                        |           |   |                         |       |   |        |   |           |                 |  |       |  
|Residential mortgages                               |  | $                      | 5,032,175 |   |                         | 73.9  | % |        | $ | 4,058,858 |                 |  | 70.9  | %
|Specialty consumer mortgages                        |  |                        | 674,157   |   |                         | 9.9   |   |        |   | 688,711   |                 |  | 12.0  |  
|                                                    |  |                        |           |   |                         |       |   |        |   |           |                 |  |       |  
|Total one-to-four family residential                |  |                        | 5,706,332 |   |                         | 83.8  |   |        |   | 4,747,569 |                 |  | 82.9  |  
|Home equity loans and lines of credit               |  |                        | 196,113   |   |                         | 2.9   |   |        |   | 150,323   |                 |  | 2.6   |  
|Multi-family                                        |  |                        | 104,463   |   |                         | 1.5   |   |        |   | 51,104    |                 |  | 0.9   |  
|Commercial real estate                              |  |                        | 292,755   |   |                         | 4.3   |   |        |   | 267,127   |                 |  | 4.7   |  
|Construction                                        |  |                        | 103,492   |   |                         | 1.5   |   |        |   | 187,518   |                 |  | 3.3   |  
|Land                                                |  |                        | 142,577   |   |                         | 2.1   |   |        |   | 94,006    |                 |  | 1.6   |  
|                                                    |  |                        |           |   |                         |       |   |        |   |           |                 |  |       |  
|Total real estate loans                             |  |                        | 6,545,732 |   |                         | 96.1  |   |        |   | 5,497,647 |                 |  | 96.0  |  
|                                                    |  |                        |           |   |                         |       |   |        |   |           |                 |  |       |  
|Other loans:                                        |  |                        |           |   |                         |       |   |        |   |           |                 |  |       |  
|Commercial                                          |  |                        | 183,492   |   |                         | 2.7   |   |        |   | 167,786   |                 |  | 2.9   |  
|Consumer                                            |  |                        | 17,416    |   |                         | 0.2   |   |        |   | 19,454    |                 |  | 0.3   |  
|                                                    |  |                        |           |   |                         |       |   |        |   |           |                 |  |       |  
|Total other loans                                   |  |                        | 200,908   |   |                         | 2.9   |   |        |   | 187,240   |                 |  | 3.2   |  
|                                                    |  |                        |           |   |                         |       |   |        |   |           |                 |  |       |  
|Total loans held in portfolio                       |  |                        | 6,746,640 |   |                         | 99.0  |   |        |   | 5,684,887 |                 |  | 99.2  |  
|Unearned discounts, premiums and deferred fees, net |  |                        | 91,145    |   |                         | 1.3   |   |        |   | 65,992    |                 |  | 1.2   |  
|Allowance for loan losses                           |  |                        | (24,777   | ) |                         | (0.3  | ) |        |   | (24,079   | )               |  | (0.4  | )
|                                                    |  |                        |           |   |                         |       |   |        |   |           |                 |  |       |  
|Total loans held in portfolio, net                  |  | $                      | 6,813,008 |   |                         | 100.0 | % |        | $ | 5,726,800 |                 |  | 100.0 | %
|                                                    |  |                        |           |   |                         |       |   |        |   |           |                 |  |       |  



33



---

##### Table of Contents

Liabilities



Deposits.    Deposits increased by $516 million, or 15%, from $3.5 billion at September 30, 2004 to $4.0 billion at March 31,
2005. The majority of the growth was from an increase in certificates of deposit of $528 million. Non-interest bearing deposits were $310 million at March 31, 2005, up $63 million, or 25% from $247 million at September 30, 2004. Interest bearing
transaction accounts, money market, and savings accounts were down from September 30, 2004 by $75 million.



Trust preferred securities and subordinated debentures.    Trust preferred securities and subordinated debentures increased by
$31 million, or 19% from $165 million as of September 30, 2004 to $195 million as of March 31, 2005. This increase is mostly the result of the issuance of $31 million of subordinated debentures by BankUnited to two of its non-consolidated trust
subsidiaries.



Advance payments by borrowers for taxes and
insurance.    Advance payments by borrowers for taxes and insurance decreased by $20 million, or 34% during the quarter to $40 million as of March 31, 2005. This decrease reflects tax payments made by BankUnited on behalf of
borrowers during the quarter ended December 31, 2004.



Asset Quality



The following table sets forth additional information
concerning BankUniteds non-performing assets at March 31, 2005 and September 30, 2004.



|                                                                  |  |                        |        |   |                   |   |        |  
|----------------------------------------------------------------- |  | ---------------------- | ------ | - | ----------------- | - | ------ | -
|                                                                  |  | March 31,2005          |        |   | September 30,2004 |  
|                                                                  |  | (Dollars in thousands) |       
|Non-accrual loans                                                 |  | $                      | 18,132 |   |                   | $ | 15,523 |  
|Restructured loans                                                |  |                        | 362    |   |                   |   | 367    |  
|Loans past due 90 days and still accruing                         |  |                        | 41     |   |                   |   | 2      |  
|                                                                  |  |                        |        |   |                   |   |        |  
|Total non-performing loans                                        |  |                        | 18,535 |   |                   |   | 15,892 |  
|Non-accrual tax certificates                                      |  |                        |       |   |                   |   | 69     |  
|Real estate owned                                                 |  |                        | 1,355  |   |                   |   | 1,611  |  
|                                                                  |  |                        |        |   |                   |   |        |  
|Total non-performing assets                                       |  |                        | 19,890 |   |                   |   | 17,572 |  
|                                                                  |  |                        |        |   |                   |   |        |  
|Allowance for losses on tax certificates                          |  |                        |       |   |                   |   | 65     |  
|Allowance for loan losses                                         |  |                        | 24,777 |   |                   |   | 24,079 |  
|                                                                  |  |                        |        |   |                   |   |        |  
|Total allowance                                                   |  | $                      | 24,777 |   |                   | $ | 24,144 |  
|                                                                  |  |                        |        |   |                   |   |        |  
|Non-performing assets as a percentage of total assets             |  |                        | 0.21   | % |                   |   | 0.20   | %
|Non-performing loans as a percentage of total loans               |  |                        | 0.27   | % |                   |   | 0.27   | %
|Allowance for loan losses as a percentage of total loans          |  |                        | 0.36   | % |                   |   | 0.42   | %
|Allowance for loan losses as a percentage of non-performing loans |  |                        | 133.68 | % |                   |   | 151.52 | %



Non-performing assets
as a percentage of total assets increased to 0.21% at March 31, 2005 from 0.20% at September 30, 2004.



The allowance for loan losses as a percentage of total loans was 0.36% as of March 31, 2005, compared to 0.42% as of September 30, 2004. Management
believes the current allowance to be prudent given the composition of its loan portfolio, which is 96% secured by real estate, the historical loss experience and its assessment of current asset quality.



34



---

##### Table of Contents

The following table sets forth the change in BankUniteds allowance for loan losses for the three
and six months ended March 31, 2005 and 2004.



|                                                                  |  |                                     |        |   |                                   |   |        |      |  |   |        |   |  |   |        |  
|----------------------------------------------------------------- |  | ----------------------------------- | ------ | - | --------------------------------- | - | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                                                  |  | For the Three Months EndedMarch 31, |        |   | For the Six Months EndedMarch 31, |  
|                                                                  |  | 2005                                |        |   | 2004                              |   |        | 2005 |  |   | 2004   |  
|                                                                  |  | (In thousands)                      |       
|Allowance for loan losses, balance (at beginning of period)       |  | $                                   | 24,447 |   |                                   | $ | 22,125 |      |  | $ | 24,079 |   |  | $ | 22,295 |  
|Provisions for loan losses                                        |  |                                     | 1,050  |   |                                   |   | 1,200  |      |  |   | 2,200  |   |  |   | 2,175  |  
|Loans charged off:                                                |  |                                     |        |   |                                   |   |        |      |  |   |        |   |  |   |        |  
|One-to-four family residential(1)                                 |  |                                     | (164   | ) |                                   |   | (151   | )    |  |   | (669   | ) |  |   | (286   | )
|Home equity loans and lines of credit                             |  |                                     | (200   | ) |                                   |   | (6     | )    |  |   | (331   | ) |  |   | (7     | )
|Commercial real estate                                            |  |                                     |       |   |                                   |   | (298   | )    |  |   |       |   |  |   | (298   | )
|Commercial                                                        |  |                                     | (344   | ) |                                   |   | (253   | )    |  |   | (498   | ) |  |   | (860   | )
|Consumer(1)                                                       |  |                                     | (59    | ) |                                   |   | (19    | )    |  |   | (78    | ) |  |   | (31    | )
|                                                                  |  |                                     |        |   |                                   |   |        |      |  |   |        |   |  |   |        |  
|Total loans charged off(2)                                        |  |                                     | (767   | ) |                                   |   | (727   | )    |  |   | (1,576 | ) |  |   | (1,482 | )
|                                                                  |  |                                     |        |   |                                   |   |        |      |  |   |        |   |  |   |        |  
|Recoveries:                                                       |  |                                     |        |   |                                   |   |        |      |  |   |        |   |  |   |        |  
|One-to-four family residential mortgages(1)                       |  |                                     |       |   |                                   |   |       |      |  |   |       |   |  |   | 192    |  
|Commercial                                                        |  |                                     | 44     |   |                                   |   | 66     |      |  |   | 68     |   |  |   | 77     |  
|Consumer(1)                                                       |  |                                     | 3      |   |                                   |   | 1      |      |  |   | 6      |   |  |   | 7      |  
|                                                                  |  |                                     |        |   |                                   |   |        |      |  |   |        |   |  |   |        |  
|Total recoveries(2)                                               |  |                                     | 47     |   |                                   |   | 67     |      |  |   | 74     |   |  |   | 276    |  
|                                                                  |  |                                     |        |   |                                   |   |        |      |  |   |        |   |  |   |        |  
|Reclassification of letter of credit reserve to other liabilities |  |                                     |       |   |                                   |   |       |      |  |   |       |   |  |   | (599   | )
|                                                                  |  |                                     |        |   |                                   |   |        |      |  |   |        |   |  |   |        |  
|Allowance for loan losses, balance (at end of period)             |  | $                                   | 24,777 |   |                                   | $ | 22,665 |      |  | $ | 24,777 |   |  | $ | 22,665 |  
|                                                                  |  |                                     |        |   |                                   |   |        |      |  |   |        |   |  |   |        |  

---

|(1) |  | Specialty consumer mortgage loans originated through our branch network are included in one-to-four family residential loans.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------

|(2) |  | Net annualized charge-offs as a percentage of average total loans were 0.05% for both three month periods ended March 31, 2005 and 2004. Net annualized charge-offs as a percentage
of average total loans were 0.05% for both six month periods ended March 31, 2005 and 2004. There can be no assurance that additional provisions for loan losses will not be required in future periods.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The following table sets forth BankUniteds allocation of the allowance
for loan losses by category as of March 31, 2005 and September 30, 2004.



|                                                |  |                |        |                   |   |       
|----------------------------------------------- |  | -------------- | ------ | ----------------- | - | ------
|                                                |  | March 31,2005  |        | September 30,2004
|                                                |  | (In thousands)
|Balance at the end of the period applicable to: |  |                |        |                   |   |       
|One-to-four family residential(1)               |  | $              | 5,868  |                   | $ | 4,889 
|Home equity loans and lines of credit           |  |                | 3,413  |                   |   | 2,608 
|Multi-family                                    |  |                | 836    |                   |   | 409   
|Commercial real estate                          |  |                | 2,786  |                   |   | 2,706 
|Construction                                    |  |                | 828    |                   |   | 1,500 
|Land                                            |  |                | 1,140  |                   |   | 752   
|Commercial                                      |  |                | 7,768  |                   |   | 7,140 
|Consumer(1)                                     |  |                | 302    |                   |   | 331   
|Unallocated                                     |  |                | 1,836  |                   |   | 3,744 
|                                                |  |                |        |                   |   |       
|Total allowance for loan losses                 |  | $              | 24,777 |                   | $ | 24,079
|                                                |  |                |        |                   |   |       

---

|(1) |  | Specialty consumer mortgage loans originated through our branch network are included in one-to-four family residential loans.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------



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Item 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



The discussion contained in BankUniteds Annual Report on Form 10-K for the year ended September 30, 2004, under Item 7a, Quantitative and
Qualitative Disclosures about Market Risk, provides detailed quantitative and qualitative disclosures about market risk and should be referenced for information thereon.



Risks Associated with Changing Interest Rates.    As a financial intermediary, BankUnited invests
in various types of interest-earning assets (primarily loans, mortgage-backed securities, and investment securities), which are funded largely by interest-bearing liabilities (primarily deposits, FHLB advances, securities sold under agreements to
repurchase, senior notes, and trust preferred securities and subordinated debentures). Such financial instruments have varying levels of sensitivity to changes in market interest rates, which creates interest rate risk for BankUnited. Accordingly,
BankUniteds net interest income, the most significant component of its net income, is subject to substantial volatility due to changes in interest rates or market yield curves, particularly if there are differences, or gaps, in the re-pricing
frequencies of its interest-earning assets and the interest-bearing liabilities which fund them. BankUnited monitors such interest rate gaps and seeks to manage its interest rate risk by adjusting the re-pricing frequencies of its interest-earning
assets and interest-bearing liabilities. Additionally, BankUnited utilizes derivative financial instruments designed to reduce the interest rate risks associated with its interest-earning assets and interest-bearing liabilities. Based on our current
asset/liability model, a moderate or slow rise in interest rates over the next year is not expected to have a significant negative effect on interest rate margin.



Risks Associated with Investments and Mortgage-Backed Securities.    BankUnited purchases fixed
and adjustable rate mortgage-backed securities and other securities for liquidity, yield and risk management purposes. Changes in market interest rates associated with BankUniteds investments and mortgage-backed securities could have a
material adverse effect on BankUniteds carrying value of its securities. Such changes in the carrying value of mortgage-backed securities and other securities classified as available-for-sale would be reflected, net of taxes, as a component of
stockholders equity. See Note 7 to the accompanying condensed notes to consolidated financial statements and Managements Discussion and Analysis of Financial Condition and Results of Operations  Securities Portfolio.



Derivative and Hedging
Activities.    BankUnited uses derivative instruments as part of its interest rate risk management activities to reduce risks associated with its loan origination and borrowing activities. Derivatives used for interest rate
risk management include various interest rate swaps and caps that relate to the pricing of specific on-balance sheet instruments and forecasted transactions. In connection with SFAS No. 133, Accounting for Derivative Instruments and Hedging
Activities (SFAS 133), we recognize all derivatives as either assets or liabilities on the consolidated balance sheet and report them at fair value with realized and unrealized gains and losses included in either earnings or in
other comprehensive income, depending on the purpose for which the derivative is held and whether the derivative qualifies for hedge accounting.



BankUnited uses interest rate swap and cap agreements that qualify as fair value hedges and those that qualify as cash flow hedges. Fair value hedges are
used to hedge fixed rate debt. BankUnited uses cash flow hedges to hedge interest rate risk associated with variable rate debt.



In connection with its interest rate management activities, BankUnited may use other derivatives as economic hedges of on-balance sheet assets and
liabilities or forecasted transactions which do not qualify for hedge accounting under SFAS 133. Accordingly, these derivatives are reported at fair value on the consolidated balance sheet with realized gains and losses included in earnings.



By using derivative instruments, BankUnited is exposed to
credit and market risk. Credit risk, which is the risk that a counterparty to a derivative instrument will fail to perform, is equal to the extent of the fair value gain in a derivative. Credit risk is created when the fair value of a derivative
contract is positive, since this generally indicates that the counterparty owes us. When the fair value of a derivative is negative, no credit risk exists since BankUnited would owe the counterparty. BankUnited minimizes the credit risk in
derivative instruments by



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##### Table of Contents

entering into transactions with high-quality counterparties as evaluated by management. Market risk is the adverse effect on the value of a financial
instrument from a change in interest rates or implied volatility of rates. We manage the market risk associated with interest rate contracts by establishing and monitoring limits as to the types and degree of risk that may be undertaken. The market
risk associated with derivatives used for interest rate risk management activity is fully incorporated into our market risk sensitivity analysis.



Item 4.    CONTROLS AND PROCEDURES



An evaluation of the effectiveness of the design and operation of BankUniteds disclosure controls and procedures was carried out by BankUnited, as of period end under the supervision and with the participation
of BankUniteds management, including the Chief Executive Officer and Chief Financial Officer. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that BankUniteds disclosure controls and procedures
were effective as of March 31, 2005 to provide reasonable assurance that the information required to be disclosed by BankUnited in reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the
time periods specified in the SECs rules and forms. We may make changes to our disclosure controls and procedures periodically, as we review their design and effectiveness on a continuing basis. No change in internal control over financial
reporting occurred during the quarter ended March 31, 2005, that has materially affected, or is likely to materially affect, such internal control over financial reporting. A controls system, no matter how well designed and operated, cannot provide
absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.



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##### Table of Contents

PART IIOTHER INFORMATION



Item 2. (C) PURCHASE OF BANKUNITED SECURITIES



Purchases of BankUnited Equity Securities by BankUnited



|                      |  |                      |  |                            |       |                                                                        |        |                                                                |        
|--------------------- |  | -------------------- |  | -------------------------- | ----- | ---------------------------------------------------------------------- | ------ | -------------------------------------------------------------- | -------
|                      |  | TotalSharesPurchased |  | AveragePrice Paidper Share |       | Total Numberof SharesPurchased asPart of aPubliclyAnnouncedProgram (1) |        | MaximumNumber ofShares that MayYet BePurchasedUnder theProgram
|January 1 - 31, 2005  |  | 11,500               |  | $                          | 29.03 |                                                                        | 11,500 |                                                                | 988,500
|                      |  |                      |  |                           
|February 1 - 28, 2005 |  |                     |  |                            |      |                                                                        |       |                                                                | 988,500
|                      |  |                      |  |                           
|March 1 - 31, 2005    |  |                     |  |                            |      |                                                                        |       |                                                                | 988,500
|                      |  |                      |  |                            |       |                                                                        |        |                                                                |        
|Total                 |  | 11,500               |  | $                          | 29.03 |                                                                        | 11,500 |                                                                | 988,500
|                      |  |                      |  |                            |       |                                                                        |        |                                                                |        

---

|(1) |  | On October 24, 2002 BankUnited announced to the public that its Board of Directors had authorized a stock repurchase program on its Class A Common Stock. Under the program,
BankUnited may purchase up to 1,000,000 shares of its Class A Common Stock. There is no expiration date for this stock purchase program.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Item 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS



The information under Part II, Item 4, of BankUniteds Form 10-Q for the quarterly period ended December 31, 2004, as filed with the Securities and
Exchange Commission on February 8, 2005, is incorporated herein by reference in response to this item.



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Item 6.    EXHIBITS



(a) Exhibits.



| | 10.1 |  | Amendment to the Employment Agreement between BankUnited Financial Corporation and Ramiro Ortiz.*
| | ---- |  | -------------------------------------------------------------------------------------------------



| | 10.2 |  | Advances and Security Agreement effective February 5, 2005 between the Bank and the Federal Home Loan Bank of Atlanta.
| | ---- |  | ----------------------------------------------------------------------------------------------------------------------



| | 10.3 |  | Joinder Agreement effective February 5, 2005 among BU REIT, Inc., BankUnited FSB, and the Federal Home Loan Bank of Atlanta.
| | ---- |  | ----------------------------------------------------------------------------------------------------------------------------



| | 31.1 |  | Certification of the Chief Executive Officer pursuant to Section 302, of the Sarbanes-Oxley Act of 2002.
| | ---- |  | --------------------------------------------------------------------------------------------------------



| | 31.2 |  | Certification of the Chief Financial Officer pursuant to Section 302, of the Sarbanes-Oxley Act of 2002.
| | ---- |  | --------------------------------------------------------------------------------------------------------



| | 32 |  | Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

|* |  | Compensatory plans or arrangements
|- |  | ----------------------------------



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SIGNATURES



Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed by the undersigned
thereunto duly authorized.



BANKUNITED FINANCIAL CORPORATION



/S/ HUMBERTO L. LOPEZ

By:

Humberto L. Lopez

Senior Executive Vice President and Chief Financial Officer



Date:    May 10, 2005



/S/ BERNARDO ARGUDIN

By:

Bernardo Argudin

Executive Vice President and Principal Accounting Officer



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Exhibit Index



|              |  |                                                                                                                                                                                    
|------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description                                                                                                                                                                        
|              | 
|10.1          |  | Amendment to the Employment Agreement between BankUnited Financial Corporation and Ramiro Ortiz.                                                                                   
|              | 
|10.2          |  | Advances and Security Agreement effective February 5, 2005 between the Bank and the Federal Home Loan Bank of Atlanta.                                                             
|              | 
|10.3          |  | Joinder Agreement effective February 5, 2005 among BU REIT, Inc., BankUnited FSB, and the Federal Home Loan Bank of
Atlanta.                                                       
|              | 
|31.1          |  | Certification of the Chief Executive Officer pursuant to Section 302, of the Sarbanes-Oxley Act of 2002.                                                                           
|              | 
|31.2          |  | Certification of the Chief Financial Officer pursuant to Section 302, of the Sarbanes-Oxley Act of 2002.                                                                           
|              | 
|32            |  | Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.