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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, 2006



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 a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of
accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act.



Large accelerated filer x     Accelerated filer ̈Non-accelerated filer ̈



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).    Yes ̈No x



The number of shares outstanding of the registrants common stock at the
close of business on May 1, 2006 was 35,908,846 shares of Class A Common Stock, $.01 par value, and 500,062 shares of Class B Common Stock, $.01 par value.



This Form 10-Q contains 40 pages.

The Index to Exhibits appears on page 36.



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##### Table of Contents

BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



FORM 10-Q REPORT FOR THE QUARTER ENDED MARCH 31, 2006



TABLE OF CONTENTS



|                             |  |                                                                                                              |  |         
|---------------------------- |  | ------------------------------------------------------------------------------------------------------------ |  | --------
|                             |  |                                                                                                              |  | Page No.
|PART IFINANCIAL INFORMATION |  |                                                                                                             
|                             |  |                                                                                                             
|Item 1.                      |  | Financial Statements                                                                                         |  |         
|                             |  |                                                                                                             
|                             |  | Consolidated Statements of Financial Condition as of March 31, 2006 (unaudited) and September 30, 2005       |  | 3       
|                             |  |                                                                                                             
|                             |  | Consolidated Statements of Income (unaudited) for the Three and Six Months Ended March 31, 2006 and 2005     |  | 4       
|                             |  |                                                                                                             
|                             |  | Consolidated Statements of Stockholders Equity (unaudited) for the Six Months Ended March 31, 2006 and 2005 |  | 5       
|                             |  |                                                                                                             
|                             |  | Condensed Consolidated Statements of Cash Flows (unaudited) for the Six Months Ended March 31, 2006 and 2005 |  | 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                                                   |  | 34      
|                             |  |                                                                                                             
|Item 4.                      |  | Controls and Procedures                                                                                      |  | 35      
|                             | 
|PART IIOTHER INFORMATION    |  |                                                                                                             
|                             |  |                                                                                                             
|Item 4.                      |  | Submission of Matters to a Vote of Security Holders                                                          |  | 36      
|                             |  |                                                                                                             
|Item 6.                      |  | Exhibits                                                                                                     |  | 36      



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##### Table of Contents

BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION



|                                                                                                                                   |  |                                          |            |   |                   |   |            |  
|---------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------- | ---------- | - | ----------------- | - | ---------- | -
|                                                                                                                                   |  | March 31,2006                            |            |   | September 30,2005 |  
|                                                                                                                                   |  | (Dollars in thousands, exceptshare data) |           
|ASSETS                                                                                                                             |  |                                          |            |   |                   |   |            |  
|Cash                                                                                                                               |  | $                                        | 56,355     |   |                   | $ | 60,870     |  
|Federal Home Loan Bank overnight deposits                                                                                          |  |                                          | 32,550     |   |                   |   | 175,249    |  
|Federal funds sold                                                                                                                 |  |                                          | 1,768      |   |                   |   | 1,932      |  
|Investment securities available for sale, at fair value                                                                            |  |                                          | 291,909    |   |                   |   | 289,932    |  
|Mortgage-backed securities available for sale, at fair value (including assets pledged of $1,245,890 and $1,223,261,
respectively) |  |                                          | 1,393,735  |   |                   |   | 1,626,005  |  
|Mortgage loans held for sale                                                                                                       |  |                                          | 14,650     |   |                   |   | 12,196     |  
|Loans held in portfolio                                                                                                            |  |                                          | 9,762,712  |   |                   |   | 7,933,759  |  
|Add: Unearned discounts, premiums and deferred costs, net                                                                          |  |                                          | 159,914    |   |                   |   | 119,588    |  
|Less: Allowance for loan losses                                                                                                    |  |                                          | (30,575    | ) |                   |   | (25,755    | )
|                                                                                                                                   |  |                                          |            |   |                   |   |            |  
|Loans held in portfolio, net                                                                                                       |  |                                          | 9,892,051  |   |                   |   | 8,027,592  |  
|                                                                                                                                   |  |                                          |            |   |                   |   |            |  
|Federal Home Loan Bank stock and other earning assets                                                                              |  |                                          | 222,582    |   |                   |   | 190,043    |  
|Office properties and equipment, net                                                                                               |  |                                          | 45,487     |   |                   |   | 41,072     |  
|Real estate owned                                                                                                                  |  |                                          | 224        |   |                   |   | 542        |  
|Interest receivable                                                                                                                |  |                                          | 54,619     |   |                   |   | 41,621     |  
|Mortgage servicing rights                                                                                                          |  |                                          | 21,640     |   |                   |   | 22,101     |  
|Goodwill                                                                                                                           |  |                                          | 28,353     |   |                   |   | 28,353     |  
|Bank-owned life insurance                                                                                                          |  |                                          | 114,759    |   |                   |   | 112,383    |  
|Prepaid expenses and other assets                                                                                                  |  |                                          | 37,739     |   |                   |   | 37,814     |  
|                                                                                                                                   |  |                                          |            |   |                   |   |            |  
|Total assets                                                                                                                       |  | $                                        | 12,208,421 |   |                   | $ | 10,667,705 |  
|                                                                                                                                   |  |                                          |            |   |                   |   |            |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                               |  |                                          |            |   |                   |   |            |  
|Liabilities                                                                                                                        |  |                                          |            |   |                   |   |            |  
|Interest bearing deposits                                                                                                          |  | $                                        | 5,057,859  |   |                   | $ | 4,361,820  |  
|Non-interest bearing deposits                                                                                                      |  |                                          | 395,264    |   |                   |   | 371,535    |  
|                                                                                                                                   |  |                                          |            |   |                   |   |            |  
|Total deposits                                                                                                                     |  |                                          | 5,453,123  |   |                   |   | 4,733,355  |  
|                                                                                                                                   |  |                                          |            |   |                   |   |            |  
|Securities sold under agreements to repurchase                                                                                     |  |                                          | 1,133,212  |   |                   |   | 1,161,348  |  
|Advances from Federal Home Loan Bank                                                                                               |  |                                          | 4,436,350  |   |                   |   | 3,820,385  |  
|Convertible senior notes                                                                                                           |  |                                          | 120,000    |   |                   |   | 120,000    |  
|Trust preferred securities and subordinated debentures                                                                             |  |                                          | 195,957    |   |                   |   | 195,500    |  
|Federal funds purchased                                                                                                            |  |                                          | 65,000     |   |                   |   |           |  
|Interest payable                                                                                                                   |  |                                          | 22,138     |   |                   |   | 15,291     |  
|Advance payments by borrowers for taxes and insurance                                                                              |  |                                          | 49,325     |   |                   |   | 74,998     |  
|Accrued expenses and other liabilities                                                                                             |  |                                          | 42,785     |   |                   |   | 39,212     |  
|                                                                                                                                   |  |                                          |            |   |                   |   |            |  
|Total liabilities                                                                                                                  |  |                                          | 11,517,890 |   |                   |   | 10,160,089 |  
|                                                                                                                                   |  |                                          |            |   |                   |   |            |  
|Commitments and Contingencies (See notes 8 and 10)                                                                                 |  |                                          |            |   |                   |   |            |  
|Stockholders Equity                                                                                                               |  |                                          |            |   |                   |   |            |  
|Preferred stock, $0.01 par value                                                                                                   |  |                                          | 10         |   |                   |   | 9          |  
|Authorized shares10,000,000                                                                                                       |  |                                          |            |   |                   |   |            |  
|Issued shares984,713 and 889,139 Outstanding shares957,993 and 862,419 Treasury shares26,720                                    |  |                                          | (528       | ) |                   |   | (528       | )
|Class A common stock, $0.01 par value                                                                                              |  |                                          | 363        |   |                   |   | 302        |  
|Authorized shares60,000,000                                                                                                       |  |                                          |            |   |                   |   |            |  
|Issued shares36,281,735 and 30,202,220 Outstanding shares35,848,155 and 29,768,791 Treasury shares433,580 and 433,429           |  |                                          | (5,226     | ) |                   |   | (5,223     | )
|Class B common stock, $0.01 par value                                                                                              |  |                                          | 6          |   |                   |   | 6          |  
|Authorized shares3,000,000                                                                                                        |  |                                          |            |   |                   |   |            |  
|Issued shares599,762 and 612,762 Outstanding shares398,562 and 431,562 Treasury shares201,200 and 181,200                       |  |                                          | (2,229     | ) |                   |   | (1,977     | )
|Additional paid-in capital                                                                                                         |  |                                          | 497,235    |   |                   |   | 342,859    |  
|Retained earnings                                                                                                                  |  |                                          | 228,669    |   |                   |   | 193,372    |  
|Deferred compensation                                                                                                              |  |                                          | 1,801      |   |                   |   | 1,695      |  
|Accumulated other comprehensive loss, net of tax                                                                                   |  |                                          | (29,570    | ) |                   |   | (22,899    | )
|                                                                                                                                   |  |                                          |            |   |                   |   |            |  
|Total stockholders equity                                                                                                         |  |                                          | 690,531    |   |                   |   | 507,616    |  
|                                                                                                                                   |  |                                          |            |   |                   |   |            |  
|Total liabilities and stockholders equity                                                                                         |  | $                                        | 12,208,421 |   |                   | $ | 10,667,705 |  
|                                                                                                                                   |  |                                          |            |   |                   |   |            |  

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, |  
|                                                                                 |  | 2006                                                    |         |   | 2005                               |   |         | 2006 |  |   | 2005    |  
|                                                                                 |  | (Dollars and shares in thousands,except per share data) |        
|Interest income:                                                                 |  |                                                         |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Interest and fees on loans                                                       |  | $                                                       | 141,479 |   |                                    | $ | 79,154  |      |  | $ | 262,488 |   |  | $ | 149,854 |  
|Interest on mortgage-backed securities                                           |  |                                                         | 16,293  |   |                                    |   | 16,884  |      |  |   | 32,923  |   |  |   | 35,120  |  
|Interest and dividends on other investments and other interest-earning assets    |  |                                                         | 6,874   |   |                                    |   | 5,657   |      |  |   | 12,928  |   |  |   | 11,000  |  
|                                                                                 |  |                                                         |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Total interest income                                                            |  |                                                         | 164,646 |   |                                    |   | 101,695 |      |  |   | 308,339 |   |  |   | 195,974 |  
|                                                                                 |  |                                                         |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Interest expense:                                                                |  |                                                         |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Interest on deposits                                                             |  |                                                         | 44,732  |   |                                    |   | 21,901  |      |  |   | 83,904  |   |  |   | 40,997  |  
|Interest on borrowings                                                           |  |                                                         | 56,094  |   |                                    |   | 37,099  |      |  |   | 105,374 |   |  |   | 70,615  |  
|Interest on subordinated debentures and preferred dividends of subsidiary trusts |  |                                                         | 3,812   |   |                                    |   | 3,141   |      |  |   | 7,575   |   |  |   | 5,930   |  
|                                                                                 |  |                                                         |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Total interest expense                                                           |  |                                                         | 104,638 |   |                                    |   | 62,141  |      |  |   | 196,853 |   |  |   | 117,542 |  
|                                                                                 |  |                                                         |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Net interest income before provision for loan losses                             |  |                                                         | 60,008  |   |                                    |   | 39,554  |      |  |   | 111,486 |   |  |   | 78,432  |  
|Provision for loan losses                                                        |  |                                                         | 2,300   |   |                                    |   | 1,050   |      |  |   | 4,600   |   |  |   | 2,200   |  
|                                                                                 |  |                                                         |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Net interest income after provision for loan losses                              |  |                                                         | 57,708  |   |                                    |   | 38,504  |      |  |   | 106,886 |   |  |   | 76,232  |  
|                                                                                 |  |                                                         |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Non-interest income:                                                             |  |                                                         |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Loan servicing fees                                                              |  |                                                         | 1,705   |   |                                    |   | 837     |      |  |   | 3,158   |   |  |   | 1,707   |  
|Amortization of mortgage servicing rights                                        |  |                                                         | (841    | ) |                                    |   | (811    | )    |  |   | (1,727  | ) |  |   | (1,581  | )
|Impairment of mortgage servicing rights                                          |  |                                                         | (330    | ) |                                    |   |        |      |  |   | (330    | ) |  |   |        |  
|Loan fees                                                                        |  |                                                         | 954     |   |                                    |   | 586     |      |  |   | 1,663   |   |  |   | 1,143   |  
|Deposit fees                                                                     |  |                                                         | 1,338   |   |                                    |   | 1,010   |      |  |   | 2,655   |   |  |   | 2,116   |  
|Other fees                                                                       |  |                                                         | 707     |   |                                    |   | 517     |      |  |   | 1,347   |   |  |   | 1,035   |  
|Net gain on sale of investments                                                  |  |                                                         | 0       |   |                                    |   | 878     |      |  |   | 0       |   |  |   | 2,488   |  
|Net gain on sale of loans and other assets                                       |  |                                                         | 1,872   |   |                                    |   | 1,687   |      |  |   | 3,762   |   |  |   | 2,080   |  
|Insurance and investment services income                                         |  |                                                         | 1,312   |   |                                    |   | 1,252   |      |  |   | 2,207   |   |  |   | 2,215   |  
|Other                                                                            |  |                                                         | 441     |   |                                    |   | 1,130   |      |  |   | 1,930   |   |  |   | 2,233   |  
|                                                                                 |  |                                                         |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Total non-interest income                                                        |  |                                                         | 7,158   |   |                                    |   | 7,086   |      |  |   | 14,665  |   |  |   | 13,436  |  
|                                                                                 |  |                                                         |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Non-interest expenses:                                                           |  |                                                         |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Employee compensation and benefits                                               |  |                                                         | 17,811  |   |                                    |   | 12,843  |      |  |   | 34,572  |   |  |   | 24,039  |  
|Occupancy and equipment                                                          |  |                                                         | 7,355   |   |                                    |   | 5,391   |      |  |   | 14,298  |   |  |   | 10,392  |  
|Telecommunications and data processing                                           |  |                                                         | 2,336   |   |                                    |   | 1,527   |      |  |   | 4,461   |   |  |   | 3,146   |  
|Advertising and promotion expense                                                |  |                                                         | 1,664   |   |                                    |   | 1,375   |      |  |   | 3,062   |   |  |   | 2,819   |  
|Professional fees                                                                |  |                                                         | 1,417   |   |                                    |   | 1,307   |      |  |   | 2,913   |   |  |   | 2,155   |  
|Other                                                                            |  |                                                         | 4,789   |   |                                    |   | 3,192   |      |  |   | 8,498   |   |  |   | 5,806   |  
|                                                                                 |  |                                                         |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Total non-interest expenses                                                      |  |                                                         | 35,372  |   |                                    |   | 25,635  |      |  |   | 67,804  |   |  |   | 48,357  |  
|                                                                                 |  |                                                         |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Income before income taxes                                                       |  |                                                         | 29,494  |   |                                    |   | 19,955  |      |  |   | 53,747  |   |  |   | 41,311  |  
|Provision for income taxes                                                       |  |                                                         | 9,806   |   |                                    |   | 6,399   |      |  |   | 17,884  |   |  |   | 13,230  |  
|                                                                                 |  |                                                         |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Net income                                                                       |  | $                                                       | 19,688  |   |                                    | $ | 13,556  |      |  | $ | 35,863  |   |  | $ | 28,081  |  
|                                                                                 |  |                                                         |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Earnings Per Share:                                                              |  |                                                         |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Basic                                                                            |  | $                                                       | 0.57    |   |                                    | $ | 0.45    |      |  | $ | 1.10    |   |  | $ | 0.93    |  
|                                                                                 |  |                                                         |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Diluted                                                                          |  | $                                                       | 0.54    |   |                                    | $ | 0.42    |      |  | $ | 1.04    |   |  | $ | 0.87    |  
|                                                                                 |  |                                                         |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|                                                                                 |  |                                                         |         |  
|Dividend declared per share                                                      |  | $                                                       | 0.005   |   |                                    | $ | 0.005   |      |  | $ | 0.01    |   |  | $ | 0.005   |  
|Weighted average number of common shares outstanding:                            |  |                                                         |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Basic                                                                            |  |                                                         | 34,453  |   |                                    |   | 30,116  |      |  |   | 32,288  |   |  |   | 30,053  |  
|Diluted                                                                          |  |                                                         | 36,663  |   |                                    |   | 32,432  |      |  |   | 34,412  |   |  |   | 32,415  |  



See accompanying
condensed notes to consolidated financial statements



4



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##### Table of Contents

BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY



|                                                           |  |                                                  |    |             |   |                           |  |                  |         |  |               |         |   |                      |   |                                               |   |  |                          |       |  |   |         |   |  |   |         |  
|---------------------------------------------------------- |  | ------------------------------------------------ | -- | ----------- | - | ------------------------- |  | ---------------- | ------- |  | ------------- | ------- | - | -------------------- | - | --------------------------------------------- | - |  | ------------------------ | ----- |  | - | ------- | - |  | - | ------- | -
|                                                           |  | For the Six Months Ended March 31, 2006 and 2005 |   
|                                                           |  | PreferredStock                                   |    | CommonStock |   | Additional Paid-inCapital |  | RetainedEarnings |         |  | TreasuryStock |         |   | DeferredCompensation |   | AccumulatedOtherComprehensiveLoss, Net of Tax |   |  | TotalStockholdersEquity |      
|                                                           |  |                                                  |    |             |   |                           |  |                 
|                                                           |  | (In thousands)                                   |   
|Balance at September 30, 2005                              |  | $                                                | 9  |             | $ | 308                       |  | $                | 342,859 |  | $             | 193,372 |   |                      | $ | (7,728                                        | ) |  | $                        | 1,695 |  | $ | (22,899 | ) |  | $ | 507,616 |  
|Comprehensive income:                                      |  |                                                  |    |             |   |                           |  |                  |         |  |               |         |   |                      |   |                                               |   |  |                          |       |  |   |         |   |  |   |         |  
|Net income for the six months ended March 31, 2006         |  |                                                  |   |             |   |                          |  |                  |        |  |               | 35,863  |   |                      |   |                                              |   |  |                          |      |  |   |        |   |  |   | 35,863  |  
|Other comprehensive loss, net of tax                       |  |                                                  |   |             |   |                          |  |                  |        |  |               |        |   |                      |   |                                              |   |  |                          |      |  |   | (6,671  | ) |  |   | (6,671  | )
|                                                           |  |                                                  |    |             |   |                           |  |                  |         |  |               |         |   |                      |   |                                               |   |  |                          |       |  |   |         |   |  |   |         |  
|Total comprehensive income                                 |  |                                                  |   |             |   |                          |  |                  |        |  |               |        |   |                      |   |                                              |   |  |                          |      |  |   |        |   |  |   | 29,192  |  
|Payment of dividends                                       |  |                                                  |   |             |   |                          |  |                  |        |  |               | (566    | ) |                      |   |                                              |   |  |                          |      |  |   |        |   |  |   | (566    | )
|Stock offering                                             |  |                                                  |   |             |   | 58                        |  |                  | 150,226 |  |               |        |   |                      |   |                                              |   |  |                          |       |  |   |        |   |  |   | 150,284 |  
|Purchase of stock                                          |  |                                                  |   |             |   |                          |  |                  |        |  |               |        |   |                      |   | (255                                          | ) |  |                          |      |  |   |        |   |  |   | (255    | )
|Deferral of compensation                                   |  |                                                  |   |             |   |                          |  |                  |        |  |               |        |   |                      |   |                                              |   |  |                          | 106   |  |   |        |   |  |   | 106     |  
|Stock option exercises and restricted stock awards         |  |                                                  | 1  |             |   | 3                         |  |                  | 4,150   |  |               |        |   |                      |   |                                              |   |  |                          |      |  |   |        |   |  |   | 4,154   |  
|                                                           |  |                                                  |    |             |   |                           |  |                  |         |  |               |         |   |                      |   |                                               |   |  |                          |       |  |   |         |   |  |   |         |  
|Balance at March 31, 2006                                  |  | $                                                | 10 |             | $ | 369                       |  | $                | 497,235 |  | $             | 228,669 |   |                      | $ | (7,983                                        | ) |  | $                        | 1,801 |  | $ | (29,570 | ) |  | $ | 690,531 |  
|                                                           |  |                                                  |    |             |   |                           |  |                  |         |  |               |         |   |                      |   |                                               |   |  |                          |       |  |   |         |   |  |   |         |  
|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 dividends                                       |  |                                                  |   |             |   |                          |  |                  |        |  |               | (207    | ) |                      |   |                                              |   |  |                          |      |  |   |        |   |  |   | (207    | )
|Declaration of common stock dividends                      |  |                                                  |   |             |   |                          |  |                  |        |  |               | (149    | ) |                      |   |                                              |   |  |                          |      |  |   |        |   |  |   | (149    | )
|Purchase of stock                                          |  |                                                  |   |             |   |                          |  |                  |        |  |               |        |   |                      |   | (334                                          | ) |  |                          |      |  |   |        |   |  |   | (334    | )
|Deferral of compensation                                   |  |                                                  |   |             |   |                          |  |                  |        |  |               |        |   |                      |   |                                              |   |  |                          | 247   |  |   |        |   |  |   | 247     |  
|Shares acquired through deferred compensation arrangements |  |                                                  |   |             |   |                          |  |                  |        |  |               |        |   |                      |   | (490                                          | ) |  |                          |      |  |   |        |   |  |   | (490    | )
|Stock option exercises and restricted stock awards         |  |                                                  | 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 |  
|                                                           |  |                                                  |    |             |   |                           |  |                  |         |  |               |         |   |                      |   |                                               |   |  |                          |       |  |   |         |   |  |   |         |  



See accompanying
condensed notes to consolidated financial statements



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



|                                                                                                |  |                                   |            |   |      |   |            |  
|----------------------------------------------------------------------------------------------- |  | --------------------------------- | ---------- | - | ---- | - | ---------- | -
|                                                                                                |  | For the Six Months EndedMarch 31, |           
|                                                                                                |  | 2006                              |            |   | 2005 |  
|                                                                                                |  | (In thousands)                    |           
|Cash flows used in operating activities                                                         |  | $                                 | (30,882    | ) |      | $ | (14,397    | )
|                                                                                                |  |                                   |            |   |      |   |            |  
|Cash flows from investing activities:                                                           |  |                                   |            |   |      |   |            |  
|Net increase in loans held in portfolio                                                         |  |                                   | (1,876,720 | ) |      |   | (1,092,549 | )
|Purchase of investment securities available for sale                                            |  |                                   | (19,686    | ) |      |   | (57,155    | )
|Purchase of mortgage-backed securities available for sale                                       |  |                                   |           |   |      |   | (715       | )
|Purchase of other earning assets                                                                |  |                                   | (98,284    | ) |      |   | (47,498    | )
|Purchase of office properties and equipment                                                     |  |                                   | (8,614     | ) |      |   | (10,205    | )
|Proceeds from repayments of investment securities available for sale                            |  |                                   | 16,540     |   |      |   | 25         |  
|Proceeds from repayments of mortgage-backed securities available for sale                       |  |                                   | 220,577    |   |      |   | 320,046    |  
|Proceeds from repayments of other earning assets                                                |  |                                   | 65,745     |   |      |   | 44,675     |  
|Proceeds from sale of investment securities available for sale                                  |  |                                   | 3,780      |   |      |   | 78,874     |  
|Proceeds from sale of mortgage-backed securities available for sale                             |  |                                   | 81,406     |   |      |   | 114,465    |  
|Proceeds from sale of real estate owned and other assets                                        |  |                                   | 746        |   |      |   | 1,794      |  
|Proceeds from sale of office properties and equipment                                           |  |                                   | 29         |   |      |   | 14         |  
|                                                                                                |  |                                   |            |   |      |   |            |  
|Net cash used in investing activities                                                           |  |                                   | (1,614,481 | ) |      |   | (648,229   | )
|                                                                                                |  |                                   |            |   |      |   |            |  
|Cash flows from financing activities:                                                           |  |                                   |            |   |      |   |            |  
|Net increase in deposits                                                                        |  |                                   | 719,768    |   |      |   | 515,640    |  
|Additions to long-term Federal Home Loan Bank advances                                          |  |                                   | 1,240,000  |   |      |   | 200,000    |  
|Repayments of long-term Federal Home Loan Bank advances                                         |  |                                   | (851,035   | ) |      |   | (275,034   | )
|Net increase in short-term Federal Home Loan Bank advances                                      |  |                                   | 227,000    |   |      |   | 91,000     |  
|Net increase in other borrowings                                                                |  |                                   | 36,864     |   |      |   | 2,229      |  
|Net proceeds from issuance of subordinated debentures                                           |  |                                   |           |   |      |   | 30,928     |  
|Net proceeds from issuance of stock                                                             |  |                                   | 151,627    |   |      |   | 1,032      |  
|Purchase of stock                                                                               |  |                                   |           |   |      |   | (334       | )
|Dividends paid on common stock                                                                  |  |                                   | (329       | ) |      |   |           |  
|Dividends paid on preferred stock                                                               |  |                                   | (237       | ) |      |   | (207       | )
|Decrease in advances from borrowers for taxes and insurance                                     |  |                                   | (25,673    | ) |      |   | (20,344    | )
|                                                                                                |  |                                   |            |   |      |   |            |  
|Net cash provided by financing activities                                                       |  |                                   | 1,497,985  |   |      |   | 544,910    |  
|                                                                                                |  |                                   |            |   |      |   |            |  
|Decrease in cash and cash equivalents                                                           |  |                                   | (147,378   | ) |      |   | (117,716   | )
|Cash and cash equivalents at beginning of period                                                |  |                                   | 238,051    |   |      |   | 181,894    |  
|                                                                                                |  |                                   |            |   |      |   |            |  
|Cash and cash equivalents at end of period                                                      |  | $                                 | 90,673     |   |      | $ | 64,178     |  
|                                                                                                |  |                                   |            |   |      |   |            |  
|Supplemental disclosure of non-cash activities:                                                 |  |                                   |            |   |      |   |            |  
|Exchange of loans for mortgage-backed securities in loan sales transactions with FNMA and FHLMC |  | $                                 | 93,934     |   |      | $ | 60,966     |  



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
consolidated subsidiaries, including BankUnited, FSB (the Bank). 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, 2006 are not necessarily indicative of the results that may be expected for the year ending September 30, 2006. 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 and Form 10-K/A for the fiscal year ended September 30, 2005.



Certain prior period amounts have been reclassified to conform to the March 31, 2006 consolidated financial statements
presentation.



2.    Impact of Certain Accounting
Pronouncements



SFAS No. 123R



In March 2004, the FASB issued a statement to revise Statement of Financial
Accounting Standards (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 eliminates the
ability to account for share-based compensation transactions using APB Opinion No. 25, Accounting for Stock Issued to Employees, and requires instead that such transactions be accounted for using a fair-value-based method. The
Securities and Exchange Commission requires companies to implement SFAS No. 123R by the beginning of the next fiscal year that begins after June 15, 2005. On October 1, 2005, BankUnited implemented SFAS No. 123R using the
modified prospective method of transition. See Note 9, Stock Based Compensation, for more information about BankUniteds stock-based compensation programs.



SFAS No. 154



In May 2005, the FASB issued SFAS No. 154 Accounting Changes and Error Corrections. This statement replaces Accounting Principles Board
Opinion No. 20 Accounting Changes, and FASB Statement No. 3, Reporting Accounting Changes in Interim Financial Statements and changes the requirements for the accounting for and reporting of a change in accounting
principle. SFAS No. 154 shall be effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. BankUnited will adopt this statement, as applicable, in its fiscal year beginning
October 1, 2006.



SFAS No. 155



In February 2006, the FASB issued SFAS No. 155 Accounting for Certain
Hybrids Financial Instruments. This statement amends SFAS No 133 Accounting for Derivative Instruments and Hedging Activities, and No. 140 Accounting for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities.



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CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONTINUED



This Statement resolves issues addressed in Statement 133 Implementation Issue No. D1,
Application of Statement 133 to Beneficial Interests in Securitized Financial Assets.



SFAS No. 155 addresses the following:



| |  |  | Permits fair value remeasurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Clarifies which interest-only strips and principal-only strips are not subject to the requirements of SFAS No. 133;
| | - |  | -------------------------------------------------------------------------------------------------------------------



| |  |  | Establishes a requirement to evaluate interests in securitized financial assets to identify interests that are freestanding derivatives or that are hybrid financial instruments that
contain an embedded derivative requiring bifurcation;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Clarifies that concentrations of credit risk in the form of subordination are not embedded derivatives;
| | - |  | -------------------------------------------------------------------------------------------------------



| |  |  | Amends SFAS No. 140 to eliminate the prohibition on a qualifying special-purpose entity from holding a derivative financial instrument that pertains to a beneficial interest other
than another derivative financial instrument.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



SFAS No. 155 shall be effective for all financial instruments acquired or issued after the beginning of an entitys first fiscal year that begins after September 15, 2006. Therefore, BankUnited will adopt this statement, as applicable,
in its fiscal year beginning October 1, 2006.



SFAS No. 156



In March 2006, the FASB issued SFAS No. 156
Accounting for Servicing of Financial Assets. This statement amends SFAS No. 140 Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities with respect to the accounting for separately
recognized servicing assets and servicing liabilities. SFAS No. 156 provides for alternative accounting treatments of mortgage servicing rights for transactions entered into after the adoption of the pronouncement and shall be effective for an
entitys first fiscal year that begins after September 15, 2006. BankUnited will consider the alternative treatment of accounting for new transactions in the fiscal year beginning October 1, 2006.



3.    Investments and Mortgage-backed Securities Available for Sale



Investment Securities Available for Sale



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



|                                                          |  |                |         |                      |   |                       |  |   |            |   |  |   |        
|--------------------------------------------------------- |  | -------------- | ------- | -------------------- | - | --------------------- |  | - | ---------- | - |  | - | -------
|                                                          |  | March 31, 2006
|                                                          |  | AmortizedCost  |         | GrossUnrealizedGains |   | GrossUnrealizedLosses |  |   | Fair Value
|                                                          |  | (In thousands)
|U.S. government sponsored entity debt securities          |  | $              | 72,613  |                      | $ |                      |  | $ | (1,315     | ) |  | $ | 71,298 
|Preferred stock of U.S. government sponsored entities (1) |  |                | 96,084  |                      |   | 250                   |  |   | (4,091     | ) |  |   | 92,243 
|Trust preferred securities of other issuers               |  |                | 23,088  |                      |   | 313                   |  |   | (70        | ) |  |   | 23,331 
|Mutual funds and other bonds (2)                          |  |                | 107,636 |                      |   | 15                    |  |   | (4,788     | ) |  |   | 102,863
|Other equity securities                                   |  |                | 2,011   |                      |   | 163                   |  |   |           |   |  |   | 2,174  
|                                                          |  |                |         |                      |   |                       |  |   |            |   |  |   |        
|Total                                                     |  | $              | 301,432 |                      | $ | 741                   |  | $ | (10,264    | ) |  | $ | 291,909
|                                                          |  |                |         |                      |   |                       |  |   |            |   |  |   |        



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CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONTINUED



|                                                          |  |                    |         |                      |   |                       |  |   |            |   |  |   |        
|--------------------------------------------------------- |  | ------------------ | ------- | -------------------- | - | --------------------- |  | - | ---------- | - |  | - | -------
|                                                          |  | September 30, 2005
|                                                          |  | AmortizedCost      |         | GrossUnrealizedGains |   | GrossUnrealizedLosses |  |   | Fair Value
|                                                          |  | (In thousands)    
|U.S. government sponsored entity debt securities          |  | $                  | 72,637  |                      | $ |                      |  | $ | (1,203     | ) |  | $ | 71,434 
|Preferred stock of U.S. government sponsored entities (1) |  |                    | 96,085  |                      |   | 15                    |  |   | (4,523     | ) |  |   | 91,577 
|Trust preferred securities of other issuers               |  |                    | 23,120  |                      |   | 379                   |  |   | (72        | ) |  |   | 23,427 
|Mutual funds and other bonds (2)                          |  |                    | 105,628 |                      |   | 29                    |  |   | (3,225     | ) |  |   | 102,432
|Other equity securities                                   |  |                    | 1,011   |                      |   | 51                    |  |   |           |   |  |   | 1,062  
|                                                          |  |                    |         |                      |   |                       |  |   |            |   |  |   |        
|Total                                                     |  | $                  | 298,481 |                      | $ | 474                   |  | $ | (9,023     | ) |  | $ | 289,932
|                                                          |  |                    |         |                      |   |                       |  |   |            |   |  |   |        

---

|(1) | U.S. Government sponsored entities include Federal National Mortgage Association, (FNMA) and Federal Home Loan Mortgage Corporation, (FHLMC).
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------

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



Investment securities available for sale as of March 31, 2006 by contractual maturity are shown below.



|                                       |  |                |         |            |   |        
|-------------------------------------- |  | -------------- | ------- | ---------- | - | -------
|                                       |  | March 31, 2006
|                                       |  | AmortizedCost  |         | Fair Value
|                                       |  | (In thousands)
|Due in one year or less                |  | $              | 56,185  |            | $ | 55,458 
|Due after one year through five years  |  |                | 30,695  |            |   | 30,015 
|Due after five years through ten years |  |                | 3,771   |            |   | 3,758  
|Due after ten years                    |  |                | 43,817  |            |   | 43,391 
|Mutual funds and equity securities     |  |                | 166,964 |            |   | 159,287
|                                       |  |                |         |            |   |        
|Total                                  |  | $              | 301,432 |            | $ | 291,909
|                                       |  |                |         |            |   |        



Mortgage-Backed
Securities Available for Sale



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



|                                    |  |                |           |                      |   |                       |  |   |            |   |  |   |          
|----------------------------------- |  | -------------- | --------- | -------------------- | - | --------------------- |  | - | ---------- | - |  | - | ---------
|                                    |  | March 31, 2006
|                                    |  | AmortizedCost  |           | GrossUnrealizedGains |   | GrossUnrealizedLosses |  |   | Fair Value
|                                    |  | (In thousands)
|FNMA mortgage-backed securities     |  | $              | 237,761   |                      | $ | 115                   |  | $ | (11,726    | ) |  | $ | 226,150  
|FHLMC mortgage-backed securities    |  |                | 70,959    |                      |   | 43                    |  |   | (2,003     | ) |  |   | 68,999   
|Collateralized mortgage obligations |  |                | 7,862     |                      |   | 1,167                 |  |   | (29        | ) |  |   | 9,000    
|Mortgage pass-through certificates  |  |                | 1,113,423 |                      |   | 61                    |  |   | (23,898    | ) |  |   | 1,089,586
|                                    |  |                |           |                      |   |                       |  |   |            |   |  |   |          
|Total(1)                            |  | $              | 1,430,005 |                      | $ | 1,386                 |  | $ | (37,656    | ) |  | $ | 1,393,735
|                                    |  |                |           |                      |   |                       |  |   |            |   |  |   |          



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CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONTINUED



|                                    |  |                    |           |                      |   |                       |  |   |            |   |  |   |          
|----------------------------------- |  | ------------------ | --------- | -------------------- | - | --------------------- |  | - | ---------- | - |  | - | ---------
|                                    |  | September 30, 2005
|                                    |  | AmortizedCost      |           | GrossUnrealizedGains |   | GrossUnrealizedLosses |  |   | Fair Value
|                                    |  | (In thousands)    
|FNMA mortgage-backed securities     |  | $                  | 266,564   |                      | $ | 168                   |  | $ | (7,624     | ) |  | $ | 259,108  
|FHLMC mortgage-backed securities    |  |                    | 80,659    |                      |   | 53                    |  |   | (1,248     | ) |  |   | 79,464   
|Collateralized mortgage obligations |  |                    | 9,065     |                      |   | 1,308                 |  |   | (29        | ) |  |   | 10,344   
|Mortgage pass-through certificates  |  |                    | 1,296,773 |                      |   | 376                   |  |   | (20,060    | ) |  |   | 1,277,089
|                                    |  |                    |           |                      |   |                       |  |   |            |   |  |   |          
|Total(1)                            |  | $                  | 1,653,061 |                      | $ | 1,905                 |  | $ | (28,961    | ) |  | $ | 1,626,005
|                                    |  |                    |           |                      |   |                       |  |   |            |   |  |   |          

---

|(1) | Included in BankUniteds portfolio of mortgage-backed securities as of March 31, 2006 and September 30, 2005, were securities with a fair value of $264 million and
$279 million, respectively, retained from BankUniteds mortgage loans securitization.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Mortgage-backed securities available for sale as of March 31, 2006, by contractual maturity and adjusted for anticipated prepayments, are shown
below.



|                                       |  |                |           |            |   |          
|-------------------------------------- |  | -------------- | --------- | ---------- | - | ---------
|                                       |  | March 31, 2006
|                                       |  | Amortized Cost |           | Fair Value
|                                       |  | (In thousands)
|Due in one year or less                |  | $              | 629,060   |            | $ | 612,985  
|Due after one year through five years  |  |                | 709,840   |            |   | 691,942  
|Due after five years through ten years |  |                | 70,083    |            |   | 68,316   
|Due after ten years                    |  |                | 21,022    |            |   | 20,492   
|                                       |  |                |           |            |   |          
|Total                                  |  | $              | 1,430,005 |            | $ | 1,393,735
|                                       |  |                |           |            |   |          



Based on the internal
model used by BankUnited, estimated average duration of the mortgage-backed securities portfolio as of March 31, 2006 was 1.78 years. This duration extends to 2.23 years in a hypothetical scenario that adds 100 basis points to market interest
rates. The model used by BankUnited is based on assumptions that may differ from the eventual outcome.



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONTINUED



The following tables provide information for investments and mortgage-backed securities available for
sale with unrealized losses as of March 31, 2006 and September 30, 2005, segregated between investments and mortgaged-backed securities sustaining unrealized losses for periods less than twelve months, and twelve months or greater.



|                                                          |  |                          |         |                      |                      |        |            |       |                       |         |  |            |         |                       |  |   |           |  |   |         |  
|--------------------------------------------------------- |  | ------------------------ | ------- | -------------------- | -------------------- | ------ | ---------- | ----- | --------------------- | ------- |  | ---------- | ------- | --------------------- |  | - | --------- |  | - | ------- | -
|                                                          |  | As of March 31, 2006     |         |                      |                      |        |            |      
|                                                          |  | Less than 12 Months      |         |                      | 12 Months or Greater |        |            | Total |                      
|                                                          |  | Fair Value               |         | UnrealizedLosses (1) |                      |        | Fair Value |       | Unrealized Losses (1) |         |  | Fair Value |         | Unrealized Losses (1) | 
|                                                          |  | (In thousands)           |        
|Available for sale securities                             |  |                          |         |                      |                      |        |            |       |                       |         |  |            |         |                       |  |   |           |  |   |         |  
|Investment securities:                                    |  |                          |         |                      |                      |        |            |       |                       |         |  |            |         |                       |  |   |           |  |   |         |  
|Trust preferred securities of other issuers               |  | $                        | 1,995   |                      | $                    | (5     | )          |       | $                     | 1,935   |  | $          | (65     | )                     |  | $ | 3,930     |  | $ | (70     | )
|U.S. government sponsored entity debt securities (2)      |  |                          |        |                      |                      |       |            |       |                       | 71,298  |  |            | (1,315  | )                     |  |   | 71,298    |  |   | (1,315  | )
|Preferred stock of U.S. government sponsored entities (2) |  |                          | 18,915  |                      |                      | (1,164 | )          |       |                       | 38,141  |  |            | (2,927  | )                     |  |   | 57,056    |  |   | (4,091  | )
|Mutual funds and other bonds (3)                          |  |                          | 15,202  |                      |                      | (313   | )          |       |                       | 79,559  |  |            | (4,475  | )                     |  |   | 94,761    |  |   | (4,788  | )
|                                                          |  |                          |         |                      |                      |        |            |       |                       |         |  |            |         |                       |  |   |           |  |   |         |  
|Total investment securities                               |  | $                        | 36,112  |                      | $                    | (1,482 | )          |       | $                     | 190,933 |  | $          | (8,782  | )                     |  | $ | 227,045   |  | $ | (10,264 | )
|                                                          |  |                          |         |                      |                      |        |            |       |                       |         |  |            |         |                       |  |   |           |  |   |         |  
|Mortgage-backed securities:                               |  |                          |         |                      |                      |        |            |       |                       |         |  |            |         |                       |  |   |           |  |   |         |  
|FNMA mortgage-backed securities                           |  | $                        | 1,215   |                      | $                    | (10    | )          |       | $                     | 218,787 |  | $          | (11,716 | )                     |  | $ | 220,002   |  | $ | (11,726 | )
|FHLMC mortgage-backed securities                          |  |                          | 1,201   |                      |                      | (15    | )          |       |                       | 65,074  |  |            | (1,988  | )                     |  |   | 66,275    |  |   | (2,003  | )
|Collateralized mortgage obligations                       |  |                          |        |                      |                      |       |            |       |                       | 1,576   |  |            | (29     | )                     |  |   | 1,576     |  |   | (29     | )
|Mortgage pass-through certificates                        |  |                          | 372,290 |                      |                      | (3,804 | )          |       |                       | 700,560 |  |            | (20,094 | )                     |  |   | 1,072,850 |  |   | (23,898 | )
|                                                          |  |                          |         |                      |                      |        |            |       |                       |         |  |            |         |                       |  |   |           |  |   |         |  
|Total mortgage-backed securities                          |  | $                        | 374,706 |                      | $                    | (3,829 | )          |       | $                     | 985,997 |  | $          | (33,827 | )                     |  | $ | 1,360,703 |  | $ | (37,656 | )
|                                                          |  |                          |         |                      |                      |        |            |       |                       |         |  |            |         |                       |  |   |           |  |   |         |  
|                                                          |  |                          |        
|                                                          |  | As of September 30, 2005 |         |                      |                      |        |            |      
|                                                          |  | Less than 12 Months      |         |                      | 12 Months or Greater |        |            | Total |                      
|                                                          |  | Fair Value               |         | UnrealizedLosses (1) |                      |        | Fair Value |       | Unrealized Losses (1) |         |  | Fair Value |         | Unrealized Losses (1) | 
|                                                          |  | (In thousands)           |        
|Available for sale securities                             |  |                          |         |                      |                      |        |            |       |                       |         |  |            |         |                       |  |   |           |  |   |         |  
|Investment securities:                                    |  |                          |         |                      |                      |        |            |       |                       |         |  |            |         |                       |  |   |           |  |   |         |  
|Trust preferred securities of other issuers               |  | $                        |        |                      | $                    |       |            |       | $                     | 1,929   |  | $          | (72     | )                     |  | $ | 1,929     |  | $ | (72     | )
|U.S. government sponsored entity debt securities (2)      |  |                          | 71,434  |                      |                      | (1,203 | )          |       |                       |        |  |            |        |                       |  |   | 71,434    |  |   | (1,203  | )
|Preferred stock of U.S. government sponsored entities (2) |  |                          | 56,816  |                      |                      | (3,172 | )          |       |                       | 29,821  |  |            | (1,351  | )                     |  |   | 86,637    |  |   | (4,523  | )
|Mutual funds and other bonds (3)                          |  |                          | 8,000   |                      |                      | (30    | )          |       |                       | 80,193  |  |            | (3,195  | )                     |  |   | 88,193    |  |   | (3,225  | )
|                                                          |  |                          |         |                      |                      |        |            |       |                       |         |  |            |         |                       |  |   |           |  |   |         |  
|Total investment securities                               |  | $                        | 136,250 |                      | $                    | (4,405 | )          |       | $                     | 111,943 |  | $          | (4,618  | )                     |  | $ | 248,193   |  | $ | (9,023  | )
|                                                          |  |                          |         |                      |                      |        |            |       |                       |         |  |            |         |                       |  |   |           |  |   |         |  
|Mortgage-backed securities:                               |  |                          |         |                      |                      |        |            |       |                       |         |  |            |         |                       |  |   |           |  |   |         |  
|FNMA mortgage-backed securities                           |  | $                        | 35,627  |                      | $                    | (666   | )          |       | $                     | 214,523 |  | $          | (6,958  | )                     |  | $ | 250,150   |  | $ | (7,624  | )
|FHLMC mortgage-backed securities                          |  |                          | 1,268   |                      |                      | (8     | )          |       |                       | 74,379  |  |            | (1,240  | )                     |  |   | 75,647    |  |   | (1,248  | )
|Collateralized mortgage obligations                       |  |                          |        |                      |                      |       |            |       |                       | 2,047   |  |            | (29     | )                     |  |   | 2,047     |  |   | (29     | )
|Mortgage pass-through certificates                        |  |                          | 580,892 |                      |                      | (4,666 | )          |       |                       | 647,519 |  |            | (15,394 | )                     |  |   | 1,228,411 |  |   | (20,060 | )
|                                                          |  |                          |         |                      |                      |        |            |       |                       |         |  |            |         |                       |  |   |           |  |   |         |  
|Total mortgage-backed securities                          |  | $                        | 617,787 |                      | $                    | (5,340 | )          |       | $                     | 938,468 |  | $          | (23,621 | )                     |  | $ | 1,556,255 |  | $ | (28,961 | )
|                                                          |  |                          |         |                      |                      |        |            |       |                       |         |  |            |         |                       |  |   |           |  |   |         |  

---

|(1) | These unrealized losses are caused by changes in interest rates and are considered to be temporary.
|--- | ---------------------------------------------------------------------------------------------------

|(2) | U.S. Government sponsored entities include Federal National Mortgage Association, (FNMA) and Federal Home Loan Mortgage Corporation, (FHLMC).
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Underlying assets of mutual funds consist primarily of mortgage-backed securities.
|--- | ----------------------------------------------------------------------------------



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONTINUED



4.    Loans Receivable



Loans receivable consist of the following:



|                                                    |  |                        |           |   |                         |       |   |        |   |           |                 |  |       |  
|--------------------------------------------------- |  | ---------------------- | --------- | - | ----------------------- | ----- | - | ------ | - | --------- | --------------- |  | ----- | -
|                                                    |  | As of March 31,2006    |           |   | As of September 30,2005 |      
|                                                    |  | Amount                 |           |   | Percent ofTotal         |       |   | Amount |   |           | Percent ofTotal | 
|                                                    |  | (Dollars in thousands) |          
|Real estate loans:                                  |  |                        |           |   |                         |       |   |        |   |           |                 |  |       |  
|One-to-four family residential:                     |  |                        |           |   |                         |       |   |        |   |           |                 |  |       |  
|Residential mortgages                               |  | $                      | 7,563,225 |   |                         | 76.5  | % |        | $ | 5,999,713 |                 |  | 74.7  | %
|Specialty consumer mortgages                        |  |                        | 684,385   |   |                         | 6.9   |   |        |   | 678,609   |                 |  | 8.5   |  
|                                                    |  |                        |           |   |                         |       |   |        |   |           |                 |  |       |  
|Total one-to-four family residential                |  |                        | 8,247,610 |   |                         | 83.4  |   |        |   | 6,678,322 |                 |  | 83.2  |  
|Home equity loans and lines of credit               |  |                        | 308,681   |   |                         | 3.1   |   |        |   | 257,789   |                 |  | 3.2   |  
|Multi-family                                        |  |                        | 103,109   |   |                         | 1.0   |   |        |   | 111,444   |                 |  | 1.4   |  
|Commercial real estate                              |  |                        | 384,333   |   |                         | 3.9   |   |        |   | 344,503   |                 |  | 4.3   |  
|Construction                                        |  |                        | 126,905   |   |                         | 1.3   |   |        |   | 87,113    |                 |  | 1.1   |  
|Land                                                |  |                        | 370,231   |   |                         | 3.7   |   |        |   | 235,829   |                 |  | 2.9   |  
|                                                    |  |                        |           |   |                         |       |   |        |   |           |                 |  |       |  
|Total real estate loans                             |  |                        | 9,540,869 |   |                         | 96.4  |   |        |   | 7,715,000 |                 |  | 96.1  |  
|                                                    |  |                        |           |   |                         |       |   |        |   |           |                 |  |       |  
|Other loans:                                        |  |                        |           |   |                         |       |   |        |   |           |                 |  |       |  
|Commercial                                          |  |                        | 202,535   |   |                         | 2.0   |   |        |   | 199,344   |                 |  | 2.5   |  
|Consumer                                            |  |                        | 19,308    |   |                         | 0.2   |   |        |   | 19,415    |                 |  | 0.2   |  
|                                                    |  |                        |           |   |                         |       |   |        |   |           |                 |  |       |  
|Total other loans                                   |  |                        | 221,843   |   |                         | 2.2   |   |        |   | 218,759   |                 |  | 2.7   |  
|                                                    |  |                        |           |   |                         |       |   |        |   |           |                 |  |       |  
|Total loans held in portfolio                       |  |                        | 9,762,712 |   |                         | 98.7  |   |        |   | 7,933,759 |                 |  | 98.8  |  
|Unearned discounts, premiums and deferred fees, net |  |                        | 159,914   |   |                         | 1.6   |   |        |   | 119,588   |                 |  | 1.5   |  
|Allowance for loan losses                           |  |                        | (30,575   | ) |                         | (0.3  | ) |        |   | (25,755   | )               |  | (0.3  | )
|                                                    |  |                        |           |   |                         |       |   |        |   |           |                 |  |       |  
|Total loans held in portfolio, net                  |  |                        | 9,892,051 |   |                         | 100.0 | % |        |   | 8,027,592 |                 |  | 100.0 | %
|                                                    |  |                        |           |   |                         |       |   |        |   |           |                 |  |       |  
|Mortgage loans held for sale                        |  |                        | 14,650    |   |                         |       |   |        |   | 12,196    |                 |  |       |  
|                                                    |  |                        |           |   |                         |       |   |        |   |           |                 |  |       |  
|Total loans, net                                    |  | $                      | 9,906,701 |   |                         |       |   |        | $ | 8,039,788 |                 |  |       |  
|                                                    |  |                        |           |   |                         |       |   |        |   |           |                 |  |       |  



Loans with payment
options:



Option ARM loans are adjustable-rate mortgages which
provide borrowers flexible payment options and have the potential for negative amortization above the original loan balance when the payment made by the borrower is less than the amount of interest due on the loan. In such a case interest not
collected is deferred and added to the principal balance of the loan. When the loan balance reaches a pre-established cap or after five years, full amortization of the loan over its remaining life is required. These loans are subject to interest
rate caps.



Interest income reported on loans includes deferred
interest on option ARM loans where periodic payments do not cover the amount of interest earned contractually and where the uncollected interest is added to the principal balance of the loans. For the quarter ended March 31, 2006, $19.5 million
in deferred interest is included in interest income on loans.



Option ARM loans represented 53.1% and 48.0% of total loans outstanding as of March 31, 2006 and September 30, 2005, respectively. As of March 31, 2006, option ARM loans with a balance of $3.1 billion had negative
amortization with approximately $37.3 million of their principal balances above their original principal balance resulting from negative amortization. As of September 30, 2005, option ARM loans with a balance of $2.0 billion had negative
amortization with approximately $12.4 million of their principal balances above their original principal balance resulting from negative amortization.



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONTINUED



The following table provides the composition of BankUniteds one-to-four family residential
loans as of March 31, 2006 and September 30, 2005, including loans held for sale.



|                                                                          |  |                        |           |                  |                          |   |        |   |                  |  |       |  
|------------------------------------------------------------------------- |  | ---------------------- | --------- | ---------------- | ------------------------ | - | ------ | - | ---------------- |  | ----- | -
|                                                                          |  | As of March 31, 2006   |           |                  | As of September 30, 2005 |  
|                                                                          |  | Amount                 |           | Percent of Total |                          |   | Amount |   | Percent of Total | 
|                                                                          |  | (Dollars in thousands) |          
|One-to-four family residential loans:                                     |  |                        |           |                  |                          |   |        |   |                  |  |       |  
|Fixed rate loans                                                          |  | $                      | 1,232,760 |                  | 14.9                     | % |        | $ | 996,455          |  | 14.9  | %
|Adjustable rate loans (ARM):                                              |  |                        |           |                  |                          |   |        |   |                  |  |       |  
|Option ARM                                                                |  |                        | 5,255,591 |                  | 63.6                     |   |        |   | 3,858,726        |  | 57.7  |  
|Non Option ARM                                                            |  |                        | 1,773,909 |                  | 21.5                     |   |        |   | 1,835,337        |  | 27.4  |  
|                                                                          |  |                        |           |                  |                          |   |        |   |                  |  |       |  
|Total ARM loans                                                           |  |                        | 7,029,500 |                  | 85.1                     |   |        |   | 5,694,063        |  | 85.1  |  
|                                                                          |  |                        |           |                  |                          |   |        |   |                  |  |       |  
|Total one-to-four family residential loans, including loans held for sale |  | $                      | 8,262,260 |                  | 100.0                    | % |        | $ | 6,690,518        |  | 100.0 | %
|                                                                          |  |                        |           |                  |                          |   |        |   |                  |  |       |  



5.    Earnings
Per Share



The following tables reconcile basic and
diluted earnings per share for the three and six months ended March 31, 2006 and 2005.



|                                                    |  |                                                        |        |                                   |   |        |  |      |        |  |   |       
|--------------------------------------------------- |  | ------------------------------------------------------ | ------ | --------------------------------- | - | ------ |  | ---- | ------ |  | - | ------
|                                                    |  | For the Three MonthsEnded March 31,                    |        | For the Six MonthsEnded March 31,
|                                                    |  | 2006                                                   |        | 2005                              |   | 2006   |  | 2005
|                                                    |  | (Dollars and sharesin thousands,except per share data)
|Basic earnings per share:                           |  |                                                        |        |                                   |   |        |  |      |        |  |   |       
|Numerator:                                          |  |                                                        |        |                                   |   |        |  |      |        |  |   |       
|Net income                                          |  | $                                                      | 19,688 |                                   | $ | 13,556 |  | $    | 35,863 |  | $ | 28,081
|Convertible Preferred stock dividends               |  |                                                        | 118    |                                   |   | 103    |  |      | 237    |  |   | 207   
|                                                    |  |                                                        |        |                                   |   |        |  |      |        |  |   |       
|Net income available to common stockholders         |  | $                                                      | 19,570 |                                   | $ | 13,453 |  | $    | 35,626 |  | $ | 27,874
|                                                    |  |                                                        |        |                                   |   |        |  |      |        |  |   |       
|Denominator:                                        |  |                                                        |        |                                   |   |        |  |      |        |  |   |       
|Weighted average common shares outstanding          |  |                                                        | 34,453 |                                   |   | 30,116 |  |      | 32,288 |  |   | 30,053
|                                                    |  |                                                        |        |                                   |   |        |  |      |        |  |   |       
|Basic earnings per share                            |  | $                                                      | 0.57   |                                   | $ | 0.45   |  | $    | 1.10   |  | $ | 0.93  
|                                                    |  |                                                        |        |                                   |   |        |  |      |        |  |   |       
|Diluted earnings per share:                         |  |                                                        |        |                                   |   |        |  |      |        |  |   |       
|Numerator:                                          |  |                                                        |        |                                   |   |        |  |      |        |  |   |       
|Net income available to common stockholders         |  | $                                                      | 19,570 |                                   | $ | 13,453 |  | $    | 35,626 |  | $ | 27,874
|Plus:                                               |  |                                                        |        |                                   |   |        |  |      |        |  |   |       
|Convertible preferred stock dividends               |  |                                                        | 118    |                                   |   | 103    |  |      | 237    |  |   | 207   
|                                                    |  |                                                        |        |                                   |   |        |  |      |        |  |   |       
|Diluted net income available to common stockholders |  | $                                                      | 19,688 |                                   | $ | 13,556 |  | $    | 35,863 |  | $ | 28,081
|                                                    |  |                                                        |        |                                   |   |        |  |      |        |  |   |       
|Denominator:                                        |  |                                                        |        |                                   |   |        |  |      |        |  |   |       
|Weighted average common shares outstanding          |  |                                                        | 34,453 |                                   |   | 30,116 |  |      | 32,288 |  |   | 30,053
|Plus:                                               |  |                                                        |        |                                   |   |        |  |      |        |  |   |       
|Stock options and restricted stock                  |  |                                                        | 1,299  |                                   |   | 1,516  |  |      | 1,215  |  |   | 1,562 
|Convertible preferred stock                         |  |                                                        | 911    |                                   |   | 800    |  |      | 909    |  |   | 800   
|                                                    |  |                                                        |        |                                   |   |        |  |      |        |  |   |       
|Diluted weighted average shares outstanding         |  |                                                        | 36,663 |                                   |   | 32,432 |  |      | 34,412 |  |   | 32,415
|                                                    |  |                                                        |        |                                   |   |        |  |      |        |  |   |       
|Diluted earnings per share(1)                       |  | $                                                      | 0.54   |                                   | $ | 0.42   |  | $    | 1.04   |  | $ | 0.87  
|                                                    |  |                                                        |        |                                   |   |        |  |      |        |  |   |       

---

|(1) | BankUnited did not consider potential common shares of 424,946, and 167,022, for the three-month periods ended March 31, 2006 and 2005, respectively, and 511,516 and 16,372 for
the six-month periods ended March 31, 2006 and 2005, respectively, in the computation of diluted earnings per share as they would have been antidilutive.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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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, 2006 and September 30, 2005 were as follows:



|                                        |  |                        |         |   |                         |   |         |  
|--------------------------------------- |  | ---------------------- | ------- | - | ----------------------- | - | ------- | -
|                                        |  | As of March 31,2006    |         |   | As of September 30,2005 |  
|                                        |  | (Dollars in thousands) |        
|Tier 1 Leverage Capital                 |  |                        |         |   |                         |   |         |  
|Amount                                  |  | $                      | 892,393 |   |                         | $ | 756,810 |  
|Actual Ratio                            |  |                        | 7.3     | % |                         |   | 7.1     | %
|Well-Capitalized Minimum Ratio(1)       |  |                        | 5.0     | % |                         |   | 5.0     | %
|Adequately Capitalized Minimum Ratio(1) |  |                        | 4.0     | % |                         |   | 4.0     | %
|                                        |  |                       
|Tier 1 Risk-Based Capital               |  |                        |         |   |                         |   |         |  
|Amount                                  |  | $                      | 892,393 |   |                         | $ | 756,810 |  
|Actual Ratio                            |  |                        | 13.8    | % |                         |   | 14.0    | %
|Well-Capitalized Minimum Ratio(1)       |  |                        | 6.0     | % |                         |   | 6.0     | %
|Adequately Capitalized Minimum Ratio(1) |  |                        | 4.0     | % |                         |   | 4.0     | %
|                                        |  |                       
|Total Risk-Based Capital                |  |                        |         |   |                         |   |         |  
|Amount                                  |  | $                      | 909,714 |   |                         | $ | 774,390 |  
|Actual Ratio                            |  |                        | 14.3    | % |                         |   | 14.5    | %
|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 2006, BankUnited Financial Corporation contributed $75 million in additional capital to the Bank.



7.    Comprehensive Income



BankUniteds comprehensive income includes all items that comprise net
income, plus other comprehensive loss. For the three and the six months ended March 31, 2006 and 2005 BankUniteds comprehensive income was as follows:



|                                                                                                                                                                                                                                                        |  |                                      |        |   |                                    |   |         |      |  |   |        |   |  |   |         |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------ | ------ | - | ---------------------------------- | - | ------- | ---- |  | - | ------ | - |  | - | ------- | -
|                                                                                                                                                                                                                                                        |  | For the Three Months Ended March 31, |        |   | For the Six Months Ended March 31, |  
|                                                                                                                                                                                                                                                        |  | 2006                                 |        |   | 2005                               |   |         | 2006 |  |   | 2005   |  
|                                                                                                                                                                                                                                                        |  | (In thousands)                       |       
|Net income                                                                                                                                                                                                                                              |  | $                                    | 19,688 |   |                                    | $ | 13,556  |      |  | $ | 35,863 |   |  | $ | 28,081  |  
|Other comprehensive loss, net of tax:                                                                                                                                                                                                                   |  |                                      |        |   |                                    |   |         |      |  |   |        |   |  |   |         |  
|Unrealized loss arising during the period on securities, net of tax benefit of $1,783 and $6,650 for the three months ended March 31,
2006 and 2005, respectively, and $3,445 and $9,573 for the six months ended March 31, 2006 and 2005, respectively |  |                                      | (3,311 | ) |                                    |   | (12,164 | )    |  |   | (6,398 | ) |  |   | (17,779 | )
|Unrealized (loss) gain on cash flow hedges, net of tax (benefit) of $(190) and $286 for the three months ended March 31, 2006 and 2005,
respectively, and $(159) and $352 for the six months ended March 31, 2006 and 2005, respectively                |  |                                      | (354   | ) |                                    |   | 531     |      |  |   | (295   | ) |  |   | 654     |  
|Less reclassification adjustment for:                                                                                                                                                                                                                   |  |                                      |        |   |                                    |   |         |      |  |   |        |   |  |   |         |  
|Realized gain on securities sold included in net income, net of tax of $0 and $308 for the three months ended March 31, 2006 and 2005,
respectively, and $0 and $871 for the six months ended March 31, 2006 and 2005, respectively                     |  |                                      |       |   |                                    |   | 571     |      |  |   |       |   |  |   | 1,617   |  
|Realized gain (loss) on cash flow hedges, net of tax (benefit) of $2 and $(33) for the three months ended March 31, 2006 and 2005,
respectively, and $(12) and $(91) for the six months ended March 31, 2006 and 2005, respectively                     |  |                                      | 4      |   |                                    |   | (61     | )    |  |   | (22    | ) |  |   | (169    | )
|Other                                                                                                                                                                                                                                                   |  |                                      | (203   | ) |                                    |   |        |      |  |   |       |   |  |   |        |  
|                                                                                                                                                                                                                                                        |  |                                      |        |   |                                    |   |         |      |  |   |        |   |  |   |         |  
|Total other comprehensive loss, net of tax                                                                                                                                                                                                              |  |                                      | (3,466 | ) |                                    |   | (12,143 | )    |  |   | (6,671 | ) |  |   | (18,573 | )
|                                                                                                                                                                                                                                                        |  |                                      |        |   |                                    |   |         |      |  |   |        |   |  |   |         |  
|Comprehensive income                                                                                                                                                                                                                                    |  | $                                    | 16,222 |   |                                    | $ | 1,413   |      |  | $ | 29,192 |   |  | $ | 9,508   |  
|                                                                                                                                                                                                                                                        |  |                                      |        |   |                                    |   |         |      |  |   |        |   |  |   |         |  



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONTINUED



8.    Accounting For Derivatives 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 include loan commitments, forward sales contracts, and interest rate swaps and caps. 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.



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



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 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.



Interest Rate Swaps and Caps



BankUnited has entered into interest rate swap and cap contracts for the purpose of hedging long-term fixed and variable rate debt (hedged item), respectively. BankUnited may use interest rate swap and cap agreements that may
qualify as fair value hedges and 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.



BankUnited has applied hedge accounting based on the short cut
method for interest rate swaps provided for in Statement of Financial Accounting Standards No. 133. In December 2005, the Securities and Exchange Commission issued guidance on the application of the short cut method under this standard. Based
on this guidance,



15



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##### Table of Contents

BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONTINUED



BankUnited has reviewed its application of the short cut method in accounting for interest rate swaps and concluded that three current hedge transactions did
not meet the requirements set forth in the guidance and hedge accounting was precluded for those items in the periods previously applied. After analysis BankUnited concluded that the reclassification of these swaps does not materially affect the
results of operations for any period presented and recognized a $242 thousand charge from prior periods in the quarter ended March 31, 2006. The inability to utilize hedge accounting during the quarter resulted in an additional $672 thousand
charge as a result of the change in market value of the interest rate swaps.



The following table summarizes certain information with respect to the use of derivatives and their impact on BankUniteds consolidated statements of income during the three and six months ended March 31,
2006 and 2005.



|                                                              |  |                                   |      |   |                                 |   |     |      |  |   |      |   |  |   |   
|------------------------------------------------------------- |  | --------------------------------- | ---- | - | ------------------------------- | - | --- | ---- |  | - | ---- | - |  | - | --
|                                                              |  | For theThree MonthsEndedMarch 31, |      |   | For theSix MonthsEndedMarch 31,
|                                                              |  | 2006                              |      |   | 2005                            |   |     | 2006 |  |   | 2005
|                                                              |  | (In thousands)                   
|Fair Value Hedges                                             |  |                                   |      |   |                                 |   |     |      |  |   |      |   |  |   |   
|Net (loss) gain recorded in earnings due to ineffectiveness   |  | $                                 |     |   |                                 | $ | (26 | )    |  | $ |     |   |  | $ | 11
|                                                              |  |                                   |      |  
|Other Derivatives (1)                                         |  |                                   |      |   |                                 |   |     |      |  |   |      |   |  |   |   
|Loss recorded in other non-interest income                    |  |                                   | (914 | ) |                                 |   |    |      |  |   | (914 | ) |  |   |  
|Gain recorded in non-interest expense                         |  |                                   | 176  |   |                                 |   | 44  |      |  |   | 74   |   |  |   | 8 
|                                                              |  |                                   |      |   |                                 |   |     |      |  |   |      |   |  |   |   
|Total net (loss) gain recorded in earnings due to derivatives |  | $                                 | (738 | ) |                                 |   | 18  |      |  | $ | (840 | ) |  | $ | 19
|                                                              |  |                                   |      |   |                                 |   |     |      |  |   |      |   |  |   |   

---

|Note: | There was no ineffectiveness related to cash flow hedges during the three and six months ended March 31, 2006 and 2005. Within the next 12 months, BankUnited estimates that
$628 thousand will be reclassified out of comprehensive income as a charge to earnings for cash flow hedges outstanding as of March 31, 2006.
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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



9.    Stock-Based Compensation



At March 31, 2006, BankUnited had certain stock-based compensation
plans (the Plans) under which incentives may be awarded to officers, directors and employees of BankUnited and its subsidiaries. Under the Plans, BankUnited may award stock options, stock appreciation rights, restricted stock, deferred
stock, bonus stock and awards in lieu of obligations, dividend equivalents, other stock-based awards and performance awards in each of its classes of stocks.



Shares issued in connection with stock-based compensation are registered under the Plans. At March 31, 2006, there were 303,831 shares of all classes
available under the Plans.



Effective October 1, 2005,
BankUnited adopted SFAS No. 123R Share Based Payments using the modified prospective transition method. SFAS No. 123R requires companies to calculate compensation expense arising from stock-based compensation based on the
respective fair values of awards at grant date. As of March 31, 2006, there was $21.7 million of unrecognized compensation cost related to unvested stock-based awards. That cost is expected to be recognized over a weighted average period of
3.99 years.



Although the Plans allow for other types of
awards, BankUnited has in the past generally awarded stock-based compensation in the form of stock options, restricted stock, and restricted stock units. Restricted stock awards are based on future service and in some instances have performance
requirements. The requisite service period for all awards is equal to the vesting period and the performance period, if applicable. Vesting periods



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONTINUED



range from immediate to nine years for options and immediate to fourteen years for restricted stock. Any unvested awards are forfeited upon termination of
employment, unless otherwise provided by the award agreement, employment agreement, or action of the Compensation Committee.



Options  BankUnited may award both incentive stock options and non-qualified stock options. Options granted under BankUniteds Plans
generally expire ten years after the date of grant and are granted at or above the fair market value of the stock on the date of grant. Option terms are determined by the Compensation Committee of BankUniteds Board of Directors at the time of
the grant. An option may vest immediately or over a period of years. BankUnited incorporates the Black Scholes Merton model to calculate fair values of options awarded. This model requires assumptions as to expected volatility, dividends, terms, and
risk free rates. Assumptions used for the periods covered herein, are outlined in the table below:



|                      |  |                                |  |                             
|--------------------- |  | ------------------------------ |  | ----------------------------
|                      |  | Three MonthsEndedMarch 31,2006 |  | Six MonthsEndedMarch 31,2006
|Expected volatility   |  | 26.0%                          |  | 26.0%                       
|Expected dividend     |  | .007% - 1.32%                  |  | .007% - 1.32%               
|Expected term (years) |  | 3.9 - 7.0                      |  | 3.9 - 7.0                   
|Risk free rate        |  | 4.52% - 4.56%                  |  | 4.45% - 4.56%               



Expected volatilities
are based on historical volatility trends of BankUniteds Class A Common Stock and other factors. Expected dividends reflect a range from actual dividends paid on BankUniteds Class A Common Stock and Series B Preferred Stock.
Expected terms represent the period of time that options granted are expected to be outstanding; the range above results from certain categories of recipients exhibiting different exercise behavior. The risk free rate is based on the U.S Treasury
yield curve in effect at the time of the grant for the appropriate life of each option.



A summary of option activity under the Plans as of March 31, 2006, and changes during the six-month period then ended is presented below:



|                                 |  |                         |   |  |                              |       |                                         |     |                                 |   |       
|-------------------------------- |  | ----------------------- | - |  | ---------------------------- | ----- | --------------------------------------- | --- | ------------------------------- | - | ------
|Options                          |  | Number ofShares (000s) |   |  | WeightedAverageExercisePrice |       | WeightedAverageRemainingContractualTerm |     | AggregateIntrinsicValue (000s)
|Outstanding, October 1, 2005 (1) |  | 3,660                   |   |  | $                            | 17.84 |                                         |     |                                 |   |       
|Granted                          |  | 3                       |   |  |                              | 25.62 |                                         |     |                                 |   |       
|Exercised                        |  | (135                    | ) |  |                              | 11.09 |                                         |     |                                 |   |       
|Expired                          |  | (62                     | ) |  |                              | 21.60 |                                         |     |                                 |   |       
|Forfeited                        |  | (17                     | ) |  |                              | 24.64 |                                         |     |                                 |   |       
|Outstanding, March 31, 2006 (2)  |  | 3,449                   |   |  | $                            | 18.01 |                                         | 5.5 |                                 | $ | 42,848
|                                 |  |                         |   | 
|Exercisable, March 31, 2006 (3)  |  | 2,693                   |   |  | $                            | 16.98 |                                         | 5.1 |                                 | $ | 36,808

---

|(1) | Outstanding number of shares as of October 1, 2005 included 2,337 thousand shares of Class A Common Stock, 493 thousand shares of Class B Common Stock, and 830 thousand
shares of Series B Preferred.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | Outstanding number of shares as of March 31, 2006 included 2,160 thousand shares of Class A Common Stock, 468 thousand shares of Class B Common Stock, and 821 thousand
shares of Series B Preferred.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(3) | Exercisable number of shares as of March 31, 2006 included 1,572 thousand shares of Class A Common Stock, 468 thousand shares of Class B Common Stock, and 653 thousand
shares of Series B Preferred.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONTINUED



The total intrinsic value of options exercised during the quarter ended March 31, 2006 and for
the six month period ended March 31, 2006 was $1.069 million and $2.035 million, respectively. Cash received from option exercises during the quarter ended March 31, 2006 and for the six-month period ended March 31, 2006 was $576
thousand and $1.35 million, respectively. The actual tax benefit realized for the tax deductions from option exercises totaled $206 thousand and $433 thousand for the quarter ended March 31, 2006 and the six month period ended March 31,
2006, respectively.



Restricted Stock  The
restricted stock awards reflect BankUniteds intent of rewarding the officers, directors and employees for BankUniteds performance, reinforcing commitment to BankUnited and responding to increased competitive pressures for talented
personnel in BankUniteds market area. Some of the awards granted to BankUniteds most senior executives are subject to being earned by the achievement of specified performance goals. If the performance goals are met the shares are subject
to predetermined vesting over a period of years commencing on the first anniversary of the end of the performance period over which the shares were earned. Performance goals are measured each quarter with adjustments made to the amortization
schedule as a result of a change in managements estimate. If performance goals are not met, any recognized compensation expense is reversed.



Other restricted awards are granted without performance based restrictions and vest in annual installments over periods ranging from five to eight years
commencing on the first anniversary of the date of the grant. Except in certain circumstances, shares of restricted stock subject to vesting are forfeited as to the portion remaining unvested at the date of termination if service with BankUnited
terminates prior to completion of the vesting schedule. The vesting schedules are intended to encourage officers, directors and employees to make long-term commitments to BankUnited. However, shares of restricted stock that have not yet vested or
become exercisable may vest and become exercisable before the end of the scheduled vesting term, in the event of the employees death, disability, and in some cases, change in control of BankUnited. Restricted stock awards granted to certain
executive officers will immediately vest if there is a change in control of BankUnited. Such awards will vest and become exercisable for all other employees in the event that any successor company does not assume the restricted stock or the employee
is involuntarily terminated within twenty-four (24) months following the effective date of the change in control.



A summary of the status of BankUniteds restricted stock for the six months ended March 31, 2006, is presented below.



|                             |  |                       |   |  |                                        |      
|---------------------------- |  | --------------------- | - |  | -------------------------------------- | -----
|Restricted Stock(1)          |  | Number ofShares       |   |  | Weighted Average Grant-Date Fair Value
|                             |  | (Shares in thousands)
|Outstanding, October 1, 2005 |  | 507                   |   |  | $                                      | 32.03
|Granted                      |  | 286                   |   |  |                                        | 27.01
|Vested                       |  | (31                   | ) |  |                                        | 25.85
|Forfeited                    |  | (12                   | ) |  |                                        | 24.12
|                             |  |                       |   |  |                                        |      
|Outstanding, March 31, 2006  |  | 750                   |   |  | $                                      | 27.19
|                             |  |                       |   |  |                                        |      



The total fair value
of restricted shares that vested during the quarters ended March 31, 2006 and the six months ended March 31, 2006 was $230 thousand and $797 thousand, respectively.

---

|(1) | Includes common and preferred shares.
|--- | -------------------------------------



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONTINUED



The following table provides pro-forma net income and earnings per share for periods covered under
this report, during which the fair value based method was not used to account for stock-based compensation.



|                                                                                                                                                             |  |                                  |        |   |                                |   |        |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -------------------------------- | ------ | - | ------------------------------ | - | ------ | -
|                                                                                                                                                             |  | Three Months EndedMarch 31, 2005 |        |   | Six Months EndedMarch 31, 2005 |  
|                                                                                                                                                             |  | (Dollars in thousands)           |        |   | (Dollars in thousands)         |  
|Net income, as reported                                                                                                                                      |  | $                                | 13,556 |   |                                | $ | 28,081 |  
|Add: Total stock-based employee and director compensation expense included in net income, net of related tax effects                                         |  |                                  | 425    |   |                                |   | 829    |  
|Deduct: Total stock-based employee and director compensation expense determined under the fair value based method for all awards, net of
related tax effects |  |                                  | (2,507 | ) |                                |   | (3,413 | )
|                                                                                                                                                             |  |                                  |        |   |                                |   |        |  
|Pro forma net income                                                                                                                                         |  | $                                | 11,474 |   |                                | $ | 25,497 |  
|                                                                                                                                                             |  |                                  |        |   |                                |   |        |  
|Earnings per share:                                                                                                                                          |  |                                  |        |   |                                |   |        |  
|Basic  as reported                                                                                                                                          |  | $                                | 0.45   |   |                                | $ | 0.93   |  
|                                                                                                                                                             |  |                                  |        |   |                                |   |        |  
|Basic  pro forma                                                                                                                                            |  | $                                | 0.38   |   |                                | $ | 0.85   |  
|                                                                                                                                                             |  |                                  |        |   |                                |   |        |  
|Diluted  as reported                                                                                                                                        |  | $                                | 0.42   |   |                                | $ | 0.87   |  
|                                                                                                                                                             |  |                                  |        |   |                                |   |        |  
|Diluted  pro forma                                                                                                                                          |  | $                                | 0.35   |   |                                | $ | 0.79   |  
|                                                                                                                                                             |  |                                  |        |   |                                |   |        |  
|Assumptions for weighted average grant-date fair value of options using the Black Scholes option pricing model are as
follows:                               |  |                                  |        |   |                                |   |        |  
|Dividend yield                                                                                                                                               |  |                                  |       |   |                                |   |       |  
|Expected volatility                                                                                                                                          |  |                                  | 28.0   | % |                                |   | 28.0   | %
|Risk free rate                                                                                                                                               |  |                                  | 3.84   | % |                                |   | 3.40   | %
|Expected term (years)                                                                                                                                        |  |                                  | 3.9    |   |                                |   | 4.7    |  



10.    Commitments and Contingencies



Commercial and 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 commercial and standby letters of credit in the amount of $44.6 million and $38.8 million as of March 31, 2006 and September 30, 2005, respectively. Fees collected on standby letters of credit 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.



11.    Subsequent Events



During April 2006, BankUnited elected to settle an interest rate swap contract resulting in a pre-tax charge to income of $359 thousand recorded in other
non-interest income. This contract was settled by BankUnited, after it had concluded during the quarter ended March 31, 2006, that it could not apply hedge accounting under the short-cut method prescribed in SFAS No. 133 and recognized a $1.6
million charge on this contract, in that quarter. This contract was being used by BankUnited to economically hedge $23 million of 10.25% Trust Preferred Securities issued by its trust subsidiary, BankUnited Capital.



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, 2006 and
2005 and consolidated financial condition as of March 31, 2006. 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
and 10-K/A (10-K) for the year ended September 30, 2005.



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, will, should, would, could, 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
| | - |  | ------------------------------------------------------------------------------------------------------------------------



| |  |  | Discussions on the outlook of the economy, competition, regulation, taxation, company strategies, subsidiaries, investment risk, and policies.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------



Actual results or performance could differ from those implied or contemplated
by forward-looking statements. BankUnited Financial Corporation, a Florida corporation, and its subsidiaries (BankUnited), wish to caution readers not to place undue reliance on any forward-looking statements, which speak only as of the
date made, and are not historical facts or guarantees of future performance. Forward-looking statements are subject to certain risks and uncertainties, including, among others: general business, economic and market conditions, fiscal and monetary
policies, war and terrorism, natural events and disasters, changes in interest rates, deposit flows, loan demand and real estate values; a deterioration in credit quality and/or a reduced demand for credit, competition with other providers of
financial products and services; the issuance or redemption of additional company equity or debt; volatility in the market price of our common stock; changes in accounting principles, policies or guidelines, changes in laws or regulations; reliance
on other companies for products and services; operational or systems risks; and other economic, competitive, servicing capacity, governmental, regulatory and technological factors affecting the companys operations, pricing, products and
delivery of services. Information in this Quarterly Report on Form 10-Q is as of the dates, and for the periods, indicated. BankUnited does not undertake, and specifically disclaims any obligation, to publicly update or revise any forward-looking
statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements, whether as the result of new information, future events or otherwise. In light of these risks, uncertainties and
assumptions, the forward-looking events discussed in or incorporated by reference into this report might not occur.



Overview of activities



BankUniteds results of operations are dependent primarily on its net interest income, which is the difference between the interest earned on its
assets, including the effect of related premium, fees and discounts, 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, gain or losses on sales of loans, other non-interest income, operating expenses and income taxes.



BankUniteds operations, like those of other financial holding companies, are affected by its asset and liability management policies, as well as
factors beyond BankUniteds control, such as general economic



20



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##### Table of Contents

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 demand for loans that are beyond managements control. Deposit flows and costs of deposits and borrowings are influenced by local competition and by
general market rates of interest.



Highlights of the quarter ended
March 31, 2006



| |  |  | BankUnited reported record quarterly net income of $19.7 million, an increase of 45% over the same quarter in the prior year. Net interest margin for the quarter improved to 2.08%
from 1.75% for the same quarter last year and was the major contributor to the improvement in net income.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Total assets reached $12.2 billion, up $2.9 billion or 32% from March 31, 2005. Asset growth has been centered in the residential loan portfolio that grew by $2.5 billion in the
last twelve months.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Loan production for the quarter of $1.8 billion was up 61% over loan production for the same quarter last year. As a result of the strong loan demand BankUnited sold $424 million of
residential mortgage loans with a gain of $1.9 million during the quarter. The secondary market has shown acceptance of BankUniteds residential mortgage product and provides a vehicle for the sale of loans in periods of high loan production.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Total deposits reached $5.5 billion, up $1.4 billion or 35% from March 31, 2005. Non-interest bearing deposits increased to $395 million up 28% from March 31, 2005.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Deposit growth is aided by BankUniteds continued branch expansion with six new branches and entry into two new Florida markets occurring during the quarter. As of March 31,
2006, BankUnited operated 71 branch offices in ten Florida counties. Nine branches have been opened in fiscal 2006.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Balance sheet growth was additionally supported by earnings retention and by the successful common stock offering of 5.75 million shares in January 2006, which raised capital
in the amount of $150.9 million
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



See further
discussion in RESULTS OF OPERATIONS and FINANCIAL CONDITION for more information on BankUniteds operating performance during the quarter ended March 31, 2006 compared to the same period in 2005, and changes in financial
condition from September 30, 2005.



Critical Accounting Estimates



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 estimates made by
management include those that relate to the allowance for loan losses, the carrying amount of mortgage servicing rights, and stock-based compensation. Factors affecting the estimate of the allowance for loan losses include quantitative factors such
as historical loss rates on segments of the portfolio, the evaluation of asset quality and managements assessment of qualitative factors that are not reflected in the historical loss experience. Factors affecting the carrying amount of
mortgage servicing rights include projected prepayment speed on the serviced loan portfolio, and discount rates. Factors affecting the computation of stock compensation include estimates of the average life of the option, volatility,
forfeitures and risk-free interest rate factors.



For a more
detailed discussion on these critical accounting estimates, see Critical Accounting Policies on page 28 of BankUniteds Annual Report on Form 10-K for the year ended September 30, 2005. For information on stock-based compensation,
see Note (9) Stock-Based Compensation to the accompanying notes to the condensed consolidated financial statements.



Accounting Pronouncements Issued and Not Yet Adopted



See Note(2) Impact of Certain Accounting Pronouncementsto the accompanying condensed notes to consolidated financial statements.



21



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##### Table of Contents

RESULTS OF OPERATIONS



For the Three Months Ended March 31, 2006 Compared to the Same Period in 2005



General



Net income for the three months ended March 31, 2006 was $19.7 million, up 45% from $13.6 million for the same quarter last year. Basic and diluted
earnings were $0.57 and $0.54 per share, respectively, for the quarter, up from $0.45 and $0.42 per share, respectively, for the same quarter last year.



The following table is a condensed version of BankUniteds Consolidated Statement of Operations for the periods presented.



|                           |  |                                          |        |        |   |        |  |   |        |  |       |  
|-------------------------- |  | ---------------------------------------- | ------ | ------ | - | ------ |  | - | ------ |  | ----- | -
|                           |  | For the three monthsended March 31,      |        | Change |  
|                           |  | 2006                                     |        | 2005   |   | $      |  | % |       
|                           |  | (In thousands, except per share amounts) |       
|Net interest income        |  | $                                        | 60,008 |        | $ | 39,554 |  | $ | 20,454 |  | 51.7  | %
|Provision for loan losses  |  |                                          | 2,300  |        |   | 1,050  |  |   | 1,250  |  | 119.0 | %
|Non-interest income        |  |                                          | 7,158  |        |   | 7,086  |  |   | 72     |  | 1.0   | %
|Non-interest expense       |  |                                          | 35,372 |        |   | 25,635 |  |   | 9,737  |  | 38.0  | %
|                           |  |                                          |        |        |   |        |  |   |        |  |       |  
|Income before taxes        |  |                                          | 29,494 |        |   | 19,955 |  |   | 9,539  |  | 47.8  | %
|Income taxes               |  |                                          | 9,806  |        |   | 6,399  |  |   | 3,407  |  | 53.2  | %
|                           |  |                                          |        |        |   |        |  |   |        |  |       |  
|Net income                 |  | $                                        | 19,688 |        | $ | 13,556 |  | $ | 6,132  |  | 45.2  | %
|                           |  |                                          |        |        |   |        |  |   |        |  |       |  
|Basic earnings per share   |  | $                                        | 0.57   |        | $ | 0.45   |  | $ | 0.12   |  | 26.7  | %
|Diluted earnings per share |  | $                                        | 0.54   |        | $ | 0.42   |  | $ | 0.12   |  | 28.6  | %



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##### Table of Contents

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.



|                                                                    |  |                                      |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|------------------------------------------------------------------- |  | ------------------------------------ | ---------- | - | -------- | - | ---------- |  | ---- | -------------- |  | - | --------- | - | ---------- | - | ------- |  | ---- | -
|                                                                    |  | For the Three Months Ended March 31, |           
|                                                                    |  | 2006                                 |            |   | 2005     |  
|                                                                    |  | AverageBalance                       |            |   | Interest |   | Yield/Rate |  |      | AverageBalance |  |   | Interest  |   | Yield/Rate |  
|                                                                    |  | (Dollars in thousands)               |           
|Interest-earning assets:                                            |  |                                      |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Loans, net(1)                                                       |  | $                                    | 9,373,969  |   |          | $ | 141,479    |  | 6.06 | %              |  | $ | 6,638,455 |   |            | $ | 79,154  |  | 4.79 | %
|Mortgage-backed securities                                          |  |                                      | 1,459,649  |   |          |   | 16,293     |  | 4.46 | %              |  |   | 1,763,429 |   |            |   | 16,884  |  | 3.83 | %
|Short-term investments(2)                                           |  |                                      | 31,962     |   |          |   | 589        |  | 7.48 | %              |  |   | 20,119    |   |            |   | 229     |  | 4.61 | %
|Investment securities and FHLB stock                                |  |                                      | 499,403    |   |          |   | 6,285      |  | 5.06 | %              |  |   | 495,675   |   |            |   | 5,428   |  | 4.40 | %
|                                                                    |  |                                      |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Total interest-earning assets                                       |  |                                      | 11,364,983 |   |          |   | 164,646    |  | 5.81 | %              |  |   | 8,917,678 |   |            |   | 101,695 |  | 4.58 | %
|                                                                    |  |                                      |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Interest-bearing liabilities:                                       |  |                                      |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Transaction and money market                                        |  |                                      | 390,688    |   |          |   | 2,172      |  | 2.25 | %              |  |   | 400,189   |   |            |   | 1,311   |  | 1.33 | %
|Savings                                                             |  |                                      | 1,272,818  |   |          |   | 11,163     |  | 3.56 | %              |  |   | 966,708   |   |            |   | 4,827   |  | 2.02 | %
|Certificates of deposits                                            |  |                                      | 3,171,118  |   |          |   | 31,397     |  | 4.02 | %              |  |   | 2,199,218 |   |            |   | 15,763  |  | 2.91 | %
|Trust preferred securities and subordinated debentures              |  |                                      | 195,095    |   |          |   | 3,812      |  | 7.82 | %              |  |   | 195,805   |   |            |   | 3,141   |  | 6.42 | %
|Senior notes                                                        |  |                                      | 120,000    |   |          |   | 1,070      |  | 3.57 | %              |  |   | 120,000   |   |            |   | 1,070   |  | 3.57 | %
|FHLB advances and other borrowings                                  |  |                                      | 5,421,407  |   |          |   | 55,024     |  | 4.12 | %              |  |   | 4,435,180 |   |            |   | 36,029  |  | 3.29 | %
|                                                                    |  |                                      |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Total interest-bearing liabilities                                  |  | $                                    | 10,571,126 |   |          | $ | 104,638    |  | 4.01 | %              |  | $ | 8,317,100 |   |            | $ | 62,141  |  | 3.03 | %
|                                                                    |  |                                      |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Excess of interest-earning assets over interest-bearing liabilities |  | $                                    | 793,857    |   |          |   |            |  |      |                |  | $ | 600,578   |   |            |   |         |  |      |  
|                                                                    |  |                                      |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Net interest income                                                 |  |                                      |            |   |          | $ | 60,008     |  |      |                |  |   |           |   |            | $ | 39,554  |  |      |  
|                                                                    |  |                                      |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Interest rate spread                                                |  |                                      |            |   |          |   |            |  | 1.80 | %              |  |   |           |   |            |   |         |  | 1.55 | %
|Effect of non-interest bearing sources                              |  |                                      |            |   |          |   |            |  | 0.28 | %              |  |   |           |   |            |   |         |  | 0.20 | %
|                                                                    |  |                                      |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Net interest margin                                                 |  |                                      |            |   |          |   |            |  | 2.08 | %              |  |   |           |   |            |   |         |  | 1.75 | %
|                                                                    |  |                                      |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Ratio of interest-earning assets to interest-bearing liabilities    |  |                                      | 107.51     | % |          |   |            |  |      |                |  |   | 107.22    | % |            |   |         |  |      |  
|                                                                    |  |                                      |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  

---

|Note: | The yields are annualized and are not calculated on a tax equivalent basis.
|----- | ---------------------------------------------------------------------------

|(1) | Includes average balances of loans held for sale of $55.8 million and $15.6 million for the three months ended March 31, 2006 and 2005, respectively. Also includes average
non-accruing loans of $9.7 million and $19.6 million for the three months ended March 31, 2006 and 2005, respectively.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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



23



---

##### Table of Contents

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 EndedMarch 31, 2006 vs. 2005 |       
|                                                       |  | Increase (Decrease)Due to                               |        |   |                |  
|                                                       |  | Changes inVolume                                        |        |   | Changesin Rate |   |        | TotalIncrease/(Decrease) | 
|                                                       |  | (Dollars in thousands)                                  |       
|Interest income attributable to:                       |  |                                                         |        |   |                |   |        |                          |  |   |        |  
|Loans, net(1)                                          |  | $                                                       | 32,229 |   |                | $ | 30,095 |                          |  | $ | 62,324 |  
|Mortgage-backed securities                             |  |                                                         | (2,909 | ) |                |   | 2,318  |                          |  |   | (591   | )
|Short-term investments(2)                              |  |                                                         | 135    |   |                |   | 225    |                          |  |   | 360    |  
|Investment securities and FHLB stock                   |  |                                                         | 5      |   |                |   | 852    |                          |  |   | 857    |  
|                                                       |  |                                                         |        |   |                |   |        |                          |  |   |        |  
|Total interest-earning assets                          |  |                                                         | 29,460 |   |                |   | 33,490 |                          |  |   | 62,950 |  
|                                                       |  |                                                         |        |   |                |   |        |                          |  |   |        |  
|Interest expense attributable to:                      |  |                                                         |        |   |                |   |        |                          |  |   |        |  
|Transaction and money market                           |  |                                                         | (31    | ) |                |   | 893    |                          |  |   | 862    |  
|Savings                                                |  |                                                         | 1,528  |   |                |   | 4,808  |                          |  |   | 6,336  |  
|Certificates of deposit                                |  |                                                         | 6,967  |   |                |   | 8,667  |                          |  |   | 15,634 |  
|Trust Preferred Securities and subordinated debentures |  |                                                         | (14    | ) |                |   | (137   | )                        |  |   | (151   | )
|Senior notes                                           |  |                                                         |       |   |                |   |       |                          |  |   |       |  
|FHLB advances and other borrowings                     |  |                                                         | 7,829  |   |                |   | 11,987 |                          |  |   | 19,816 |  
|                                                       |  |                                                         |        |   |                |   |        |                          |  |   |        |  
|Total interest-bearing liabilities                     |  |                                                         | 16,279 |   |                |   | 26,218 |                          |  |   | 42,497 |  
|                                                       |  |                                                         |        |   |                |   |        |                          |  |   |        |  
|Increase in net interest income                        |  | $                                                       | 13,181 |   |                | $ | 7,272  |                          |  | $ | 20,453 |  
|                                                       |  |                                                         |        |   |                |   |        |                          |  |   |        |  

---

|(1) | Includes interest earned on loans held for sale.
|--- | ------------------------------------------------

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



Net Interest Income.    Net interest income is the most significant component of our revenue. Our
ability to grow net interest income is dependent on loan demand, our ability to raise deposits and obtain borrowing facilities. Movements in interest rates and pricing pressure from competitors can have a significant impact on our balance sheet
volume and net interest income. BankUnited manages net interest income through its asset and liability management practices.



Net interest income before provision for loan losses was $60.0 million for the quarter ended March 31, 2006, increasing by $20.4 million or 51% over
the $39.6 million reported for the same period in 2005. The net interest margin improved this quarter to 2.08% from 1.75% for the same quarter last year. The overall yield on interest earning assets increased by 123 basis points, while the overall
rates paid in interest bearing liabilities increased by 98 basis points, resulting in an improvement in the interest rate spread of 25 basis points for the three months ended March 31, 2006 compared to the same period in 2005.



Interest income on loans includes deferred interest on option ARM loans where
periodic payments do not cover the amount of interest earned contractually and where the uncollected interest is added to the principal balance of the loans. For the quarter ended March 31, 2006, $19.5 million in deferred interest is
included in interest income on loans.



24



---

##### Table of Contents

The improvement in net interest income is attributable principally to the growth in earning assets and to
the change in earning asset mix. Average earning assets in the current quarter increased by $2.4 billion or 27% from the quarter a year ago. Growth was centered in higher yield average loans that represent 82% of earning assets in the current
quarter as compared to 74% in the same quarter for the prior year.



Improvement in the net interest spread, which rose to 1.80% for the quarter also contributed to net interest income. Factors affecting the yield improvement on assets included prepayment fees that increased from $750 thousand in the quarter
ended March 31, 2005 to $3.0 million in the current quarter and other loan product changes. Factors resulting in improved cost of interest bearing liabilities included the prepayment of long-term high rate FHLB debt in the quarter ended
June 30, 2005, and the growth in non-interest bearing sources of funds. Prepayments on residential mortgage loans reduce loan interest income as the net deferred cost amortization is accelerated with the prepayment. For the quarter ended March
31, 2006, residential loan prepayments as a percentage of the average outstanding residential loans was 4.4% as compared to 5.6% for the quarter ended March 31, 2005. The slower prepayment rate contributed to the net interest margin for the quarter.



The additional equity raised during the quarter, earnings
retention and the growth in non-interest bearing deposits resulted in an increase in average earning assets funded by non-interest bearing liabilities and equity to $794 million for the quarter ended March 31, 2006, as compared to $601 million
for the same period in the prior year.



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 overall review of asset quality. The
provision for loan losses of $2.3 million for the three months ended March 31, 2006 represents an increase compared to the $1.1 million provided during the same period in 2005, reflecting loan portfolio growth. Net charge-offs for the three
months ended March 31, 2006, were $0.4 million compared to $0.7 million for the same period in 2005. Non-performing loans to total loans decreased during the last twelve months from 0.27% to 0.11% as of March 31, 2006, as compared to 0.10% at
September 30, 2005. The allowance for loan losses as a percentage of total loans was 0.31% as of March 31, 2006 compared to 0.36% as of March 31, 2005 and 0.32% at September 30, 2005. See Asset Quality for more information
on BankUniteds allowance for loan losses.



Analysis of Non-Interest
Income and Expenses



|                                          |  |                                     |       |   |      |   |       |                     |  |   |      |   |  |        |  
|----------------------------------------- |  | ----------------------------------- | ----- | - | ---- | - | ----- | ------------------- |  | - | ---- | - |  | ------ | -
|                                          |  | For the Three MonthsEnded March 31, |       |   |      |  
|                                          |  | 2006                                |       |   | 2005 |   |       | Increase/(Decrease) | 
|                                          |  | (Dollars in thousands)              |      
|Non-interest income:                      |  |                                     |       |   |      |   |       |                     |  |   |      |   |  |        |  
|Loan servicing fees                       |  | $                                   | 1,705 |   |      | $ | 837   |                     |  | $ | 868  |   |  | 103.7  | %
|Amortization of mortgage servicing rights |  |                                     | (841  | ) |      |   | (811  | )                   |  |   | (30  | ) |  | (3.7   | )
|Impairment of mortgage servicing rights   |  |                                     | (330  | ) |      |   |      |                     |  |   | (330 | ) |  | (100.0 | )
|Loan fees                                 |  |                                     | 954   |   |      |   | 586   |                     |  |   | 368  |   |  | 62.8   |  
|Deposit fees                              |  |                                     | 1,338 |   |      |   | 1,010 |                     |  |   | 328  |   |  | 32.5   |  
|Other fees                                |  |                                     | 707   |   |      |   | 517   |                     |  |   | 190  |   |  | 36.8   |  
|Net gain on sale of assets                |  |                                     | 1,872 |   |      |   | 2,565 |                     |  |   | (693 | ) |  | (27.0  | )
|Insurance and investment services income  |  |                                     | 1,312 |   |      |   | 1,252 |                     |  |   | 60   |   |  | 4.8    |  
|Other                                     |  |                                     | 441   |   |      |   | 1,130 |                     |  |   | (689 | ) |  | (61.0  | )
|                                          |  |                                     |       |   |      |   |       |                     |  |   |      |   |  |        |  
|Total non-interest income                 |  | $                                   | 7,158 |   |      | $ | 7,086 |                     |  | $ | 72   |   |  | 1.0    | %
|                                          |  |                                     |       |   |      |   |       |                     |  |   |      |   |  |        |  



Total non-interest income of $7.2
million for the quarter ended March 31, 2006 was comparable to the $7.1 million reported for the same quarter in the prior year.



BankUniteds portfolio of residential loans serviced for others was $1.7 billion as of March 31, 2006 compared to $1.3 billion as of
March 31, 2005. Servicing fee income, net of amortization and impairment increased to $534



25



---

##### Table of Contents

thousand for the quarter ended March 31, 2006 as compared to $26 thousand for the same quarter in 2005. This improvement reflects the increase in
ancillary fees earned on loans serviced for others including prepayment fees and the increase in the volume of loans serviced. An impairment charge of $330 thousand was taken during the quarter ended March 31, 2006, on the portfolio of loans
securitized in the prior year.



Fees on loans, deposit fees and
other fees were $3.0 million for the quarter ended March 31, 2006 up 43% compared to $2.1 million for the same quarter in the prior year.



Net gain on the sale of assets included $1.9 million from the sale of loans for the quarter ended March 31, 2006 as compared to $2.6 million for the
same quarter in the prior year, which was comprised of $1.7 million from the sale of loans and $0.9 million from the sale of investments.



BankUnited has entered into interest rate swaps to hedge specific debt obligations and has applied hedge accounting based on the short cut
method provided for in the Statement of Financial Accounting Standards No. 133. In December 2005, the Securities and Exchange Commission issued guidance on the application of the short cut method under this standard. Based on this guidance,
BankUnited has reviewed its application of the short cut method in accounting for interest rate swaps and concluded that three current hedge transactions did not meet the requirements set forth in the guidance and hedge accounting was precluded for
those items in the periods previously applied. BankUnited believes that the reclassification of these swaps does not materially affect the results of operations for any period presented and recognized a $242 thousand charge from prior periods in the
current quarter. The impact of the interest rate swaps valuation for the current quarter resulted in an additional $672 thousand charge during the quarter. The change in value of these swaps is included in other income with a combined loss of $914
thousand in the quarter ended March 31, 2006. The $914 thousand net loss resulted from a gain on two swaps of $697 thousand and a loss of $1.6 million on a third swap. See Note (11) Subsequent Eventsto the accompanying notes to the
consolidated financial statements.



|                                       |  |                                     |        |      |   |          |  |   |       |  |      |  
|-------------------------------------- |  | ----------------------------------- | ------ | ---- | - | -------- |  | - | ----- |  | ---- | -
|                                       |  | For the Three MonthsEnded March 31, |        |      |  
|                                       |  | 2006                                |        | 2005 |   | Increase | 
|                                       |  | (Dollars in thousands)              |       
|Non-interest expenses:                 |  |                                     |        |      |   |          |  |   |       |  |      |  
|Employee compensation and benefits     |  | $                                   | 17,811 |      | $ | 12,843   |  | $ | 4,968 |  | 38.7 | %
|Occupancy and equipment                |  |                                     | 7,355  |      |   | 5,391    |  |   | 1,964 |  | 36.4 |  
|Telecommunications and data processing |  |                                     | 2,336  |      |   | 1,527    |  |   | 709   |  | 46.4 |  
|Advertising and promotion expense      |  |                                     | 1,664  |      |   | 1,375    |  |   | 289   |  | 21.0 |  
|Professional fees                      |  |                                     | 1,417  |      |   | 1,307    |  |   | 110   |  | 8.4  |  
|Other operating expenses               |  |                                     | 4,789  |      |   | 3,192    |  |   | 1,597 |  | 50.0 |  
|                                       |  |                                     |        |      |   |          |  |   |       |  |      |  
|Total non-interest expenses            |  | $                                   | 35,372 |      | $ | 25,635   |  | $ | 9,637 |  | 37.6 | %
|                                       |  |                                     |        |      |   |          |  |   |       |  |      |  



Non-interest expense
increased by $9.6 million, or 38%, for the three months ended March 31, 2006, compared to the same period in 2005. Growth in operating expenses is centered in employee and facilities expenses. Growth in expenses is driven by the growth in asset
volume and continued expansion of the branch network and supporting operations. Compensation expense in 2006 reflects the implementation of FAS 123R with a total increase in share-based compensation of $647 thousand from the same period in 2005.



For the Six Months Ended March 31, 2006 Compared to the Same Period in
2005



General



Net income for the six months ended March 31, 2006 was $35.9 million,
up 28% from $28.1 million for the same quarter last year. Basic and diluted earnings were $1.10 and $1.04 per share, respectively, for the six-month period, up from $0.93 and $0.87 per share, respectively, for the same six-month period last
year.



26



---

##### Table of Contents

The following table is a condensed version of BankUniteds Consolidated Statement of Operations for
the periods presented.



|                           |  |                                          |         |        |   |        |  |   |        |  |       |  
|-------------------------- |  | ---------------------------------------- | ------- | ------ | - | ------ |  | - | ------ |  | ----- | -
|                           |  | For the six monthsended March 31,        |         | Change |  
|                           |  | 2006                                     |         | 2005   |   | $      |  | % |       
|                           |  | (In thousands, except per share amounts) |        
|Net interest income        |  | $                                        | 111,486 |        | $ | 78,432 |  | $ | 33,054 |  | 42.1  | %
|Provision for loan losses  |  |                                          | 4,600   |        |   | 2,200  |  |   | 2,400  |  | 109.1 | %
|Non-interest income        |  |                                          | 14,665  |        |   | 13,436 |  |   | 1,229  |  | 9.1   | %
|Non-interest expense       |  |                                          | 67,804  |        |   | 48,357 |  |   | 19,447 |  | 40.2  | %
|                           |  |                                          |         |        |   |        |  |   |        |  |       |  
|Income before taxes        |  |                                          | 53,747  |        |   | 41,311 |  |   | 12,436 |  | 30.1  | %
|Income taxes               |  |                                          | 17,884  |        |   | 13,230 |  |   | 4,654  |  | 35.2  | %
|                           |  |                                          |         |        |   |        |  |   |        |  |       |  
|Net income                 |  | $                                        | 35,863  |        | $ | 28,081 |  | $ | 7,782  |  | 27.7  | %
|                           |  |                                          |         |        |   |        |  |   |        |  |       |  
|Basic earnings per share   |  | $                                        | 1.10    |        | $ | 0.93   |  | $ | 0.17   |  | 18.3  | %
|Diluted earnings per share |  | $                                        | 1.04    |        | $ | 0.87   |  | $ | 0.17   |  | 19.5  | %



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 have been
calculated on a pre-tax basis.



Yields Earned and Rates Paid



|                                                                    |  |                                    |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|------------------------------------------------------------------- |  | ---------------------------------- | ---------- | - | -------- | - | ---------- |  | ---- | -------------- |  | - | --------- | - | ---------- | - | ------- |  | ---- | -
|                                                                    |  | For the Six Months Ended March 31, |           
|                                                                    |  | 2006                               |            |   | 2005     |  
|                                                                    |  | Average Balance                    |            |   | Interest |   | Yield/Rate |  |      | AverageBalance |  |   | Interest  |   | Yield/Rate |  
|                                                                    |  | (Dollars in thousands)             |           
|Interest-earning assets:                                            |  |                                    |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Loans, net(1)                                                       |  | $                                  | 8,913,209  |   |          | $ | 262,488    |  | 5.89 | %              |  | $ | 6,328,638 |   |            |   | 149,854 |  | 4.74 | %
|Mortgage-backed securities                                          |  |                                    | 1,517,121  |   |          |   | 32,923     |  | 4.34 | %              |  |   | 1,860,348 |   |            |   | 35,120  |  | 3.78 | %
|Short-term investments(2)                                           |  |                                    | 32,366     |   |          |   | 1,052      |  | 6.52 | %              |  |   | 19,289    |   |            |   | 391     |  | 4.07 | %
|Investment securities and FHLB stock                                |  |                                    | 489,548    |   |          |   | 11,876     |  | 4.86 | %              |  |   | 493,238   |   |            |   | 10,609  |  | 4.31 | %
|                                                                    |  |                                    |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Total interest-earning assets                                       |  |                                    | 10,952,244 |   |          |   | 308,339    |  | 5.63 | %              |  |   | 8,701,513 |   |            |   | 195,974 |  | 4.51 | %
|                                                                    |  |                                    |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Interest-bearing liabilities:                                       |  |                                    |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Transaction and money market                                        |  |                                    | 388,759    |   |          |   | 3,958      |  | 2.04 | %              |  |   | 399,017   |   |            |   | 2,509   |  | 1.26 | %
|Savings                                                             |  |                                    | 1,235,666  |   |          |   | 20,908     |  | 3.39 | %              |  |   | 969,569   |   |            |   | 9,224   |  | 1.91 | %
|Certificates of deposits                                            |  |                                    | 3,050,195  |   |          |   | 59,038     |  | 3.88 | %              |  |   | 2,076,520 |   |            |   | 29,263  |  | 2.83 | %
|Trust preferred securities and subordinated debentures              |  |                                    | 195,279    |   |          |   | 7,575      |  | 7.76 | %              |  |   | 185,643   |   |            |   | 5,930   |  | 6.39 | %
|Senior notes                                                        |  |                                    | 120,000    |   |          |   | 2,139      |  | 3.57 | %              |  |   | 120,000   |   |            |   | 2,139   |  | 3.57 | %
|FHLB advances and other borrowings                                  |  |                                    | 5,237,490  |   |          |   | 103,235    |  | 3.95 | %              |  |   | 4,348,183 |   |            |   | 68,476  |  | 3.16 | %
|                                                                    |  |                                    |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Total interest-bearing liabilities                                  |  | $                                  | 10,227,389 |   |          | $ | 196,853    |  | 3.86 | %              |  | $ | 8,098,932 |   |            | $ | 117,542 |  | 2.91 | %
|                                                                    |  |                                    |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Excess of interest-earning assets over interest-bearing liabilities |  | $                                  | 724,855    |   |          |   |            |  |      |                |  | $ | 602,581   |   |            |   |         |  |      |  
|                                                                    |  |                                    |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Net interest income                                                 |  |                                    |            |   |          | $ | 111,486    |  |      |                |  |   |           |   |            | $ | 78,432  |  |      |  
|                                                                    |  |                                    |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Interest rate spread                                                |  |                                    |            |   |          |   |            |  | 1.77 | %              |  |   |           |   |            |   |         |  | 1.60 | %
|Effect of non-interest bearing sources                              |  |                                    |            |   |          |   |            |  | 0.26 | %              |  |   |           |   |            |   |         |  | 0.20 | %
|                                                                    |  |                                    |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Net interest margin                                                 |  |                                    |            |   |          |   |            |  | 2.03 | %              |  |   |           |   |            |   |         |  | 1.80 | %
|                                                                    |  |                                    |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Ratio of interest-earning assets to interest-bearing liabilities    |  |                                    | 107.09     | % |          |   |            |  |      |                |  |   | 107.44    | % |            |   |         |  |      |  
|                                                                    |  |                                    |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  



27



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---

|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 balances of loans held for sale of $34.7 million and $19.6 million for the six months ended March 31, 2006 and 2005, respectively. Also includes average
non-accruing loans of $9.8 million and $17.9 million for the six months ended March 31, 2006 and 2005, respectively.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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



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, 2006 vs. 2005 |       
|                                                       |  | Increase (Decrease)Due to                             |        |   |               
|                                                       |  | Changes inVolume                                      |        |   | Changesin Rate |   | TotalIncrease/(Decrease) | 
|                                                       |  | (Dollars in thousands)                                |       
|Interest income attributable to:                       |  |                                                       |        |   |                |   |                          |  |   |         |  
|Loans, net(1)                                          |  | $                                                     | 60,161 |   |                | $ | 52,474                   |  | $ | 112,635 |  
|Mortgage-backed securities                             |  |                                                       | (6,480 | ) |                |   | 4,283                    |  |   | (2,197  | )
|Short-term investments(2)                              |  |                                                       | 265    |   |                |   | 396                      |  |   | 661     |  
|Investment securities and FHLB stock                   |  |                                                       | (188   | ) |                |   | 1,455                    |  |   | 1,267   |  
|                                                       |  |                                                       |        |   |                |   |                          |  |   |         |  
|Total interest-earning assets                          |  |                                                       | 53,758 |   |                |   | 58,608                   |  |   | 112,366 |  
|                                                       |  |                                                       |        |   |                |   |                          |  |   |         |  
|Interest expense attributable to:                      |  |                                                       |        |   |                |   |                          |  |   |         |  
|Transaction and money market                           |  |                                                       | (65    | ) |                |   | 1,514                    |  |   | 1,449   |  
|Savings                                                |  |                                                       | 2,532  |   |                |   | 9,152                    |  |   | 11,684  |  
|Certificates of deposit                                |  |                                                       | 13,721 |   |                |   | 16,053                   |  |   | 29,774  |  
|Trust Preferred Securities and subordinated debentures |  |                                                       | 308    |   |                |   | 1,337                    |  |   | 1,645   |  
|Senior notes                                           |  |                                                       |       |   |                |   |                         |  |   |        |  
|FHLB advances and other borrowings                     |  |                                                       | 14,005 |   |                |   | 20,754                   |  |   | 34,759  |  
|                                                       |  |                                                       |        |   |                |   |                          |  |   |         |  
|Total interest-bearing liabilities                     |  |                                                       | 30,501 |   |                |   | 48,810                   |  |   | 79,311  |  
|                                                       |  |                                                       |        |   |                |   |                          |  |   |         |  
|Increase (decrease) in net interest income             |  | $                                                     | 23,257 |   |                | $ | 9,798                    |  | $ | 33,055  |  
|                                                       |  |                                                       |        |   |                |   |                          |  |   |         |  

---

|(1) | Includes interest earned on loans held for sale.
|--- | ------------------------------------------------

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



Net Interest Income.



Net interest income before provision for loan losses was $111.5 million for the six month period ended March 31, 2006, increasing by $33.1 million or
42% from $78.4 million reported for the same period in 2005. The net interest margin improved to 2.03% for the period, from 1.80% for the same period last year. The overall yield on interest earning assets increased by 112 basis points, while the
overall rates paid in interest bearing liabilities increased by 95 basis points, resulting in an improvement in the interest rate spread of 17 basis points for the six months ended March 31, 2006 compared to the same period in 2005.



The improvement in net interest income is attributable primarily to the
growth in earning assets and to the change in earning asset mix. Average earning assets for the six-month period increased by $2.2 billion or 25% from the same period a year ago. Growth was centered in higher yield average loans, which represent 81%
of earning assets in the current six-month period as compared to 73% in the same period for the prior year.



28



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Improvement in the net interest spread which rose to 1.77% for the current period also contributed to net
interest income. Factors affecting the yield improvement on assets included prepayment fees on loans that increased from $1.3 million for the six month period ended March 31, 2005 to $5.0 million in the six month period ended March 31,
2006 and other loan product changes. Factors resulting in improved cost of interest bearing liabilities included the prepayment of long-term high rate FHLB debt in the quarter ended June 30, 2005, and the growth in non-interest bearing sources
of funds. Prepayments on residential mortgage loans reduce loan interest income as the net deferred cost amortization is accelerated with the prepayment. For the six months ended March 31, 2006, residential loan prepayments as a percentage of the
average outstanding residential loans was 8.8% as compared to 11.1% for the six months ended March 31, 2005. The slower prepayment rate contributed to the net interest margin for the six-month period.



The additional equity raised during the quarter ended March 31, 2006,
earnings retention and the growth in non-interest bearing deposits resulted in an increase in average earning assets funded by non-interest bearing liabilities and equity to $725 million for the six month period ended March 31, 2006 as compared
to $603 million for the same period in the prior year.



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 $4.6 million and $2.2 million for the six-month periods ended March 31, 2006 and 2005, respectively. Net charge-offs for the six months ended March 31, 2006 were a net recovery of $0.2 million compared to $1.5 million in
losses for the same period in 2005. See Asset Qualityfor information on BankUniteds allowance for loan losses.



Analysis of Non-Interest Income and Expenses



|                                          |  |                                   |        |   |      |   |        |                     |  |   |       |   |  |        |  
|----------------------------------------- |  | --------------------------------- | ------ | - | ---- | - | ------ | ------------------- |  | - | ----- | - |  | ------ | -
|                                          |  | For the Six MonthsEnded March 31, |        |   |      |   |        |                     | 
|                                          |  | 2006                              |        |   | 2005 |   |        | Increase/(Decrease) | 
|                                          |  | (Dollars in thousands)            |       
|Non-interest income:                      |  |                                   |        |   |      |   |        |                     |  |   |       |   |  |        |  
|Loan servicing fees                       |  | $                                 | 3,158  |   |      | $ | 1,707  |                     |  | $ | 1,451 |   |  | 85.0   | %
|Amortization of mortgage servicing rights |  |                                   | (1,727 | ) |      |   | (1,581 | )                   |  |   | (146  | ) |  | (9.2   | )
|Impairment of mortgage servicing rights   |  |                                   | (330   | ) |      |   |       |                     |  |   | (330  | ) |  | (100.0 | )
|Loan fees                                 |  |                                   | 1,663  |   |      |   | 1,143  |                     |  |   | 520   |   |  | 45.5   |  
|Deposit fees                              |  |                                   | 2,655  |   |      |   | 2,116  |                     |  |   | 539   |   |  | 25.5   |  
|Other fees                                |  |                                   | 1,347  |   |      |   | 1,035  |                     |  |   | 312   |   |  | 30.1   |  
|Net gain on sale of assets                |  |                                   | 3,762  |   |      |   | 4,568  |                     |  |   | (806  | ) |  | (17.6  | )
|Insurance and investment services income  |  |                                   | 2,207  |   |      |   | 2,215  |                     |  |   | (8    | ) |  | (0.4   | )
|Other                                     |  |                                   | 1,930  |   |      |   | 2,233  |                     |  |   | (303  | ) |  | (13.6  | )
|                                          |  |                                   |        |   |      |   |        |                     |  |   |       |   |  |        |  
|Total non-interest income                 |  | $                                 | 14,665 |   |      | $ | 13,436 |                     |  | $ | 1,229 |   |  | 9.1    | %
|                                          |  |                                   |        |   |      |   |        |                     |  |   |       |   |  |        |  



Total non-interest
income of $14.7 million for the six-month period ended March 31, 2006 reflects a 9.1% increase from the $13.4 million reported for the same period in the prior year.



BankUniteds portfolio of residential loans serviced for others was $1.7 billion as of March 31, 2006 compared to
$1.3 billion as of March 31, 2005. Servicing fee income net of amortization and impairment increased to $1.1 million for the six-month period ended March 31, 2006 as compared to $126 thousand for the same period in 2005. This improvement
reflects the increase in ancillary fees earned on loans serviced for others including prepayment fees and the increase in the volume of loans serviced. An impairment charge of $330 thousand was taken during the six-month period ended March 31,
2006.



Fees on loans, deposit fees and other fees were $5.7
million for the six-month period ended March 31, 2006, up 33% compared to $4.3 million for the same period in the prior year.



29



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##### Table of Contents

Net gain on the sale of assets included $3.8 million from the sale of loans for the six months ended
March 31, 2006 as compared to $4.6 million for the same quarter in the prior year, which was comprised of $2.1 million from the sale of loans and $2.5 million from the sale of investments.



BankUnited has entered into interest rate swaps to hedge specific debt
obligations and has applied hedge accounting based on the short cut method provided for in the Statement of Financial Accounting Standards No. 133. Recently the Securities and Exchange Commission issued guidance on the application
of the short cut method under this standard. Based on this guidance, BankUnited has reviewed its application of the short cut method in accounting for interest rate swaps and concluded that three current hedge transactions did not meet the
requirements set forth in the guidance and hedge accounting was precluded for those items in the periods previously applied. BankUnited believes that the reclassification of these swaps does not materially affect the results of operations for any
period presented. The impact of the interest rate swaps valuation resulted in a $914 thousand charge for the six-month period ended March 31, 2006. Unrealized gain or loss on interest rate swaps and caps is included in other income. The $914
thousand net loss resulted from a gain on two swaps of $697 thousand and a loss of $1.6 million on a third swap. See Note (11) Subsequent Eventsto the accompanying notes to the consolidated financial statements.



|                                       |  |                                   |        |      |   |          |  |   |        |  |      |  
|-------------------------------------- |  | --------------------------------- | ------ | ---- | - | -------- |  | - | ------ |  | ---- | -
|                                       |  | For the Six MonthsEnded March 31, |        |      |   |          | 
|                                       |  | 2006                              |        | 2005 |   | Increase | 
|                                       |  | (Dollars in thousands)            |       
|Non-interest expenses:                 |  |                                   |        |      |   |          |  |   |        |  |      |  
|Employee compensation and benefits     |  | $                                 | 34,572 |      | $ | 24,039   |  | $ | 10,533 |  | 43.8 | %
|Occupancy and equipment                |  |                                   | 14,298 |      |   | 10,392   |  |   | 3,906  |  | 37.6 |  
|Telecommunications and data processing |  |                                   | 4,461  |      |   | 3,146    |  |   | 1,315  |  | 41.8 |  
|Advertising and promotion expense      |  |                                   | 3,062  |      |   | 2,819    |  |   | 243    |  | 8.6  |  
|Professional fees                      |  |                                   | 2,913  |      |   | 2,155    |  |   | 758    |  | 35.2 |  
|Other operating expenses               |  |                                   | 8,498  |      |   | 5,806    |  |   | 2,692  |  | 46.4 |  
|                                       |  |                                   |        |      |   |          |  |   |        |  |      |  
|Total non-interest expenses            |  | $                                 | 67,804 |      | $ | 48,357   |  | $ | 19,447 |  | 40.2 | %
|                                       |  |                                   |        |      |   |          |  |   |        |  |      |  



Non-interest expense
increased by $19.4 million, or 40%, for the six months ended March 31, 2006, compared to the same period in 2005. Growth in operating expenses is centered in employee and facilities expenses. Growth in expenses is driven by the growth in asset
volume and continued expansion of the branch network. Compensation expense in 2006 reflects the implementation of FAS 123R with a total increase in share-based compensation of $1.3 million from the same period in 2005. Of this amount, $945 thousand
reflects the impact of option expensing.



LIQUIDITY



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.



BankUnited, FSB has a borrowing line available at the Federal Home Loan Bank
of Atlanta secured by eligible real estate loans. BankUnited has additional borrowing capacity through securities sold under repurchase agreement with various counterparts. As of March 31, 2006 BankUnited, had $4.4 billion in advances
outstanding at the FHLB and $1.1 billion in securities sold under agreement to repurchase. Additional borrowing capacity under the FHLB line is $1.0 billion with certain limitations on short and long-term availability.



30



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##### Table of Contents

Short-term borrowing facilities are also available through fed funds purchased from other financial
institutions. As of March 31, 2006, BankUnited had $65 million in short term fed funds purchased.



Significant Sources and Uses of Funds



For the six months ended March 31, 2006, BankUnited recorded asset growth of $1.5 billion primarily through loan growth of $1.9 billion after sale of loans of $672 million during the period.



BankUnited funded its asset and loan growth for the six months ended March
31, 2006 primarily through deposit growth of $720 million, an increase on FHLB advances of $616 million, an equity offering of $150.9 million, repayment of mortgage backed securities of $221 million and a decline in cash equivalents of $147 million.



For the six months ended March 31, 2005, BankUnited recorded
asset growth of $550 million primarily through loan growth of $1.1 billion after sale of loans of $245 million during the period.



BankUnited funded its asset and loan growth for the six months ended March 31, 2005 primarily through deposit growth of $516 million, repayment of
mortgage backed securities of $320 million sale of mortgage backed securities and other securities of $132 million (excluding securities sold related to loan sales) and a decline in cash equivalents of $118 million.



FINANCIAL CONDITION



Assets



Loans comprise the major earning asset of BankUnited and increased from $8.0 billion at September 30, 2005 to $9.9 billion at March 31, 2006.
The portfolio is centered in first mortgage residential loans that amount to $8.2 billion or 83% of the net loan portfolio, which grew $1.6 billion or 24% from September 30, 2005. The portfolio also includes commercial real estate loans that amount
to $985 million or 10% of the net loan portfolio, which grew $206 million or 27% from September 30, 2005. Total loans secured by real estate represent 96% of the portfolio. Loan portfolio composition remains stable when compared to
September 30, 2005, but the loan portfolio as a percentage of total assets has grown from 75% at September 30, 2005 to 81% at March 31, 2006, as a result of strong loan demand.



Option ARM loans are adjustable-rate mortgages which provide borrowers
flexible payment options and have the potential for negative amortization above the original loan balance. Option ARM loans represented 53.1% and 48.0% of total loans outstanding as of March 31, 2006 and September 30, 2005, respectively.
As of March 31, 2006, option ARM loans with a balance of $3.1 billion had negative amortization with approximately $37.3 million of their principal balances resulting from negative amortization. As of September 30, 2005, option ARM loans
with a balance of $2.0 billion had negative amortization with approximately $12.4 million of their principal balances resulting from negative amortization. These loans are subject to interest rate caps.



BankUnited has conservative underwriting standards that include evaluation of
a borrowers debt service ability based on repayment of the loan at the fully indexed rate. As of March 31, 2006, the weighted average FICO score for option ARM loans was over 700.



As of March 31, 2006, the average balance of an MTA option ARM loan was
$295 thousand and the average loan to value (LTV) ratio based on the initial appraisal of the collateral was 76% without considering purchase mortgage insurance (PMI). Generally, loans produced with LTVs greater than 80% require PMI. As of
March 31, 2006, the average LTV ratio based on the initial appraisal of the collateral for the option ARM loan portfolio including PMI was 73%. The current LTVs may actually be lower than stated due to appreciation of housing markets as well as
loan principal reduction.



31



---

##### Table of Contents

Negative amortization may increase the individual loan balance up to an additional 15% of the original
loan balance. The loan contractually converts to fully amortizing principal payments upon reaching the earlier of five years or the additional 15% maximum negative amortization. Full amortization of the loan balance over the remaining life of the
loan is required. For example, a loan with an initial 73% LTV ratio, the loan principal could increase through deferred interest to a maximum LTV of 84% of the original appraised value of the collateral.



Interest income on loans includes deferred interest on option ARM loans where
periodic payments do not cover the amount of interest earned contractually and where the uncollected interest is added to the principal balance of the loans. For the quarter ended March 31, 2006, $19.5 million in deferred interest was included
in interest income on loans.



See Note(4) Loans Receivableto the
accompanying condensed notes to consolidated financial statements.



Liabilities



Deposits.    Deposits increased from $4.7 billion at September 30, 2005 to $5.5 billion at March 31, 2006 and funded 45% of our total assets at March 31, 2006. The majority of the deposit growth was
from interest bearing deposits that increased by $696 million. Core deposits, defined as checking, money market, and saving deposits as well as time deposits under $100 thousand reached $4 billion as of March 31, 2006 and represented 70% of
total deposits.



FHLB
advances.    FHLB advances increased from $3.8 billion at September 30, 2005 to $4.4 billion at March 31, 2006 and funded 36% of our total assets at March 31, 2006. Maturity of advances is managed by BankUnited
as part of its asset and liability management process.



Securities sold under agreements to repurchase.    Securities sold under agreements to repurchase (repos) remained level at $1.1 billion at March 31, 2006 when compared to the balance at September 30,
2005 and funded 9% of total assets at March 31, 2006.



Other borrowings    BankUnited utilizes other forms of short and long term borrowing. At March 31, 2006 there were $65 million outstanding in fed funds purchased and none at September 30, 2005. These are
used for funding short-term liquidity needs. There were no significant changes in other forms of borrowing between September 30, 2005 and March 31, 2006.



Equity



BankUnited completed an equity offering in the quarter ended March 31, 2006 and raised $150.9 million in additional equity.



32



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##### Table of Contents

Asset Quality



The following table sets forth additional information concerning BankUniteds non-performing assets at March 31, 2006 and September 30,
2005.



|                                                                  |  |                        |        |   |                   |   |        |  
|----------------------------------------------------------------- |  | ---------------------- | ------ | - | ----------------- | - | ------ | -
|                                                                  |  | March 31,2006          |        |   | September 30,2005 |  
|                                                                  |  | (Dollars in thousands) |       
|Non-accrual loans                                                 |  | $                      | 10,794 |   |                   | $ | 8,391  |  
|Loans past due 90 days and still accruing                         |  |                        | 366    |   |                   |   |       |  
|                                                                  |  |                        |        |   |                   |   |        |  
|Total non-performing loans                                        |  |                        | 11,160 |   |                   |   | 8,391  |  
|Real estate owned                                                 |  |                        | 224    |   |                   |   | 542    |  
|                                                                  |  |                        |        |   |                   |   |        |  
|Total non-performing assets                                       |  | $                      | 11,384 |   |                   | $ | 8,933  |  
|                                                                  |  |                        |        |   |                   |   |        |  
|Allowance for loan losses                                         |  | $                      | 30,575 |   |                   | $ | 25,755 |  
|                                                                  |  |                        |        |   |                   |   |        |  
|Non-performing assets as a percentage of total assets             |  |                        | 0.09   | % |                   |   | 0.08   | %
|Non-performing loans as a percentage of total loans               |  |                        | 0.11   | % |                   |   | 0.10   | %
|Allowance for loan losses as a percentage of total loans          |  |                        | 0.31   | % |                   |   | 0.32   | %
|Allowance for loan losses as a percentage of non-performing loans |  |                        | 273.97 | % |                   |   | 306.94 | %



Management believes
the current allowance to be appropriate given the composition of its loan portfolio, which as of March 31, 2006 was 96% secured by real estate, and based upon the historical loss experience and its assessment of current asset quality.



The following table sets forth the change in BankUniteds
allowance for loan losses for the three months and six months ended March 31, 2006 and 2005.



|                                                            |  |                            |        |   |                          |   |        |               |  |   |               |   |  |   |        |  
|----------------------------------------------------------- |  | -------------------------- | ------ | - | ------------------------ | - | ------ | ------------- |  | - | ------------- | - |  | - | ------ | -
|                                                            |  | For the Three Months Ended |        |   | For the Six Months Ended |  
|                                                            |  | March 31,2006              |        |   | March 31,2005            |   |        | March 31,2006 |  |   | March 31,2005 |  
|                                                            |  | (In thousands)             |       
|Allowance for loan losses, balance (at beginning of period) |  | $                          | 28,646 |   |                          | $ | 24,447 |               |  | $ | 25,755        |   |  | $ | 24,079 |  
|Provisions for loan losses                                  |  |                            | 2,300  |   |                          |   | 1,050  |               |  |   | 4,600         |   |  |   | 2,200  |  
|Loans charged off:                                          |  |                            |        |   |                          |   |        |               |  |   |               |   |  |   |        |  
|One-to-four family residential                              |  |                            |       |   |                          |   | (164   | )             |  |   |              |   |  |   | (669   | )
|Home equity loans and lines of credit                       |  |                            |       |   |                          |   | (200   | )             |  |   |              |   |  |   | (331   | )
|Commercial                                                  |  |                            | (493   | ) |                          |   | (344   | )             |  |   | (493          | ) |  |   | (498   | )
|Consumer                                                    |  |                            |       |   |                          |   | (59    | )             |  |   |              |   |  |   | (78    | )
|                                                            |  |                            |        |   |                          |   |        |               |  |   |               |   |  |   |        |  
|Total loans charged off(1)                                  |  |                            | (493   | ) |                          |   | (767   | )             |  |   | (493          | ) |  |   | (1,576 | )
|                                                            |  |                            |        |   |                          |   |        |               |  |   |               |   |  |   |        |  
|Recoveries:                                                 |  |                            |        |   |                          |   |        |               |  |   |               |   |  |   |        |  
|Commercial                                                  |  |                            | 117    |   |                          |   | 44     |               |  |   | 707           |   |  |   | 68     |  
|Consumer                                                    |  |                            | 5      |   |                          |   | 3      |               |  |   | 6             |   |  |   | 6      |  
|                                                            |  |                            |        |   |                          |   |        |               |  |   |               |   |  |   |        |  
|Total recoveries(1)                                         |  |                            | 122    |   |                          |   | 47     |               |  |   | 713           |   |  |   | 74     |  
|                                                            |  |                            |        |   |                          |   |        |               |  |   |               |   |  |   |        |  
|Allowance for loan losses, balance (at end of period)       |  | $                          | 30,575 |   |                          | $ | 24,777 |               |  | $ | 30,575        |   |  | $ | 24,777 |  
|                                                            |  |                            |        |   |                          |   |        |               |  |   |               |   |  |   |        |  

---

|(1) | Net annualized (recoveries) charge-offs as a percentage of average total loans were 0.008% and 0.022% for the three months ended March 31, 2006 and 2005, respectively; and
(0.005%) and 0.047% for the six months ended March 31, 2006 and 2005, respectively.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



There can be no assurance that additional provisions for loan losses will not be required in future periods.



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The following table sets forth BankUniteds allocation of the allowance for loan losses by category
as of March 31, 2006 and September 30, 2005.



|                                                |  |                |        |                   |   |       
|----------------------------------------------- |  | -------------- | ------ | ----------------- | - | ------
|                                                |  | March 31, 2006 |        | September 30,2005
|                                                |  | (In thousands)
|Balance at the end of the period applicable to: |  |                |        |                   |   |       
|One-to-four family residential                  |  | $              | 7,908  |                   | $ | 6,356 
|Home equity loans and lines of credit           |  |                | 3,653  |                   |   | 2,909 
|Multi-family                                    |  |                | 825    |                   |   | 891   
|Commercial real estate                          |  |                | 3,956  |                   |   | 3,076 
|Construction                                    |  |                | 1,015  |                   |   | 697   
|Land                                            |  |                | 2,962  |                   |   | 1,886 
|Commercial                                      |  |                | 6,928  |                   |   | 7,161 
|Consumer                                        |  |                | 992    |                   |   | 843   
|Unallocated                                     |  |                | 2,336  |                   |   | 1,936 
|                                                |  |                |        |                   |   |       
|Total allowance for loan losses                 |  | $              | 30,575 |                   | $ | 25,755
|                                                |  |                |        |                   |   |       



|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, 2005, 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. Temporary changes in the carrying value of mortgage-backed securities and other securities
classified as available-for-sale are reflected, net of taxes, as a component of stockholders equity, while other than temporary impairment charges, if any, are recorded in earnings. See Note (3) Investments and Mortgage-backed Securities
Available for Saleto the accompanying condensed notes to the consolidated financial statements.



Risk Associated with Derivative and Hedging Activities



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



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BankUnited would owe the counterparty. BankUnited minimizes the credit risk in derivative instruments by 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. See discussion in Note (8) Accounting for Derivatives and
Hedging Activities to the accompanying condensed notes to the consolidated financial statements.



|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 the end of the period covered by this report, 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, 2006, and provides 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 and that such information is accumulated and communicated to management to
allow timely decisions regarding required disclosures. BankUnited may make changes to its disclosure controls and procedures periodically, as management reviews the design and effectiveness on a continuing basis. No change in internal control over
financial reporting occurred during the quarter ended March 31, 2006, 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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PART IIOTHER INFORMATION



|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, 2005, as filed with the
Securities and Exchange Commission on February 9, 2006, is incorporated herein by reference in response to this item.



|Item 6. | EXHIBITS
|------- | --------



(c)    Exhibits.



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.




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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
thereunder duly authorized.



BANKUNITED FINANCIAL CORPORATIONBy:

/S/    HUMBERTO L.
LOPEZHumberto L. Lopez Senior Executive Vice President and Chief Financial Officer




May 9, 2006



By:

/S/    BERNARDO M.
ARGUDINBernardo M. Argudin Executive Vice President and Principal Accounting Officer




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