##### Table of Contents

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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 December 31, 2004



or



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



Commission File No. 1-13921



BankUnited Financial Corporation

(Exact name of registrant as specified in its charter)



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



255 Alhambra Circle,
Coral Gables, Florida 33134

(Address of principal executive offices) (Zip Code)



(305) 569-2000

(Registrants telephone number, including area code)



Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No ̈



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



The number of shares outstanding of the registrants common stock at the
close of business on February 1, 2005 was 29,806,589 shares of Class A Common Stock, $.01 par value, and 431,562 shares of Class B Common Stock, $.01 par value.



This Form 10-Q contains 33 pages.

The
Index to Exhibits appears on page 34.



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##### Table of Contents

BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



FORM 10-Q REPORT FOR THE QUARTER ENDED DECEMBER 31, 2004



TABLE OF CONTENTS



|                                                                                                                  |  |         
|----------------------------------------------------------------------------------------------------------------- |  | --------
|                                                                                                                  |  | Page No.
|PART IFINANCIAL INFORMATION                                                                                      |  |         
|                                                                                                                  | 
|Item 1.    Financial Statements                                                                                   |  |         
|                                                                                                                  | 
|Consolidated Statements of Financial Condition as of December 31, 2004 and September 30, 2004 (unaudited)         |  | 3       
|                                                                                                                  | 
|Consolidated Statements of Income (unaudited) for the Three Months EndedDecember 31, 2004 and 2003                |  | 4       
|                                                                                                                  | 
|Consolidated Statements of Stockholders Equity (unaudited) for the Three Months Ended December 31, 2004 and 2003 |  | 5       
|                                                                                                                  | 
|Condensed Consolidated Statements of Cash Flows (unaudited) for the Three Months Ended December 31, 2004 and 2003 |  | 6       
|                                                                                                                  | 
|Condensed Notes to Consolidated Financial Statements (unaudited)                                                  |  | 7       
|                                                                                                                  | 
|Item 2.    Managements Discussion and Analysis of Financial Condition and Results of Operations                  |  | 18      
|                                                                                                                  | 
|Item 3.    Quantitative and Qualitative Disclosures About Market Risk                                             |  | 29      
|                                                                                                                  | 
|Item 4.    Controls and Procedures                                                                                |  | 30      
|                                                                                                                  | 
|PART IIOTHER INFORMATION                                                                                         |  |         
|                                                                                                                  | 
|Item 4.    Submission of Matters to a Vote of Security Holders                                                    |  | 31      
|                                                                                                                  | 
|Item 5.    Other Information                                                                                      |  | 31      
|                                                                                                                  | 
|Item 6.    Exhibits                                                                                               |  | 32      



2



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##### Table of Contents

BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION



|                                                                                                                                       |  |                                          |           |   |                   |   |           |  
|-------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------- | --------- | - | ----------------- | - | --------- | -
|                                                                                                                                       |  | December 31,2004                         |           |   | September 30,2004 |  
|                                                                                                                                       |  | (Dollars in thousands, exceptshare data) |          
|ASSETS                                                                                                                                 |  |                                          |           |   |                   |   |           |  
|Cash                                                                                                                                   |  | $                                        | 32,387    |   |                   | $ | 31,062    |  
|Federal Home Loan Bank overnight deposits                                                                                              |  |                                          | 11,441    |   |                   |   | 148,647   |  
|Federal funds sold                                                                                                                     |  |                                          | 938       |   |                   |   | 2,185     |  
|Investments securities available for sale, at fair value                                                                               |  |                                          | 346,489   |   |                   |   | 333,939   |  
|Mortgage-backed securities available for sale, at fair value                                                                           |  |                                          | 1,826,121 |   |                   |   | 2,068,180 |  
|Mortgage loans held for sale at fair value                                                                                             |  |                                          | 25,874    |   |                   |   | 28,786    |  
|Loans held in portfolio                                                                                                                |  |                                          | 6,239,142 |   |                   |   | 5,684,887 |  
|Add: Unearned discounts, premiums and deferred fees, net                                                                               |  |                                          | 81,056    |   |                   |   | 65,992    |  
|Less: Allowance for loan losses                                                                                                        |  |                                          | (24,447   | ) |                   |   | (24,079   | )
|                                                                                                                                       |  |                                          |           |   |                   |   |           |  
|Loans held in portfolio, net                                                                                                           |  |                                          | 6,295,751 |   |                   |   | 5,726,800 |  
|                                                                                                                                       |  |                                          |           |   |                   |   |           |  
|FHLB stock and other earning assets                                                                                                    |  |                                          | 153,059   |   |                   |   | 156,166   |  
|Office properties and equipment, net                                                                                                   |  |                                          | 30,020    |   |                   |   | 26,417    |  
|Real estate owned                                                                                                                      |  |                                          | 1,602     |   |                   |   | 1,611     |  
|Interest receivable                                                                                                                    |  |                                          | 33,759    |   |                   |   | 32,195    |  
|Mortgage servicing rights                                                                                                              |  |                                          | 15,406    |   |                   |   | 15,414    |  
|Goodwill                                                                                                                               |  |                                          | 28,353    |   |                   |   | 28,353    |  
|Bank-owned life insurance                                                                                                              |  |                                          | 89,210    |   |                   |   | 88,210    |  
|Prepaid expenses and other assets                                                                                                      |  |                                          | 24,262    |   |                   |   | 22,480    |  
|                                                                                                                                       |  |                                          |           |   |                   |   |           |  
|Total assets                                                                                                                           |  | $                                        | 8,914,672 |   |                   | $ | 8,710,445 |  
|                                                                                                                                       |  |                                          |           |   |                   |   |           |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                   |  |                                          |           |   |                   |   |           |  
|Liabilities                                                                                                                            |  |                                          |           |   |                   |   |           |  
|Interest bearing deposits                                                                                                              |  | $                                        | 3,464,755 |   |                   | $ | 3,281,108 |  
|Non-interest bearing deposits                                                                                                          |  |                                          | 262,028   |   |                   |   | 247,154   |  
|                                                                                                                                       |  |                                          |           |   |                   |   |           |  
|Total deposits                                                                                                                         |  |                                          | 3,726,783 |   |                   |   | 3,528,262 |  
|                                                                                                                                       |  |                                          |           |   |                   |   |           |  
|Securities sold under agreements to repurchase                                                                                         |  |                                          | 1,231,569 |   |                   |   | 1,182,237 |  
|Advances from Federal Home Loan Bank                                                                                                   |  |                                          | 3,069,835 |   |                   |   | 3,115,428 |  
|Convertible senior notes                                                                                                               |  |                                          | 120,000   |   |                   |   | 120,000   |  
|Trust preferred securities and subordinated debentures                                                                                 |  |                                          | 195,841   |   |                   |   | 164,979   |  
|Interest payable                                                                                                                       |  |                                          | 15,572    |   |                   |   | 14,051    |  
|Advance payments by borrowers for taxes and insurance                                                                                  |  |                                          | 24,214    |   |                   |   | 59,971    |  
|Accrued expenses and other liabilities                                                                                                 |  |                                          | 28,851    |   |                   |   | 32,860    |  
|                                                                                                                                       |  |                                          |           |   |                   |   |           |  
|Total liabilities                                                                                                                      |  |                                          | 8,412,665 |   |                   |   | 8,217,788 |  
|                                                                                                                                       |  |                                          |           |   |                   |   |           |  
|Commitments and Contingencies (See notes 4, 8 and 9)                                                                                   |  |                                          |           |   |                   |   |           |  
|Stockholders Equity                                                                                                                   |  |                                          |           |   |                   |   |           |  
|Preferred Stock, $0.01 par value                                                                                                       |  |                                          | 9         |   |                   |   | 8         |  
|Authorized shares10,000,000Issued shares853,405 and 803,405Outstanding shares826,685 and
776,685Treasury shares26,720              |  |                                          | (528      | ) |                   |   | (528      | )
|Class A common stock, $0.01 par value                                                                                                  |  |                                          | 302       |   |                   |   | 299       |  
|Authorized shares60,000,000Issued shares30,151,376 and 29,866,275Outstanding
shares29,807,647 and 29,522,546Treasury shares343,729 |  |                                          | (3,008    | ) |                   |   | (3,008    | )
|Class B common stock, $0.1 par value                                                                                                   |  |                                          | 5         |   |                   |   | 6         |  
|Authorized shares3,000,000Issued shares517,762 and 622,762Outstanding shares431,562 and
536,562Treasury shares86,200               |  |                                          | (1,011    | ) |                   |   | (1,011    | )
|Additional paid-in capital                                                                                                             |  |                                          | 337,599   |   |                   |   | 336,258   |  
|Retained earnings                                                                                                                      |  |                                          | 181,135   |   |                   |   | 166,713   |  
|Deferred compensation                                                                                                                  |  |                                          | 1,230     |   |                   |   | 1,216     |  
|Accumulated other comprehensive loss                                                                                                   |  |                                          | (13,726   | ) |                   |   | (7,296    | )
|                                                                                                                                       |  |                                          |           |   |                   |   |           |  
|Total stockholders equity                                                                                                             |  |                                          | 502,007   |   |                   |   | 492,657   |  
|                                                                                                                                       |  |                                          |           |   |                   |   |           |  
|Total liabilities and stockholders equity                                                                                             |  | $                                        | 8,914,672 |   |                   | $ | 8,710,445 |  
|                                                                                                                                       |  |                                          |           |   |                   |   |           |  



See accompanying
condensed notes to consolidated financial statements





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##### Table of Contents

BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONSOLIDATED STATEMENTS OF INCOME



|                                                                        |  |                                                        |        |   |      |   |        |  
|----------------------------------------------------------------------- |  | ------------------------------------------------------ | ------ | - | ---- | - | ------ | -
|                                                                        |  | For the Three Months EndedDecember 31,                 |       
|                                                                        |  | 2004                                                   |        |   | 2003 |  
|                                                                        |  | (Dollars and shares inthousands,except per share data) |       
|Interest income:                                                        |  |                                                        |        |   |      |   |        |  
|Interest and fees on loans                                              |  | $                                                      | 70,103 |   |      | $ | 54,361 |  
|Interest on mortgage-backed securities                                  |  |                                                        | 18,236 |   |      |   | 19,797 |  
|Interest and dividends on investments and other interest-earning assets |  |                                                        | 5,343  |   |      |   | 4,615  |  
|                                                                        |  |                                                        |        |   |      |   |        |  
|Total interest income                                                   |  |                                                        | 93,682 |   |      |   | 78,773 |  
|                                                                        |  |                                                        |        |   |      |   |        |  
|Interest expense:                                                       |  |                                                        |        |   |      |   |        |  
|Interest on deposits                                                    |  |                                                        | 19,096 |   |      |   | 18,270 |  
|Interest on borrowings                                                  |  |                                                        | 33,516 |   |      |   | 26,000 |  
|Preferred dividends of subsidiary trusts                                |  |                                                        | 2,789  |   |      |   | 2,424  |  
|                                                                        |  |                                                        |        |   |      |   |        |  
|Total interest expense                                                  |  |                                                        | 55,401 |   |      |   | 46,694 |  
|                                                                        |  |                                                        |        |   |      |   |        |  
|Net interest income before provision for loan losses                    |  |                                                        | 38,281 |   |      |   | 32,079 |  
|Provision for loan losses                                               |  |                                                        | 1,150  |   |      |   | 975    |  
|                                                                        |  |                                                        |        |   |      |   |        |  
|Net interest income after provision for loan losses                     |  |                                                        | 37,131 |   |      |   | 31,104 |  
|                                                                        |  |                                                        |        |   |      |   |        |  
|Non-interest income:                                                    |  |                                                        |        |   |      |   |        |  
|Loan servicing fees                                                     |  |                                                        | 870    |   |      |   | 738    |  
|Amortization of mortgage servicing rights                               |  |                                                        | (782   | ) |      |   | (1,511 | )
|Loan fees                                                               |  |                                                        | 1,154  |   |      |   | 939    |  
|Deposit fees                                                            |  |                                                        | 1,106  |   |      |   | 1,119  |  
|Other fees                                                              |  |                                                        | 518    |   |      |   | 480    |  
|Net gain (loss) on sale of investments and mortgage-backed securities   |  |                                                        | 1,481  |   |      |   | (595   | )
|Net gain on sale of loans and other assets                              |  |                                                        | 522    |   |      |   | 1,752  |  
|Insurance and investment services income                                |  |                                                        | 963    |   |      |   | 942    |  
|Other                                                                   |  |                                                        | 1,115  |   |      |   | 1,198  |  
|                                                                        |  |                                                        |        |   |      |   |        |  
|Total non-interest income                                               |  |                                                        | 6,947  |   |      |   | 5,062  |  
|                                                                        |  |                                                        |        |   |      |   |        |  
|Non-interest expenses:                                                  |  |                                                        |        |   |      |   |        |  
|Employee compensation and benefits                                      |  |                                                        | 11,196 |   |      |   | 10,804 |  
|Occupancy and equipment                                                 |  |                                                        | 5,001  |   |      |   | 3,704  |  
|Telecommunications and data processing                                  |  |                                                        | 1,619  |   |      |   | 1,384  |  
|Advertising and promotion expense                                       |  |                                                        | 1,444  |   |      |   | 1,151  |  
|Professional fees-legal and accounting                                  |  |                                                        | 848    |   |      |   | 1,320  |  
|Insurance                                                               |  |                                                        | 382    |   |      |   | 357    |  
|Other                                                                   |  |                                                        | 2,232  |   |      |   | 393    |  
|                                                                        |  |                                                        |        |   |      |   |        |  
|Total non-interest expenses                                             |  |                                                        | 22,722 |   |      |   | 19,113 |  
|                                                                        |  |                                                        |        |   |      |   |        |  
|Income before income taxes                                              |  |                                                        | 21,356 |   |      |   | 17,053 |  
|Provision for income taxes                                              |  |                                                        | 6,831  |   |      |   | 5,503  |  
|                                                                        |  |                                                        |        |   |      |   |        |  
|Net income                                                              |  | $                                                      | 14,525 |   |      | $ | 11,550 |  
|                                                                        |  |                                                        |        |   |      |   |        |  
|                                                                        |  |                                                       
|Earnings Per Share:                                                     |  |                                                        |        |   |      |   |        |  
|Basic                                                                   |  | $                                                      | 0.48   |   |      | $ | 0.39   |  
|                                                                        |  |                                                        |        |   |      |   |        |  
|Diluted                                                                 |  | $                                                      | 0.45   |   |      | $ | 0.36   |  
|                                                                        |  |                                                        |        |   |      |   |        |  
|Weighted average number of common shares outstanding:                   |  |                                                        |        |   |      |   |        |  
|Basic                                                                   |  |                                                        | 30,023 |   |      |   | 29,686 |  
|Diluted                                                                 |  |                                                        | 32,381 |   |      |   | 32,238 |  



See accompanying
condensed notes to consolidated financial statements



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##### Table of Contents

BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY



|                                                           |  |                                                       |   |             |   |                |  |                  |         |  |               |         |   |                      |   |                                                       |   |  |                          |       |  |   |         |   |  |   |         |  
|---------------------------------------------------------- |  | ----------------------------------------------------- | - | ----------- | - | -------------- |  | ---------------- | ------- |  | ------------- | ------- | - | -------------------- | - | ----------------------------------------------------- | - |  | ------------------------ | ----- |  | - | ------- | - |  | - | ------- | -
|                                                           |  | For the Three Months Ended December 31, 2004 and 2003 |  
|                                                           |  | PreferredStock                                        |   | CommonStock |   | Paid-inCapital |  | RetainedEarnings |         |  | TreasuryStock |         |   | DeferredCompensation |   | AccumulatedOtherComprehensiveLoss Net of Tax          |   |  | TotalStockholdersEquity |      
|                                                           |  | (In thousands)                                        |  
|Balance at September 30, 2004                              |  | $                                                     | 8 |             | $ | 305            |  | $                | 336,258 |  | $             | 166,713 |   |                      | $ | (4,547                                                | ) |  | $                        | 1,216 |  | $ | (7,296  | ) |  | $ | 492,657 |  
|Comprehensive income:                                      |  |                                                       |   |             |   |                |  |                  |         |  |               |         |   |                      |   |                                                       |   |  |                          |       |  |   |         |   |  |   |         |  
|Net income for the three months ended December 31, 2004    |  |                                                       |  |             |   |               |  |                  |        |  |               | 14,525  |   |                      |   |                                                      |   |  |                          |      |  |   |        |   |  |   | 14,525  |  
|Other comprehensive loss, net of tax                       |  |                                                       |  |             |   |               |  |                  |        |  |               |        |   |                      |   |                                                      |   |  |                          |      |  |   | (6,430  | ) |  |   | (6,430  | )
|                                                           |  |                                                       |   |             |   |                |  |                  |         |  |               |         |   |                      |   |                                                       |   |  |                          |       |  |   |         |   |  |   |         |  
|Total comprehensive income                                 |  |                                                       |  |             |   |               |  |                  |        |  |               |        |   |                      |   |                                                      |   |  |                          |      |  |   |        |   |  |   | 8,095   |  
|Payment of preferred stock dividends                       |  |                                                       |  |             |   |               |  |                  |        |  |               | (103    | ) |                      |   |                                                      |   |  |                          |      |  |   |        |   |  |   | (103    | )
|Deferral of compensation                                   |  |                                                       |  |             |   |               |  |                  |        |  |               |        |   |                      |   |                                                      |   |  |                          | 14    |  |   |        |   |  |   | 14      |  
|Stock option exercises and restricted stock                |  |                                                       | 1 |             |   | 2              |  |                  | 1,341   |  |               |        |   |                      |   |                                                      |   |  |                          |      |  |   |        |   |  |   | 1,344   |  
|                                                           |  |                                                       |   |             |   |                |  |                  |         |  |               |         |   |                      |   |                                                       |   |  |                          |       |  |   |         |   |  |   |         |  
|Balance at December 31, 2004                               |  | $                                                     | 9 |             | $ | 307            |  | $                | 337,599 |  | $             | 181,135 |   |                      | $ | (4,547                                                | ) |  | $                        | 1,230 |  | $ | (13,726 | ) |  | $ | 502,007 |  
|                                                           |  |                                                       |   |             |   |                |  |                  |         |  |               |         |   |                      |   |                                                       |   |  |                          |       |  |   |         |   |  |   |         |  
|                                                           |  |                                                       |   |             |   |                |  |                 
|                                                           |  | PreferredStock                                        |   | CommonStock |   | Paid-inCapital |  | RetainedEarnings |         |  | TreasuryStock |         |   | DeferredCompensation |   | AccumulatedOtherComprehensiveIncome (Loss) Net of Tax |   |  | TotalStockholdersEquity |      
|                                                           |  | (In thousands)                                        |  
|Balance at September 30, 2003                              |  | $                                                     | 7 |             | $ | 301            |  | $                | 328,017 |  | $             | 116,370 |   |                      | $ | (3,904                                                | ) |  | $                        | 794   |  | $ | 5,788   |   |  | $ | 447,373 |  
|Comprehensive income:                                      |  |                                                       |   |             |   |                |  |                  |         |  |               |         |   |                      |   |                                                       |   |  |                          |       |  |   |         |   |  |   |         |  
|Net income for the three months ended December 31, 2003    |  |                                                       |  |             |   |               |  |                  |        |  |               | 11,550  |   |                      |   |                                                      |   |  |                          |      |  |   |        |   |  |   | 11,550  |  
|Other comprehensive loss, net of tax                       |  |                                                       |  |             |   |               |  |                  |        |  |               |        |   |                      |   |                                                      |   |  |                          |      |  |   | (6,935  | ) |  |   | (6,935  | )
|                                                           |  |                                                       |   |             |   |                |  |                  |         |  |               |         |   |                      |   |                                                       |   |  |                          |       |  |   |         |   |  |   |         |  
|Total comprehensive income                                 |  |                                                       |  |             |   |               |  |                  |        |  |               |        |   |                      |   |                                                      |   |  |                          |      |  |   |        |   |  |   | 4,615   |  
|Payment of preferred stock dividends                       |  |                                                       |  |             |   |               |  |                  |        |  |               | (81     | ) |                      |   |                                                      |   |  |                          |      |  |   |        |   |  |   | (81     | )
|Deferral of compensation                                   |  |                                                       |  |             |   |               |  |                  |        |  |               |        |   |                      |   |                                                      |   |  |                          | 217   |  |   |        |   |  |   | 217     |  
|Shares acquired through deferred compensation arrangements |  |                                                       |  |             |   |               |  |                  |        |  |               |        |   |                      |   | (526                                                  | ) |  |                          |      |  |   |        |   |  |   | (526    | )
|Stock option exercises and restricted stock                |  |                                                       | 1 |             |   | 2              |  |                  | 2,476   |  |               |        |   |                      |   |                                                      |   |  |                          |      |  |   |        |   |  |   | 2,479   |  
|                                                           |  |                                                       |   |             |   |                |  |                  |         |  |               |         |   |                      |   |                                                       |   |  |                          |       |  |   |         |   |  |   |         |  
|Balance at December 31, 2003                               |  | $                                                     | 8 |             | $ | 303            |  | $                | 330,493 |  | $             | 127,839 |   |                      | $ | (4,430                                                | ) |  | $                        | 1,011 |  | $ | (1,147  | ) |  | $ | 454,077 |  
|                                                           |  |                                                       |   |             |   |                |  |                  |         |  |               |         |   |                      |   |                                                       |   |  |                          |       |  |   |         |   |  |   |         |  



See accompanying
condensed notes to consolidated financial statements



5



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##### Table of Contents

BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



|                                                                          |  |                                        |          |   |      |   |          |  
|------------------------------------------------------------------------- |  | -------------------------------------- | -------- | - | ---- | - | -------- | -
|                                                                          |  | For the Three Months EndedDecember 31, |         
|                                                                          |  | 2004                                   |          |   | 2003 |  
|                                                                          |  | (In thousands)                         |         
|Cash flows used in operating activities                                   |  | $                                      | (13,014  | ) |      | $ | (7,010   | )
|Cash flows from investing activities:                                     |  |                                        |          |   |      |   |          |  
|Net increase in loans held in portfolio                                   |  |                                        | (572,635 | ) |      |   | (186,955 | )
|Purchase of investment securities available for sale                      |  |                                        | (49,880  | ) |      |   | (10,401  | )
|Purchase of mortgage-backed securities available for sale                 |  |                                        |         |   |      |   | (267,546 | )
|Purchase of other earning assets                                          |  |                                        | (17,673  | ) |      |   | (23,549  | )
|Purchase of office properties and equipment                               |  |                                        | (5,051   | ) |      |   | (2,083   | )
|Proceeds from repayments of investment securities available for sale      |  |                                        | 2        |   |      |   |         |  
|Proceeds from repayments of mortgage-backed securities available for sale |  |                                        | 179,866  |   |      |   | 218,855  |  
|Proceeds from repayments of other earning assets                          |  |                                        | 20,780   |   |      |   | 23,801   |  
|Proceeds from sale of investment securities available for sale            |  |                                        | 33,720   |   |      |   |         |  
|Proceeds from sale of mortgage-backed securities available for sale       |  |                                        | 86,114   |   |      |   | 94,334   |  
|Proceeds from sale of real estate owned and other assets                  |  |                                        | 1,017    |   |      |   | 2,735    |  
|                                                                          |  |                                        |          |   |      |   |          |  
|Net cash used in investing activities                                     |  |                                        | (323,740 | ) |      |   | (150,809 | )
|                                                                          |  |                                        |          |   |      |   |          |  
|Cash flows from financing activities:                                     |  |                                        |          |   |      |   |          |  
|Net increase in deposits                                                  |  |                                        | 198,521  |   |      |   | 47,830   |  
|Net decrease in Federal Home Loan Bank advances                           |  |                                        | (44,032  | ) |      |   | (4,994   | )
|Net increase in securities sold under agreements to repurchase            |  |                                        | 49,332   |   |      |   | 103,155  |  
|Net proceeds from issuance of Subordinated Debentures                     |  |                                        | 30,928   |   |      |   |         |  
|Net proceeds from issuance of stock                                       |  |                                        | 737      |   |      |   | 1,816    |  
|Dividends paid on preferred stock                                         |  |                                        | (103     | ) |      |   | (81      | )
|Decrease in advances from borrowers for taxes and insurance               |  |                                        | (35,757  | ) |      |   | (32,814  | )
|                                                                          |  |                                        |          |   |      |   |          |  
|Net cash provided by financing activities                                 |  |                                        | 199,626  |   |      |   | 114,912  |  
|                                                                          |  |                                        |          |   |      |   |          |  
|Decrease in cash and cash equivalents                                     |  |                                        | (137,128 | ) |      |   | (42,907  | )
|Cash and cash equivalents at beginning of period                          |  |                                        | 181,894  |   |      |   | 226,898  |  
|                                                                          |  |                                        |          |   |      |   |          |  
|Cash and cash equivalents at end of period                                |  | $                                      | 44,766   |   |      | $ | 183,991  |  
|                                                                          |  |                                        |          |   |      |   |          |  
|Supplemental disclosure of non-cash investing and financing activities:   |  |                                        |          |   |      |   |          |  
|Securitization of mortgage loans held for sale                            |  | $                                      | 31,534   |   |      | $ | 87,808   |  
|Transfer of loans held for sale to portfolio                              |  |                                        |         |   |      | $ | 70,760   |  





See accompanying condensed notes to consolidated financial statements



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



1.    Principles of Consolidation and Basis of Presentation



The accompanying unaudited consolidated financial statements include the accounts of BankUnited Financial Corporation (BankUnited) and its
subsidiaries, including BankUnited, FSB (the Bank), with the exception of BankUniteds trust subsidiaries which do not meet the criteria for consolidation under FASB Interpretation No. 46. 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-month period ended December 31, 2004 are not necessarily indicative of the results that may be expected for the
year ending September 30, 2005. These condensed notes should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in BankUniteds Annual Report on Form 10-K for the fiscal year ended September 30, 2004.



Certain prior period amounts have been reclassified to conform
to the December 31, 2004 consolidated financial statements presentation.



2.    Impact of Certain Accounting Pronouncements



SFAS No. 148



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



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



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



The disclosure requirements under SFAS No. 148 for interim financial statements are effective and
were adopted by BankUnited on January 1, 2003. The following table provides the required disclosures for the three month period ended December 31, 2004 compared to the same period in the prior year:



|                                                                                                                                                             |  |                                         |        |   |      |   |        |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | --------------------------------------- | ------ | - | ---- | - | ------ | -
|                                                                                                                                                             |  | For the Three Months Ended December 31, |       
|                                                                                                                                                             |  | 2004                                    |        |   | 2003 |  
|                                                                                                                                                             |  | (Dollars in thousands)                  |       
|Net income, as reported                                                                                                                                      |  | $                                       | 14,525 |   |      | $ | 11,550 |  
|Add: Total stock-based employee and director compensation expense included in net income, net of related tax effects                                         |  |                                         | 403    |   |      |   | 200    |  
|Deduct: Total stock-based employee and director compensation expense determined under the fair value based method for all awards, net of
related tax effects |  |                                         | (772   | ) |      |   | (558   | )
|                                                                                                                                                             |  |                                         |        |   |      |   |        |  
|Pro forma net income                                                                                                                                         |  | $                                       | 14,156 |   |      | $ | 11,192 |  
|                                                                                                                                                             |  |                                         |        |   |      |   |        |  
|Earnings per share:                                                                                                                                          |  |                                         |        |   |      |   |        |  
|Basic  as reported                                                                                                                                          |  | $                                       | 0.48   |   |      | $ | 0.39   |  
|                                                                                                                                                             |  |                                         |        |   |      |   |        |  
|Basic  pro forma                                                                                                                                            |  | $                                       | 0.47   |   |      | $ | 0.37   |  
|                                                                                                                                                             |  |                                         |        |   |      |   |        |  
|Diluted  as reported                                                                                                                                        |  | $                                       | 0.45   |   |      | $ | 0.36   |  
|                                                                                                                                                             |  |                                         |        |   |      |   |        |  
|Diluted  pro forma                                                                                                                                          |  | $                                       | 0.44   |   |      | $ | 0.35   |  
|                                                                                                                                                             |  |                                         |        |   |      |   |        |  
|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   | % |      |   | 36.8   | %
|Risk free interest rate                                                                                                                                      |  |                                         | 3.35   | % |      |   | 3.26   | %
|Expected life (years)                                                                                                                                        |  |                                         | 4.75   |   |      |   | 5.12   |  



SFAS No. 123R



In December 2004, the FASB issued a statement to revise SFAS No. 123 and
SFAS No. 95, Share-Based Payment, that addresses the accounting for share-based payment transactions in which an enterprise receives employee services in exchange for (a) equity instruments of the enterprise or (b) liabilities that are
based on the fair value of the enterprises equity instruments or that may be settled by the issuance of such equity instruments. The Statement will eliminate the ability to account for share-based compensation transactions using APB Opinion
No. 25, Accounting for Stock Issued to Employees, and will require instead that such transactions be accounted for using a fair-value-based method. The FASB has indicated that the statement will be effective for any interim or annual
period beginning after June 15, 2005, meaning that an entity should apply the statement to all employee awards of share-based payment granted, modified, or settled in any interim or annual period beginning after June 15, 2005. Management has not yet
determined the impact that this statement will have on BankUniteds consolidated financial condition and results of operations. See Note 11. Subsequent Events for information on the acceleration of vesting periods for two stock option grants.



EITF Issue No. 04-8



As previously disclosed, the Emerging Issues Task Force of the FASB recently
reached a consensus position Issue No. 04-8, Accounting Issues Related to Certain Features of Contingently Convertible Debt and the Effect



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



of Diluted Earnings Per Share, which could have required that the dilutive effect of contingently convertible debt instruments such as
BankUniteds 3.125% Convertible Senior Notes (the Notes), be reflected in BankUniteds calculation of diluted earnings per share for reporting periods ending after December 15, 2004. Previous accounting rules provided for the
exclusion of the effect of the contingently convertible instruments until the contingency had been satisfied.



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



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



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







9



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



3.    Investment and Mortgage-backed Securities Available for Sale



Investment Securities Available for Sale



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



|                                                                                                                               |  |                    |         |                      |   |                       |  |   |            |   |  |   |        
|------------------------------------------------------------------------------------------------------------------------------ |  | ------------------ | ------- | -------------------- | - | --------------------- |  | - | ---------- | - |  | - | -------
|                                                                                                                               |  | December 31, 2004 
|                                                                                                                               |  | AmortizedCost      |         | GrossUnrealizedGains |   | GrossUnrealizedLosses |  |   | Fair Value
|                                                                                                                               |  | (In thousands)    
|U.S. government agency securities                                                                                              |  | $                  | 72,673  |                      | $ |                      |  | $ | (233       | ) |  | $ | 72,440 
|Preferred stock of the Federal Home Loan Mortgage Corporation (FHLMC) and the Federal National Mortgage Association
(FNMA) |  |                    | 96,088  |                      |   | 462                   |  |   | (2,920     | ) |  |   | 93,630 
|Trust preferred securities of other issuers                                                                                    |  |                    | 83,077  |                      |   | 2,409                 |  |   | (205       | ) |  |   | 85,281 
|Mutual funds and other bonds                                                                                                   |  |                    | 95,968  |                      |   | 38                    |  |   | (1,878     | ) |  |   | 94,128 
|Other equity securities                                                                                                        |  |                    | 932     |                      |   | 78                    |  |   |           |   |  |   | 1,010  
|                                                                                                                               |  |                    |         |                      |   |                       |  |   |            |   |  |   |        
|Total                                                                                                                          |  | $                  | 348,738 |                      | $ | 2,987                 |  | $ | (5,236     | ) |  | $ | 346,489
|                                                                                                                               |  |                    |         |                      |   |                       |  |   |            |   |  |   |        
|                                                                                                                               | 
|                                                                                                                               |  | September 30, 2004
|                                                                                                                               |  | AmortizedCost      |         | GrossUnrealizedGains |   | GrossUnrealizedLosses |  |   | Fair Value
|                                                                                                                               |  | (In thousands)    
|U.S. government agency securities                                                                                              |  | $                  | 52,038  |                      | $ | 539                   |  | $ |           |   |  | $ | 52,577 
|Preferred stock of FHLMC and FNMA                                                                                              |  |                    | 96,089  |                      |   | 436                   |  |   | (2,028     | ) |  |   | 94,497 
|Trust preferred securities of other issuers                                                                                    |  |                    | 88,567  |                      |   | 4,072                 |  |   | (250       | ) |  |   | 92,389 
|Mutual funds and other bonds                                                                                                   |  |                    | 95,186  |                      |   | 34                    |  |   | (1,706     | ) |  |   | 93,514 
|Other equity securities                                                                                                        |  |                    | 932     |                      |   | 30                    |  |   |           |   |  |   | 962    
|                                                                                                                               |  |                    |         |                      |   |                       |  |   |            |   |  |   |        
|Total                                                                                                                          |  | $                  | 332,812 |                      | $ | 5,111                 |  | $ | (3,984     | ) |  | $ | 333,939
|                                                                                                                               |  |                    |         |                      |   |                       |  |   |            |   |  |   |        



Investment securities
available for sale as of December 31, 2004, by contractual maturity, are shown below.



|                                       |  |                   |         |            |   |        
|-------------------------------------- |  | ----------------- | ------- | ---------- | - | -------
|                                       |  | December 31, 2004
|                                       |  | AmortizedCost     |         | Fair Value
|                                       |  | (In thousands)   
|Due in one year or less                |  | $                 | 8,375   |            | $ | 8,358  
|Due after one year through five years  |  |                   | 81,802  |            |   | 81,649 
|Due after five years through ten years |  |                   | 861     |            |   | 856    
|Due after ten years                    |  |                   | 94,527  |            |   | 96,341 
|Mutual funds and equity securities     |  |                   | 163,173 |            |   | 159,285
|                                       |  |                   |         |            |   |        
|Total                                  |  | $                 | 348,738 |            | $ | 346,489
|                                       |  |                   |         |            |   |        



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



Mortgage-Backed Securities Available for Sale



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



|                                    |  |                    |           |                      |   |                       |  |   |            |   |  |   |          
|----------------------------------- |  | ------------------ | --------- | -------------------- | - | --------------------- |  | - | ---------- | - |  | - | ---------
|                                    |  | December 31, 2004 
|                                    |  | AmortizedCost      |           | GrossUnrealizedGains |   | GrossUnrealizedLosses |  |   | Fair Value
|                                    |  | (In thousands)    
|FNMA mortgage-backed securities     |  | $                  | 323,829   |                      | $ | 201                   |  | $ | (4,532     | ) |  | $ | 319,498  
|FHLMC mortgage-backed securities    |  |                    | 95,973    |                      |   | 89                    |  |   | (1,493     | ) |  |   | 94,569   
|Collateralized mortgage obligations |  |                    | 3,223     |                      |   |                      |  |   | (25        | ) |  |   | 3,198    
|Mortgage pass-through certificates  |  |                    | 1,421,149 |                      |   | 2,152                 |  |   | (14,445    | ) |  |   | 1,408,856
|                                    |  |                    |           |                      |   |                       |  |   |            |   |  |   |          
|Total(1)                            |  | $                  | 1,844,174 |                      | $ | 2,442                 |  | $ | (20,495    | ) |  | $ | 1,826,121
|                                    |  |                    |           |                      |   |                       |  |   |            |   |  |   |          
|                                    | 
|                                    |  | September 30, 2004
|                                    |  | AmortizedCost      |           | GrossUnrealizedGains |   | GrossUnrealizedLosses |  |   | Fair Value
|                                    |  | (In thousands)    
|FNMA mortgage-backed securities     |  | $                  | 361,326   |                      | $ | 640                   |  | $ | (3,714     | ) |  | $ | 358,252  
|FHLMC mortgage-backed securities    |  |                    | 114,869   |                      |   | 72                    |  |   | (1,355     | ) |  |   | 113,586  
|Collateralized mortgage obligations |  |                    | 4,648     |                      |   |                      |  |   | (34        | ) |  |   | 4,614    
|Mortgage pass-through certificates  |  |                    | 1,598,498 |                      |   | 3,624                 |  |   | (10,394    | ) |  |   | 1,591,728
|                                    |  |                    |           |                      |   |                       |  |   |            |   |  |   |          
|Total(1)                            |  | $                  | 2,079,341 |                      | $ | 4,336                 |  | $ | (15,497    | ) |  | $ | 2,068,180
|                                    |  |                    |           |                      |   |                       |  |   |            |   |  |   |          

---

|(1) |  | As of both December 31, 2004 and September 30, 2004, there were $1.9 million of retained securities from securitized loans included in BankUniteds portfolio of mortgage-backed
securities. These amounts represent the fair value of those securities and do not include servicing rights.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Mortgage-backed securities available for sale as of December 31, 2004, by contractual maturity and adjusted for anticipated prepayments, are shown below.



|                                       |  |                   |           |            |   |          
|-------------------------------------- |  | ----------------- | --------- | ---------- | - | ---------
|                                       |  | December 31, 2004
|                                       |  | Amortized Cost    |           | Fair Value
|                                       |  | (In thousands)   
|Due in one year or less                |  | $                 | 535,461   |            | $ | 530,388  
|Due after one year through five years  |  |                   | 1,108,834 |            |   | 1,097,748
|Due after five years through ten years |  |                   | 105,036   |            |   | 104,041  
|Due after ten years                    |  |                   | 94,843    |            |   | 93,944   
|                                       |  |                   |           |            |   |          
|Total                                  |  | $                 | 1,844,174 |            | $ | 1,826,121
|                                       |  |                   |           |            |   |          



Based on the internal
model used by BankUnited, estimated average duration of the mortgage-backed securities portfolio as of December 31, 2004 was 2.87 years. This duration extends to 3.37 years in a hypothetical scenario which adds 100 basis points to market interest
rates. The model used by BankUnited is based on assumptions which may differ from the eventual outcome.



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



4.    Convertible Senior Notes



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



As indicated in the discussion of SFAS No. 123R in Note 1. Impact of Certain Accounting Pronouncements, BankUnited entered into a supplemental Indenture
agreement on December 28, 2004 to irrevocably elect and agree that it will pay only cash in settlement of the principal amount of its outstanding Notes in respect of its conversion obligations. As a result, BankUnited will reflect the effects of the
Notes in diluted earnings per share using the treasury stock method. Under current accounting rules, until the market price of the Class A Common Stock exceeds the conversion price, no additional earnings dilution will take place. As the price of
Class A Common Stock exceeds the conversion price, an increasing number of shares would be included in diluted earnings per share.



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



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



5.    Earnings Per Share



The following tables reconcile basic and diluted earnings per share for the three months ended December 31, 2004 and 2003.



|                                                    |  |                                                        |        |      |   |       
|--------------------------------------------------- |  | ------------------------------------------------------ | ------ | ---- | - | ------
|                                                    |  | For the Three MonthsEnded December 31,                
|                                                    |  | 2004                                                   |        | 2003
|                                                    |  | (Dollars and sharesin thousands,except per share data)
|Basic earnings per share:                           |  |                                                        |        |      |   |       
|Numerator:                                          |  |                                                        |        |      |   |       
|Net income                                          |  | $                                                      | 14,525 |      | $ | 11,550
|Preferred stock dividends                           |  |                                                        | 103    |      |   | 81    
|                                                    |  |                                                        |        |      |   |       
|Net income available to common stockholders         |  | $                                                      | 14,422 |      | $ | 11,469
|                                                    |  |                                                        |        |      |   |       
|Denominator:                                        |  |                                                        |        |      |   |       
|Weighted average common shares outstanding          |  |                                                        | 30,023 |      |   | 29,686
|                                                    |  |                                                        |        |      |   |       
|Basic earnings per share                            |  | $                                                      | 0.48   |      | $ | 0.39  
|                                                    |  |                                                        |        |      |   |       
|Diluted earnings per share:                         |  |                                                        |        |      |   |       
|Numerator:                                          |  |                                                        |        |      |   |       
|Net income available to common stockholders         |  | $                                                      | 14,422 |      | $ | 11,469
|Plus:                                               |  |                                                        |        |      |   |       
|Convertible preferred stock dividends               |  |                                                        | 103    |      |   | 81    
|                                                    |  |                                                        |        |      |   |       
|Diluted net income available to common stockholders |  | $                                                      | 14,525 |      | $ | 11,550
|                                                    |  |                                                        |        |      |   |       
|Denominator:                                        |  |                                                        |        |      |   |       
|Weighted average common shares outstanding          |  |                                                        | 30,023 |      |   | 29,686
|Plus:                                               |  |                                                        |        |      |   |       
|Stock options and restricted stock                  |  |                                                        | 1,558  |      |   | 1,795 
|Convertible preferred stock                         |  |                                                        | 800    |      |   | 757   
|                                                    |  |                                                        |        |      |   |       
|Diluted weighted average shares outstanding         |  |                                                        | 32,381 |      |   | 32,238
|                                                    |  |                                                        |        |      |   |       
|Diluted earnings per share(1)                       |  | $                                                      | 0.45   |      | $ | 0.36  
|                                                    |  |                                                        |        |      |   |       

---

|(1) |  | There were no antidilutive effects during the three month periods ending December 31, 2004 and 2003.
|--- |  | ----------------------------------------------------------------------------------------------------



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



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



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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 December 31, 2004 and September 30, 2004 were as follows:



|                                        |  |                        |         |   |                         |   |         |  
|--------------------------------------- |  | ---------------------- | ------- | - | ----------------------- | - | ------- | -
|                                        |  | As of December 31,2004 |         |   | As of September 30,2004 |  
|                                        |  | (Dollars in thousands) |        
|Tier 1 Leverage Capital                 |  |                        |         |   |                         |   |         |  
|Amount                                  |  | $                      | 638,978 |   |                         | $ | 526,368 |  
|Actual Ratio                            |  |                        | 7.3     | % |                         |   | 7.3     | %
|Well-Capitalized Minimum Ratio(1)       |  |                        | 5.0     | % |                         |   | 5.0     | %
|Adequately Capitalized Minimum Ratio(1) |  |                        | 4.0     | % |                         |   | 4.0     | %
|                                        |  |                       
|Tier 1 Risk-Based Capital               |  |                        |         |   |                         |   |         |  
|Amount                                  |  | $                      | 638,978 |   |                         | $ | 526,368 |  
|Actual Ratio                            |  |                        | 14.7    | % |                         |   | 15.4    | %
|Well-Capitalized Minimum Ratio(1)       |  |                        | 6.0     | % |                         |   | 6.0     | %
|Adequately Capitalized Minimum Ratio(1) |  |                        | 4.0     | % |                         |   | 4.0     | %
|                                        |  |                       
|Total Risk-Based Capital                |  |                        |         |   |                         |   |         |  
|Amount                                  |  | $                      | 661,021 |   |                         | $ | 543,119 |  
|Actual Ratio                            |  |                        | 15.2    | % |                         |   | 15.9    | %
|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 April and September of 2004, BankUnited Financial Corporation contributed $30 million and $20 million, respectively, in additional capital to the Bank
funded by proceeds it received from the issuance of $120 million of convertible senior notes in February and March of 2004.



7.    Comprehensive Income



BankUniteds comprehensive income includes all items which comprise net income, plus other comprehensive (loss) income. For the three months ended
December 31, 2004 and 2003 BankUniteds comprehensive income was as follows:



|                                                                                                                                                                                  |  |                                         |        |   |      |   |        |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------- | ------ | - | ---- | - | ------ | -
|                                                                                                                                                                                  |  | For the Three Months Ended December 31, |       
|                                                                                                                                                                                  |  | 2004                                    |        |   | 2003 |  
|                                                                                                                                                                                  |  | (In thousands)                          |       
|Net income                                                                                                                                                                        |  | $                                       | 14,525 |   |      | $ | 11,550 |  
|Other comprehensive loss, net of tax:                                                                                                                                             |  |                                         |        |   |      |   |        |  
|Unrealized loss arising during the period on securities, net of tax benefit of $3,024 and $3,781 for the three months ended December 31, 2004
and 2003, respectively              |  |                                         | (5,615 | ) |      |   | (7,022 | )
|Unrealized gain on cash flow hedges, net of tax of $66 and $146 for the three months ended December 31, 2004 and 2003,
respectively                                               |  |                                         | 123    |   |      |   | 271    |  
|Less reclassification adjustment for:                                                                                                                                             |  |                                         |        |   |      |   |        |  
|Realized gain (loss) on securities sold included in net income, net of tax expense (benefit) of $563 and $(8) for the three months ended
December 31, 2004 and 2003, respectively |  |                                         | 1,046  |   |      |   | (16    | )
|Realized (loss) gain on cash flow hedges, net of tax (benefit) expense of $58 and $91 for the three months ended December 31, 2004 and 2003,
respectively                         |  |                                         | (108   | ) |      |   | 168    |  
|                                                                                                                                                                                  |  |                                         |        |   |      |   |        |  
|Total other comprehensive loss, net of tax                                                                                                                                        |  |                                         | (6,430 | ) |      |   | (6,935 | )
|                                                                                                                                                                                  |  |                                         |        |   |      |   |        |  
|Comprehensive income                                                                                                                                                              |  | $                                       | 8,095  |   |      | $ | 4,615  |  
|                                                                                                                                                                                  |  |                                         |        |   |      |   |        |  



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##### Table of Contents

BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



8.    Accounting For Derivatives and Hedging Activities



Loan Commitments



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



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



Interest Rate Swaps and Caps



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



15



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##### Table of Contents

BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



The following table summarizes certain information with respect to the use of derivatives and their
impact on BankUniteds statements of income during the three months ended December 31, 2004 and 2003:



|                                                     |  |                                      |     |   |      |   |      
|---------------------------------------------------- |  | ------------------------------------ | --- | - | ---- | - | -----
|                                                     |  | For theThree MonthsEndedDecember 31,
|                                                     |  | 2004                                 |     |   | 2003
|                                                     |  | (In thousands)                      
|Fair Value Hedges                                    |  |                                      |     |   |      |   |      
|Net gain recorded in earnings due to ineffectiveness |  | $                                    | 37  |   |      | $ | 80   
|                                                     |  |                                     
|Other Derivatives (1)                                |  |                                      |     |   |      |   |      
|Net (loss) gain recorded in earnings                 |  |                                      | (36 | ) |      |   | 1,250
|                                                     |  |                                      |     |   |      |   |      
|Total                                                |  | $                                    | 1   |   |      | $ | 1,330
|                                                     |  |                                      |     |   |      |   |      

---

|Note: |  | There was no ineffectiveness related to cash flow hedges during the three months ended December 31, 2004 and 2003. Within the next 12 months, BankUnited estimates that $279 thousand
will be reclassified out of comprehensive income as a charge to earnings.
|----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



9.    Commitments and Contingencies



Standby letters of credit are off balance sheet instruments which represent
conditional commitments issued by BankUnited to guarantee the performance of a customer to a third party. BankUnited had outstanding standby letters of credit, and risk participations, in the amount of $49.9 million and $53.5 million as of December
31, 2004 and September 30, 2004, respectively. Fees collected on standby letters of credit and risk participations represent the fair value of these commitments and are deferred and amortized over their term, which is typically one year or less.



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



10.    Related Party Transactions



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



11.    Subsequent Events



Acceleration of Vesting



On January 24, 2005, the Compensation Committee of the Board of Directors of BankUnited determined to accelerate the vesting of two stock options which were granted to Alfred Camner, the BankUniteds Chief Executive Officer, and Ramiro
Ortiz, the BankUniteds President and Chief Operating Officer, under BankUniteds 2002 Stock Award and Incentive Plan (the 2002 Plan) on September 30, 2004. The acceleration of vesting was approved to become effective
automatically if, and at such time, that the market price of BankUniteds Class A Common Stock closed below $29.15 per share. The exercise prices of both options were



16



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##### Table of Contents

BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)



based on the fair market value of the BankUniteds Class A Common Stock on the date of grant, which was $29.15. On January 25, 2005 the price of
BankUniteds Class A Common Stock closed at $29.04 per share. As a result of the acceleration, the option granted to the CEO for the purchase of 75,000 shares of BankUniteds Noncumulative Convertible Preferred Stock, Series B, and the
option granted to the President and COO for the purchase of 50,000 shares of BankUniteds Class A Common Stock, became immediately vested and exercisable on January 25, 2005, instead of vesting in five equal installments commencing on the first
anniversary of the date of grant.



The 2002 Plan permits the
Compensation Committee to adjust the terms and conditions of awards granted under that plan in response to changes in accounting principles, among other reasons, subject to certain restrictions. The Compensation Committee has determined to
accelerate the vesting of these options as a result of the issuance by the FASB of SFAS No. 123R, which BankUnited expects to adopt effective July 1, 2005. BankUnited anticipates that, by accelerating the vesting of these options at a time when
their exercise price was higher than the market price, BankUnited will not be required to recognize compensation expense on the options. The value of these options will be reflected in the footnote disclosures to BankUniteds financial
statements for the quarter ending March 31, 2005, as required by Financial Accounting Standard 148. BankUnited projects that, if the vesting of these options had not been accelerated, then SFAS 123R would have required BankUnited to recognize
approximately $1.4 million in compensation expense from these options over their remaining vesting terms, in quarters beginning after June 15, 2005.



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



Purchase of BankUnited Class A Common Stock



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



17



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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 month periods ended December 31, 2004 and 2003 and
consolidated financial condition as of December 31, 2004. This discussion and analysis should be read in conjunction with the Consolidated Financial Statements and Notes thereto contained in BankUniteds Annual Report on Form 10-K for the year
ended September 30, 2004.



This Quarterly Report on Form 10-Q
contains forward-looking statements. Such forward-looking statements are within the meaning of that term in Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of
1934, as amended (the Exchange Act). Words and phrases such as: will likely result, expect, will continue, anticipate, estimate, project, believe,
intend, should, may, can, plan, target and similar expressions are intended to identify forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements may include, but are not limited to, discussions concerning:



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



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



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



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



Overview



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

operating expenses. Results of
operations are also dependent on the dollar volume and asset quality of BankUniteds loans and investments.



In addition to the foregoing, results of BankUniteds operations, like those of other financial institution holding companies, are affected by
BankUniteds asset and liability management policies, as well as factors



18



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beyond BankUniteds control, such as general economic conditions and the monetary and fiscal policies of the federal government. Lending activities are
affected by the demand for mortgage financing and other types of loans, and are thus influenced by interest rates and other factors affecting the supply of housing and the availability of funds. Deposit flows and costs of funds are influenced by
yields available on competing investments and by general market rates of interest.



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



| |  |  | Loan production for the first quarter of fiscal 2005 improved by 52% compared to the same quarter in fiscal 2004, to reach $1.1 billion.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Total loans, net increased to $5.8 billion, up 9.8% for the quarter compared to September 30th of 2004.
| | - |  | -------------------------------------------------------------------------------------------------------



| |  |  | Non-performing assets as a percentage of total assets of 0.19%, down from 0.20% at September 30th of 2004.
| | - |  | ----------------------------------------------------------------------------------------------------------



| |  |  | Total deposits of $3.7 billion, up by 5.6% compared to $3.5 billion at September 30, 2004.
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | Non-interest bearing deposits increased by 6.0% during the quarter to $262 million as of December 31, 2004.
| | - |  | -----------------------------------------------------------------------------------------------------------



| |  |  | Market capitalization increased during the quarter by 10% to $966 million as of December 31, 2004.
| | - |  | --------------------------------------------------------------------------------------------------



| |  |  | Record net income of $14.5 million, up 26% over the 1st quarter of fiscal 2004.
| | - |  | -------------------------------------------------------------------------------



See discussion in RESULTS OF OPERATIONS and FINANCIAL CONDITION for more information on BankUniteds
operating performance during the quarter ended December 31 2004 compared to the same period in 2003, and changes in financial condition from September 30, 2004.



Fiscal 2005 Developments



BankUnited opened a loan production office in Arizona in January 2005 and three full-service banking offices in Florida during February of 2005. As of
February 7, 2005 BankUnited was operating 53 full-service banking offices. BankUnited plans to open 7 to 11 additional banking offices by the end of the calendar year 2005.



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



Critical Accounting Policies



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



19



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##### Table of Contents

amount of the allowance for loan losses, and the valuation of loans held for sale. On a periodic basis, management obtains a valuation of mortgage servicing
rights prepared by independent third parties.



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



Accounting Pronouncements Issued and Not Yet Adopted



BankUnited expects to implement Statement of Financial Accounting Standards
No. 123 Revised Accounting for Stock Based Compensation, (SFAS No. 123R) in the fourth quarter of its fiscal year 2005. See Note 2. Impact of Certain Accounting Pronouncements  SFAS No. 123R in the condensed
notes to consolidated financial statements. Management has already taken measures to reduce the impact that share-based compensation arrangements will have on earnings upon the adoption of SFAS No. 123R (See Note 11. Subsequent Events
Acceleration of Vesting in the condensed notes to consolidated financial statements). Management is evaluating the overall impact that the new rules for share-based compensation arrangements will have on earnings upon the adoption of SFAS No.
123R.



RESULTS OF OPERATIONS



For the Three Months Ended December 31, 2004 Compared to the Same Period in 2003



General



Net income for the three months ended December 31, 2004 was $14.5 million,
up 26% from $11.6 million for the same quarter last year. Basic and diluted earnings were $0.48 and $0.45 per share, respectively, for the quarter, up from $0.39 and $0.36 per share, respectively, for the same quarter last year. The net increase in
net income of $2.9 million includes an increase in net interest income before provision for loan losses of $6.2 million, an increase in non-interest income of $1.9 million, an increase in non-interest expense of $3.6 million, and an
increase in tax provision of $1.3 million.



Analysis of Net Interest Income



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



20



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##### Table of Contents

Yields Earned and Rates Paid



|                                                                    |  |                                         |           |   |          |   |            |  |      |                |  |   |           |   |            |   |        |  |      |  
|------------------------------------------------------------------- |  | --------------------------------------- | --------- | - | -------- | - | ---------- |  | ---- | -------------- |  | - | --------- | - | ---------- | - | ------ |  | ---- | -
|                                                                    |  | For the Three Months Ended December 31, |          
|                                                                    |  | 2004                                    |           |   | 2003     |  
|                                                                    |  | AverageBalance                          |           |   | Interest |   | Yield/Rate |  |      | AverageBalance |  |   | Interest  |   | Yield/Rate |  
|                                                                    |  | (Dollars in thousands)                  |          
|Interest-earning assets:                                            |  |                                         |           |   |          |   |            |  |      |                |  |   |           |   |            |   |        |  |      |  
|Loans, net(1)                                                       |  | $                                       | 6,025,555 |   |          | $ | 70,103     |  | 4.65 | %              |  |   | 4,286,556 |   |            |   | 54,361 |  | 5.07 | %
|Mortgage-backed securities                                          |  |                                         | 1,955,160 |   |          |   | 18,236     |  | 3.73 | %              |  |   | 2,101,452 |   |            |   | 19,797 |  | 3.77 | %
|Short-term investments(2)                                           |  |                                         | 18,478    |   |          |   | 163        |  | 3.53 | %              |  |   | 16,775    |   |            |   | 92     |  | 2.19 | %
|Investment securities and FHLB stock                                |  |                                         | 490,855   |   |          |   | 5,180      |  | 4.22 | %              |  |   | 420,896   |   |            |   | 4,523  |  | 4.30 | %
|                                                                    |  |                                         |           |   |          |   |            |  |      |                |  |   |           |   |            |   |        |  |      |  
|Total interest-earning assets                                       |  |                                         | 8,490,048 |   |          |   | 93,682     |  | 4.40 | %              |  |   | 6,825,679 |   |            |   | 78,773 |  | 4.61 | %
|                                                                    |  |                                         |           |   |          |   |            |  |      |                |  |   |           |   |            |   |        |  |      |  
|Interest-bearing liabilities:                                       |  |                                         |           |   |          |   |            |  |      |                |  |   |           |   |            |   |        |  |      |  
|Transaction and money market                                        |  |                                         | 397,869   |   |          |   | 1,199      |  | 1.20 | %              |  |   | 368,046   |   |            |   | 960    |  | 1.03 | %
|Savings                                                             |  |                                         | 972,368   |   |          |   | 4,398      |  | 1.79 | %              |  |   | 868,653   |   |            |   | 3,598  |  | 1.64 | %
|Certificates of deposits                                            |  |                                         | 1,956,489 |   |          |   | 13,499     |  | 2.76 | %              |  |   | 1,814,463 |   |            |   | 13,712 |  | 3.02 | %
|Trust preferred securities and subordinated debentures(3)           |  |                                         | 175,702   |   |          |   | 2,789      |  | 6.30 | %              |  |   | 168,231   |   |            |   | 2,424  |  | 5.72 | %
|Senior notes(4)                                                     |  |                                         | 120,000   |   |          |   | 1,070      |  | 3.54 | %              |  |   | 200,000   |   |            |   | 3,436  |  | 6.82 | %
|FHLB advances and other borrowings(3)                               |  |                                         | 4,263,078 |   |          |   | 32,446     |  | 3.02 | %              |  |   | 2,902,562 |   |            |   | 22,564 |  | 3.08 | %
|                                                                    |  |                                         |           |   |          |   |            |  |      |                |  |   |           |   |            |   |        |  |      |  
|Total interest-bearing liabilities                                  |  | $                                       | 7,885,506 |   |          | $ | 55,401     |  | 2.79 | %              |  | $ | 6,321,955 |   |            | $ | 46,694 |  | 2.93 | %
|                                                                    |  |                                         |           |   |          |   |            |  |      |                |  |   |           |   |            |   |        |  |      |  
|Excess of interest-earning assets over interest-bearing liabilities |  | $                                       | 604,542   |   |          |   |            |  |      |                |  | $ | 503,724   |   |            |   |        |  |      |  
|                                                                    |  |                                         |           |   |          |   |            |  |      |                |  |   |           |   |            |   |        |  |      |  
|Net interest income                                                 |  |                                         |           |   |          | $ | 38,281     |  |      |                |  |   |           |   |            | $ | 32,079 |  |      |  
|                                                                    |  |                                         |           |   |          |   |            |  |      |                |  |   |           |   |            |   |        |  |      |  
|Interest rate spread                                                |  |                                         |           |   |          |   |            |  | 1.61 | %              |  |   |           |   |            |   |        |  | 1.68 | %
|Effect of non-interest bearing sources                              |  |                                         |           |   |          |   |            |  | 0.20 | %              |  |   |           |   |            |   |        |  | 0.23 | %
|                                                                    |  |                                         |           |   |          |   |            |  |      |                |  |   |           |   |            |   |        |  |      |  
|Net interest margin                                                 |  |                                         |           |   |          |   |            |  | 1.81 | %              |  |   |           |   |            |   |        |  | 1.91 | %
|                                                                    |  |                                         |           |   |          |   |            |  |      |                |  |   |           |   |            |   |        |  |      |  
|Ratio of interest-earning assets to interest-bearing liabilities    |  |                                         | 107.67    | % |          |   |            |  |      |                |  |   | 107.97    | % |            |   |        |  |      |  
|                                                                    |  |                                         |           |   |          |   |            |  |      |                |  |   |           |   |            |   |        |  |      |  

---

|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 loans held for sale. Also includes average non-accruing loans of $16.3 million and $33.2 million for the three months ended December 31, 2004 and 2003, respectively.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

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

|(4) |  | Includes convertible senior notes issued in February and March of 2004, and senior notes up until February 2004, which matured at that time.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------



The net interest margin decreased this quarter to 1.81%, down from 1.91% for
the same quarter last year. This decrease resulted primarily from the lagging effect on the re-pricing of the adjustable rate mortgage loans as short-term interest rates increased during the quarter. Approximately 42% of BankUniteds loan
portfolio as of December 31, 2004, consisted of adjustable rate mortgages indexed to the Monthly Treasury Average (MTA).



The MTA index is the twelve month average of the monthly average yields of U.S. Treasury securities adjusted to a constant maturity of one year. The
twelve month look back period and averaging nature of this index results in a slower reaction to changes in short term interest rates on assets indexed to the MTA than on liabilities priced at the short term market rates. This lag can produce
volatility in the net interest margin. In a



21



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rising interest rate environment, this lagging effect will tend to reduce the net interest margin with improvement as the short-term interest rates level off
or reduce. The magnitude of the impact on margin is a function of the size of the interest rate movement and frequency of change while the timing of the lag is driven by the twelve month averaging. (See Lag Risk in Item 7A. of
BankUniteds Annual Report on Form 10-K for the fiscal year ended September 30, 2004)



Additionally, the margin was adversely affected by the level of prepayments during the quarter ended December 31, 2004, changes in the level of prepayments could affect the net interest margin in the future.



Net interest income before provision for loan losses was $38
million for the quarter ended December 31, 2004, a $6.2 million, or 19% increase over $32 million for the same period in 2003. The total net increase of $6.2 million is due to two overall factors: a net increase of $10.6 million due to changes in
volume of average interest earning assets and interest-bearing liabilities, and a net decrease of $4.4 million due to changes in yields earned on interest-earning assets and rates paid on interest-bearing liabilities (see the Rate/Volume Analysis
table).



Rate/Volume Analysis



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



|                                                          |  |                                                            |        |   |                |   |        |                          |  |   |        |  
|--------------------------------------------------------- |  | ---------------------------------------------------------- | ------ | - | -------------- | - | ------ | ------------------------ |  | - | ------ | -
|                                                          |  | For the Three Month Period EndedDecember 31, 2004 vs. 2003 |       
|                                                          |  | Increase (Decrease)Due to                                  |        |   |                |  
|                                                          |  | Changes inVolume                                           |        |   | Changesin Rate |   |        | TotalIncrease/(Decrease) | 
|                                                          |  | (Dollars in thousands)                                     |       
|Interest income attributable to:                          |  |                                                            |        |   |                |   |        |                          |  |   |        |  
|Loans, net (1)                                            |  | $                                                          | 22,054 |   |                | $ | (6,312 | )                        |  | $ | 15,742 |  
|Mortgage-backed securities                                |  |                                                            | (1,378 | ) |                |   | (183   | )                        |  |   | (1,561 | )
|Short-term investments(2)                                 |  |                                                            | 9      |   |                |   | 62     |                          |  |   | 71     |  
|Investment securities and FHLB stock                      |  |                                                            | 752    |   |                |   | (95    | )                        |  |   | 657    |  
|                                                          |  |                                                            |        |   |                |   |        |                          |  |   |        |  
|Total interest-earning assets                             |  |                                                            | 21,437 |   |                |   | (6,528 | )                        |  |   | 14,909 |  
|                                                          |  |                                                            |        |   |                |   |        |                          |  |   |        |  
|Interest expense attributable to:                         |  |                                                            |        |   |                |   |        |                          |  |   |        |  
|Transaction and money market                              |  |                                                            | 77     |   |                |   | 162    |                          |  |   | 239    |  
|Savings                                                   |  |                                                            | 426    |   |                |   | 374    |                          |  |   | 800    |  
|Certificates of deposit                                   |  |                                                            | 1,073  |   |                |   | (1,286 | )                        |  |   | (213   | )
|Trust Preferred Securities and subordinated debentures(3) |  |                                                            | 107    |   |                |   | 258    |                          |  |   | 365    |  
|Senior notes(4)                                           |  |                                                            | (1,363 | ) |                |   | (1,003 | )                        |  |   | (2,366 | )
|FHLB advances and other borrowings                        |  |                                                            | 10,490 |   |                |   | (608   | )                        |  |   | 9,882  |  
|                                                          |  |                                                            |        |   |                |   |        |                          |  |   |        |  
|Total interest-bearing liabilities                        |  |                                                            | 10,810 |   |                |   | (2,103 | )                        |  |   | 8,707  |  
|                                                          |  |                                                            |        |   |                |   |        |                          |  |   |        |  
|Increase (decrease) in net interest income                |  | $                                                          | 10,627 |   |                | $ | (4,425 | )                        |  | $ | 6,202  |  
|                                                          |  |                                                            |        |   |                |   |        |                          |  |   |        |  

---

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

|(2) |  | Short-term investments include FHLB overnight deposits, federal funds sold, securities purchased under agreements to resell, and certificates of deposit.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------

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

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



22



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##### Table of Contents

Interest Income.    Interest income increased by $15 million for the three
months ended December 31, 2004, compared to the same period in 2003. This improvement was generated by an increase of $1.7 billion in average loans outstanding during the three months ended December 31, 2004, compared to the same period in 2003,
which increased interest income by $22 million, offset by decreases of $6.3 million due to a reduction in yield of 42 basis points on those loans.



The overall yield on interest earning assets decreased by 21 basis points.



Interest Expense.    Interest expense increased by $8.7 million for the three months ended
December 31, 2004, compared to the same period in 2003. This net change is the result of increases in interest expense of $10.8 million due to changes in volume, offset by decreases of $2.1 million due to a reduction in rates.



The growth in loans was funded by an increase of $1.4 billion in average FHLB
advances outstanding during the three months ended December 31, 2004, compared to the same period in 2003. This resulted in increased interest expense of $10.5 million offset by a $0.6 million decrease due to rate changes between the two periods.



In February 2004, $200 million in senior notes were repaid and
replaced with $120 million of convertible senior notes during the same quarter of that year. The interest rate on senior debt declined from 6.82% for the quarter ended December 31, 2003 to 3.54% for the quarter ended December 31, 2004. The combined
volume and rate changes reduced senior note expense by $2.4 million.



The overall cost of interest bearing liabilities was reduced by 14 basis points.



Provision for Loan Losses.    BankUnited records a provision for loan losses as a charge to income in amounts necessary to adjust the allowance for loan losses as determined by management
through its review of asset quality. The provision for loan losses of $1.2 million for three months ended December 31, 2004 represents an increase compared to $1.0 million for the same period in 2003. Net charge-offs for the three months ended
December 31, 2004 were $782 thousand compared to $546 thousand for 2003. See Asset Quality for information on BankUniteds allowance for loan losses.



Analysis of Non-Interest Income and Expenses



|                                                                     |  |                                       |       |   |      |   |        |                     |  |   |        |   |  |        |  
|-------------------------------------------------------------------- |  | ------------------------------------- | ----- | - | ---- | - | ------ | ------------------- |  | - | ------ | - |  | ------ | -
|                                                                     |  | For the Three MonthsEndedDecember 31, |       |   |      |  
|                                                                     |  | 2004                                  |       |   | 2003 |   |        | Increase/(Decrease) | 
|                                                                     |  | (Dollars in thousands)                |      
|Non-interest income:                                                 |  |                                       |       |   |      |   |        |                     |  |   |        |   |  |        |  
|Loan servicing fees                                                  |  | $                                     | 870   |   |      | $ | 738    |                     |  | $ | 132    |   |  | 17.9   | %
|Amortization of mortgage servicing rights                            |  |                                       | (782  | ) |      |   | (1,511 | )                   |  |   | 729    |   |  | (48.2  | )
|Loan fees                                                            |  |                                       | 1,154 |   |      |   | 939    |                     |  |   | 215    |   |  | 22.9   |  
|Deposit fees                                                         |  |                                       | 1,106 |   |      |   | 1,119  |                     |  |   | (13    | ) |  | (1.2   | )
|Other fees                                                           |  |                                       | 518   |   |      |   | 480    |                     |  |   | 38     |   |  | 7.9    |  
|Net gain (loss) on sale of investment and mortgage-backed securities |  |                                       | 1,481 |   |      |   | (595   | )                   |  |   | 2,076  |   |  | (348.9 | )
|Net gain on sale of loans and other assets                           |  |                                       | 522   |   |      |   | 1,752  |                     |  |   | (1,230 | ) |  | (70.2  | )
|Insurance and investment services income                             |  |                                       | 963   |   |      |   | 942    |                     |  |   | 21     |   |  | 2.2    |  
|Other                                                                |  |                                       | 1,115 |   |      |   | 1,198  |                     |  |   | (83    | ) |  | (6.9   | )
|                                                                     |  |                                       |       |   |      |   |        |                     |  |   |        |   |  |        |  
|Total non-interest income                                            |  | $                                     | 6,947 |   |      | $ | 5,062  |                     |  | $ | 1,885  |   |  | 37.2   | %
|                                                                     |  |                                       |       |   |      |   |        |                     |  |   |        |   |  |        |  



Total non-interest
income reached $6.9 million for the quarter, up 37% over the same quarter last year. Non-interest income included net gains from the sale of loans, investments and mortgage-backed securities of $2.0 million for the quarter ended December 31,
2004, as compared to $1.2 million for the same quarter last year.



23



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##### Table of Contents

BankUniteds portfolio of residential loans serviced for others was $1.2 billion at December 31,
2004. BankUnited provided for the amortization of $0.8 million of servicing rights for the quarter, compared to $1.5 million for the same quarter last year. This amortization, offset by fees earned on these loans of $0.9 million, resulted
in net revenue of $88 thousand in the first quarter compared to net losses of $773 thousand for the same quarter last year.



Fee income, which includes loan fees, deposit fees and other fees (excluding loan servicing fees), was $2.8 million for the first quarter of fiscal
2005, up 9.5% compared to the same quarter last year.



Insurance and investment income for the quarter was $1.0 million, up 2.2% over the same quarter last year. During the quarter, BankUnited experienced a slow-down in annuity sales, reflecting the effects of a rising interest rate environment
in which customers elected to place a greater percentage of their funds into deposit accounts.



|                                         |  |                                       |        |      |   |                     |  |   |       |   |  |       |  
|---------------------------------------- |  | ------------------------------------- | ------ | ---- | - | ------------------- |  | - | ----- | - |  | ----- | -
|                                         |  | For the Three MonthsEndedDecember 31, |        |      |  
|                                         |  | 2004                                  |        | 2003 |   | Increase/(Decrease) | 
|                                         |  | (Dollars in thousands)                |       
|Non-interest expenses:                   |  |                                       |        |      |   |                     |  |   |       |   |  |       |  
|Employee compensation and benefits       |  | $                                     | 11,196 |      | $ | 10,804              |  | $ | 392   |   |  | 3.6   | %
|Occupancy and equipment                  |  |                                       | 5,001  |      |   | 3,704               |  |   | 1,297 |   |  | 35.0  |  
|Telecommunications and data processing   |  |                                       | 1,619  |      |   | 1,384               |  |   | 235   |   |  | 17.0  |  
|Advertising and promotion expense        |  |                                       | 1,444  |      |   | 1,151               |  |   | 293   |   |  | 25.5  |  
|Professional fees  legal and accounting |  |                                       | 848    |      |   | 1,320               |  |   | (472  | ) |  | (35.8 | )
|Insurance                                |  |                                       | 382    |      |   | 357                 |  |   | 25    |   |  | 7.0   |  
|Other operating expenses                 |  |                                       | 2,232  |      |   | 393                 |  |   | 1,839 |   |  | 468.0 |  
|                                         |  |                                       |        |      |   |                     |  |   |       |   |  |       |  
|Total non-interest expenses              |  | $                                     | 22,722 |      | $ | 19,113              |  | $ | 3,609 |   |  | 18.9  | %
|                                         |  |                                       |        |      |   |                     |  |   |       |   |  |       |  



Non-interest expense
increased $3.6 million for the quarter, or 19%, from the same quarter in the prior fiscal year. This increase is due in part to a $1.3 million gain recorded during the quarter ended December 31, 2003 from fair value adjustments to derivatives
reflected as a credit in other operating expense. There were no significant gains or losses during the quarter ended December 31, 2004 from fair value adjustments to derivatives. The remaining increase of $2.3 million reflects BankUniteds
continuing strategic investment in infrastructure and new banking offices as well as increased advertising and promotion expense. The decline in professional fees is primarily the result of lower legal expenses.



LIQUIDITY



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



24



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



As of December 31, 2004, BankUnited had $1.2 billion in investments and mortgage-backed securities pledged against
securities sold under agreements to repurchase with an outstanding balance of $1.2 billion, of which approximately $65 million mature overnight.



As of December 31, 2004, BankUnited had $3.1 billion of FHLB advances outstanding, including approximately $325 million, which matured within 30 days.
These advances were secured by loans with a market value of approximately $4.7 billion as of December 31, 2004. As of December 31, 2004, BankUnited had approximately $369 million available on its credit line with the FHLB of Atlanta. In addition,
BankUnited had $10 million available as of December 31, 2004 under a credit facility entered into with another financial institution to purchase overnight Federal Funds on a short-term basis. This credit line was increased to $20 million in
January 2005.



Discussion of Cash Flows



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



Significant Sources of Funds



During the fiscal quarters ended December 31, 2004 and
2003, BankUnited received $689 million and $563 in payments on loans, respectively. Proceeds from the repayment of mortgage-backed securities for the quarter ended December 31, 2004 was $180 million compared to $219 million for the same period in
2003. BankUnited sold $120 million of investments and mortgage-backed securities during the quarter ended December 31, 2004 compared to $94 million for the same period in 2003. BankUnited raised $199 million in additional deposits during the quarter
ended December 31, 2004 compared to $48 million during the same quarter during 2003. BankUnited received funds of $49 million and $103 million during the three months ended December 31, 2004 and 2003, respectively from additional repurchase
agreements. During the quarter ended December 31, 2004, BankUnited raised $31 million from the issuance of subordinated debentures to two of its non-consolidated trust subsidiaries, none during the same period in 2003.



Significant Uses of Funds



During the three months ended December 31, 2004, BankUnited funded $1.3
billion of loans as compared to $822 million during the same period of 2003. In addition, BankUnited purchased $50 million of investment and mortgage-backed securities during the three months ended December 31, 2004 compared to $278 million during
the same period of 2003. BankUnited paid down $44 million and $5.0 million of FHLB advances during the three month ended December 31, 2004 and 2003, respectively. BankUnited used $36 million and $33 million, respectively during the three months
ended December 31, 2004 and 2003 to make escrow related tax payments on behalf of borrowers.



FINANCIAL CONDITION



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



Assets



Mortgage-backed securities available for sale.    The balance of mortgage-backed securities
available for sale was $1.8 billion as of December 31, 2004, which is a net decrease of $242 million, or 11.7% compared to



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##### Table of Contents

$2.1 billion as of September 30, 2004. The net decrease of $242 million is predominantly the result of repayments of $180 million, sales of $86 million,
and a $6.9 million market value adjustment, offset by an increase from securitizations of $31.5 million. (See Note 3. of the accompanying condensed notes to consolidated financial statements for additional information on investment securities and
mortgage-backed securities).



Loans.    Loans receivable, net (including loans held for sale) increased by $566 million, or 9.8% from $5.8 billion at September 30, 2004 to $6.3 billion at December 31, 2004. The portfolio is centered in first
mortgage residential loans which account for 84% of the portfolio with an additional 12% in other real estate secured loans. There has not been a significant change in loan portfolio mix during the quarter.



The majority of the growth in loans was in one-to-four family residential,
which had a net increase of $535 million. BankUniteds MTA loans increased by $542 million during the quarter.



Loans receivable consist of the following:



|                                                    |  |                        |           |   |                         |       |   |        |   |           |                 |  |       |  
|--------------------------------------------------- |  | ---------------------- | --------- | - | ----------------------- | ----- | - | ------ | - | --------- | --------------- |  | ----- | -
|                                                    |  | As of December 31,2004 |           |   | As of September 30,2004 |      
|                                                    |  | Amount                 |           |   | Percent ofTotal         |       |   | Amount |   |           | Percent ofTotal | 
|                                                    |  | (Dollars in thousands) |          
|Real estate loans:                                  |  |                        |           |   |                         |       |   |        |   |           |                 |  |       |  
|One-to-four family residential:                     |  |                        |           |   |                         |       |   |        |   |           |                 |  |       |  
|Residential mortgages                               |  | $                      | 4,608,200 |   |                         | 73.2  | % |        | $ | 4,058,858 |                 |  | 70.9  | %
|Specialty consumer mortgages                        |  |                        | 674,799   |   |                         | 10.7  |   |        |   | 688,711   |                 |  | 12.0  |  
|                                                    |  |                        |           |   |                         |       |   |        |   |           |                 |  |       |  
|Total one-to-four family residential                |  |                        | 5,282,999 |   |                         | 83.9  |   |        |   | 4,747,569 |                 |  | 82.9  |  
|Home equity loans and lines of credit               |  |                        | 173,859   |   |                         | 2.8   |   |        |   | 150,323   |                 |  | 2.6   |  
|Multi-family                                        |  |                        | 70,755    |   |                         | 1.1   |   |        |   | 51,104    |                 |  | 0.9   |  
|Commercial real estate                              |  |                        | 279,805   |   |                         | 4.4   |   |        |   | 267,127   |                 |  | 4.7   |  
|Construction                                        |  |                        | 117,107   |   |                         | 1.9   |   |        |   | 187,518   |                 |  | 3.3   |  
|Land                                                |  |                        | 120,366   |   |                         | 1.9   |   |        |   | 94,006    |                 |  | 1.6   |  
|                                                    |  |                        |           |   |                         |       |   |        |   |           |                 |  |       |  
|Total real estate loans                             |  |                        | 6,044,891 |   |                         | 96.0  |   |        |   | 5,497,647 |                 |  | 96.0  |  
|                                                    |  |                        |           |   |                         |       |   |        |   |           |                 |  |       |  
|Other loans:                                        |  |                        |           |   |                         |       |   |        |   |           |                 |  |       |  
|Commercial                                          |  |                        | 175,939   |   |                         | 2.8   |   |        |   | 167,786   |                 |  | 2.9   |  
|Consumer                                            |  |                        | 18,312    |   |                         | 0.3   |   |        |   | 19,454    |                 |  | 0.3   |  
|                                                    |  |                        |           |   |                         |       |   |        |   |           |                 |  |       |  
|Total other loans                                   |  |                        | 194,251   |   |                         | 3.1   |   |        |   | 187,240   |                 |  | 3.2   |  
|                                                    |  |                        |           |   |                         |       |   |        |   |           |                 |  |       |  
|Total loans held in portfolio                       |  |                        | 6,239,142 |   |                         | 99.1  |   |        |   | 5,684,887 |                 |  | 99.2  |  
|Unearned discounts, premiums and deferred fees, net |  |                        | 81,056    |   |                         | 1.3   |   |        |   | 65,992    |                 |  | 1.2   |  
|Allowance for loan losses                           |  |                        | (24,447   | ) |                         | (0.4  | ) |        |   | (24,079   | )               |  | (0.4  | )
|                                                    |  |                        |           |   |                         |       |   |        |   |           |                 |  |       |  
|Total loans held in portfolio, net                  |  |                        | 6,295,751 |   |                         | 100.0 | % |        |   | 5,726,800 |                 |  | 100.0 | %
|                                                    |  |                        |           |   |                         |       |   |        |   |           |                 |  |       |  
|Mortgage loans held for sale                        |  |                        | 25,874    |   |                         |       |   |        |   | 28,786    |                 |  |       |  
|                                                    |  |                        |           |   |                         |       |   |        |   |           |                 |  |       |  
|Total loans, net                                    |  | $                      | 6,321,625 |   |                         |       |   |        | $ | 5,755,586 |                 |  |       |  
|                                                    |  |                        |           |   |                         |       |   |        |   |           |                 |  |       |  



Liabilities



Deposits.    Deposits increased by $199 million,
or 5.6%, from $3.5 billion at September 30, 2004 to $3.7 billion at December 31, 2004. The majority of the growth was from an increase in certificates of deposit of $171 million. Non-interest bearing deposits were $262 million at December 31,
2004, up $15 million, or 6% from $247 million at September 30, 2004.



Securities sold under agreements to repurchase.    Securities sold under agreements to repurchase (repos) increased by $49 million or 4.2% from September 30, 2004 to $1.2 billion at December 31, 2004.



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##### Table of Contents

FHLB advances.    FHLB advances decreased by $46 million, or 1.5%, from
September 30, 2004 to $3.1 billion at December 31, 2004.



Trust preferred securities and subordinated debentures.    Trust preferred securities and subordinated debentures increased by $31 million, or 18% from $165 million as of September 30, 2004 to $196 million as of
December 31, 2004. This increase is the result of the issuance of $31 million of subordinated debentures by BankUnited to two of its non-consolidated trust subsidiaries.



Advance payments by borrowers for taxes and insurance.    Advance payments by borrowers for taxes
and insurance decreased by $36 million, or 60% during the quarter to $24 million as of December 31, 2004. This decrease reflects tax payments made by BankUnited on behalf of borrowers during the quarter.



Asset Quality



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



|                                                                  |  |                        |        |   |                   |   |        |  
|----------------------------------------------------------------- |  | ---------------------- | ------ | - | ----------------- | - | ------ | -
|                                                                  |  | December 31,2004       |        |   | September 30,2004 |  
|                                                                  |  | (Dollars in thousands) |       
|Non-accrual loans                                                 |  | $                      | 14,998 |   |                   | $ | 15,523 |  
|Restructured loans                                                |  |                        | 364    |   |                   |   | 367    |  
|Loans past due 90 days and still accruing                         |  |                        | 39     |   |                   |   | 2      |  
|                                                                  |  |                        |        |   |                   |   |        |  
|Total non-performing loans                                        |  |                        | 15,401 |   |                   |   | 15,892 |  
|Non-accrual tax certificates                                      |  |                        |       |   |                   |   | 69     |  
|Real estate owned                                                 |  |                        | 1,602  |   |                   |   | 1,611  |  
|                                                                  |  |                        |        |   |                   |   |        |  
|Total non-performing assets                                       |  |                        | 17,003 |   |                   |   | 17,572 |  
|                                                                  |  |                        |        |   |                   |   |        |  
|Allowance for losses on tax certificates                          |  |                        |       |   |                   |   | 65     |  
|Allowance for loan losses                                         |  |                        | 24,447 |   |                   |   | 24,079 |  
|                                                                  |  |                        |        |   |                   |   |        |  
|Total allowance                                                   |  | $                      | 24,447 |   |                   | $ | 24,144 |  
|                                                                  |  |                        |        |   |                   |   |        |  
|Non-performing assets as a percentage of total assets             |  |                        | 0.19   | % |                   |   | 0.20   | %
|Non-performing loans as a percentage of total loans               |  |                        | 0.24   | % |                   |   | 0.27   | %
|Allowance for loan losses as a percentage of total loans          |  |                        | 0.39   | % |                   |   | 0.42   | %
|Allowance for loan losses as a percentage of non-performing loans |  |                        | 158.74 | % |                   |   | 151.52 | %



Non-performing assets
as a percentage of total assets improved to 0.19% at December 31, 2004 from 0.20% at September 30, 2004.



The allowance for loan losses as a percentage of total loans was 0.39% as of December 31, 2004, compared to 0.42% as of September 30, 2004.
Management believes the current allowance to be prudent given the composition of its loan portfolio, which is 96% secured by real estate, the historical loss experience and its assessment of current asset quality.



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The following table sets forth the change in BankUniteds allowance for loan losses for the three
months ended December 31, 2004 and 2003.



|                                                                  |  |                            |        |   |                  |   |        |  
|----------------------------------------------------------------- |  | -------------------------- | ------ | - | ---------------- | - | ------ | -
|                                                                  |  | For the Three Months Ended |       
|                                                                  |  | December 30,2004           |        |   | December 30,2003 |  
|                                                                  |  | (In thousands)             |       
|Allowance for loan losses, balance (at beginning of period)       |  | $                          | 24,079 |   |                  | $ | 22,295 |  
|Provisions for loan losses                                        |  |                            | 1,150  |   |                  |   | 975    |  
|Loans charged off:                                                |  |                            |        |   |                  |   |        |  
|One-to-four family residential(1)                                 |  |                            | (505)  |   |                  |   | (135)  |  
|Home equity loans and lines of credit                             |  |                            | (131)  |   |                  |   | (1)    |  
|Commercial                                                        |  |                            | (154)  |   |                  |   | (607)  |  
|Consumer(1)                                                       |  |                            | (19)   |   |                  |   | (12)   |  
|                                                                  |  |                            |        |   |                  |   |        |  
|Total loans charged off(2)                                        |  |                            | (809   | ) |                  |   | (755   | )
|                                                                  |  |                            |        |   |                  |   |        |  
|Recoveries:                                                       |  |                            |        |   |                  |   |        |  
|One-to-four family residential mortgages(1)                       |  |                            |       |   |                  |   | 192    |  
|Commercial                                                        |  |                            | 24     |   |                  |   | 11     |  
|Consumer(1)                                                       |  |                            | 3      |   |                  |   | 6      |  
|                                                                  |  |                            |        |   |                  |   |        |  
|Total recoveries(2)                                               |  |                            | 27     |   |                  |   | 209    |  
|                                                                  |  |                            |        |   |                  |   |        |  
|Reclassification of letter of credit reserve to other liabilities |  |                            |       |   |                  |   | (599)  |  
|                                                                  |  |                            |        |   |                  |   |        |  
|Allowance for loan losses, balance (at end of period)             |  | $                          | 24,447 |   |                  | $ | 22,125 |  
|                                                                  |  |                            |        |   |                  |   |        |  

---

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

|(2) |  | Net annualized charge-offs as a percentage of average total loans were 0.05% for both three month periods ended December 31, 2004 and 2003.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------



The net annualized charge-off ratio for the quarter ended December 31, 2004
remained flat at 0.05% compared to the same quarter in 2003. There can be no assurance that additional provisions for loan losses will not be required in future periods.



The following table sets forth BankUniteds allocation of the allowance for loan losses by category as of December 31,
2004 and September 30, 2003.



|                                                |  |                   |        |                   |   |       
|----------------------------------------------- |  | ----------------- | ------ | ----------------- | - | ------
|                                                |  | December 31, 2004 |        | September 30,2004
|                                                |  | (In thousands)   
|Balance at the end of the period applicable to: |  |                   |        |                   |   |       
|One-to-four family residential(1)               |  | $                 | 5,294  |                   | $ | 4,889 
|Home equity loans and lines of credit           |  |                   | 3,165  |                   |   | 2,608 
|Multi-family                                    |  |                   | 566    |                   |   | 409   
|Commercial real estate                          |  |                   | 3,201  |                   |   | 2,706 
|Construction                                    |  |                   | 937    |                   |   | 1,500 
|Land                                            |  |                   | 963    |                   |   | 752   
|Commercial                                      |  |                   | 7,815  |                   |   | 7,140 
|Consumer(1)                                     |  |                   | 346    |                   |   | 331   
|Unallocated                                     |  |                   | 2,160  |                   |   | 3,744 
|                                                |  |                   |        |                   |   |       
|Total allowance for loan losses                 |  | $                 | 24,447 |                   | $ | 24,079
|                                                |  |                   |        |                   |   |       

---

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





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Item 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



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



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



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



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



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



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



By using derivative instruments, BankUnited is exposed to
credit and market risk. Credit risk, which is the risk that a counterparty to a derivative instrument will fail to perform, is equal to the extent of the fair value gain in a derivative. Credit risk is created when the fair value of a derivative
contract is positive, since this generally



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##### Table of Contents

indicates that the counterparty owes us. When the fair value of a derivative is negative, no credit risk exists since BankUnited would owe the counterparty.
BankUnited minimizes the credit risk in derivative instruments by entering into transactions with high-quality counterparties as evaluated by management. Market risk is the adverse effect on the value of a financial instrument from a change in
interest rates or implied volatility of rates. We manage the market risk associated with interest rate contracts by establishing and monitoring limits as to the types and degree of risk that may be undertaken. The market risk associated with
derivatives used for interest rate risk management activity is fully incorporated into our market risk sensitivity analysis.



Item 4.    CONTROLS AND PROCEDURES



An evaluation of the effectiveness of the design and operation of BankUniteds disclosure controls and procedures was carried out by BankUnited, as of period end under the supervision and with the participation
of BankUniteds management, including the Chief Executive Officer and Chief Financial Officer. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that BankUniteds disclosure controls and procedures
have been designed and are being operated in a manner that 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. We may make changes to our disclosure controls and procedures periodically, as we review their design and effectiveness on a continuing basis. No change in internal
control over financial reporting occurred during the quarter ended December 31, 2004, that has materially affected, or is likely to materially affect, such internal control over financial reporting. A controls system, no matter how well designed and
operated, cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.



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##### Table of Contents

PART IIOTHER INFORMATION



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



At BankUniteds annual meeting of stockholders held on January 24, 2005, the stockholders voted on the election of three Class III directors to serve
until 2008, the election of one Class I director to serve until 2006, and the election of two Class II directors to serve until 2007.



The stockholders voted to elect the nominees for Class III directors as follows:



|                   |  |           |  |               
|------------------ |  | --------- |  | --------------
|                   |  | Votes For |  | Votes Withheld
|Allen M. Bernkrant |  | 4,510,807 |  | 465,775       
|Alfred R. Camner   |  | 4,525,409 |  | 451,173       
|Neil H. Messinger  |  | 4,846,322 |  | 130,260       



The stockholders voted
to elect the nominee for Class I director as follows:



|              |  |           |  |               
|------------- |  | --------- |  | --------------
|              |  | Votes For |  | Votes Withheld
|Tod Aronovitz |  | 4,947,008 |  | 29,574        



The stockholders voted
to elect the nominees for Class II directors as follows:



|                    |  |           |  |               
|------------------- |  | --------- |  | --------------
|                    |  | Votes For |  | Votes Withheld
|Lauren Camner       |  | 4,516,505 |  | 460,077       
|Dr. Albert E. Smith |  | 4,945,958 |  | 30,624        



Item 5.    OTHER INFORMATION



During the first quarter of fiscal 2005, the Compensation Committee of BankUniteds Board of Directors set performance goals for BankUniteds CEO, Alfred R. Camner to receive a cash bonus for the quarter and
authorized payments of incentive bonuses to the CEO and other executive officers of BankUnited for fiscal 2004 periods based on evaluations made of performance measurements established during the first and second quarters of fiscal 2004, as
disclosed below.



In addition, during the first quarter of
fiscal 2005, the Committee set performance goals for the CEO and Chief Operating Officer, Ramiro Ortiz, to earn compensation for fiscal 2005 periods and increased fees for members of the audit and compensation committees of BankUniteds Board
of Directors for fiscal 2005, as described in Exhibit 10.1 to this report, which Exhibit is incorporated herein by reference.



Incentive Award for Chief Executive Officer (CEO) for the Quarter Ending December 31, 2004



On October 23, 2004, the Compensation Committee of BankUniteds Board
of Directors set performance goals for BankUniteds CEO, Alfred R. Camner, to earn cash compensation for the quarter ending December 31, 2004, under BankUniteds 2002 Incentive and Stock Award Plan (the 2002 Plan). The goals
consisted of measures for total assets, total deposits and total loan balances to be achieved by the end of the quarter, and of measures for diluted earnings per share, residential and consumer loan production and net income to be achieved for the
quarter. The goals also included measures for non-performing assets as a percent of total assets to be achieved for the quarter. The CEO was eligible to earn up to $250,000 for the quarter, depending upon whether the goals were achieved and the
level of achievement.



On January 21, 2005, the Committee
evaluated whether the performance goals had been achieved during the quarter, determined that they had, and, in accordance with the amount of compensation specified in the goals for the actual level of achievement, awarded the CEO $250,000 under the
2002 Plan.



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##### Table of Contents

Payments of Incentive Awards to Executive Officers



On October 26, 2004, the Compensation Committee authorized the payment of
incentive awards to the following executive officers in respect of the periods and in the form stated below:



|                                                                                          |  |                                                                     |  |                                     
|----------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------- |  | ------------------------------------
|Name and Position                                                                         |  | Form and Amount of Award                                            |  | Performance Period                  
|Alfred R. Camner, CEO                                                                     |  | $250,000                                                            |  | Quarter ended September 30, 2004    
|                                                                                          |  |                                                                    
|                                                                                          |  | Restricted stock grant of 30,000 shares of Series B Preferred Stock |  | Nine-months ended September 30, 2004
|                                                                                          |  |                                                                    
|                                                                                          |  | $970,000                                                            |  | Fiscal year ended September 30, 2004
|                                                                                          |  |                                                                    
|Ramiro Ortiz, President and COO                                                           |  | $335,000                                                            |  | Fiscal year ended September 30, 2004
|                                                                                          |  |                                                                    
|Humberto L. Lopez,Senior Executive Vice President and Chief Financial Officer             |  | $140,624                                                            |  | Fiscal year ended September 30, 2004
|                                                                                          |  |                                                                    
|Abel Iglesias,Executive Vice President, Corporate and Commercial Banking, BankUnited, FSB |  | $135,140                                                            |  | Fiscal year ended September 30, 2004
|                                                                                          |  |                                                                    
|Robert Green,Executive Vice President, Residential Real Estate, BankUnited, FSB           |  | $100,236                                                            |  | Fiscal year ended September 30, 2004



Item 6.    EXHIBITS



(a) Exhibits.



| | 10.1 |  | Determination of performance goals and committee compensation.*
| | ---- |  | ---------------------------------------------------------------



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



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



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



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



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

---

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



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SIGNATURES



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



BANKUNITED FINANCIAL CORPORATION



/s/    HUMBERTO L. LOPEZ

By:

Humberto L. Lopez

Senior Executive Vice President and Chief Financial Officer



Date:    February 8, 2005



/s/    BERNARDO ARGUDIN

By:

Bernardo Argudin

Executive Vice President and Principal Accounting Officer



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Exhibit Index



|            |  |                                                                                                                                                                                    
|----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                        
|            | 
|10.1        |  | Determination of performance goals and committee compensation.*                                                                                                                    
|            | 
|10.2        |  | Form of Agreement for Advances and Security Agreement effective February 5, 2005 between the Bank and the Federal Home Loan Bank of Atlanta.                                       
|            | 
|10.3        |  | Form of Joinder Agreement effective February 5, 2005 among BU REIT, Inc., BankUnited FSB, and the Federal Home Loan Bank of Atlanta.                                               
|            | 
|31.1        |  | Certification of the Chief Executive Officer pursuant to Section 302, of the Sarbanes-Oxley Act of 2002.                                                                           
|            | 
|31.2        |  | Certification of the Chief Financial Officer pursuant to Section 302, of the Sarbanes-Oxley Act of 2002.                                                                           
|            | 
|32          |  | Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.

---

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