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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 June 30, 2006



or



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



Commission File No. 1-13921



BankUnited Financial Corporation

(Exact name of registrant as specified in its charter)



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



255 Alhambra Circle,
Coral Gables, Florida 33134

(Address of principal executive offices) (Zip Code)



(305) 569-2000

(Registrants telephone number, including area code)



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



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



Large accelerated filer x    Accelerated filer ̈Non-accelerated filer ̈



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



The number of shares outstanding of the registrants
common stock at the close of business on August 1, 2006 was 36,133,590 shares of Class A Common Stock, $.01 par value, and 525,062 shares of Class B Common Stock, $.01 par value.



This Form 10-Q contains 39 pages.

The Index to Exhibits appears on page 38.



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



FORM 10-Q REPORT FOR THE QUARTER ENDED JUNE 30, 2006



TABLE OF CONTENTS



|                             |  |                                                                                                              |  |         
|---------------------------- |  | ------------------------------------------------------------------------------------------------------------ |  | --------
|                             |  |                                                                                                              |  | Page No.
|PART IFINANCIAL INFORMATION |  |                                                                                                             
|                             |  |                                                                                                             
|Item 1.                      |  | Financial Statements                                                                                         |  |         
|                             |  |                                                                                                             
|                             |  | Consolidated Statements of Financial Condition as of June 30, 2006 (unaudited) and September 30, 2005        |  | 3       
|                             |  |                                                                                                             
|                             |  | Consolidated Statements of Income (unaudited) for the Three and Nine Months Ended June 30, 2006 and 2005     |  | 4       
|                             |  |                                                                                                             
|                             |  | Consolidated Statements of Stockholders Equity (unaudited) for the Nine Months Ended June 30, 2006 and 2005 |  | 5       
|                             |  |                                                                                                             
|                             |  | Condensed Consolidated Statements of Cash Flows (unaudited) for the Nine Months Ended June 30, 2006 and 2005 |  | 6       
|                             |  |                                                                                                             
|                             |  | Condensed Notes to Consolidated Financial Statements (unaudited)                                             |  | 7       
|                             |  |                                                                                                             
|Item 2.                      |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                        |  | 22      
|                             |  |                                                                                                             
|Item 3.                      |  | Quantitative and Qualitative Disclosures About Market Risk                                                   |  | 37      
|                             |  |                                                                                                             
|Item 4.                      |  | Controls and Procedures                                                                                      |  | 37      
|                             | 
|PART IIOTHER INFORMATION    |  |                                                                                                             
|                             |  |                                                                                                             
|Item 6.                      |  | Exhibits                                                                                                     |  | 39      



2



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION



|                                                                                                                                   |  |                                          |            |   |                   |   |            |  
|---------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------- | ---------- | - | ----------------- | - | ---------- | -
|                                                                                                                                   |  | June 30,2006                             |            |   | September 30,2005 |  
|                                                                                                                                   |  | (Dollars in thousands, exceptshare data) |           
|ASSETS                                                                                                                             |  |                                          |            |   |                   |   |            |  
|Cash                                                                                                                               |  | $                                        | 64,958     |   |                   | $ | 60,870     |  
|Federal Home Loan Bank overnight deposits                                                                                          |  |                                          | 46,230     |   |                   |   | 175,249    |  
|Federal funds sold                                                                                                                 |  |                                          |           |   |                   |   | 1,932      |  
|                                                                                                                                   |  |                                          |            |   |                   |   |            |  
|Cash and cash equivalents                                                                                                          |  |                                          | 111,188    |   |                   |   | 238,051    |  
|                                                                                                                                   |  |                                          |            |   |                   |   |            |  
|Investment securities available for sale, at fair value                                                                            |  |                                          | 294,652    |   |                   |   | 289,932    |  
|Mortgage-backed securities available for sale, at fair value (including assets pledged of $1,037,757 and $1,223,261,
respectively) |  |                                          | 1,301,836  |   |                   |   | 1,626,005  |  
|Mortgage loans held for sale                                                                                                       |  |                                          | 109,967    |   |                   |   | 12,196     |  
|Loans held in portfolio                                                                                                            |  |                                          | 10,373,958 |   |                   |   | 7,933,759  |  
|Add: Unearned discounts, premiums and deferred costs, net                                                                          |  |                                          | 177,236    |   |                   |   | 119,588    |  
|Less: Allowance for loan losses                                                                                                    |  |                                          | (32,349    | ) |                   |   | (25,755    | )
|                                                                                                                                   |  |                                          |            |   |                   |   |            |  
|Loans held in portfolio, net                                                                                                       |  |                                          | 10,518,845 |   |                   |   | 8,027,592  |  
|                                                                                                                                   |  |                                          |            |   |                   |   |            |  
|Federal Home Loan Bank stock and other earning assets                                                                              |  |                                          | 240,192    |   |                   |   | 190,043    |  
|Office properties and equipment, net                                                                                               |  |                                          | 48,010     |   |                   |   | 41,072     |  
|Real estate owned                                                                                                                  |  |                                          | 666        |   |                   |   | 542        |  
|Interest receivable                                                                                                                |  |                                          | 61,632     |   |                   |   | 41,621     |  
|Mortgage servicing rights                                                                                                          |  |                                          | 20,697     |   |                   |   | 22,101     |  
|Goodwill                                                                                                                           |  |                                          | 28,353     |   |                   |   | 28,353     |  
|Bank-owned life insurance                                                                                                          |  |                                          | 115,958    |   |                   |   | 112,383    |  
|Prepaid expenses and other assets                                                                                                  |  |                                          | 25,048     |   |                   |   | 37,814     |  
|                                                                                                                                   |  |                                          |            |   |                   |   |            |  
|Total assets                                                                                                                       |  | $                                        | 12,877,044 |   |                   | $ | 10,667,705 |  
|                                                                                                                                   |  |                                          |            |   |                   |   |            |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                               |  |                                          |            |   |                   |   |            |  
|Liabilities                                                                                                                        |  |                                          |            |   |                   |   |            |  
|Interest bearing deposits                                                                                                          |  | $                                        | 5,470,228  |   |                   | $ | 4,361,820  |  
|Non-interest bearing deposits                                                                                                      |  |                                          | 384,812    |   |                   |   | 371,535    |  
|                                                                                                                                   |  |                                          |            |   |                   |   |            |  
|Total deposits                                                                                                                     |  |                                          | 5,855,040  |   |                   |   | 4,733,355  |  
|                                                                                                                                   |  |                                          |            |   |                   |   |            |  
|Securities sold under agreements to repurchase                                                                                     |  |                                          | 951,062    |   |                   |   | 1,161,348  |  
|Advances from Federal Home Loan Bank                                                                                               |  |                                          | 4,834,350  |   |                   |   | 3,820,385  |  
|Convertible senior notes                                                                                                           |  |                                          | 120,000    |   |                   |   | 120,000    |  
|Trust preferred securities and subordinated debentures                                                                             |  |                                          | 195,874    |   |                   |   | 195,500    |  
|Federal funds purchased                                                                                                            |  |                                          | 60,000     |   |                   |   |           |  
|Interest payable                                                                                                                   |  |                                          | 28,171     |   |                   |   | 15,291     |  
|Advance payments by borrowers for taxes and insurance                                                                              |  |                                          | 68,795     |   |                   |   | 74,998     |  
|Accrued expenses and other liabilities                                                                                             |  |                                          | 50,358     |   |                   |   | 39,212     |  
|                                                                                                                                   |  |                                          |            |   |                   |   |            |  
|Total liabilities                                                                                                                  |  |                                          | 12,163,650 |   |                   |   | 10,160,089 |  
|                                                                                                                                   |  |                                          |            |   |                   |   |            |  
|Commitments and Contingencies (See notes 8 and 10)                                                                                 |  |                                          |            |   |                   |   |            |  
|                                                                                                                                   |  |                                         
|Stockholders Equity                                                                                                               |  |                                          |            |   |                   |   |            |  
|Preferred stock, $0.01 par value                                                                                                   |  |                                          | 10         |   |                   |   | 9          |  
|Authorized shares10,000,000                                                                                                       |  |                                          |            |   |                   |   |            |  
|Issued shares984,713 and 889,139Outstanding shares957,993 and 862,419Treasury shares26,720                                      |  |                                          | (528       | ) |                   |   | (528       | )
|Class A common stock, $0.01 par value                                                                                              |  |                                          | 366        |   |                   |   | 302        |  
|Authorized shares60,000,000                                                                                                       |  |                                          |            |   |                   |   |            |  
|Issued shares36,559,850 and 30,202,220Outstanding shares36,126,270 and 29,768,791Treasury shares433,580 and 433,429             |  |                                          | (5,226     | ) |                   |   | (5,223     | )
|Class B common stock, $0.01 par value                                                                                              |  |                                          | 7          |   |                   |   | 6          |  
|Authorized shares3,000,000                                                                                                        |  |                                          |            |   |                   |   |            |  
|Issued shares716,262 and 612,762Outstanding shares515,062 and 431,562Treasury shares201,200 and 181,200                         |  |                                          | (2,229     | ) |                   |   | (1,977     | )
|Additional paid-in capital                                                                                                         |  |                                          | 501,009    |   |                   |   | 342,859    |  
|Retained earnings                                                                                                                  |  |                                          | 252,188    |   |                   |   | 193,372    |  
|Deferred compensation                                                                                                              |  |                                          | 1,801      |   |                   |   | 1,695      |  
|Accumulated other comprehensive loss, net of tax                                                                                   |  |                                          | (34,004    | ) |                   |   | (22,899    | )
|                                                                                                                                   |  |                                          |            |   |                   |   |            |  
|Total stockholders equity                                                                                                         |  |                                          | 713,394    |   |                   |   | 507,616    |  
|                                                                                                                                   |  |                                          |            |   |                   |   |            |  
|Total liabilities and stockholders equity                                                                                         |  | $                                        | 12,877,044 |   |                   | $ | 10,667,705 |  
|                                                                                                                                   |  |                                          |            |   |                   |   |            |  



See accompanying
condensed notes to consolidated financial statements



3



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONSOLIDATED STATEMENTS OF INCOME



|                                                                                 |  |                                                         |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|-------------------------------------------------------------------------------- |  | ------------------------------------------------------- | ------- | - | ---------------------------------- | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                                                                 |  | For the Three Months Ended June 30,                     |         |   | For the Nine Months Ended June 30, |  
|                                                                                 |  | 2006                                                    |         |   | 2005                               |   |         | 2006 |  |   | 2005    |  
|                                                                                 |  | (Dollars and shares in thousands,except per share data) |        
|Interest income:                                                                 |  |                                                         |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Interest and fees on loans                                                       |  | $                                                       | 168,144 |   |                                    | $ | 88,637  |      |  | $ | 430,632 |   |  | $ | 238,491 |  
|Interest on mortgage-backed securities                                           |  |                                                         | 15,119  |   |                                    |   | 15,341  |      |  |   | 48,042  |   |  |   | 50,461  |  
|Interest and dividends on other investments and other interest-earning assets    |  |                                                         | 7,082   |   |                                    |   | 5,696   |      |  |   | 19,590  |   |  |   | 16,525  |  
|                                                                                 |  |                                                         |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Total interest income                                                            |  |                                                         | 190,345 |   |                                    |   | 109,674 |      |  |   | 498,264 |   |  |   | 305,477 |  
|                                                                                 |  |                                                         |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Interest expense:                                                                |  |                                                         |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Interest on deposits                                                             |  |                                                         | 54,246  |   |                                    |   | 26,160  |      |  |   | 138,150 |   |  |   | 67,157  |  
|Interest on borrowings                                                           |  |                                                         | 65,308  |   |                                    |   | 41,522  |      |  |   | 170,682 |   |  |   | 112,137 |  
|Interest on subordinated debentures and preferred dividends of subsidiary trusts |  |                                                         | 3,996   |   |                                    |   | 3,395   |      |  |   | 11,571  |   |  |   | 9,325   |  
|                                                                                 |  |                                                         |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Total interest expense                                                           |  |                                                         | 123,550 |   |                                    |   | 71,077  |      |  |   | 320,403 |   |  |   | 188,619 |  
|                                                                                 |  |                                                         |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Net interest income before provision for loan losses                             |  |                                                         | 66,795  |   |                                    |   | 38,597  |      |  |   | 177,861 |   |  |   | 116,858 |  
|Provision for loan losses                                                        |  |                                                         | 1,200   |   |                                    |   | 800     |      |  |   | 5,800   |   |  |   | 3,000   |  
|                                                                                 |  |                                                         |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Net interest income after provision for loan losses                              |  |                                                         | 65,595  |   |                                    |   | 37,797  |      |  |   | 172,061 |   |  |   | 113,858 |  
|                                                                                 |  |                                                         |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Non-interest income:                                                             |  |                                                         |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Loan servicing fees                                                              |  |                                                         | 2,066   |   |                                    |   | 797     |      |  |   | 5,224   |   |  |   | 2,504   |  
|Amortization of mortgage servicing rights                                        |  |                                                         | (1,083  | ) |                                    |   | (937    | )    |  |   | (2,810  | ) |  |   | (2,518  | )
|Impairment of mortgage servicing rights                                          |  |                                                         | (540    | ) |                                    |   | (130    | )    |  |   | (870    | ) |  |   | (130    | )
|Loan fees                                                                        |  |                                                         | 838     |   |                                    |   | 592     |      |  |   | 2,501   |   |  |   | 1,735   |  
|Deposit fees                                                                     |  |                                                         | 1,375   |   |                                    |   | 1,066   |      |  |   | 4,030   |   |  |   | 3,182   |  
|Other fees                                                                       |  |                                                         | 795     |   |                                    |   | 572     |      |  |   | 2,142   |   |  |   | 1,607   |  
|Net gain on sale of investments and mortgages-backed securities                  |  |                                                         |        |   |                                    |   | 1,025   |      |  |   |        |   |  |   | 3,514   |  
|Net gain (loss) on sale of loans and other assets                                |  |                                                         | 4,973   |   |                                    |   | (96     | )    |  |   | 8,735   |   |  |   | 1,983   |  
|Insurance and investment services income                                         |  |                                                         | 921     |   |                                    |   | 970     |      |  |   | 3,128   |   |  |   | 3,185   |  
|Loss on swaps                                                                    |  |                                                         | (551    | ) |                                    |   | (1,369  | )    |  |   | (1,465  | ) |  |   | (1,369  | )
|Other                                                                            |  |                                                         | 1,700   |   |                                    |   | 1,385   |      |  |   | 4,964   |   |  |   | 3,789   |  
|                                                                                 |  |                                                         |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Total non-interest income                                                        |  |                                                         | 10,494  |   |                                    |   | 3,875   |      |  |   | 25,579  |   |  |   | 17,482  |  
|                                                                                 |  |                                                         |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Non-interest expenses:                                                           |  |                                                         |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Employee compensation and benefits                                               |  |                                                         | 20,511  |   |                                    |   | 13,231  |      |  |   | 55,083  |   |  |   | 37,270  |  
|Occupancy and equipment                                                          |  |                                                         | 8,012   |   |                                    |   | 7,214   |      |  |   | 22,310  |   |  |   | 17,606  |  
|Telecommunications and data processing                                           |  |                                                         | 2,707   |   |                                    |   | 1,886   |      |  |   | 7,168   |   |  |   | 5,032   |  
|Advertising and promotion expense                                                |  |                                                         | 2,019   |   |                                    |   | 1,434   |      |  |   | 5,081   |   |  |   | 4,253   |  
|Professional fees                                                                |  |                                                         | 1,733   |   |                                    |   | 1,848   |      |  |   | 4,646   |   |  |   | 3,417   |  
|Debt extinguishment                                                              |  |                                                         |        |   |                                    |   | 36,548  |      |  |   |        |   |  |   | 36,548  |  
|Other                                                                            |  |                                                         | 5,213   |   |                                    |   | 3,161   |      |  |   | 13,712  |   |  |   | 9,553   |  
|                                                                                 |  |                                                         |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Total non-interest expenses                                                      |  |                                                         | 40,195  |   |                                    |   | 65,322  |      |  |   | 108,000 |   |  |   | 113,679 |  
|                                                                                 |  |                                                         |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Income (loss) before income taxes                                                |  |                                                         | 35,894  |   |                                    |   | (23,650 | )    |  |   | 89,640  |   |  |   | 17,661  |  
|Provision (benefit) for income taxes                                             |  |                                                         | 12,069  |   |                                    |   | (8,841  | )    |  |   | 29,953  |   |  |   | 4,389   |  
|                                                                                 |  |                                                         |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Net income (loss)                                                                |  | $                                                       | 23,825  |   |                                    | $ | (14,809 | )    |  | $ | 59,687  |   |  | $ | 13,272  |  
|                                                                                 |  |                                                         |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Earnings Per Share:                                                              |  |                                                         |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Basic                                                                            |  | $                                                       | 0.65    |   |                                    | $ | (.50    | )    |  | $ | 1.77    |   |  | $ | 0.43    |  
|                                                                                 |  |                                                         |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Diluted                                                                          |  | $                                                       | 0.62    |   |                                    | $ | (.50    | )    |  | $ | 1.66    |   |  | $ | 0.41    |  
|                                                                                 |  |                                                         |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|                                                                                 |  |                                                         |         |  
|Dividend declared per share                                                      |  | $                                                       | 0.005   |   |                                    | $ | 0.005   |      |  | $ | 0.015   |   |  | $ | 0.01    |  
|Weighted average number of common shares outstanding:                            |  |                                                         |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Basic                                                                            |  |                                                         | 36,212  |   |                                    |   | 30,134  |      |  |   | 33,596  |   |  |   | 30,062  |  
|Diluted                                                                          |  |                                                         | 38,629  |   |                                    |   | 30,134  |      |  |   | 35,879  |   |  |   | 32,366  |  



See accompanying
condensed notes to consolidated financial statements



4



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY



|                                                           |  |                                                  |    |             |   |                           |  |                  |         |  |               |         |   |                      |   |                                               |   |  |                          |       |  |   |         |   |  |   |         |  
|---------------------------------------------------------- |  | ------------------------------------------------ | -- | ----------- | - | ------------------------- |  | ---------------- | ------- |  | ------------- | ------- | - | -------------------- | - | --------------------------------------------- | - |  | ------------------------ | ----- |  | - | ------- | - |  | - | ------- | -
|                                                           |  | For the Nine Months Ended June 30, 2006 and 2005 |   
|                                                           |  | PreferredStock                                   |    | CommonStock |   | Additional Paid-inCapital |  | RetainedEarnings |         |  | TreasuryStock |         |   | DeferredCompensation |   | AccumulatedOtherComprehensiveLoss, Net of Tax |   |  | TotalStockholdersEquity |      
|                                                           |  | (In thousands)                                   |   
|Balance at September 30, 2005                              |  | $                                                | 9  |             | $ | 308                       |  | $                | 342,859 |  | $             | 193,372 |   |                      | $ | (7,728                                        | ) |  | $                        | 1,695 |  | $ | (22,899 | ) |  | $ | 507,616 |  
|Comprehensive income:                                      |  |                                                  |    |             |   |                           |  |                  |         |  |               |         |   |                      |   |                                               |   |  |                          |       |  |   |         |   |  |   |         |  
|Net income for the Nine months ended June 30, 2006         |  |                                                  |   |             |   |                          |  |                  |        |  |               | 59,687  |   |                      |   |                                              |   |  |                          |      |  |   |        |   |  |   | 59,687  |  
|Other comprehensive loss, net of tax                       |  |                                                  |   |             |   |                          |  |                  |        |  |               |        |   |                      |   |                                              |   |  |                          |      |  |   | (11,105 | ) |  |   | (11,105 | )
|                                                           |  |                                                  |    |             |   |                           |  |                  |         |  |               |         |   |                      |   |                                               |   |  |                          |       |  |   |         |   |  |   |         |  
|Total comprehensive income                                 |  |                                                  |   |             |   |                          |  |                  |        |  |               |        |   |                      |   |                                              |   |  |                          |      |  |   |        |   |  |   | 48,582  |  
|Payment of dividends                                       |  |                                                  |   |             |   |                          |  |                  |        |  |               | (871    | ) |                      |   |                                              |   |  |                          |      |  |   |        |   |  |   | (871    | )
|Stock offering                                             |  |                                                  |   |             |   | 58                        |  |                  | 150,226 |  |               |        |   |                      |   |                                              |   |  |                          |      |  |   |        |   |  |   | 150,284 |  
|Shares acquired through deferred compensation arrangements |  |                                                  |   |             |   |                          |  |                  |        |  |               |        |   |                      |   | (255                                          | ) |  |                          |      |  |   |        |   |  |   | (255    | )
|Deferral of compensation                                   |  |                                                  |   |             |   |                          |  |                  |        |  |               |        |   |                      |   |                                              |   |  |                          | 106   |  |   |        |   |  |   | 106     |  
|Stock option exercises and restricted stock awards         |  |                                                  | 1  |             |   | 7                         |  |                  | 7,924   |  |               |        |   |                      |   |                                              |   |  |                          |      |  |   |        |   |  |   | 7,932   |  
|                                                           |  |                                                  |    |             |   |                           |  |                  |         |  |               |         |   |                      |   |                                               |   |  |                          |       |  |   |         |   |  |   |         |  
|Balance at June 30, 2006                                   |  | $                                                | 10 |             | $ | 373                       |  | $                | 501,009 |  | $             | 252,188 |   |                      | $ | (7,983                                        | ) |  | $                        | 1,801 |  | $ | (34,004 | ) |  | $ | 713,394 |  
|                                                           |  |                                                  |    |             |   |                           |  |                  |         |  |               |         |   |                      |   |                                               |   |  |                          |       |  |   |         |   |  |   |         |  
|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 Nine months ended June 30, 2005         |  |                                                  |   |             |   |                          |  |                  |        |  |               | 13,272  |   |                      |   |                                              |   |  |                          |      |  |   |        |   |  |   | 13,272  |  
|Other comprehensive loss, net of tax                       |  |                                                  |   |             |   |                          |  |                  |        |  |               |        |   |                      |   |                                              |   |  |                          |      |  |   | (8,923  | ) |  |   | (8,923  | )
|                                                           |  |                                                  |    |             |   |                           |  |                  |         |  |               |         |   |                      |   |                                               |   |  |                          |       |  |   |         |   |  |   |         |  
|Total comprehensive income                                 |  |                                                  |   |             |   |                          |  |                  |        |  |               |        |   |                      |   |                                              |   |  |                          |      |  |   |        |   |  |   | 4,349   |  
|Payment of dividends                                       |  |                                                  |   |             |   |                          |  |                  |        |  |               | (617    | ) |                      |   |                                              |   |  |                          |      |  |   |        |   |  |   | (617    | )
|Purchase of stock                                          |  |                                                  |   |             |   |                          |  |                  |        |  |               |        |   |                      |   | (334                                          | ) |  |                          |      |  |   |        |   |  |   | (334    | )
|Deferral of compensation                                   |  |                                                  |   |             |   |                          |  |                  |        |  |               |        |   |                      |   |                                              |   |  |                          | 261   |  |   |        |   |  |   | 261     |  
|Shares acquired through deferred compensation arrangements |  |                                                  |   |             |   |                          |  |                  |        |  |               |        |   |                      |   | (490                                          | ) |  |                          |      |  |   |        |   |  |   | (490    | )
|Stock option exercises and restricted stock awards         |  |                                                  | 1  |             |   | 3                         |  |                  | 3,833   |  |               |        |   |                      |   |                                              |   |  |                          |      |  |   |        |   |  |   | 3,837   |  
|                                                           |  |                                                  |    |             |   |                           |  |                  |         |  |               |         |   |                      |   |                                               |   |  |                          |       |  |   |         |   |  |   |         |  
|Balance at June 30, 2005                                   |  | $                                                | 9  |             | $ | 308                       |  | $                | 340,091 |  | $             | 179,368 |   |                      | $ | (5,371                                        | ) |  | $                        | 1,477 |  | $ | (16,219 | ) |  | $ | 499,663 |  
|                                                           |  |                                                  |    |             |   |                           |  |                  |         |  |               |         |   |                      |   |                                               |   |  |                          |       |  |   |         |   |  |   |         |  



See accompanying
condensed notes to consolidated financial statements



5



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



|                                                                                                |  |                                   |            |   |      |   |            |  
|----------------------------------------------------------------------------------------------- |  | --------------------------------- | ---------- | - | ---- | - | ---------- | -
|                                                                                                |  | For the Nine Months EndedJune 30, |           
|                                                                                                |  | 2006                              |            |   | 2005 |  
|                                                                                                |  | (In thousands)                    |           
|Cash flows provided by (used) in operating activities                                           |  | $                                 | (53,945    | ) |      | $ | (85,938    | )
|                                                                                                |  |                                   |            |   |      |   |            |  
|Cash flows from investing activities:                                                           |  |                                   |            |   |      |   |            |  
|Net increase in loans held in portfolio                                                         |  |                                   | (2,576,764 | ) |      |   | (1,827,051 | )
|Purchase of investment securities available for sale                                            |  |                                   | (31,863    | ) |      |   | (69,426    | )
|Purchase of other earning assets                                                                |  |                                   | (154,309   | ) |      |   | (83,772    | )
|Purchase of office properties and equipment                                                     |  |                                   | (13,857    | ) |      |   | (14,724    | )
|Purchase of bank-owned life insurance                                                           |  |                                   |           |   |      |   | (20,000    | )
|Proceeds from repayments of investment securities available for sale                            |  |                                   | 20,635     |   |      |   | 275        |  
|Proceeds from repayments of mortgage-backed securities available for sale                       |  |                                   | 309,426    |   |      |   | 471,140    |  
|Proceeds from repayments of other earning assets                                                |  |                                   | 104,160    |   |      |   | 64,295     |  
|Proceeds from sale of investment securities available for sale                                  |  |                                   | 3,780      |   |      |   | 96,292     |  
|Proceeds from sale of mortgage-backed securities available for sale                             |  |                                   | 132,573    |   |      |   | 162,930    |  
|Proceeds from sale of real estate owned and other assets                                        |  |                                   | 970        |   |      |   | 4,607      |  
|Proceeds from sale of office properties and equipment                                           |  |                                   | 29         |   |      |   | 19         |  
|                                                                                                |  |                                   |            |   |      |   |            |  
|Net cash used in investing activities                                                           |  |                                   | (2,205,220 | ) |      |   | (1,215,415 | )
|                                                                                                |  |                                   |            |   |      |   |            |  
|Cash flows from financing activities:                                                           |  |                                   |            |   |      |   |            |  
|Net increase in deposits                                                                        |  |                                   | 1,121,684  |   |      |   | 694,723    |  
|Additions to long-term Federal Home Loan Bank advances                                          |  |                                   | 2,685,250  |   |      |   | 875,100    |  
|Repayments of long-term Federal Home Loan Bank advances                                         |  |                                   | (1,316,285 | ) |      |   | (505,000   | )
|Net (decrease) increase in short-term Federal Home Loan Bank advances                           |  |                                   | (355,000   | ) |      |   | 15,967     |  
|Net (decrease) increase in other borrowings                                                     |  |                                   | (150,286   | ) |      |   | 115,605    |  
|Net proceeds from issuance of subordinated debentures                                           |  |                                   |           |   |      |   | 30,928     |  
|Net proceeds from issuance of stock                                                             |  |                                   | 154,013    |   |      |   | 1,495      |  
|Purchase of stock                                                                               |  |                                   |           |   |      |   | (334       | )
|Dividends paid on common stock                                                                  |  |                                   | (516       | ) |      |   | (298       | )
|Dividends paid on preferred stock                                                               |  |                                   | (355       | ) |      |   | (319       | )
|Decrease in advances from borrowers for taxes and insurance                                     |  |                                   | (6,203     | ) |      |   | (796       | )
|                                                                                                |  |                                   |            |   |      |   |            |  
|Net cash provided by financing activities                                                       |  |                                   | 2,132,302  |   |      |   | 1,227,071  |  
|                                                                                                |  |                                   |            |   |      |   |            |  
|Decrease in cash and cash equivalents                                                           |  |                                   | (126,863   | ) |      |   | (74,280    | )
|Cash and cash equivalents at beginning of period                                                |  |                                   | 238,051    |   |      |   | 181,894    |  
|                                                                                                |  |                                   |            |   |      |   |            |  
|Cash and cash equivalents at end of period                                                      |  | $                                 | 111,188    |   |      | $ | 107,614    |  
|                                                                                                |  |                                   |            |   |      |   |            |  
|Supplemental disclosure of non-cash activities:                                                 |  |                                   |            |   |      |   |            |  
|Exchange of loans for mortgage-backed securities in loan sales transactions with FNMA and FHLMC |  | $                                 | 131,414    |   |      | $ | 110,344    |  
|Securities sold pending settlement                                                              |  | $                                 |           |   |      | $ | 42,647     |  



See accompanying
condensed notes to consolidated financial statements



6



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



1.    Principles of Consolidation and Basis of Presentation



The accompanying unaudited consolidated financial statements include the accounts of BankUnited Financial Corporation (BankUnited) and its
consolidated subsidiaries, including BankUnited, FSB (the Bank). All significant inter-company 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. All adjustments (consisting of normal recurring accruals), which, in the opinion of management, are necessary for a fair presentation of the financial statements, have been included.
Operating results for the three and nine-month periods ended June 30, 2006 are not necessarily indicative of the results that may be expected for the year ending September 30, 2006. These condensed notes should be read in conjunction with
the Consolidated Financial Statements and Notes thereto included in BankUniteds Annual Report on Form 10-K and Form 10-K/A for the fiscal year ended September 30, 2005.



Certain prior period amounts have been reclassified to conform to the June 30, 2006 consolidated financial statements
presentation.



2.    Impact of Certain Accounting
Pronouncements



SFAS No. 123R



In March 2004, the FASB issued a statement to revise Statement of Financial
Accounting Standards (SFAS) No. 123 and SFAS No. 95, Share-Based Payment, that addresses the accounting for share-based payment transactions in which an enterprise receives employee services in exchange for
(a) equity instruments of the enterprise or (b) liabilities that are based on the fair value of the enterprises equity instruments or that may be settled by the issuance of such equity instruments. The Statement eliminates the
ability to account for share-based compensation transactions using APB Opinion No. 25, Accounting for Stock Issued to Employees, and requires instead that such transactions be accounted for using a fair-value-based method. The
Securities and Exchange Commission required companies to implement SFAS No. 123R by the beginning of the next fiscal year that began on or after June 15, 2005. On October 1, 2005, BankUnited implemented SFAS No. 123R using the
modified prospective method of transition. See Note 9, Stock Based Compensation, for more information about BankUniteds stock-based compensation programs.



SFAS No. 154



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



SFAS No. 155



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



7



---

BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONTINUED



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



SFAS No. 155 addresses the following:



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



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



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



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



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



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



Management does not expect this statement to have a material effect on BankUnited Financial Statements.



SFAS No. 156



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



Management does not expect this statement to have a material effect on BankUnited Financial Statements.



FIN No. 48



In June 2006, the FASB issued FASB Interpretation No. 48 (FIN No. 48), an interpretation of FASB Statement
No.109 Accounting for Income Taxes.



This
interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This interpretation also provides guidance on
de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.



FIN No 48 shall be effective for fiscal years beginning after December 15, 2006. Therefore, BankUnited will adopt this statement, as applicable, in
its fiscal year beginning October 1, 2007.



8



---

BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONTINUED



Management does not expect this interpretation to have a material effect on BankUnited Financial
Statements.



3.    Investments and Mortgage-backed
Securities Available for Sale



Investment Securities Available for Sale



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



|                                                          |  |                |         |                      |   |                       |  |   |            |   |  |   |        
|--------------------------------------------------------- |  | -------------- | ------- | -------------------- | - | --------------------- |  | - | ---------- | - |  | - | -------
|                                                          |  | June 30, 2006 
|                                                          |  | AmortizedCost  |         | GrossUnrealizedGains |   | GrossUnrealizedLosses |  |   | Fair Value
|                                                          |  | (In thousands)
|U.S. government sponsored entity debt securities (1)      |  | $              | 72,601  |                      | $ |                      |  | $ | (1,192     | ) |  | $ | 71,409 
|Preferred stock of U.S. government sponsored entities (1) |  |                | 96,083  |                      |   | 30                    |  |   | (8,375     | ) |  |   | 87,738 
|Trust preferred securities of other issuers               |  |                | 23,072  |                      |   | 381                   |  |   | (67        | ) |  |   | 23,386 
|Mutual funds and other bonds (2)                          |  |                | 114,564 |                      |   | 12                    |  |   | (5,690     | ) |  |   | 108,886
|Other equity securities                                   |  |                | 3,097   |                      |   | 136                   |  |   |           |   |  |   | 3,233  
|                                                          |  |                |         |                      |   |                       |  |   |            |   |  |   |        
|Total                                                     |  | $              | 309,417 |                      | $ | 559                   |  | $ | (15,324    | ) |  | $ | 294,652
|                                                          |  |                |         |                      |   |                       |  |   |            |   |  |   |        



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

---

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

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



Investment securities available for sale as of June 30, 2006 by contractual maturity are shown below.



|                                       |  |                |         |            |   |        
|-------------------------------------- |  | -------------- | ------- | ---------- | - | -------
|                                       |  | June 30, 2006 
|                                       |  | AmortizedCost  |         | Fair Value
|                                       |  | (In thousands)
|Due in one year or less                |  | $              | 55,141  |            | $ | 54,574 
|Due after one year through five years  |  |                | 30,812  |            |   | 30,086 
|Due after five years through ten years |  |                | 972     |            |   | 954    
|Due after ten years                    |  |                | 53,385  |            |   | 52,592 
|Mutual funds and equity securities     |  |                | 169,107 |            |   | 156,446
|                                       |  |                |         |            |   |        
|Total                                  |  | $              | 309,417 |            | $ | 294,652
|                                       |  |                |         |            |   |        



9



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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.



|                                    |  |                |           |                      |   |                       |  |   |            |   |  |   |          
|----------------------------------- |  | -------------- | --------- | -------------------- | - | --------------------- |  | - | ---------- | - |  | - | ---------
|                                    |  | June 30, 2006 
|                                    |  | AmortizedCost  |           | GrossUnrealizedGains |   | GrossUnrealizedLosses |  |   | Fair Value
|                                    |  | (In thousands)
|FNMA mortgage-backed securities     |  | $              | 224,151   |                      | $ | 39                    |  | $ | (11,241    | ) |  | $ | 212,949  
|FHLMC mortgage-backed securities    |  |                | 66,892    |                      |   | 55                    |  |   | (2,289     | ) |  |   | 64,658   
|Collateralized mortgage obligations |  |                | 7,377     |                      |   | 886                   |  |   | (28        | ) |  |   | 8,235    
|Mortgage pass-through certificates  |  |                | 1,041,426 |                      |   | 41                    |  |   | (25,473    | ) |  |   | 1,015,994
|                                    |  |                |           |                      |   |                       |  |   |            |   |  |   |          
|Total(1)                            |  | $              | 1,339,846 |                      | $ | 1,021                 |  | $ | (39,031    | ) |  | $ | 1,301,836
|                                    |  |                |           |                      |   |                       |  |   |            |   |  |   |          



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

---

|(1) | Included in BankUniteds portfolio of mortgage-backed securities as of June 30, 2006 and September 30, 2005, were securities with a fair value of $248 million and
$279 million, respectively, retained from BankUniteds mortgage loans securitization.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Mortgage-backed securities available for sale as of June 30, 2006, by contractual maturity and adjusted for anticipated prepayments, are shown below.



|                                       |  |                |           |            |   |          
|-------------------------------------- |  | -------------- | --------- | ---------- | - | ---------
|                                       |  | June 30, 2006 
|                                       |  | Amortized Cost |           | Fair Value
|                                       |  | (In thousands)
|Due in one year or less                |  | $              | 400,544   |            | $ | 388,315  
|Due after one year through five years  |  |                | 853,364   |            |   | 829,941  
|Due after five years through ten years |  |                | 67,299    |            |   | 65,452   
|Due after ten years                    |  |                | 18,639    |            |   | 18,128   
|                                       |  |                |           |            |   |          
|Total                                  |  | $              | 1,339,846 |            | $ | 1,301,836
|                                       |  |                |           |            |   |          



Based on the internal
model used by BankUnited, estimated average duration of the mortgage-backed securities portfolio as of June 30, 2006 was 1.74 years. This duration extends to 2.17 years in a hypothetical scenario that immediately adds 100 basis points to market
interest rates. The model used by BankUnited is based on assumptions that may differ from the eventual outcome.



10



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONTINUED



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



|                                                          |  |                          |         |                      |                      |        |            |       |                       |           |  |            |         |                       |  |   |           |  |   |         |  
|--------------------------------------------------------- |  | ------------------------ | ------- | -------------------- | -------------------- | ------ | ---------- | ----- | --------------------- | --------- |  | ---------- | ------- | --------------------- |  | - | --------- |  | - | ------- | -
|                                                          |  | As of June 30, 2006      |         |                      |                      |        |            |      
|                                                          |  | Less than 12 Months      |         |                      | 12 Months or Greater |        |            | Total |                      
|                                                          |  | Fair Value               |         | UnrealizedLosses (1) |                      |        | Fair Value |       | Unrealized Losses (1) |           |  | Fair Value |         | Unrealized Losses (1) | 
|                                                          |  | (In thousands)           |        
|Available for sale securities                             |  |                          |         |                      |                      |        |            |       |                       |           |  |            |         |                       |  |   |           |  |   |         |  
|Investment securities:                                    |  |                          |         |                      |                      |        |            |       |                       |           |  |            |         |                       |  |   |           |  |   |         |  
|Trust preferred securities of other issuers               |  | $                        | 1,995   |                      | $                    | (5     | )          |       | $                     | 1,938     |  | $          | (62     | )                     |  | $ | 3,933     |  | $ | (67     | )
|U.S. government sponsored entity debt securities (2)      |  |                          |        |                      |                      |       |            |       |                       | 71,409    |  |            | (1,192  | )                     |  |   | 71,409    |  |   | (1,192  | )
|Preferred stock of U.S. government sponsored entities (2) |  |                          | 28,743  |                      |                      | (1,255 | )          |       |                       | 43,966    |  |            | (7,120  | )                     |  |   | 72,709    |  |   | (8,375  | )
|Mutual funds and other bonds (3)                          |  |                          | 13,948  |                      |                      | (501   | )          |       |                       | 79,404    |  |            | (5,189  | )                     |  |   | 93,352    |  |   | (5,690  | )
|                                                          |  |                          |         |                      |                      |        |            |       |                       |           |  |            |         |                       |  |   |           |  |   |         |  
|Total investment securities                               |  | $                        | 44,686  |                      | $                    | (1,761 | )          |       | $                     | 196,717   |  | $          | (13,563 | )                     |  | $ | 241,403   |  | $ | (15,324 | )
|                                                          |  |                          |         |                      |                      |        |            |       |                       |           |  |            |         |                       |  |   |           |  |   |         |  
|Mortgage-backed securities:                               |  |                          |         |                      |                      |        |            |       |                       |           |  |            |         |                       |  |   |           |  |   |         |  
|FNMA mortgage-backed securities                           |  | $                        | 2,767   |                      | $                    | (10    | )          |       | $                     | 206,412   |  | $          | (11,231 | )                     |  | $ | 209,179   |  | $ | (11,241 | )
|FHLMC mortgage-backed securities                          |  |                          |        |                      |                      |       |            |       |                       | 62,050    |  |            | (2,289  | )                     |  |   | 62,050    |  |   | (2,289  | )
|Collateralized mortgage obligations                       |  |                          |        |                      |                      |       |            |       |                       | 1,493     |  |            | (28     | )                     |  |   | 1,493     |  |   | (28     | )
|Mortgage pass-through certificates                        |  |                          | 94,198  |                      |                      | (2,112 | )          |       |                       | 913,160   |  |            | (23,361 | )                     |  |   | 1,007,358 |  |   | (25,473 | )
|                                                          |  |                          |         |                      |                      |        |            |       |                       |           |  |            |         |                       |  |   |           |  |   |         |  
|Total mortgage-backed securities                          |  | $                        | 96,965  |                      | $                    | (2,122 | )          |       | $                     | 1,183,115 |  | $          | (36,909 | )                     |  | $ | 1,280,080 |  | $ | (39,031 | )
|                                                          |  |                          |         |                      |                      |        |            |       |                       |           |  |            |         |                       |  |   |           |  |   |         |  
|                                                          |  |                          |        
|                                                          |  | As of September 30, 2005 |         |                      |                      |        |            |      
|                                                          |  | Less than 12 Months      |         |                      | 12 Months or Greater |        |            | Total |                      
|                                                          |  | Fair Value               |         | UnrealizedLosses (1) |                      |        | Fair Value |       | Unrealized Losses (1) |           |  | Fair Value |         | Unrealized Losses (1) | 
|                                                          |  | (In thousands)           |        
|Available for sale securities                             |  |                          |         |                      |                      |        |            |       |                       |           |  |            |         |                       |  |   |           |  |   |         |  
|Investment securities:                                    |  |                          |         |                      |                      |        |            |       |                       |           |  |            |         |                       |  |   |           |  |   |         |  
|Trust preferred securities of other issuers               |  | $                        |        |                      | $                    |       |            |       | $                     | 1,929     |  | $          | (72     | )                     |  | $ | 1,929     |  | $ | (72     | )
|U.S. government sponsored entity debt securities (2)      |  |                          | 71,434  |                      |                      | (1,203 | )          |       |                       |          |  |            |        |                       |  |   | 71,434    |  |   | (1,203  | )
|Preferred stock of U.S. government sponsored entities (2) |  |                          | 56,816  |                      |                      | (3,172 | )          |       |                       | 29,821    |  |            | (1,351  | )                     |  |   | 86,637    |  |   | (4,523  | )
|Mutual funds and other bonds (3)                          |  |                          | 8,000   |                      |                      | (30    | )          |       |                       | 80,193    |  |            | (3,195  | )                     |  |   | 88,193    |  |   | (3,225  | )
|                                                          |  |                          |         |                      |                      |        |            |       |                       |           |  |            |         |                       |  |   |           |  |   |         |  
|Total investment securities                               |  | $                        | 136,250 |                      | $                    | (4,405 | )          |       | $                     | 111,943   |  | $          | (4,618  | )                     |  | $ | 248,193   |  | $ | (9,023  | )
|                                                          |  |                          |         |                      |                      |        |            |       |                       |           |  |            |         |                       |  |   |           |  |   |         |  
|Mortgage-backed securities:                               |  |                          |         |                      |                      |        |            |       |                       |           |  |            |         |                       |  |   |           |  |   |         |  
|FNMA mortgage-backed securities                           |  | $                        | 35,627  |                      | $                    | (666   | )          |       | $                     | 214,523   |  | $          | (6,958  | )                     |  | $ | 250,150   |  | $ | (7,624  | )
|FHLMC mortgage-backed securities                          |  |                          | 1,268   |                      |                      | (8     | )          |       |                       | 74,379    |  |            | (1,240  | )                     |  |   | 75,647    |  |   | (1,248  | )
|Collateralized mortgage obligations                       |  |                          |        |                      |                      |       |            |       |                       | 2,047     |  |            | (29     | )                     |  |   | 2,047     |  |   | (29     | )
|Mortgage pass-through certificates                        |  |                          | 580,892 |                      |                      | (4,666 | )          |       |                       | 647,519   |  |            | (15,394 | )                     |  |   | 1,228,411 |  |   | (20,060 | )
|                                                          |  |                          |         |                      |                      |        |            |       |                       |           |  |            |         |                       |  |   |           |  |   |         |  
|Total mortgage-backed securities                          |  | $                        | 617,787 |                      | $                    | (5,340 | )          |       | $                     | 938,468   |  | $          | (23,621 | )                     |  | $ | 1,556,255 |  | $ | (28,961 | )
|                                                          |  |                          |         |                      |                      |        |            |       |                       |           |  |            |         |                       |  |   |           |  |   |         |  

---

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

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

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



11



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONTINUED



4.    Loans Receivable



Loans receivable consist of the following:



|                                                    |  |                        |            |   |                         |       |   |        |   |           |                 |  |       |  
|--------------------------------------------------- |  | ---------------------- | ---------- | - | ----------------------- | ----- | - | ------ | - | --------- | --------------- |  | ----- | -
|                                                    |  | As of June 30,2006     |            |   | As of September 30,2005 |      
|                                                    |  | Amount                 |            |   | Percent ofTotal         |       |   | Amount |   |           | Percent ofTotal | 
|                                                    |  | (Dollars in thousands) |           
|Real estate loans:                                  |  |                        |            |   |                         |       |   |        |   |           |                 |  |       |  
|One-to-four family residential:                     |  |                        |            |   |                         |       |   |        |   |           |                 |  |       |  
|Residential mortgages                               |  | $                      | 8,188,069  |   |                         | 77.8  | % |        | $ | 5,999,713 |                 |  | 74.7  | %
|Specialty consumer mortgages                        |  |                        | 692,069    |   |                         | 6.6   |   |        |   | 678,609   |                 |  | 8.5   |  
|                                                    |  |                        |            |   |                         |       |   |        |   |           |                 |  |       |  
|Total one-to-four family residential                |  |                        | 8,880,138  |   |                         | 84.4  |   |        |   | 6,678,322 |                 |  | 83.2  |  
|Home equity loans and lines of credit               |  |                        | 336,080    |   |                         | 3.2   |   |        |   | 257,789   |                 |  | 3.2   |  
|Multi-family                                        |  |                        | 85,180     |   |                         | 0.8   |   |        |   | 111,444   |                 |  | 1.4   |  
|Commercial real estate                              |  |                        | 386,952    |   |                         | 3.7   |   |        |   | 344,503   |                 |  | 4.3   |  
|Construction                                        |  |                        | 153,120    |   |                         | 1.4   |   |        |   | 87,113    |                 |  | 1.1   |  
|Land                                                |  |                        | 325,785    |   |                         | 3.1   |   |        |   | 235,829   |                 |  | 2.9   |  
|                                                    |  |                        |            |   |                         |       |   |        |   |           |                 |  |       |  
|Total real estate loans                             |  |                        | 10,167,255 |   |                         | 96.6  |   |        |   | 7,715,000 |                 |  | 96.1  |  
|                                                    |  |                        |            |   |                         |       |   |        |   |           |                 |  |       |  
|Other loans:                                        |  |                        |            |   |                         |       |   |        |   |           |                 |  |       |  
|Commercial                                          |  |                        | 188,971    |   |                         | 1.8   |   |        |   | 199,344   |                 |  | 2.5   |  
|Consumer                                            |  |                        | 17,732     |   |                         | 0.2   |   |        |   | 19,415    |                 |  | 0.2   |  
|                                                    |  |                        |            |   |                         |       |   |        |   |           |                 |  |       |  
|Total other loans                                   |  |                        | 206,703    |   |                         | 2.0   |   |        |   | 218,759   |                 |  | 2.7   |  
|                                                    |  |                        |            |   |                         |       |   |        |   |           |                 |  |       |  
|Total loans held in portfolio                       |  |                        | 10,373,958 |   |                         | 98.6  |   |        |   | 7,933,759 |                 |  | 98.8  |  
|Unearned discounts, premiums and deferred fees, net |  |                        | 177,236    |   |                         | 1.7   |   |        |   | 119,588   |                 |  | 1.5   |  
|Allowance for loan losses                           |  |                        | (32,349    | ) |                         | (0.3  | ) |        |   | (25,755   | )               |  | (0.3  | )
|                                                    |  |                        |            |   |                         |       |   |        |   |           |                 |  |       |  
|Total loans held in portfolio, net                  |  |                        | 10,518,845 |   |                         | 100.0 | % |        |   | 8,027,592 |                 |  | 100.0 | %
|                                                    |  |                        |            |   |                         |       |   |        |   |           |                 |  |       |  
|Mortgage loans held for sale                        |  |                        | 109,967    |   |                         |       |   |        |   | 12,196    |                 |  |       |  
|                                                    |  |                        |            |   |                         |       |   |        |   |           |                 |  |       |  
|Total loans, net                                    |  | $                      | 10,628,812 |   |                         |       |   |        | $ | 8,039,788 |                 |  |       |  
|                                                    |  |                        |            |   |                         |       |   |        |   |           |                 |  |       |  



Loans with payment
options:



Option ARM loans are adjustable-rate mortgages which
provide borrowers flexible payment options and have the potential for the borrower to make payments which are less than the amount of interest due on the loan. In such a case, interest not collected is deferred and added to the principal balance of
the loan. Negative amortization may therefore occur in the amount by which the principal balance of a loan grows to exceed the original principal balance. Full amortization of the loan over its remaining life is required at the earlier of five years
or when the loan balance reaches a pre-established cap of 115% of the original loan balance. These loans are subject to interest rate caps.



Interest income reported on loans includes deferred interest on option ARM loans where periodic payments do not cover the amount of interest earned
contractually and where the uncollected interest is added to the principal balance of the loans. For the quarter ended June 30, 2006, $20.9 million in deferred interest is included in interest income on loans.



Option ARM loans represented 56.8% and 48.0% of total loans outstanding as of
June 30, 2006 and September 30, 2005, respectively. As of June 30, 2006, option ARM loans with a balance of $4.0 billion,



12



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONTINUED



representing 67% of the option ARM portfolio, had $57.5 million of negative amortization above their original principal balance. As of September 30,
2005, option ARM loans with a balance of $2.0 billion, representing 53% of the option ARM portfolio, had negative amortization of $12.4 million above their original principal balance.



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



|                                                                          |  |                        |           |                  |                          |   |        |   |                  |  |       |  
|------------------------------------------------------------------------- |  | ---------------------- | --------- | ---------------- | ------------------------ | - | ------ | - | ---------------- |  | ----- | -
|                                                                          |  | As of June 30, 2006    |           |                  | As of September 30, 2005 |  
|                                                                          |  | Amount                 |           | Percent of Total |                          |   | Amount |   | Percent of Total | 
|                                                                          |  | (Dollars in thousands) |          
|One-to-four family residential loans:                                     |  |                        |           |                  |                          |   |        |   |                  |  |       |  
|Fixed rate loans                                                          |  | $                      | 1,247,054 |                  | 13.9                     | % |        | $ | 996,455          |  | 14.9  | %
|Adjustable rate loans (ARM):                                              |  |                        |           |                  |                          |   |        |   |                  |  |       |  
|Option ARM                                                                |  |                        | 5,977,742 |                  | 66.5                     |   |        |   | 3,858,726        |  | 57.7  |  
|Non Option ARM                                                            |  |                        | 1,765,309 |                  | 19.6                     |   |        |   | 1,835,337        |  | 27.4  |  
|                                                                          |  |                        |           |                  |                          |   |        |   |                  |  |       |  
|Total ARM loans                                                           |  |                        | 7,743,051 |                  | 86.1                     |   |        |   | 5,694,063        |  | 85.1  |  
|                                                                          |  |                        |           |                  |                          |   |        |   |                  |  |       |  
|Total one-to-four family residential loans, including loans held for sale |  | $                      | 8,990,105 |                  | 100.0                    | % |        | $ | 6,690,518        |  | 100.0 | %
|                                                                          |  |                        |           |                  |                          |   |        |   |                  |  |       |  



5.    Earnings
Per Share



The following tables reconcile basic and
diluted earnings per share for the three and nine months ended June 30, 2006 and 2005.



|                                                   |  |                                                        |        |      |                                   |         |      |  |      |        |  |   |       
|-------------------------------------------------- |  | ------------------------------------------------------ | ------ | ---- | --------------------------------- | ------- | ---- |  | ---- | ------ |  | - | ------
|                                                   |  | For the Three MonthsEnded June 30,                     |        |      | For the Nine MonthsEnded June 30,
|                                                   |  | 2006                                                   |        | 2005 |                                   |         | 2006 |  | 2005
|                                                   |  | (Dollars and sharesin thousands,except per share data)
|Basic earnings per share:                          |  |                                                        |        |      |                                   |         |      |  |      |        |  |   |       
|Numerator:                                         |  |                                                        |        |      |                                   |         |      |  |      |        |  |   |       
|Net income (loss)                                  |  | $                                                      | 23,825 |      | $                                 | (14,809 | )    |  | $    | 59,687 |  | $ | 13,272
|Convertible Preferred stock dividends              |  |                                                        | 118    |      |                                   | 112     |      |  |      | 355    |  |   | 319   
|                                                   |  |                                                        |        |      |                                   |         |      |  |      |        |  |   |       
|Net income (loss) available to common stockholders |  | $                                                      | 23,707 |      | $                                 | (14,921 | )    |  | $    | 59,332 |  | $ | 12,953
|                                                   |  |                                                        |        |      |                                   |         |      |  |      |        |  |   |       
|Denominator:                                       |  |                                                        |        |      |                                   |         |      |  |      |        |  |   |       
|Weighted average common shares outstanding         |  |                                                        | 36,212 |      |                                   | 30,134  |      |  |      | 33,596 |  |   | 30,062
|                                                   |  |                                                        |        |      |                                   |         |      |  |      |        |  |   |       
|Basic earnings per share                           |  | $                                                      | 0.65   |      | $                                 | (0.50   | )    |  | $    | 1.77   |  | $ | 0.43  
|                                                   |  |                                                        |        |      |                                   |         |      |  |      |        |  |   |       



13



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONTINUED



|                                                           |  |                                                        |        |      |                                   |         |      |  |      |        |  |   |       
|---------------------------------------------------------- |  | ------------------------------------------------------ | ------ | ---- | --------------------------------- | ------- | ---- |  | ---- | ------ |  | - | ------
|                                                           |  | For the Three MonthsEnded June 30,                     |        |      | For the Nine MonthsEnded June 30,
|                                                           |  | 2006                                                   |        | 2005 |                                   |         | 2006 |  | 2005
|                                                           |  | (Dollars and sharesin thousands,except per share data)
|Diluted earnings per share: (1)                            |  |                                                        |        |      |                                   |         |      |  |      |        |  |   |       
|Numerator:                                                 |  |                                                        |        |      |                                   |         |      |  |      |        |  |   |       
|Net income (loss) available to common stockholders         |  | $                                                      | 23,707 |      | $                                 | (14,921 | )    |  | $    | 59,332 |  | $ | 12,953
|Plus:                                                      |  |                                                        |        |      |                                   |         |      |  |      |        |  |   |       
|Convertible preferred stock dividends                      |  |                                                        | 118    |      |                                   |        |      |  |      | 355    |  |   | 319   
|                                                           |  |                                                        |        |      |                                   |         |      |  |      |        |  |   |       
|Diluted net income (loss) available to common stockholders |  | $                                                      | 23,825 |      | $                                 | (14,921 | )    |  | $    | 59,687 |  | $ | 13,272
|                                                           |  |                                                        |        |      |                                   |         |      |  |      |        |  |   |       
|Denominator:                                               |  |                                                        |        |      |                                   |         |      |  |      |        |  |   |       
|Weighted average common shares outstanding                 |  |                                                        | 36,212 |      |                                   | 30,134  |      |  |      | 33,596 |  |   | 30,062
|Plus:                                                      |  |                                                        |        |      |                                   |         |      |  |      |        |  |   |       
|Stock options and restricted stock                         |  |                                                        | 1,493  |      |                                   |        |      |  |      | 1,371  |  |   | 1,493 
|Convertible preferred stock                                |  |                                                        | 924    |      |                                   |        |      |  |      | 912    |  |   | 811   
|                                                           |  |                                                        |        |      |                                   |         |      |  |      |        |  |   |       
|Diluted weighted average shares outstanding                |  |                                                        | 38,629 |      |                                   | 30,134  |      |  |      | 35,879 |  |   | 32,366
|                                                           |  |                                                        |        |      |                                   |         |      |  |      |        |  |   |       
|Diluted earnings per share                                 |  | $                                                      | 0.62   |      | $                                 | (0.50   | )    |  | $    | 1.66   |  | $ | 0.41  
|                                                           |  |                                                        |        |      |                                   |         |      |  |      |        |  |   |       

---

|(1) | BankUnited did not consider potential common shares of 24,750, and 167,022, for the three-month periods ended June 30, 2006 and 2005, respectively, and 429,612 and 16,372 for
the nine-month periods ended June 30, 2006 and 2005, respectively, in the computation of diluted earnings per share as they would have been antidilutive.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



6.    Regulatory Capital



The Banks regulatory capital levels as of June 30, 2006 and September 30, 2005 were as follows:



|                                        |  |                        |         |                         |   |        
|--------------------------------------- |  | ---------------------- | ------- | ----------------------- | - | -------
|                                        |  | As of June 30,2006     |         | As of September 30,2005
|                                        |  | (Dollars in thousands)
|Tier 1 Leverage Capital                 |  |                        |         |                         |   |        
|Amount                                  |  | $                      | 917,933 |                         | $ | 756,810
|Actual Ratio                            |  |                        | 7.1%    |                         |   | 7.1%   
|Well-Capitalized Minimum Ratio(1)       |  |                        | 5.0%    |                         |   | 5.0%   
|Adequately Capitalized Minimum Ratio(1) |  |                        | 4.0%    |                         |   | 4.0%   
|                                        |  |                       
|Tier 1 Risk-Based Capital               |  |                        |         |                         |   |        
|Amount                                  |  | $                      | 917,933 |                         | $ | 756,810
|Actual Ratio                            |  |                        | 13.5%   |                         |   | 14.0%  
|Well-Capitalized Minimum Ratio(1)       |  |                        | 6.0%    |                         |   | 6.0%   
|Adequately Capitalized Minimum Ratio(1) |  |                        | 4.0%    |                         |   | 4.0%   
|                                        |  |                       
|Total Risk-Based Capital                |  |                        |         |                         |   |        
|Amount                                  |  | $                      | 937,641 |                         | $ | 774,390
|Actual Ratio                            |  |                        | 14.0%   |                         |   | 14.5%  
|Well-Capitalized Minimum Ratio(1)       |  |                        | 10.0%   |                         |   | 10.0%  
|Adequately Capitalized Minimum Ratio(1) |  |                        | 8.0%    |                         |   | 8.0%   

---

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



14



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONTINUED



7.    Comprehensive Income



BankUniteds comprehensive income (loss) includes all items that comprise net income (loss), plus other comprehensive
income (loss) . For the three and the nine months ended June 30, 2006 and 2005 BankUniteds comprehensive income (loss) was as follows:



|                                                                                                                                                                                                                                                                              |  |                                     |        |   |                                    |   |         |      |  |   |         |   |  |   |        |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------- | ------ | - | ---------------------------------- | - | ------- | ---- |  | - | ------- | - |  | - | ------ | -
|                                                                                                                                                                                                                                                                              |  | For the Three Months Ended June 30, |        |   | For the Nine Months Ended June 30, |  
|                                                                                                                                                                                                                                                                              |  | 2006                                |        |   | 2005                               |   |         | 2006 |  |   | 2005    |  
|                                                                                                                                                                                                                                                                              |  | (In thousands)                      |       
|Net income (loss)                                                                                                                                                                                                                                                             |  | $                                   | 23,825 |   |                                    | $ | (14,809 | )    |  | $ | 59,687  |   |  | $ | 13,272 |  
|Other comprehensive (loss) income, net of tax:                                                                                                                                                                                                                                |  |                                     |        |   |                                    |   |         |      |  |   |         |   |  |   |        |  
|Unrealized (loss) gain arising during the period on securities, net of tax (benefit) expense of ($2,597) and $5,761 for the three months ended
June 30, 2006 and 2005, respectively, and ($6,042) and ($3,812) for the nine months ended June 30, 2006 and 2005, respectively |  |                                     | (4,823 | ) |                                    |   | 10,669  |      |  |   | (11,221 | ) |  |   | (7,080 | )
|Unrealized gain (loss) on cash flow hedges, net of tax expense (benefit) of $224 and ($239) for the three months ended June 30, 2006 and
2005, respectively, and $65 and $96 for the nine months ended June 30, 2006 and 2005, respectively                                   |  |                                     | 416    |   |                                    |   | (444    | )    |  |   | 121     |   |  |   | 179    |  
|Less reclassification adjustment for:                                                                                                                                                                                                                                         |  |                                     |        |   |                                    |   |         |      |  |   |         |   |  |   |        |  
|Realized gain on securities sold included in net income, net of tax expense of $0 and $359 for the three months ended June 30, 2006 and
2005, respectively, and $0 and $1,230 for the nine months ended June 30, 2006 and 2005, respectively                                  |  |                                     |       |   |                                    |   | 667     |      |  |   |        |   |  |   | 2,284  |  
|Realized gain (loss) on cash flow hedges, net of tax expense (benefit) of $15 and $(33) for the three months ended June 30, 2006 and
2005, respectively, and $3 and $(141) for the nine months ended June 30, 2006 and 2005, respectively                                     |  |                                     | 27     |   |                                    |   | (62     | )    |  |   | 5       |   |  |   | (262   | )
|                                                                                                                                                                                                                                                                              |  |                                     |        |   |                                    |   |         |      |  |   |         |   |  |   |        |  
|Total other comprehensive (loss) income, net of tax                                                                                                                                                                                                                           |  |                                     | (4,434 | ) |                                    |   | 9,650   |      |  |   | (11,105 | ) |  |   | (8,923 | )
|                                                                                                                                                                                                                                                                              |  |                                     |        |   |                                    |   |         |      |  |   |         |   |  |   |        |  
|Comprehensive income (loss)                                                                                                                                                                                                                                                   |  | $                                   | 19,391 |   |                                    | $ | (5,159  | )    |  | $ | 48,582  |   |  | $ | 4,349  |  
|                                                                                                                                                                                                                                                                              |  |                                     |        |   |                                    |   |         |      |  |   |         |   |  |   |        |  



8.  Accounting For
Derivatives and Hedging Activities



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



Loan Commitments



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



15



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONTINUED



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 and fair value exposure of loans held for sale to a change in interest rates. Fair value changes of forward sales contracts, not eligible for hedge
accounting under SFAS No. 133, are recorded in earnings under non-interest expense with an offset in other liabilities.



Forward contracts may be allocated to loans held for sale in a relationship that qualifies for hedge accounting, in which case any ineffectiveness is
charged to earnings under non-interest expense with an offset in other liabilities.



Loans Held For Sale



Loans held for sale are
accounted for under the lower of cost or market method, unless they are effectively hedged under SFAS No. 133. Lower of cost or market adjustments are recorded in earnings under non-interest expense. As of June 30, 2006 and September 2005, all loans
held for sale were subjected to lower of cost or market.



Interest Rate
Swaps and Caps



At different times, BankUnited has entered
into interest rate swap and cap contracts for the purpose of hedging long-term fixed and variable rate debt (hedged item), respectively. BankUnited may use interest rate swap and cap agreements that may qualify as fair value hedges and
cash flow hedges. Fair value hedges are used to hedge fixed rate debt. BankUnited uses cash flow hedges to hedge interest rate risk associated with variable rate debt.



BankUnited had applied hedge accounting based on the short cut method for interest rate swaps provided for in
Statement of Financial Accounting Standards No. 133. In December 2005, the Securities and Exchange Commission issued guidance on the application of the short cut method under this standard. Based on this guidance, BankUnited has reviewed its
application of the short cut method in accounting for interest rate swaps and concluded that three current hedge transactions did not meet the requirements set forth in the guidance and hedge accounting was precluded for those items in the periods
previously applied. After analysis BankUnited concluded that the reclassification of these swaps does not materially affect the results of operations for any period presented and recognized a $242 thousand net charge from prior periods in the
quarter ended March 31, 2006. The inability to utilize hedge accounting during the quarter ended March 31, 2006 resulted in an additional $672 thousand net charge as a result of the change in market value of the interest rate swaps; a
combined net charge of $914 thousand. The net charge of $914 thousand included a gain of $697 thousand related to two cash flow swaps and a $1.6 million loss on a fair value swap.



During the quarter ended June 30, 2006, BankUnited elected to settle the fair value swap contract resulting in a charge
to income of $359 thousand recorded in non-interest income. For the nine-month period ended June 30, 2006, a $2 million loss was recognized on this swap transaction.



16



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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 consolidated statements of income during the three and nine months ended June 30, 2006 and 2005.



|                                                                                        |  |                                  |      |   |                                 |   |        |      |  |   |        |   |  |   |        |  
|--------------------------------------------------------------------------------------- |  | -------------------------------- | ---- | - | ------------------------------- | - | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                                                                        |  | For theThree MonthsEndedJune 30, |      |   | For theNine MonthsEndedJune 30, |  
|                                                                                        |  | 2006                             |      |   | 2005                            |   |        | 2006 |  |   | 2005   |  
|                                                                                        |  | (In thousands)                   |     
|Interest Rate Swaps                                                                     |  |                                  |      |   |                                 |   |        |      |  |   |        |   |  |   |        |  
|Net gain recorded in non-interest expense due to ineffectiveness                        |  | $                                |     |   |                                 | $ | 29     |      |  | $ |       |   |  | $ | 41     |  
|Loss on swaps recorded in non-interest income                                           |  |                                  | (359 | ) |                                 |   | (1,369 | )    |  |   | (1,970 | ) |  |   | (1,369 | )
|Net (loss) gain recorded in non-interest income related to valuation of cash flow swaps |  |                                  | (192 | ) |                                 |   |       |      |  |   | 505    |   |  |   |       |  
|Other Derivatives (1)                                                                   |  |                                  |      |   |                                 |   |        |      |  |   |        |   |  |   |        |  
|(Loss) gain recorded in non-interest expense                                            |  |                                  | (49  | ) |                                 |   | 84     |      |  |   | 24     |   |  |   | 92     |  
|                                                                                        |  |                                  |      |   |                                 |   |        |      |  |   |        |   |  |   |        |  
|Total net loss recorded in earnings due to derivatives                                  |  | $                                | (600 | ) |                                 | $ | (1,256 | )    |  | $ | (1,441 | ) |  | $ | (1,236 | )
|                                                                                        |  |                                  |      |   |                                 |   |        |      |  |   |        |   |  |   |        |  

---

|Note: | There was no ineffectiveness related to cash flow hedges during the three and nine months ended June 30, 2006. Within the next 12 months, BankUnited estimates that $657
thousand will be reclassified out of comprehensive income as a charge to earnings for cash flow hedges outstanding as of June 30, 2006.
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(1) | BankUnited uses these derivatives to economically hedge interest rate risk, but they do not qualify for hedge accounting treatment.
|--- | -----------------------------------------------------------------------------------------------------------------------------------



9.    Stock-Based Compensation



At June 30, 2006, BankUnited had certain stock-based compensation plans
(the Plans) under which incentives may be awarded to officers, directors and employees of BankUnited and its subsidiaries. Under the Plans, BankUnited may award stock options, stock appreciation rights, restricted stock and awards in
lieu of obligations, dividend equivalents, other stock-based awards and performance awards in each of its classes of stocks.



Shares issued in connection with stock-based compensation are registered under the Plans. At June 30, 2006, there were 713,078 shares of all classes
available under the Plans.



Effective October 1, 2005,
BankUnited adopted SFAS No. 123R Share Based Payments using the modified prospective transition method. SFAS No. 123R requires companies to calculate compensation expense arising from stock-based compensation based on the
respective fair values of awards at grant date. As of June 30, 2006, there was $21.6 million of unrecognized compensation cost related to unvested stock-based awards. That cost is expected to be recognized over a weighted average period of 3.83
years.



The following table presents the total stock-based
compensation for the three-month and nine-month periods ended June 30, 2006:

|                                                                 |  |                                |       |                                |   |      
|---------------------------------------------------------------- |  | ------------------------------ | ----- | ------------------------------ | - | -----
|                                                                 |  | Three Months EndedJune 30 2006 |       | Nine Months EndedJune 30, 2006
|                                                                 |  | (Dollars in thousands)        
|Total stock-based compensation                                   |  | $                              | 1,390 |                                | $ | 3,957
|Total recognized tax benefit related to stock-based compensation |  | $                              | 415   |                                | $ | 1,203



17



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONTINUED



Although the Plans allow for other types of awards, BankUnited has in the past generally awarded
stock-based compensation in the form of stock options, restricted stock, and restricted stock units. Restricted stock awards are based on future service and in some instances have performance requirements. The requisite service period for all awards
is equal to the vesting period plus the performance period, if applicable. Vesting periods range from immediate to nine years for options and immediate to fourteen years for restricted stock. Any unvested awards are forfeited upon termination of
employment, unless otherwise provided by the award agreement, employment agreement, or action of the Compensation Committee.



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



|                      |  |                               |  |                             
|--------------------- |  | ----------------------------- |  | ----------------------------
|                      |  | Three MonthsEndedJune 30,2006 |  | Nine MonthsEndedJune 30,2006
|Expected volatility   |  | 26.0%                         |  | 26.0%                       
|Expected dividend     |  | .007% - 1.32%                 |  | .007% -1.32%                
|Expected term (years) |  | 3.9 - 7.0                     |  | 3.9 - 7.0                   
|Risk free rate        |  | 4.84% - 5.21%                 |  | 4.45% - 5.21%               



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



A summary of options outstanding as of June 30, 2006, and changes during the nine-month period then ended is presented below:



|                                 |  |                         |   |  |                              |       |                                         |     |                                 |   |       
|-------------------------------- |  | ----------------------- | - |  | ---------------------------- | ----- | --------------------------------------- | --- | ------------------------------- | - | ------
|Options                          |  | Number ofShares (000s) |   |  | WeightedAverageExercisePrice |       | WeightedAverageRemainingContractualTerm |     | AggregateIntrinsicValue (000s)
|Outstanding, October 1, 2005 (1) |  | 3,660                   |   |  | $                            | 17.84 |                                         |     |                                 |   |       
|Granted                          |  | 4                       |   |  |                              | 26.06 |                                         |     |                                 |   |       
|Exercised                        |  | (440                    | ) |  |                              | 8.96  |                                         |     |                                 |   |       
|Forfeited                        |  | (67                     | ) |  |                              | 21.48 |                                         |     |                                 |   |       
|Expired                          |  | (21                     | ) |  |                              | 24.53 |                                         |     |                                 |   |       
|                                 |  |                         |   |  |                              |       |                                         |     |                                 |   |       
|Outstanding, June 30, 2006 (2)   |  | 3,136                   |   |  | $                            | 18.98 |                                         | 5.6 |                                 | $ | 48,630
|                                 |  |                         |   |  |                              |       |                                         |     |                                 |   |       
|Exercisable, June 30, 2006 (3)   |  | 2,417                   |   |  | $                            | 17.95 |                                         | 5.3 |                                 | $ | 40,263
|Unvested, June 30, 2006 (4)      |  | 719                     |   |  | $                            | 22.42 |                                         | 6.8 |                                 | $ | 8,367 

---

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



18



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONTINUED



|(2) | Outstanding number of shares as of June 30, 2006 included 2,091 thousand shares of Class A Common Stock, 224 thousand shares of Class B Common Stock, and
821 thousand shares of Series B Preferred.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(3) | Exercisable number of shares as of June 30, 2006 included 1,540 thousand shares of Class A Common Stock, 224 thousand shares of Class B Common Stock, and
653 thousand shares of Series B Preferred.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(4) | Unvested number of shares as of June 30, 2006 included 551 thousand shares of Class A Common Stock, 0 shares of Class B Common Stock, and 168 thousand shares of
Series B Preferred.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The following table presents
the values of option grants and exercises for the three-month and nine-month periods ended June 30, 2006:



|                                           |  |                                                     |       |                                |   |      
|------------------------------------------ |  | --------------------------------------------------- | ----- | ------------------------------ | - | -----
|                                           |  | Three Months EndedJune 30 2006                      |       | Nine Months EndedJune 30, 2006
|                                           |  | (Dollars in thousands, except for amount per share)
|Fair value per share of options granted    |  | $                                                   |      |                                | $ | 7.69 
|Total intrinsic value of options exercised |  | $                                                   | 6,233 |                                | $ | 8,268
|Cash received from options exercised       |  | $                                                   | 2,447 |                                | $ | 3,944



Restricted
Stock  The restricted stock awards reflect BankUniteds intent of rewarding the officers, directors and employees for BankUniteds performance, reinforcing commitment to BankUnited and responding to increased competitive
pressures for talented personnel in BankUniteds market area. Some of the awards granted to BankUniteds most senior executives are subject to being earned by the achievement of specified performance goals. Performance goals are measured
each quarter with adjustments made to the amortization schedule as a result of a change in managements estimate. If performance goals are not met, any recognized compensation expense is reversed. Performance awards vest from the date that the
grant is earned. Other awards vest from the date of the grant.



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



19



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONTINUED



A summary of the status of BankUniteds restricted stock for the nine months ended June 30,
2006, is presented below.



|                             |  |                         |   |  |                                                 |      
|---------------------------- |  | ----------------------- | - |  | ----------------------------------------------- | -----
|Restricted Stock (1)         |  | Number ofShares (000s) |   |  | Weighted Average Grant-Date Fair Value pershare
|Outstanding, October 1, 2005 |  | 507                     |   |  | $                                               | 32.03
|Granted                      |  | 386                     |   |  |                                                 | 27.59
|Vested                       |  | (38                     | ) |  |                                                 | 27.15
|Forfeited                    |  | (23                     | ) |  |                                                 | 25.63
|                             |  |                         |   |  |                                                 |      
|Outstanding, June 30, 2006   |  | 832                     |   |  | $                                               | 23.84
|                             |  |                         |   |  |                                                 |      



The total fair value
of restricted shares that vested during the three months ended June 30, 2006 and the nine months ended June 30, 2006 was $245 thousand and $1.04 million, respectively.

---

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



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



|                                                                                                                                                             |  |                                |         |   |                                |   |        |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------------------ | ------- | - | ------------------------------ | - | ------ | -
|                                                                                                                                                             |  | Three Months EndedJune 30 2005 |         |   | Nine Months EndedJune 30, 2005 |  
|                                                                                                                                                             |  | (Dollars in thousands)         |         |   | (Dollars in thousands)         |  
|Net income (loss), as reported                                                                                                                               |  | $                              | (14,809 | ) |                                | $ | 13,272 |  
|Add: Total stock-based employee and director compensation expense included in net income, net of related tax effects                                         |  |                                | 479     |   |                                |   | 1,308  |  
|Deduct: Total stock-based employee and director compensation expense determined under the fair value based method for all awards, net of
related tax effects |  |                                | 1,511   |   |                                |   | 4,924  |  
|                                                                                                                                                             |  |                                |         |   |                                |   |        |  
|Pro forma net income                                                                                                                                         |  | $                              | (15,841 | ) |                                | $ | 9,656  |  
|                                                                                                                                                             |  |                                |         |   |                                |   |        |  
|Earnings per share:                                                                                                                                          |  |                                |         |   |                                |   |        |  
|Basic  as reported                                                                                                                                          |  | $                              | (0.50   | ) |                                | $ | 0.43   |  
|                                                                                                                                                             |  |                                |         |   |                                |   |        |  
|Basic  pro forma                                                                                                                                            |  | $                              | (0.53   | ) |                                | $ | 0.31   |  
|                                                                                                                                                             |  |                                |         |   |                                |   |        |  
|Diluted  as reported                                                                                                                                        |  | $                              | (0.50   | ) |                                | $ | 0.41   |  
|                                                                                                                                                             |  |                                |         |   |                                |   |        |  
|Diluted  pro forma                                                                                                                                          |  | $                              | (0.53   | ) |                                | $ | 0.30   |  
|                                                                                                                                                             |  |                                |         |   |                                |   |        |  
|Assumptions for weighted average grant-date fair value of options using the Black-Scholes option pricing model are as follows:                               |  |                                |         |   |                                |   |        |  
|Dividend yield                                                                                                                                               |  |                                | 0.07    | % |                                |   | 0.07   | %
|Expected volatility                                                                                                                                          |  |                                | 28.0    | % |                                |   | 28.0   | %
|Risk free rate                                                                                                                                               |  |                                | 3.83    | % |                                |   | 3.43   | %
|Expected term (years)                                                                                                                                        |  |                                | 4.84    |   |                                |   | 4.76   |  



20



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONTINUED



10.    Commitments and Contingencies



Commercial and standby letters of credit are off balance sheet instruments
which represent conditional commitments issued by BankUnited to guarantee the performance of a customer to a third party. BankUnited had outstanding commercial and standby letters of credit in the amount of $46.8 million and $38.8 million as of
June 30, 2006 and September 30, 2005, respectively. Fees collected on standby letters of credit represent the fair value of these commitments and are deferred and amortized over their term, which is typically one year or less.



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



21



---

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



As used in this Form 10-Q, BankUnited, we, us and our refers to BankUnited
and its subsidiaries on a consolidated basis. The following discussion and analysis and the related financial data present a review of BankUniteds consolidated operating results for the three and nine month periods ended June 30, 2006 and
2005 and consolidated financial condition as of June 30, 2006. This discussion and analysis should be read in conjunction with the Consolidated Financial Statements and Notes thereto contained in BankUniteds Annual Report on Form 10-K and
10-K/A (10-K) for the year ended September 30, 2005.



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



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



| |  |  | Expansion of operations, including office openings, entrance into new markets, and development of products and services; and
| | - |  | ----------------------------------------------------------------------------------------------------------------------------



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



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



Overview of activities



BankUniteds results of operations are dependent primarily on its net interest income, which is the difference between the interest earned on its
assets, including the effect of related premium, fees and discounts, and its cost of funds, which consists of the interest paid on its deposits and borrowings. BankUniteds results of operations are also affected by its provision for loan
losses, gain or losses on sales of loans, other non-interest income, operating expenses and income taxes.



22



---

BankUniteds operations, like those of other financial holding companies, are affected by its asset
and liability management policies, as well as factors beyond BankUniteds control, such as general economic conditions and the monetary and fiscal policies of the federal government. Lending activities are affected by the demand for mortgage
financing and other types of loans, and are thus influenced by interest rates and other factors affecting the demand for loans that are beyond managements control. Deposit flows and costs of deposits and borrowings are influenced by local
competition and by general market rates of interest.



Highlights of the
quarter ended June 30, 2006



| |  |  | BankUnited had record quarterly net income of $23.8 million. Net interest margin for the quarter improved to 2.18% from 1.66% for the same quarter last year and was the major
contributor to the improvement in net income.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Total assets reached $12.9 billion, up $2.9 billion, or 29%, from June 30, 2005. Asset growth has been centered in the residential loan portfolio, which grew by $2.5 billion in
the last twelve months.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Loan production for the quarter of $1.8 billion was up 17% over loan production for the same quarter last year. As a result of strong loan demand, BankUnited sold $495 million of
residential mortgage loans with a gain of $5 million during the quarter. The secondary market has shown acceptance of BankUniteds residential mortgage product and provides a vehicle for the sale of loans in periods of high loan production.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Total deposits reached $5.9 billion, up $1.6 billion or 39% from June 30, 2005. Non-interest bearing deposits increased to $385 million up, 18% from June 30, 2005.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Deposit growth is aided by BankUniteds continued branch expansion with two new branches and entry into one new Florida market occurring during the quarter. As of June 30,
2006, BankUnited operated 73 branch offices in eleven Florida counties. Twelve branches have been opened in fiscal 2006.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



Critical Accounting Estimates



BankUniteds financial position and results of operations are impacted by managements application of accounting policies involving judgments
made to arrive at the carrying value of certain assets. In implementing its policies, management must make estimates and assumptions about the effect of matters that are inherently less than certain. Actual results could differ significantly from
these estimates, which could materially affect the amounts of our assets, liabilities, income and expenses. Critical accounting estimates made by management include those that relate to the allowance for loan losses, the carrying amount of mortgage
servicing rights, and stock-based compensation. Factors affecting the estimate of the allowance for loan losses include quantitative factors such as historical loss rates on segments of the portfolio, the evaluation of asset quality and
managements assessment of qualitative factors that are not reflected in the historical loss experience. Factors affecting the carrying amount of mortgage servicing rights include projected prepayment speed on the serviced loan portfolio, and
discount rates. Factors affecting the computation of stock compensation include estimates of the average life of the option, volatility, forfeitures and risk-free interest rate factors.



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



Accounting Pronouncements Issued and Not Yet Adopted



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



23



---

RESULTS OF OPERATIONS



For the Three Months Ended June 30, 2006 Compared to the Same Period in 2005



General



Net income for the three months ended June 30, 2006 was $23.8 million, compared to a quarterly net loss of $14.8 million for the same quarter last
year. Basic and diluted earnings were $0.65 and $0.62 per share, respectively, for the quarter, up from $(0.50) and $(0.50) per share, respectively, for the same quarter last year.



The net loss for the quarter ended June 30, 2005, included an after-tax charge of $24.6 million related to the
companys prepayment of Federal Loan Home Bank of Atlanta (FHLB) advances and the settlement of related swaps. Excluding losses related to the FHLB prepayments, BankUniteds net income for the quarter ended June 30, 2005, was $9.8
million, and basic and diluted earnings were $0.32 and $0.30 per share respectively



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



|                                     |  |                                          |        |      |        |         |   |  |   |         |   |  |       |   
|------------------------------------ |  | ---------------------------------------- | ------ | ---- | ------ | ------- | - |  | - | ------- | - |  | ----- | --
|                                     |  | For the three monthsended June 30,       |        |      | Change |        
|                                     |  | 2006                                     |        | 2005 |        |         | $ |  |   | %       |  
|                                     |  | (In thousands, except per share amounts) |       
|Net interest income                  |  | $                                        | 66,795 |      | $      | 38,597  |   |  | $ | 28,198  |   |  | 73.1  | % 
|Provision for loan losses            |  |                                          | 1,200  |      |        | 800     |   |  |   | 400     |   |  | 50.0  | % 
|Non-interest income                  |  |                                          | 10,494 |      |        | 3,875   |   |  |   | 6,619   |   |  | 170.8 | % 
|Non-interest expense                 |  |                                          | 40,195 |      |        | 65,322  |   |  |   | (25,127 | ) |  | (38.5 | )%
|                                     |  |                                          |        |      |        |         |   |  |   |         |   |  |       |   
|Income (loss) before taxes           |  |                                          | 35,894 |      |        | (23,650 | ) |  |   | 59,544  |   |  | 251.8 | % 
|Provision (benefit) for income taxes |  |                                          | 12,069 |      |        | (8,841  | ) |  |   | 20,910  |   |  | 236.5 | % 
|                                     |  |                                          |        |      |        |         |   |  |   |         |   |  |       |   
|Net income (loss)                    |  | $                                        | 23,825 |      | $      | (14,809 | ) |  | $ | 38,634  |   |  | 260.9 | % 
|                                     |  |                                          |        |      |        |         |   |  |   |         |   |  |       |   
|Basic earnings per share             |  | $                                        | 0.65   |      | $      | (0.50   | ) |  | $ | 1.15    |   |  | 230.0 | % 
|Diluted earnings per share           |  | $                                        | 0.62   |      | $      | (0.50   | ) |  | $ | 1.12    |   |  | 224.0 | % 



24



---

Analysis of Net Interest Income



Yields Earned and Rates Paid



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



|                                                                    |  |                                     |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|------------------------------------------------------------------- |  | ----------------------------------- | ---------- | - | -------- | - | ---------- |  | ---- | -------------- |  | - | --------- | - | ---------- | - | ------- |  | ---- | -
|                                                                    |  | For the Three Months Ended June 30, |           
|                                                                    |  | 2006                                |            |   | 2005     |  
|                                                                    |  | AverageBalance                      |            |   | Interest |   | Yield/Rate |  |      | AverageBalance |  |   | Interest  |   | Yield/Rate |  
|                                                                    |  | (Dollars in thousands)              |           
|Interest-earning assets:                                            |  |                                     |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Loans, net(1)                                                       |  | $                                   | 10,289,935 |   |          | $ | 168,144    |  | 6.54 | %              |  | $ | 7,181,767 |   |            | $ | 88,637  |  | 4.94 | %
|Mortgage-backed securities                                          |  |                                     | 1,357,336  |   |          |   | 15,119     |  | 4.46 | %              |  |   | 1,614,157 |   |            |   | 15,341  |  | 3.80 | %
|Short-term investments(2)                                           |  |                                     | 24,306     |   |          |   | 357        |  | 5.88 | %              |  |   | 22,895    |   |            |   | 167     |  | 2.93 | %
|Investment securities and FHLB stock                                |  |                                     | 517,924    |   |          |   | 6,725      |  | 5.20 | %              |  |   | 467,829   |   |            |   | 5,529   |  | 4.73 | %
|                                                                    |  |                                     |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Total interest-earning assets                                       |  |                                     | 12,189,501 |   |          |   | 190,345    |  | 6.25 | %              |  |   | 9,286,648 |   |            |   | 109,674 |  | 4.73 | %
|                                                                    |  |                                     |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Interest-bearing liabilities:                                       |  |                                     |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Transaction and money market                                        |  |                                     | 391,956    |   |          |   | 2,254      |  | 2.31 | %              |  |   | 384,912   |   |            |   | 1,353   |  | 1.41 | %
|Savings                                                             |  |                                     | 1,317,987  |   |          |   | 12,846     |  | 3.91 | %              |  |   | 922,650   |   |            |   | 5,250   |  | 2.28 | %
|Certificates of deposits                                            |  |                                     | 3,584,949  |   |          |   | 39,146     |  | 4.38 | %              |  |   | 2,484,654 |   |            |   | 19,557  |  | 3.16 | %
|Trust preferred securities and subordinated debentures              |  |                                     | 195,924    |   |          |   | 3,996      |  | 8.16 | %              |  |   | 195,458   |   |            |   | 3,395   |  | 6.95 | %
|Senior notes                                                        |  |                                     | 120,000    |   |          |   | 1,070      |  | 3.57 | %              |  |   | 120,000   |   |            |   | 1,069   |  | 3.57 | %
|FHLB advances and other borrowings                                  |  |                                     | 5,690,042  |   |          |   | 64,238     |  | 4.53 | %              |  |   | 4,519,851 |   |            |   | 40,453  |  | 3.59 | %
|                                                                    |  |                                     |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Total interest-bearing liabilities                                  |  | $                                   | 11,300,858 |   |          | $ | 123,550    |  | 4.38 | %              |  | $ | 8,627,525 |   |            | $ | 71,077  |  | 3.30 | %
|                                                                    |  |                                     |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Excess of interest-earning assets over interest-bearing liabilities |  | $                                   | 888,643    |   |          |   |            |  |      |                |  | $ | 659,123   |   |            |   |         |  |      |  
|                                                                    |  |                                     |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Net interest income                                                 |  |                                     |            |   |          | $ | 66,795     |  |      |                |  |   |           |   |            | $ | 38,597  |  |      |  
|                                                                    |  |                                     |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Interest rate spread                                                |  |                                     |            |   |          |   |            |  | 1.87 | %              |  |   |           |   |            |   |         |  | 1.43 | %
|Effect of non-interest bearing sources                              |  |                                     |            |   |          |   |            |  | 0.31 | %              |  |   |           |   |            |   |         |  | 0.23 | %
|                                                                    |  |                                     |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Net interest margin                                                 |  |                                     |            |   |          |   |            |  | 2.18 | %              |  |   |           |   |            |   |         |  | 1.66 | %
|                                                                    |  |                                     |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Ratio of interest-earning assets to interest-bearing liabilities    |  |                                     | 107.86     | % |          |   |            |  |      |                |  |   | 107.64    | % |            |   |         |  |      |  
|                                                                    |  |                                     |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  

---

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

|(1) | Includes average balances of loans held for sale of $113.3 million and $15.9 million for the three months ended June 30, 2006 and 2005, respectively. Also includes average
non-accruing loans of $11.5 million and $10.7 million for the three months ended June 30, 2006 and 2005, respectively.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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



25



---

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 EndedJune 30, 2006 vs. 2005 |       
|                                                       |  | Increase (Decrease)Due to                              |        |   |               
|                                                       |  | Changes inVolume                                       |        |   | Changesin Rate |   | TotalIncrease/(Decrease) | 
|                                                       |  | (Dollars in thousands)                                 |       
|Interest income attributable to:                       |  |                                                        |        |   |                |   |                          |  |   |        |  
|Loans, net (1)                                         |  | $                                                      | 37,937 |   |                | $ | 41,570                   |  | $ | 79,507 |  
|Mortgage-backed securities                             |  |                                                        | (2,441 | ) |                |   | 2,219                    |  |   | (222   | )
|Short-term investments (2)                             |  |                                                        | 10     |   |                |   | 180                      |  |   | 190    |  
|Investment securities and FHLB stock                   |  |                                                        | 551    |   |                |   | 645                      |  |   | 1,196  |  
|                                                       |  |                                                        |        |   |                |   |                          |  |   |        |  
|Total interest-earning assets                          |  |                                                        | 36,057 |   |                |   | 44,614                   |  |   | 80,671 |  
|                                                       |  |                                                        |        |   |                |   |                          |  |   |        |  
|Interest expense attributable to:                      |  |                                                        |        |   |                |   |                          |  |   |        |  
|Transaction and money market                           |  |                                                        | 25     |   |                |   | 876                      |  |   | 901    |  
|Savings                                                |  |                                                        | 2,250  |   |                |   | 5,346                    |  |   | 7,596  |  
|Certificates of deposit                                |  |                                                        | 8,661  |   |                |   | 10,928                   |  |   | 19,589 |  
|Trust Preferred Securities and subordinated debentures |  |                                                        | 8      |   |                |   | 593                      |  |   | 601    |  
|Senior notes                                           |  |                                                        |       |   |                |   | 2                        |  |   | 2      |  
|FHLB advances and other borrowings                     |  |                                                        | 10,473 |   |                |   | 13,311                   |  |   | 23,784 |  
|                                                       |  |                                                        |        |   |                |   |                          |  |   |        |  
|Total interest-bearing liabilities                     |  |                                                        | 21,417 |   |                |   | 31,056                   |  |   | 52,473 |  
|                                                       |  |                                                        |        |   |                |   |                          |  |   |        |  
|Increase in net interest income                        |  | $                                                      | 14,640 |   |                | $ | 13,558                   |  | $ | 28,198 |  
|                                                       |  |                                                        |        |   |                |   |                          |  |   |        |  

---

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

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



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



Net interest income before provision for loan losses was $66.8 million for the quarter ended June 30, 2006, increasing by $28.2 million or 73% over
the $38.6 million reported for the same period in 2005. The net interest margin improved this quarter to 2.18% from 1.66% for the same quarter last year. The overall yield on interest earning assets increased by 152 basis points, while the overall
rates paid on interest bearing liabilities increased by 108 basis points, resulting in an improvement in the interest rate spread of 44 basis points for the three months ended June 30, 2006 compared to the same period in 2005.



Interest income on loans includes deferred interest on option ARM loans where
periodic payments do not cover the amount of interest earned contractually and where the uncollected interest is added to the principal balance of the loans. For the quarter ended June 30, 2006, $20.9 million in deferred interest is
included in interest income on loans.



26



---

The improvement in net interest income and net interest margin is attributable to the growth in earning
assets, the change in earning asset mix, the improved spread between earning assets and interest bearing liabilities, and faster repricing of ARM loans than deposits. Average earning assets in the current quarter increased by $2.9 billion or 31%
from the quarter a year ago. Growth was centered in higher yield average loans that represent 84% of earning assets in the current quarter as compared to 77% in the same quarter for the prior year.



The net interest spread rose to 1.87% for the quarter from 1.43% for the
quarter ended June 30, 2005. Factors affecting the yield improvement on assets included prepayment fees that increased from $1.4 million in the quarter ended June 30, 2005 to $4.4 million in the quarter ended June 30, 2006. Factors
resulting in improved cost of interest bearing liabilities included the prepayment of long-term high rate FHLB debt in the quarter ended June 30, 2005, the growth in non-interest bearing sources of funds including the stock offering in the
quarter ended March 31, 2006.



Prepayments on residential
mortgage loans reduce loan interest income as the net deferred cost amortization is accelerated with the prepayment. For the quarter ended June 30, 2006, the constant prepayment rate (CPR) was 17.1% as compared to 23.4% for the quarter ended
June 30, 2005. The slower prepayment rate also contributed to the increase in the net interest margin for the quarter.



Provision for Loan Losses.    BankUnited records a provision for loan losses as a charge to income in amounts necessary to
adjust the allowance for loan losses as determined by management through its overall review of asset quality. The provision for loan losses of $1.2 million for the three months ended June 30, 2006 represents an increase compared to the $0.8
million provided during the same period in 2005 and reflects loan portfolio growth centered in residential loans and net recoveries for the quarter. Net recoveries for the three months ended June 30, 2006, were $0.6 million compared to net
charge-offs of $0.7 million for the same period in 2005. Non-performing loans to total loans remained at 0.12% this quarter compared to same quarter last year, and compared to 0.10% at September 30, 2005. The allowance for loan losses as a
percentage of total loans was 0.31% as of June 30, 2006 compared to 0.33% as of June 30, 2005 and 0.32% at September 30, 2005. See Asset Quality for more information on BankUniteds allowance for loan losses.



Analysis of Non-Interest Income and Expenses



|                                          |  |                                    |        |   |      |   |        |                     |  |   |       |   |  |        |  
|----------------------------------------- |  | ---------------------------------- | ------ | - | ---- | - | ------ | ------------------- |  | - | ----- | - |  | ------ | -
|                                          |  | For the Three MonthsEnded June 30, |        |   |      |   |        |                     | 
|                                          |  | 2006                               |        |   | 2005 |   |        | Increase/(Decrease) | 
|                                          |  | (Dollars in thousands)             |       
|Non-interest income:                      |  |                                    |        |   |      |   |        |                     |  |   |       |   |  |        |  
|Loan servicing fees                       |  | $                                  | 2,066  |   |      | $ | 797    |                     |  | $ | 1,269 |   |  | 159.2  | %
|Amortization of mortgage servicing rights |  |                                    | (1,083 | ) |      |   | (937   | )                   |  |   | (146  | ) |  | (15.6  | )
|Impairment of mortgage servicing rights   |  |                                    | (540   | ) |      |   | (130   | )                   |  |   | (410  | ) |  | (315.4 | )
|Loan fees                                 |  |                                    | 838    |   |      |   | 592    |                     |  |   | 246   |   |  | 41.6   |  
|Deposit fees                              |  |                                    | 1,375  |   |      |   | 1,066  |                     |  |   | 309   |   |  | 29.0   |  
|Other fees                                |  |                                    | 795    |   |      |   | 572    |                     |  |   | 223   |   |  | 39.0   |  
|Net gain on sale of assets                |  |                                    | 4,973  |   |      |   | 929    |                     |  |   | 4,044 |   |  | 435.3  |  
|Insurance and investment services income  |  |                                    | 921    |   |      |   | 970    |                     |  |   | (49   | ) |  | (5.1   | )
|Losses on swaps                           |  |                                    | (551   | ) |      |   | (1,369 | )                   |  |   | 818   |   |  | 59.8   |  
|Other                                     |  |                                    | 1,700  |   |      |   | 1,385  |                     |  |   | 315   |   |  | 22.7   |  
|                                          |  |                                    |        |   |      |   |        |                     |  |   |       |   |  |        |  
|Total non-interest income                 |  | $                                  | 10,494 |   |      | $ | 3,875  |                     |  | $ | 6,619 |   |  | 170.8  | %
|                                          |  |                                    |        |   |      |   |        |                     |  |   |       |   |  |        |  



Total non-interest income of $10.5
million for the quarter ended June 30, 2006 reflects a 171% increase from the same quarter in the prior year.



27



---

BankUniteds portfolio of residential loans serviced for others was $1.6 billion as of June 30,
2006 compared to $1.2 billion as of June 30, 2005. Servicing fee income, net of amortization and impairment increased to $443 thousand for the quarter ended June 30, 2006 as compared to a loss of $270 thousand for the same quarter in 2005.
This improvement reflects the increase in ancillary fees earned on loans serviced for others including prepayment fees and the increase in the volume of loans serviced.



Fees on loans, deposit fees and other fees were $3.0 million for the quarter ended June 30, 2006 up 35% compared to
$2.2 million for the same quarter in the prior year.



Net
gain on the sale of assets included $5 million from the sale of loans for the quarter ended June 30, 2006 as compared to $0.9 million for the same quarter in the prior year, which was comprised of $1 million from the sale of investments and a
loss of $100 thousand from the sale of loans.



During the
quarter ended June 30, 2006, BankUnited elected to settle an interest rate swap contract resulting in a pre-tax charge to income of $359 thousand recorded in other non-interest income. The contract was being used by BankUnited to economically
hedge $23 million of 10.25% Trust Preferred Securities issued by its trust subsidiary, BankUnited Capital. BankUnited has entered into interest rate swaps to hedge other specific debt obligations and has applied hedge accounting to those swaps. See
Note (8) Accounting for Derivatives and Hedging Activitiesto the accompanying notes to the consolidated financial statements.



|                                       |  |                                    |        |      |   |          |  |   |         |   |  |        |   
|-------------------------------------- |  | ---------------------------------- | ------ | ---- | - | -------- |  | - | ------- | - |  | ------ | --
|                                       |  | For the Three MonthsEnded June 30, |        |      |   |          |  |  
|                                       |  | 2006                               |        | 2005 |   | Increase | 
|                                       |  | (Dollars in thousands)             |       
|Non-interest expenses:                 |  |                                    |        |      |   |          |  |   |         |   |  |        |   
|Employee compensation and benefits     |  | $                                  | 20,511 |      | $ | 13,231   |  | $ | 7,280   |   |  | 55.0   | % 
|Occupancy and equipment                |  |                                    | 8,012  |      |   | 7,214    |  |   | 798     |   |  | 11.1   |   
|Telecommunications and data processing |  |                                    | 2,707  |      |   | 1,886    |  |   | 821     |   |  | 43.5   |   
|Advertising and promotion expense      |  |                                    | 2,019  |      |   | 1,434    |  |   | 585     |   |  | 40.8   |   
|Professional fees                      |  |                                    | 1,733  |      |   | 1,848    |  |   | (115    | ) |  | (6.2   | ) 
|Debt extinguishment                    |  |                                    |       |      |   | 36,548   |  |   | (36,548 | ) |  | (100.0 | ) 
|Other operating expenses               |  |                                    | 5,213  |      |   | 3,161    |  |   | 2,052   |   |  | 64.9   |   
|                                       |  |                                    |        |      |   |          |  |   |         |   |  |        |   
|Total non-interest expenses            |  | $                                  | 40,195 |      | $ | 65,322   |  | $ | (25,127 | ) |  | (38.5  | )%
|                                       |  |                                    |        |      |   |          |  |   |         |   |  |        |   



Non-interest expense
was $40.2 million for the quarter compared to $65.3 million for the same quarter in 2005. Excluding a $36.5 million pretax prepayment fee on FHLB debt, non-interest expense was $28.8 million for the quarter ended June 30, 2005.
Non-interest expense for the quarter ended June 30, 2006, increased 40% from the quarter ended June 30, 2005, excluding the FHLB prepayment fees. This increase reflects the companys continued expansion of its branch network,
operations and support areas. It also includes an increase of $3.2 million in commissions and performance-based compensation. Compensation expense in 2006 also reflects the implementation of FAS 123R with a total increase in share-based compensation
of $653 thousand from the same period in 2005.



For the Nine Months Ended
June 30, 2006 Compared to the Same Period in 2005



General



Net income for the nine months ended June 30, 2006
was $59.7 million, up from $13.3 million for the same period last year. Basic and diluted earnings were $1.77 and $1.66 per share, respectively, for the nine-month period, up from $0.43 and $0.41 per share, respectively, for the same nine-month
period last year.



28



---

The net income for the nine months ended June 30, 2005, included an after-tax charge of $24.6
million related to the companys prepayment of Federal Loan Home Bank of Atlanta (FHLB) advances and the settlement of related swaps. Excluding losses related to the FHLB prepayments, BankUniteds net income for the nine months ended
June 30, 2005, was $37.9 million and the basic and diluted earnings were $1.25 and $1.17 per share, respectively.



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



|                           |  |                                          |         |        |   |         |  |   |        |   |  |        |   
|-------------------------- |  | ---------------------------------------- | ------- | ------ | - | ------- |  | - | ------ | - |  | ------ | --
|                           |  | For the nine monthsended June 30,        |         | Change |  
|                           |  | 2006                                     |         | 2005   |   | $       |  |   | %      |  
|                           |  | (In thousands, except per share amounts) |        
|Net interest income        |  | $                                        | 177,861 |        | $ | 116,858 |  | $ | 61,003 |   |  | 52.2   | % 
|Provision for loan losses  |  |                                          | 5,800   |        |   | 3,000   |  |   | 2,800  |   |  | 93.3   | % 
|Non-interest income        |  |                                          | 25,579  |        |   | 17,482  |  |   | 8,097  |   |  | 46.3   | % 
|Non-interest expense       |  |                                          | 108,000 |        |   | 113,679 |  |   | (5,679 | ) |  | (5.0   | )%
|                           |  |                                          |         |        |   |         |  |   |        |   |  |        |   
|Income before taxes        |  |                                          | 89,640  |        |   | 17,661  |  |   | 71,979 |   |  | 407.6  | % 
|Income taxes               |  |                                          | 29,953  |        |   | 4,389   |  |   | 25,564 |   |  | 582.5  | % 
|                           |  |                                          |         |        |   |         |  |   |        |   |  |        |   
|Net income                 |  | $                                        | 59,687  |        | $ | 13,272  |  | $ | 46,415 |   |  | 349.72 | % 
|                           |  |                                          |         |        |   |         |  |   |        |   |  |        |   
|Basic earnings per share   |  | $                                        | 1.77    |        | $ | 0.43    |  | $ | 1.34   |   |  | 311.6  | % 
|Diluted earnings per share |  | $                                        | 1.66    |        | $ | 0.41    |  | $ | 1.25   |   |  | 304.9  | % 



Analysis of Net Interest Income



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



29



---

Yields Earned and Rates Paid



|                                                                    |  |                                    |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|------------------------------------------------------------------- |  | ---------------------------------- | ---------- | - | -------- | - | ---------- |  | ---- | -------------- |  | - | --------- | - | ---------- | - | ------- |  | ---- | -
|                                                                    |  | For the Nine Months Ended June 30, |           
|                                                                    |  | 2006                               |            |   | 2005     |  
|                                                                    |  | Average Balance                    |            |   | Interest |   | Yield/Rate |  |      | AverageBalance |  |   | Interest  |   | Yield/Rate |  
|                                                                    |  | (Dollars in thousands)             |           
|Interest-earning assets:                                            |  |                                    |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Loans, net(1)                                                       |  | $                                  | 9,372,118  |   |          | $ | 430,632    |  | 6.13 | %              |  | $ | 6,613,014 |   |            |   | 238,491 |  | 4.81 | %
|Mortgage-backed securities                                          |  |                                    | 1,463,860  |   |          |   | 48,042     |  | 4.38 | %              |  |   | 1,778,284 |   |            |   | 50,461  |  | 3.78 | %
|Short-term investments(2)                                           |  |                                    | 29,679     |   |          |   | 989        |  | 4.39 | %              |  |   | 20,491    |   |            |   | 388     |  | 2.50 | %
|Investment securities and FHLB stock                                |  |                                    | 499,007    |   |          |   | 18,601     |  | 4.98 | %              |  |   | 484,768   |   |            |   | 16,137  |  | 4.44 | %
|                                                                    |  |                                    |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Total interest-earning assets                                       |  |                                    | 11,364,664 |   |          |   | 498,264    |  | 5.85 | %              |  |   | 8,896,557 |   |            |   | 305,477 |  | 4.58 | %
|                                                                    |  |                                    |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Interest-bearing liabilities:                                       |  |                                    |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Transaction and money market                                        |  |                                    | 389,825    |   |          |   | 6,212      |  | 2.13 | %              |  |   | 394,315   |   |            |   | 3,862   |  | 1.31 | %
|Savings                                                             |  |                                    | 1,263,106  |   |          |   | 33,754     |  | 3.57 | %              |  |   | 953,929   |   |            |   | 14,474  |  | 2.03 | %
|Certificates of deposits                                            |  |                                    | 3,228,446  |   |          |   | 98,184     |  | 4.07 | %              |  |   | 2,212,564 |   |            |   | 48,821  |  | 2.95 | %
|Trust preferred securities and subordinated debentures              |  |                                    | 195,494    |   |          |   | 11,571     |  | 7.89 | %              |  |   | 188,915   |   |            |   | 9,325   |  | 6.58 | %
|Senior notes                                                        |  |                                    | 120,000    |   |          |   | 3,210      |  | 3.57 | %              |  |   | 120,000   |   |            |   | 3,208   |  | 3.57 | %
|FHLB advances and other borrowings                                  |  |                                    | 5,388,341  |   |          |   | 167,472    |  | 4.16 | %              |  |   | 4,405,406 |   |            |   | 108,929 |  | 3.31 | %
|                                                                    |  |                                    |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Total interest-bearing liabilities                                  |  | $                                  | 10,585,212 |   |          | $ | 320,403    |  | 4.05 | %              |  | $ | 8,275,129 |   |            | $ | 188,619 |  | 3.05 | %
|                                                                    |  |                                    |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Excess of interest-earning assets over interest-bearing liabilities |  | $                                  | 779,452    |   |          |   |            |  |      |                |  | $ | 621,428   |   |            |   |         |  |      |  
|                                                                    |  |                                    |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Net interest income                                                 |  |                                    |            |   |          | $ | 177,861    |  |      |                |  |   |           |   |            | $ | 116,858 |  |      |  
|                                                                    |  |                                    |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Interest rate spread                                                |  |                                    |            |   |          |   |            |  | 1.80 | %              |  |   |           |   |            |   |         |  | 1.53 | %
|Effect of non-interest bearing sources                              |  |                                    |            |   |          |   |            |  | 0.28 | %              |  |   |           |   |            |   |         |  | 0.22 | %
|                                                                    |  |                                    |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Net interest margin                                                 |  |                                    |            |   |          |   |            |  | 2.08 | %              |  |   |           |   |            |   |         |  | 1.75 | %
|                                                                    |  |                                    |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  
|Ratio of interest-earning assets to interest-bearing liabilities    |  |                                    | 107.36     | % |          |   |            |  |      |                |  |   | 107.51    | % |            |   |         |  |      |  
|                                                                    |  |                                    |            |   |          |   |            |  |      |                |  |   |           |   |            |   |         |  |      |  



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

|(1) | Includes average balances of loans held for sale of $60.9 million and $18.4 million for the nine months ended June 30, 2006 and 2005, respectively. Also includes average
non-accruing loans of $10.4 million and $15.5 million for the nine months ended June 30, 2006 and 2005, respectively.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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



30



---

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 Nine Month Period EndedJune 30, 2006 vs. 2005 |       
|                                                       |  | Increase (Decrease)Due to                             |        |   |               
|                                                       |  | Changes inVolume                                      |        |   | Changesin Rate |   | TotalIncrease/(Decrease) | 
|                                                       |  | (Dollars in thousands)                                |       
|Interest income attributable to:                       |  |                                                       |        |   |                |   |                          |  |   |         |  
|Loans, net (1)                                         |  | $                                                     | 98,053 |   |                | $ | 94,088                   |  | $ | 192,141 |  
|Mortgage-backed securities                             |  |                                                       | (8,922 | ) |                |   | 6,503                    |  |   | (2,419  | )
|Short-term investments (2)                             |  |                                                       | 174    |   |                |   | 427                      |  |   | 601     |  
|Investment securities and FHLB stock                   |  |                                                       | 330    |   |                |   | 2,134                    |  |   | 2,464   |  
|                                                       |  |                                                       |        |   |                |   |                          |  |   |         |  
|Total interest-earning assets                          |  |                                                       | 89,635 |   |                |   | 103,152                  |  |   | 192,787 |  
|                                                       |  |                                                       |        |   |                |   |                          |  |   |         |  
|Interest expense attributable to:                      |  |                                                       |        |   |                |   |                          |  |   |         |  
|Transaction and money market                           |  |                                                       | (44    | ) |                |   | 2,394                    |  |   | 2,350   |  
|Savings                                                |  |                                                       | 4,691  |   |                |   | 14,589                   |  |   | 19,280  |  
|Certificates of deposit                                |  |                                                       | 22,415 |   |                |   | 26,948                   |  |   | 49,363  |  
|Trust Preferred Securities and subordinated debentures |  |                                                       | 325    |   |                |   | 1,921                    |  |   | 2,246   |  
|Senior notes                                           |  |                                                       |       |   |                |   | 2                        |  |   | 2       |  
|FHLB advances and other borrowings                     |  |                                                       | 24,304 |   |                |   | 34,239                   |  |   | 58,543  |  
|                                                       |  |                                                       |        |   |                |   |                          |  |   |         |  
|Total interest-bearing liabilities                     |  |                                                       | 51,691 |   |                |   | 80,093                   |  |   | 131,784 |  
|                                                       |  |                                                       |        |   |                |   |                          |  |   |         |  
|Increase (decrease) in net interest income             |  | $                                                     | 37,944 |   |                | $ | 23,059                   |  | $ | 61,003  |  
|                                                       |  |                                                       |        |   |                |   |                          |  |   |         |  

---

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

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



Net Interest Income.



Net interest income before provision for loan losses was $177.9 million for the nine months ended June 30, 2006, increasing by $61 million, or 52%,
from $116.9 million for the same period in 2005. The net interest margin improved to 2.08% for the period, from 1.75% for the same period last year. The overall yield on interest earning assets increased by 127 basis points, while the overall rates
paid on interest bearing liabilities increased by 100 basis points, resulting in an improvement in the interest rate spread of 27 basis points for the nine months ended June 30, 2006 compared to the same period in 2005.



The improvement in net interest income is attributable primarily to the
growth in earning assets, the change in earning asset mix, and improving net interest rate spread. Average earning assets for the nine-month period increased by $2.5 billion, or 28%, from the same period a year ago. Growth was centered in loans,
which are the highest-yielding earning assets. Average loans represent 82% of earning assets in the current nine-month period as compared to 74% in the same period for the prior year.



The net interest spread rose to 1.80% from 1.53% for the same period last year. Factors affecting the yield improvement on
assets included prepayment fees on loans that increased from $2.8 million for the nine-month period ended June 30, 2005 to $9.4 million for the nine-month period ended June 30, 2006. Factors resulting in



31



---

improved cost of interest bearing liabilities included the prepayment of long-term high rate FHLB debt in the quarter ended June 30, 2005, and the
growth in non-interest bearing sources of funds, including the stock offering in the quarter ended March 31, 2006.



Prepayments on residential mortgage loans reduce loan interest income as the net deferred cost amortization is accelerated with the prepayment. For the
nine months ended June 30, 2006, the constant prepayment rate (CPR) was 16.7% as compared to 20.4% for the quarter ended June 30, 2005. The slower prepayment rate contributed to increase in the net interest margin for the nine-month period
ended June 30, 2006.



Provision for Loan
Losses.    BankUnited records a provision for loan losses as a charge to income in amounts necessary to adjust the allowance for loan losses as determined by management through its review of asset quality. The provision for
loan losses was $5.8 million and $3.0 million for the nine-month periods ended June 30, 2006 and 2005, respectively. Net recoveries for the nine months ended June 30, 2006 were $0.8 million compared to net charge-offs of $2.2 million for
the same period in 2005. The provision for the nine-month period primarily reflects loan portfolio growth, and net recoveries for the year. See Asset Qualityfor information on BankUniteds allowance for loan losses.



Analysis of Non-Interest Income and Expenses



|                                          |  |                                   |        |   |                     |   |        |   |  |   |       |   |  |        |  
|----------------------------------------- |  | --------------------------------- | ------ | - | ------------------- | - | ------ | - |  | - | ----- | - |  | ------ | -
|                                          |  | For the Nine MonthsEnded June 30, |        |   | Increase/(Decrease) |  
|                                          |  | 2006                              |        |   | 2005                |   |       
|                                          |  | (Dollars in thousands)            |       
|Non-interest income:                      |  |                                   |        |   |                     |   |        |   |  |   |       |   |  |        |  
|Loan servicing fees                       |  | $                                 | 5,224  |   |                     | $ | 2,504  |   |  | $ | 2,720 |   |  | 108.6  | %
|Amortization of mortgage servicing rights |  |                                   | (2,810 | ) |                     |   | (2,518 | ) |  |   | (292  | ) |  | (11.6  | )
|Impairment of mortgage servicing rights   |  |                                   | (870   | ) |                     |   | (130   | ) |  |   | (740  | ) |  | (100.0 | )
|Loan fees                                 |  |                                   | 2,501  |   |                     |   | 1,735  |   |  |   | 766   |   |  | 44.1   |  
|Deposit fees                              |  |                                   | 4,030  |   |                     |   | 3,182  |   |  |   | 848   |   |  | 26.6   |  
|Other fees                                |  |                                   | 2,142  |   |                     |   | 1,607  |   |  |   | 535   |   |  | 33.3   |  
|Net gain on sale of assets                |  |                                   | 8,735  |   |                     |   | 5,497  |   |  |   | 3,238 |   |  | 58.9   |  
|Insurance and investment services income  |  |                                   | 3,128  |   |                     |   | 3,185  |   |  |   | (57   | ) |  | (1.8   | )
|Losses on swaps                           |  |                                   | (1,465 | ) |                     |   | (1,369 | ) |  |   | (96   | ) |  | 7.0    |  
|Other                                     |  |                                   | 4,964  |   |                     |   | 3,789  |   |  |   | 1,175 |   |  | 31.0   |  
|                                          |  |                                   |        |   |                     |   |        |   |  |   |       |   |  |        |  
|Total non-interest income                 |  | $                                 | 25,579 |   |                     | $ | 17,482 |   |  | $ | 8,097 |   |  | 46.3   | %
|                                          |  |                                   |        |   |                     |   |        |   |  |   |       |   |  |        |  



Total non-interest
income of $25.6 million for the nine-month period ended June 30, 2006 reflects a 46.3% increase from the $17.5 million reported for the same period in the prior year.



BankUniteds portfolio of residential loans serviced for others was $1.6 billion as of June 30, 2006 compared to
$1.2 billion as of June 30, 2005. Servicing fee income net of amortization and impairment increased to $1.5 million for the nine-month period ended June 30, 2006, as compared to a loss of $144 thousand for the same period in 2005. This
improvement reflects the increase in ancillary fees earned on loans serviced for others including prepayment fees and the increase in the volume of loans serviced. An impairment charge of $870 thousand was taken during the nine-month period ended
June 30, 2006.



Fees on loans, deposit fees and other fees
were $8.7 million for the nine-month period ended June 30, 2006, up 33% compared to $6.5 million for the same period in the prior year.



Net gain on the sale of assets consisted of $8.7 million from the sale of loans for the nine months ended June 30, 2006 as compared to $5.5 million
for the same period in the prior year, which was comprised of $2.0 million from the sale of loans and $3.5 million from the sale of investments.



32



---

For the nine-month period ended June 30, 2006, BankUnited settled an interest rate swap contract on
which it recognized a $2 million loss recorded in non-interest income. See Note (8) Accounting for Derivatives and Hedging Activitiesto the accompanying notes to the consolidated financial statements.



|                                       |  |                                   |         |          |   |         |  |   |         |   |  |        |   
|-------------------------------------- |  | --------------------------------- | ------- | -------- | - | ------- |  | - | ------- | - |  | ------ | --
|                                       |  | For the Nine MonthsEnded June 30, |         | Increase |  
|                                       |  | 2006                              |         | 2005     |  
|                                       |  | (Dollars in thousands)            |        
|Non-interest expenses:                 |  |                                   |         |          |   |         |  |   |         |   |  |        |   
|Employee compensation and benefits     |  | $                                 | 55,803  |          | $ | 37,270  |  | $ | 17,813  |   |  | 47.8   | % 
|Occupancy and equipment                |  |                                   | 22,310  |          |   | 17,606  |  |   | 4,704   |   |  | 26.7   |   
|Telecommunications and data processing |  |                                   | 7,168   |          |   | 5,032   |  |   | 2,136   |   |  | 42.4   |   
|Advertising and promotion expense      |  |                                   | 5,081   |          |   | 4,253   |  |   | 828     |   |  | 19.5   |   
|Professional fees                      |  |                                   | 4,646   |          |   | 3,417   |  |   | 1,229   |   |  | 36.0   |   
|Debt extinguishment                    |  |                                   |        |          |   | 36,548  |  |   | (36,548 | ) |  | (100.0 | ) 
|Other operating expenses               |  |                                   | 13,712  |          |   | 9,553   |  |   | 4,159   |   |  | 43.5   |   
|                                       |  |                                   |         |          |   |         |  |   |         |   |  |        |   
|Total non-interest expenses            |  | $                                 | 108,000 |          | $ | 113,679 |  | $ | (5,679  | ) |  | (5.0   | )%
|                                       |  |                                   |         |          |   |         |  |   |         |   |  |        |   



Non-interest expense
decreased by $5.7 million, or 5.0%, for the nine months ended June 30, 2006, compared to the same period in 2005. Excluding a $36.5 million pretax prepayment fee on FHLB debt, non-interest expense was $77.1 million for the nine-month period
ended June 30, 2005. Non-interest expense for the nine-month period ended June 30, 2006, increased 40% from the nine-month period ended June 30, 2005, excluding the FHLB prepayment fees. Growth in operating expenses is centered in
employee and facilities expenses. Growth in expenses is driven by the growth in asset volume, continued expansion of the branch network. It also includes an increase of $8.3 million in commissions and performance-based compensation. Compensation
expense in 2006 also reflects the implementation of FAS 123R with a total increase in share-based compensation of $1.9 million from the same period in 2005. Of this amount, $1.4 million reflects the impact of option expensing.



LIQUIDITY



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



BankUnited, FSB has a borrowing line available at the Federal Home Loan Bank of Atlanta secured by eligible real estate loans. BankUnited has additional
borrowing capacity through securities sold under repurchase agreement with various counterparts. As of June 30, 2006 BankUnited, had $4.8 billion in advances outstanding at the FHLB and $1.0 billion in securities sold under agreement to
repurchase. Additional borrowing capacity under the FHLB line is $0.9 billion with certain limitations on short and long-term availability.



Short-term borrowing facilities are also available through fed funds purchased from other financial institutions. As of June 30, 2006, BankUnited had
$60 million in short-term fed funds purchased.



33



---

Significant Sources and Uses of Funds



For the nine months ended June 30, 2006, BankUnited recorded asset growth of $2.2 billion, primarily through loan
growth of $2.5 billion after sales of loans of $1.2 billion during the period.



BankUnited funded its asset and loan growth for the nine months ended June 30, 2006 primarily through deposit growth of $1.1 billion, an increase in FHLB advances of $1.0 billion, an equity offering of $150.9
million, repayment of mortgage backed securities of $309 million and a decline in cash equivalents of $127 million.



For the nine months ended June 30, 2005, BankUnited recorded asset growth of $1.2 billion primarily through loan growth of $1.8 billion after sales
of loans of $332 million during the period.



BankUnited funded
its asset and loan growth for the nine months ended June 30, 2005 primarily through deposit growth of $695 million, repayments of mortgage backed securities of $471 million, an increase in FHLB advances of $386 million and a decline in cash
equivalents of $74 million.



FINANCIAL CONDITION



Assets



Total net loans comprise the major earning asset of BankUnited and increased from $8.0 billion at September 30, 2005 to
$10.6 billion at June 30, 2006. Loans are centered in first mortgage residential loans that amount to $9.0 billion, or 83%, of the net loan portfolio, which grew $2.3 billion, or 34%, from September 30, 2005.



The following table provides a detail of residential loans (excluding
premiums and discounts) by state, including both portfolio loans and loans held for sale, for states with balances of 4% and higher.



|                                 |  |                       |       |                 |                         |   |        |   |                 |  |        |  
|-------------------------------- |  | --------------------- | ----- | --------------- | ----------------------- | - | ------ | - | --------------- |  | ------ | -
|Residential loans by state       |  | As of June 30,2006    |       |                 | As of September 30,2005 |  
|                                 |  | Amount                |       | Percent ofTotal |                         |   | Amount |   | Percent ofTotal | 
|                                 |  | (Dollars in millions) |      
|Florida                          |  | $                     | 5,864 |                 | 65.23                   | % |        | $ | 4,912           |  | 73.41  | %
|Illinois                         |  |                       | 592   |                 | 6.59                    |   |        |   | 422             |  | 6.31   |  
|California                       |  |                       | 409   |                 | 4.55                    |   |        |   | 107             |  | 1.60   |  
|Arizona                          |  |                       | 383   |                 | 4.26                    |   |        |   | 153             |  | 2.28   |  
|Virginia                         |  |                       | 376   |                 | 4.18                    |   |        |   | 233             |  | 3.48   |  
|Other (states with less than 4%) |  |                       | 1,366 |                 | 15.19                   |   |        |   | 864             |  | 12.92  |  
|                                 |  |                       |       |                 |                         |   |        |   |                 |  |        |  
|Total residential loans          |  | $                     | 8,990 |                 | 100.00                  | % |        | $ | 6,691           |  | 100.00 | %



The following table
provides a detail of total loans (excluding premiums and discounts) by state, including both portfolio loans and loans held for sale, for states with balances of 3.5% and higher. Non-residential loans are originated from the Florida lending offices.



|                                   |  |                       |        |                 |                         |   |        |   |                 |  |        |  
|---------------------------------- |  | --------------------- | ------ | --------------- | ----------------------- | - | ------ | - | --------------- |  | ------ | -
|Total loans by state               |  | As of June 30,2006    |        |                 | As of September 30,2005 |  
|                                   |  | Amount                |        | Percent ofTotal |                         |   | Amount |   | Percent ofTotal | 
|                                   |  | (Dollars in millions) |       
|Florida                            |  | $                     | 7,352  |                 | 70.13                   | % |        | $ | 6,161           |  | 77.54  | %
|Illinois                           |  |                       | 592    |                 | 5.65                    |   |        |   | 422             |  | 5.32   |  
|California                         |  |                       | 409    |                 | 3.90                    |   |        |   | 107             |  | 1.35   |  
|Arizona                            |  |                       | 383    |                 | 3.65                    |   |        |   | 153             |  | 1.92   |  
|Virginia                           |  |                       | 376    |                 | 3.59                    |   |        |   | 233             |  | 2.93   |  
|Other (states with less than 3.5%) |  |                       | 1,372  |                 | 13.08                   |   |        |   | 870             |  | 10.94  |  
|                                   |  |                       |        |                 |                         |   |        |   |                 |  |        |  
|Total loans                        |  | $                     | 10,484 |                 | 100.00                  | % |        | $ | 7,946           |  | 100.00 | %



34



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The portfolio also includes commercial real estate loans that amount to $951 million, or 9%, of the net
loan portfolio. Commercial real estate loans increased $172 million, or 22%, from September 30, 2005. Total loans secured by real estate represent 96% of the portfolio. Loan portfolio composition remains stable when compared to
September 30, 2005, but the loan portfolio as a percentage of total assets has grown from 76% at September 30, 2005 to 82% at June 30, 2006, as a result of strong loan demand.



Option ARM loans are adjustable-rate mortgages which provide borrowers
flexible payment options and have the potential for negative amortization above the original loan balance. Option ARM loans represented 56.8% and 48.0% of total loans outstanding as of June 30, 2006 and September 30, 2005, respectively. As
of June 30, 2006, option ARM loans with a balance of $4 billion, representing 67% of the option ARM portfolio, had $57.5 million of their principal balances above their original principal balance as a result of negative amortization. As of
September 30, 2005, option ARM loans with a balance of $2.0 billion, representing 53% of the option ARM portfolio, had negative amortization of $12.4 million. These loans are subject to interest rate caps.



BankUnited has conservative underwriting standards that include evaluation of
a borrowers debt service ability based on repayment of the loan at the fully indexed rate. As of June 30, 2006, the weighted average FICO score for BankUniteds option ARM loans was over 712.



As of June 30, 2006, the average balance of an option ARM loan was $299
thousand and the average loan to value (LTV) ratio based on the initial appraisal of the collateral was 77% without considering purchase mortgage insurance (PMI). Generally, loans produced with LTVs greater than 80% require PMI. As of
June 30, 2006, the average LTV ratio based on the initial appraisal of the collateral for the option ARM loan portfolio including PMI was 73%. LTVs may decline over time due to appreciation of housing markets as well as loan principal
reduction.



Negative amortization may increase the individual
loan balance up to an additional 15% of the original loan balance. The loan contractually converts to fully amortizing principal payments upon reaching the earlier of five years or the additional 15% maximum negative amortization. Upon reaching that
threshold, full amortization of the loan balance over the remaining life of the loan is required. For example, for a loan with an initial 73% LTV ratio, the loan principal could increase through deferred interest to a maximum LTV of 84% of the
original appraised value of the collateral. See Note(4) Loans Receivableto the accompanying condensed notes to consolidated financial statements.



Liabilities



Deposits.    Deposits increased from $4.7 billion at September 30, 2005 to $5.9 billion at June 30, 2006 and
funded 45% of BankUniteds total assets at June 30, 2006. The majority of the deposit growth was from interest bearing deposits that increased by $1.1 billion. Core deposits, defined as checking, money market, and saving deposits as well
as time deposits of $100 thousand and less, reached $4.2 billion as of June 30, 2006 and represented 71% of total deposits.



FHLB advances.    FHLB advances increased from $3.8 billion at September 30, 2005 to $4.8 billion at June 30,
2006 and funded 38% of BankUniteds total assets at June 30, 2006. Maturity of advances is managed by BankUnited as part of its asset and liability management process.



Securities sold under agreements to repurchase.    Securities sold under agreements to repurchase
(repos) decreased from $1.1 billion at September 30, 2005 to $1.0 at June 30, 2006 and funded 7% of total assets at June 30, 2006.



Other borrowings    BankUnited utilizes other forms of short and long term borrowing. At June 30, 2006 there were $60
million outstanding in fed funds purchased and none at September 30, 2005. These funds are used for funding short-term liquidity needs. There were no significant changes in other forms of borrowing between September 30, 2005 and
June 30, 2006.



35



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Asset Quality



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



|                                                                  |  |                        |        |   |                   |   |        |  
|----------------------------------------------------------------- |  | ---------------------- | ------ | - | ----------------- | - | ------ | -
|                                                                  |  | June 30,2006           |        |   | September 30,2005 |  
|                                                                  |  | (Dollars in thousands) |       
|Non-accrual loans                                                 |  | $                      | 13,230 |   |                   | $ | 8,391  |  
|Loans past due 90 days and still accruing                         |  |                        | 51     |   |                   |   |       |  
|                                                                  |  |                        |        |   |                   |   |        |  
|Total non-performing loans                                        |  |                        | 13,281 |   |                   |   | 8,391  |  
|Real estate owned                                                 |  |                        | 666    |   |                   |   | 542    |  
|                                                                  |  |                        |        |   |                   |   |        |  
|Total non-performing assets                                       |  | $                      | 13,947 |   |                   | $ | 8,933  |  
|                                                                  |  |                        |        |   |                   |   |        |  
|Allowance for loan losses                                         |  | $                      | 32,349 |   |                   | $ | 25,755 |  
|                                                                  |  |                        |        |   |                   |   |        |  
|Non-performing assets as a percentage of total assets             |  |                        | 0.11   | % |                   |   | 0.08   | %
|Non-performing loans as a percentage of total loans               |  |                        | 0.12   | % |                   |   | 0.10   | %
|Allowance for loan losses as a percentage of total loans          |  |                        | 0.31   | % |                   |   | 0.32   | %
|Allowance for loan losses as a percentage of non-performing loans |  |                        | 243.57 | % |                   |   | 306.94 | %



Management believes
the current allowance to be appropriate given the composition of its loan portfolio, which as of June 30, 2006 was 96% secured by real estate, and based upon the historical loss experience and its assessment of current asset quality. There can
be no assurance that additional provisions for loan losses will not be required in future periods.



The following table sets forth the change in BankUniteds allowance for loan losses for the three months and nine months ended June 30, 2006 and
2005.



|                                                            |  |                            |        |   |                           |   |        |              |  |   |              |   |  |   |        |  
|----------------------------------------------------------- |  | -------------------------- | ------ | - | ------------------------- | - | ------ | ------------ |  | - | ------------ | - |  | - | ------ | -
|                                                            |  | For the Three Months Ended |        |   | For the Nine Months Ended |  
|                                                            |  | June 30,2006               |        |   | June 30,2005              |   |        | June 30,2006 |  |   | June 30,2005 |  
|                                                            |  | (In thousands)             |       
|Allowance for loan losses, balance (at beginning of period) |  | $                          | 30,575 |   |                           | $ | 24,777 |              |  | $ | 25,755       |   |  | $ | 24,079 |  
|Provisions for loan losses                                  |  |                            | 1,200  |   |                           |   | 800    |              |  |   | 5,800        |   |  |   | 3,000  |  
|Loans charged off:                                          |  |                            |        |   |                           |   |        |              |  |   |              |   |  |   |        |  
|One-to-four family residential                              |  |                            | (81    | ) |                           |   | (235   | )            |  |   | (81          | ) |  |   | (903   | )
|Home equity loans and lines of credit                       |  |                            |       |   |                           |   | (241   | )            |  |   |             |   |  |   | (572   | )
|Commercial                                                  |  |                            | 33     |   |                           |   | (219   | )            |  |   | (460         | ) |  |   | (717   | )
|Consumer                                                    |  |                            | (73    | ) |                           |   | (36    | )            |  |   | (73          | ) |  |   | (114   | )
|                                                            |  |                            |        |   |                           |   |        |              |  |   |              |   |  |   |        |  
|Total loans charged off(1)                                  |  |                            | (121   | ) |                           |   | (731   | )            |  |   | (614         | ) |  |   | (2,306 | )
|                                                            |  |                            |        |   |                           |   |        |              |  |   |              |   |  |   |        |  
|Recoveries:                                                 |  |                            |        |   |                           |   |        |              |  |   |              |   |  |   |        |  
|Commercial                                                  |  |                            | 688    |   |                           |   | 30     |              |  |   | 1,395        |   |  |   | 97     |  
|Consumer                                                    |  |                            | 7      |   |                           |   | 50     |              |  |   | 13           |   |  |   | 56     |  
|                                                            |  |                            |        |   |                           |   |        |              |  |   |              |   |  |   |        |  
|Total recoveries(1)                                         |  |                            | 695    |   |                           |   | 80     |              |  |   | 1,408        |   |  |   | 153    |  
|                                                            |  |                            |        |   |                           |   |        |              |  |   |              |   |  |   |        |  
|Allowance for loan losses, balance (at end of period)       |  | $                          | 32,349 |   |                           | $ | 24,296 |              |  | $ | 32,349       |   |  | $ | 24,926 |  
|                                                            |  |                            |        |   |                           |   |        |              |  |   |              |   |  |   |        |  

---

|(1) | Net annualized (recoveries) charge-offs as a percentage of average total loans were (0.02%) and 0.04% for the three months ended June 30, 2006 and 2005, respectively; and
(0.01%) and 0.04% for the nine months ended June 30, 2006 and 2005, respectively.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



36



---

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



|                                                |  |                |        |                   |   |       
|----------------------------------------------- |  | -------------- | ------ | ----------------- | - | ------
|                                                |  | June 30, 2006  |        | September 30,2005
|                                                |  | (In thousands)
|Balance at the end of the period applicable to: |  |                |        |                   |   |       
|One-to-four family residential                  |  | $              | 8,611  |                   | $ | 6,356 
|Home equity loans and lines of credit           |  |                | 3,716  |                   |   | 2,909 
|Multi-family                                    |  |                | 681    |                   |   | 891   
|Commercial real estate                          |  |                | 4,321  |                   |   | 3,076 
|Construction                                    |  |                | 1,225  |                   |   | 697   
|Land                                            |  |                | 2,606  |                   |   | 1,886 
|Commercial                                      |  |                | 6,512  |                   |   | 7,161 
|Consumer                                        |  |                | 794    |                   |   | 843   
|Unallocated                                     |  |                | 3,973  |                   |   | 1,936 
|                                                |  |                |        |                   |   |       
|Total allowance for loan losses                 |  | $              | 32,349 |                   | $ | 25,755
|                                                |  |                |        |                   |   |       



|Item 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|------- | ----------------------------------------------------------



The discussion contained in BankUniteds Annual Report on Form 10-K for the year ended September 30, 2005, under Item 7a,
Quantitative and Qualitative Disclosures about Market Risk, provides detailed quantitative and qualitative disclosures about market risk and should be referenced for information thereon.



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



Risks Associated with
Investments and Mortgage-Backed Securities.    BankUnited purchases fixed and adjustable rate mortgage-backed securities and other securities for liquidity, yield and risk management purposes. Changes in market interest rates
associated with BankUniteds investments and mortgage-backed securities could have a material adverse effect on BankUniteds carrying value of its securities. Temporary changes in the carrying value of mortgage-backed securities and other
securities classified as available-for-sale are reflected, net of taxes, as a component of stockholders equity, while other than temporary impairment charges, if any, are recorded in earnings. See Note (3) Investments and
Mortgage-backed Securities Available for Saleto the accompanying condensed notes to the consolidated financial statements.



Risk Associated with Derivative and Hedging Activities



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



37



---

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. See discussion in Note (8) Accounting for Derivatives and Hedging Activities to the accompanying condensed notes to the consolidated financial statements.



|Item 4. | CONTROLS AND PROCEDURES
|------- | -----------------------



An evaluation of the effectiveness of the design and operation of BankUniteds disclosure controls and procedures was carried out by BankUnited, as
of the end of the period covered by this report, under the supervision and with the participation of BankUniteds management, including the Chief Executive Officer and Chief Financial Officer. Based on that evaluation, the Chief Executive
Officer and Chief Financial Officer concluded that BankUniteds disclosure controls and procedures were effective as of June 30, 2006, and provides reasonable assurance that the information required to be disclosed by BankUnited in reports
filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms and that such information is accumulated and communicated to management to allow
timely decisions regarding required disclosures. BankUnited may make changes to its disclosure controls and procedures periodically, as management reviews the design and effectiveness on a continuing basis. No change in internal control over
financial reporting occurred during the quarter ended June 30, 2006, that has materially affected, or is likely to materially affect, such internal control over financial reporting. A controls system, no matter how well designed and operated,
cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.



38



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PART IIOTHER INFORMATION



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



(c)    Exhibits.



|     |  |                                                                                                                                                                                    
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | 
|10.1 |  | Amendment to Employment Agreement between BankUnited and Alfred R. Camner.                                                                                                         
|     | 
|10.2 |  | Amendment to Employment Agreement between BankUnited and Alfred R. Camner.                                                                                                         
|     | 
|10.3 |  | Amendment to Employment Agreement between Bank and Alfred R. Camner.                                                                                                               
|     | 
|10.4 |  | Severance Arrangement between BankUnited and Hunting Deutsch.                                                                                                                      
|     | 
|10.5 |  | Change of Control Agreement between BankUnited and Hunting Deutsch.                                                                                                                
|     | 
|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.





39



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SIGNATURES



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



BANKUNITED FINANCIAL CORPORATIONBy:

/s/    Humberto L. LopezHumberto L. Lopez Senior Executive Vice President and Chief Financial Officer




August 9, 2006



By:

/s/    Bernardo M. ArgudinBernardo M. Argudin Executive Vice President and Principal Accounting Officer




40



---

Exhibit Index



|               |  |                                                                                                                                                                                    
|-------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit Number |  | Description                                                                                                                                                                        
|               | 
|10.1           |  | Amendment to Employment Agreement between BankUnited and Alfred R. Camner.                                                                                                         
|               | 
|10.2           |  | Amendment to Employment Agreement between BankUnited and Alfred R. Camner.                                                                                                         
|               | 
|10.3           |  | Amendment to Employment Agreement between Bank and Alfred R. Camner.                                                                                                               
|               | 
|10.4           |  | Severance Arrangement between BankUnited and Hunting Deutsch.                                                                                                                      
|               | 
|10.5           |  | Change of Control Agreement between BankUnited and Hunting Deutsch.                                                                                                                
|               | 
|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.