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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



Form 10-Q



(Mark One)



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



For the quarterly period ended March 31, 2007



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, as amended (the Exchange Act) during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days.    Yes x    No ̈



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



Large accelerated filer x    Accelerated filer ̈Non-accelerated filer ̈



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



The number of shares outstanding of the registrants common stock at the
close of business on May 1, 2007 was 35,889,469 shares of Class A Common Stock, $0.01 par value, and 523,747 shares of Class B Common Stock, $0.01 par value.



This Form 10-Q contains 47 pages.

The Index to Exhibits appears on page 47.



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##### Table of Contents

BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



FORM 10-Q REPORT FOR THE QUARTER ENDED MARCH 31, 2007



TABLE OF CONTENTS



|                             |  |                                                                                                                 |  |         
|---------------------------- |  | --------------------------------------------------------------------------------------------------------------- |  | --------
|                             |  |                                                                                                                 |  | Page No.
|PART IFINANCIAL INFORMATION |  |                                                                                                                
|                             |  |                                                                                                                
|Item 1.                      |  | Financial Statements                                                                                            |  |         
|                             |  |                                                                                                                
|                             |  | Consolidated Statements of Financial Condition as of March 31, 2007 (unaudited) and September 30, 2006          |  | 3       
|                             |  |                                                                                                                
|                             |  | Consolidated Statements of Income (unaudited) for the Three Months and Six Months Ended March 31, 2007 and 2006 |  | 4       
|                             |  |                                                                                                                
|                             |  | Consolidated Statements of Stockholders Equity (unaudited) for the Six Months Ended March 31, 2007 and 2006    |  | 5       
|                             |  |                                                                                                                
|                             |  | Condensed Consolidated Statements of Cash Flows (unaudited) for the Six Months Ended March 31, 2007 and 2006    |  | 6       
|                             |  |                                                                                                                
|                             |  | Condensed Notes to Consolidated Financial Statements (unaudited)                                                |  | 7       
|                             |  |                                                                                                                
|Item 2.                      |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                           |  | 23      
|                             |  |                                                                                                                
|Item 3.                      |  | Quantitative and Qualitative Disclosures About Market Risk                                                      |  | 40      
|                             |  |                                                                                                                
|Item 4.                      |  | Controls and Procedures                                                                                         |  | 41      
|                             | 
|PART IIOTHER INFORMATION    |  |                                                                                                                
|                             |  |                                                                                                                
|Item 1A.                     |  | Risk Factors                                                                                                    |  | 42      
|                             |  |                                                                                                                
|Item 2.                      |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                     |  | 44      
|                             |  |                                                                                                                
|Item 4.                      |  | Submission of Matters to a Vote of Security Holders                                                             |  | 44      
|                             |  |                                                                                                                
|Item 6.                      |  | Exhibits                                                                                                        |  | 45      



2



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##### Table of Contents

BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED)



|                                                                                                                                                                         |  |                                                  |            |   |                    |   |            |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------------------------------------ | ---------- | - | ------------------ | - | ---------- | -
|                                                                                                                                                                         |  | March 31, 2007                                   |            |   | September 30, 2006 |  
|                                                                                                                                                                         |  | (Dollars in thousands, except per share amounts) |           
|ASSETS                                                                                                                                                                   |  |                                                  |            |   |                    |   |            |  
|Cash                                                                                                                                                                     |  | $                                                | 48,249     |   |                    | $ | 53,284     |  
|Federal Home Loan Bank overnight deposits                                                                                                                                |  |                                                  | 198,174    |   |                    |   | 12,317     |  
|Federal funds sold                                                                                                                                                       |  |                                                  | 1,431      |   |                    |   | 1,054      |  
|                                                                                                                                                                         |  |                                                  |            |   |                    |   |            |  
|Cash and cash equivalents                                                                                                                                                |  |                                                  | 247,854    |   |                    |   | 66,655     |  
|                                                                                                                                                                         |  |                                                  |            |   |                    |   |            |  
|Investment securities available for sale, at fair value                                                                                                                  |  |                                                  | 202,517    |   |                    |   | 299,909    |  
|Mortgage-backed securities available for sale, at fair value (including assets pledged of $326,701 and $1,094,525 at March 31, 2007 and
September 30 2006, respectively) |  |                                                  | 1,053,924  |   |                    |   | 1,225,944  |  
|Mortgage loans held for sale at lower of cost or market                                                                                                                  |  |                                                  | 29,309     |   |                    |   | 9,542      |  
|Loans held in portfolio                                                                                                                                                  |  |                                                  | 11,631,164 |   |                    |   | 11,240,483 |  
|Add: Unearned discounts, premiums and deferred loan costs, net                                                                                                           |  |                                                  | 212,756    |   |                    |   | 196,601    |  
|Less: Allowance for loan losses                                                                                                                                          |  |                                                  | (41,827    | ) |                    |   | (36,378    | )
|                                                                                                                                                                         |  |                                                  |            |   |                    |   |            |  
|Loans held in portfolio, net                                                                                                                                             |  |                                                  | 11,802,093 |   |                    |   | 11,400,706 |  
|                                                                                                                                                                         |  |                                                  |            |   |                    |   |            |  
|FHLB stock and other earning assets                                                                                                                                      |  |                                                  | 270,885    |   |                    |   | 255,492    |  
|Office properties and equipment, net                                                                                                                                     |  |                                                  | 57,777     |   |                    |   | 48,728     |  
|Real estate owned                                                                                                                                                        |  |                                                  | 3,138      |   |                    |   | 729        |  
|Accrued interest receivable                                                                                                                                              |  |                                                  | 77,175     |   |                    |   | 71,398     |  
|Mortgage servicing rights                                                                                                                                                |  |                                                  | 19,060     |   |                    |   | 20,259     |  
|Goodwill                                                                                                                                                                 |  |                                                  | 28,353     |   |                    |   | 28,353     |  
|Bank owned life insurance                                                                                                                                                |  |                                                  | 119,604    |   |                    |   | 117,167    |  
|Prepaid expenses and other assets                                                                                                                                        |  |                                                  | 31,686     |   |                    |   | 26,017     |  
|                                                                                                                                                                         |  |                                                  |            |   |                    |   |            |  
|Total assets                                                                                                                                                             |  | $                                                | 13,943,375 |   |                    | $ | 13,570,899 |  
|                                                                                                                                                                         |  |                                                  |            |   |                    |   |            |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                     |  |                                                  |            |   |                    |   |            |  
|Liabilities:                                                                                                                                                             |  |                                                  |            |   |                    |   |            |  
|Interest bearing deposits                                                                                                                                                |  | $                                                | 6,475,849  |   |                    | $ | 5,681,868  |  
|Non-interest bearing deposits                                                                                                                                            |  |                                                  | 368,286    |   |                    |   | 392,264    |  
|                                                                                                                                                                         |  |                                                  |            |   |                    |   |            |  
|Total deposits                                                                                                                                                           |  |                                                  | 6,844,135  |   |                    |   | 6,074,132  |  
|                                                                                                                                                                         |  |                                                  |            |   |                    |   |            |  
|Securities sold under agreements to repurchase                                                                                                                           |  |                                                  | 310,582    |   |                    |   | 1,066,389  |  
|Advances from Federal Home Loan Bank                                                                                                                                     |  |                                                  | 5,464,350  |   |                    |   | 5,174,350  |  
|Convertible senior notes                                                                                                                                                 |  |                                                  | 120,000    |   |                    |   | 120,000    |  
|Trust preferred securities and subordinated debentures                                                                                                                   |  |                                                  | 250,148    |   |                    |   | 195,791    |  
|Interest payable                                                                                                                                                         |  |                                                  | 29,730     |   |                    |   | 32,006     |  
|Advance payments by borrowers for taxes and insurance                                                                                                                    |  |                                                  | 51,470     |   |                    |   | 92,717     |  
|Accrued expenses and other liabilities                                                                                                                                   |  |                                                  | 68,036     |   |                    |   | 62,354     |  
|                                                                                                                                                                         |  |                                                  |            |   |                    |   |            |  
|Total liabilities                                                                                                                                                        |  |                                                  | 13,138,451 |   |                    |   | 12,817,739 |  
|                                                                                                                                                                         |  |                                                  |            |   |                    |   |            |  
|Commitments and Contingencies (See note (10)                                                                                                                             |  |                                                  |            |   |                    |   |            |  
|                                                                                                                                                                         |  |                                                 
|Stockholders Equity:                                                                                                                                                    |  |                                                  |            |   |                    |   |            |  
|Preferred stock, $0.01 par value                                                                                                                                         |  |                                                  | 11         |   |                    |   | 10         |  
|Authorized shares10,000,000                                                                                                                                             |  |                                                  |            |   |                    |   |            |  
|Issued shares1,069,153 and 984,713 Outstanding shares1,042,433 and 957,993 Treasury shares26,720                                                                      |  |                                                  | (528       | ) |                    |   | (528       | )
|Class A common stock, $0.01 par value                                                                                                                                    |  |                                                  | 369        |   |                    |   | 366        |  
|Authorized shares100,000,000                                                                                                                                            |  |                                                  |            |   |                    |   |            |  
|Issued shares36,917,314 and 36,574,523 Outstanding shares35,997,452 and 36,140,943 Treasury shares919,862 and 433,580                                                 |  |                                                  | (17,380    | ) |                    |   | (5,226     | )
|Class B common stock, $0.01 par value                                                                                                                                    |  |                                                  | 8          |   |                    |   | 8          |  
|Authorized shares3,000,000                                                                                                                                              |  |                                                  |            |   |                    |   |            |  
|Issued shares750,947 and 771,262 Outstanding shares504,747 and 525,062 Treasury shares246,200                                                                         |  |                                                  | (2,802     | ) |                    |   | (2,802     | )
|Additional paid-in capital                                                                                                                                               |  |                                                  | 508,527    |   |                    |   | 503,585    |  
|Retained earnings                                                                                                                                                        |  |                                                  | 327,215    |   |                    |   | 276,078    |  
|Deferred compensation                                                                                                                                                    |  |                                                  | 2,048      |   |                    |   | 2,048      |  
|Accumulated other comprehensive loss                                                                                                                                     |  |                                                  | (12,544    | ) |                    |   | (20,379    | )
|                                                                                                                                                                         |  |                                                  |            |   |                    |   |            |  
|Total stockholders equity                                                                                                                                               |  |                                                  | 804,924    |   |                    |   | 753,160    |  
|                                                                                                                                                                         |  |                                                  |            |   |                    |   |            |  
|Total liabilities and stockholders equity                                                                                                                               |  | $                                                | 13,943,375 |   |                    | $ | 13,570,899 |  
|                                                                                                                                                                         |  |                                                  |            |   |                    |   |            |  



See accompanying
condensed notes to consolidated financial statements



3



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##### Table of Contents

BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)



|                                                                              |  |                                                          |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|----------------------------------------------------------------------------- |  | -------------------------------------------------------- | ------- | - | ---------------------------------- | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                                                              |  | For the Three Months Ended March 31,                     |         |   | For the Six Months Ended March 31, |  
|                                                                              |  | 2007                                                     |         |   | 2006                               |   |         | 2007 |  |   | 2006    |  
|                                                                              |  | (Dollars and shares in thousands, except per share data) |        
|Interest income:                                                              |  |                                                          |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Interest and fees on loans                                                    |  | $                                                        | 216,240 |   |                                    | $ | 141,479 |      |  | $ | 428,055 |   |  | $ | 262,488 |  
|Interest on mortgage-backed securities                                        |  |                                                          | 13,337  |   |                                    |   | 16,293  |      |  |   | 27,107  |   |  |   | 32,923  |  
|Interest and dividends on investments and other interest-earning assets       |  |                                                          | 7,465   |   |                                    |   | 6,620   |      |  |   | 15,709  |   |  |   | 12,508  |  
|                                                                              |  |                                                          |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Total interest income                                                         |  |                                                          | 237,042 |   |                                    |   | 164,392 |      |  |   | 470,871 |   |  |   | 307,919 |  
|                                                                              |  |                                                          |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Interest expense:                                                             |  |                                                          |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Interest on deposits                                                          |  |                                                          | 74,341  |   |                                    |   | 44,732  |      |  |   | 142,060 |   |  |   | 83,904  |  
|Interest on borrowings                                                        |  |                                                          | 74,539  |   |                                    |   | 56,094  |      |  |   | 156,811 |   |  |   | 105,374 |  
|Preferred dividends of trust preferred securities and subordinated debentures |  |                                                          | 5,822   |   |                                    |   | 3,812   |      |  |   | 10,865  |   |  |   | 7,575   |  
|                                                                              |  |                                                          |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Total interest expense                                                        |  |                                                          | 154,702 |   |                                    |   | 104,638 |      |  |   | 309,736 |   |  |   | 196,853 |  
|                                                                              |  |                                                          |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Net interest income before provision for loan losses                          |  |                                                          | 82,340  |   |                                    |   | 59,754  |      |  |   | 161,135 |   |  |   | 111,066 |  
|Provision for loan losses                                                     |  |                                                          | 4,000   |   |                                    |   | 2,300   |      |  |   | 8,000   |   |  |   | 4,600   |  
|                                                                              |  |                                                          |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Net interest income after provision for loan losses                           |  |                                                          | 78,340  |   |                                    |   | 57,454  |      |  |   | 153,135 |   |  |   | 106,466 |  
|                                                                              |  |                                                          |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Non-interest income:                                                          |  |                                                          |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Loan servicing fees                                                           |  |                                                          | 1,782   |   |                                    |   | 1,705   |      |  |   | 3,729   |   |  |   | 3,158   |  
|Amortization of mortgage servicing rights                                     |  |                                                          | (811    | ) |                                    |   | (841    | )    |  |   | (1,668  | ) |  |   | (1,727  | )
|Impairment of mortgage servicing rights                                       |  |                                                          | (133    | ) |                                    |   | (330    | )    |  |   | (965    | ) |  |   | (330    | )
|Loan fees                                                                     |  |                                                          | 1,265   |   |                                    |   | 954     |      |  |   | 2,339   |   |  |   | 1,663   |  
|Deposit fees                                                                  |  |                                                          | 1,510   |   |                                    |   | 1,338   |      |  |   | 2,984   |   |  |   | 2,655   |  
|Other fees                                                                    |  |                                                          | 697     |   |                                    |   | 706     |      |  |   | 1,369   |   |  |   | 1,347   |  
|Net loss on sale of investments and mortgage-backed securities                |  |                                                          | (566    | ) |                                    |   |        |      |  |   | (524    | ) |  |   |        |  
|Net gain on sale of loans and other assets                                    |  |                                                          | 3,474   |   |                                    |   | 1,872   |      |  |   | 9,069   |   |  |   | 3,762   |  
|Income from insurance and investment services                                 |  |                                                          | 1,320   |   |                                    |   | 1,312   |      |  |   | 2,272   |   |  |   | 2,212   |  
|Loss on swaps                                                                 |  |                                                          | (121    | ) |                                    |   | (914    | )    |  |   | (318    | ) |  |   | (914    | )
|Other non-interest income                                                     |  |                                                          | 1,736   |   |                                    |   | 1,610   |      |  |   | 3,456   |   |  |   | 3,259   |  
|                                                                              |  |                                                          |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Total non-interest income                                                     |  |                                                          | 10,153  |   |                                    |   | 7,412   |      |  |   | 21,743  |   |  |   | 15,085  |  
|                                                                              |  |                                                          |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Non-interest expenses:                                                        |  |                                                          |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Employee compensation and benefits                                            |  |                                                          | 26,551  |   |                                    |   | 17,811  |      |  |   | 50,837  |   |  |   | 34,572  |  
|Occupancy and equipment                                                       |  |                                                          | 9,551   |   |                                    |   | 7,355   |      |  |   | 18,107  |   |  |   | 14,298  |  
|Telecommunications and data processing                                        |  |                                                          | 2,933   |   |                                    |   | 2,336   |      |  |   | 5,764   |   |  |   | 4,461   |  
|Advertising and promotion expense                                             |  |                                                          | 2,243   |   |                                    |   | 1,664   |      |  |   | 4,018   |   |  |   | 3,062   |  
|Professional fees                                                             |  |                                                          | 1,842   |   |                                    |   | 1,417   |      |  |   | 3,459   |   |  |   | 2,913   |  
|Other                                                                         |  |                                                          | 8,206   |   |                                    |   | 4,789   |      |  |   | 14,188  |   |  |   | 8,498   |  
|                                                                              |  |                                                          |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Total non-interest expenses                                                   |  |                                                          | 51,326  |   |                                    |   | 35,372  |      |  |   | 96,373  |   |  |   | 67,804  |  
|                                                                              |  |                                                          |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Income before income taxes                                                    |  |                                                          | 37,167  |   |                                    |   | 29,494  |      |  |   | 78,505  |   |  |   | 53,747  |  
|Provision for income taxes                                                    |  |                                                          | 12,763  |   |                                    |   | 9,806   |      |  |   | 26,733  |   |  |   | 17,884  |  
|                                                                              |  |                                                          |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Net income                                                                    |  | $                                                        | 24,404  |   |                                    | $ | 19,688  |      |  | $ | 51,772  |   |  | $ | 35,863  |  
|                                                                              |  |                                                          |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Earnings Per Share:                                                           |  |                                                          |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Basic                                                                         |  | $                                                        | 0.67    |   |                                    | $ | 0.57    |      |  | $ | 1.42    |   |  | $ | 1.10    |  
|                                                                              |  |                                                          |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Diluted                                                                       |  | $                                                        | 0.64    |   |                                    | $ | 0.54    |      |  | $ | 1.35    |   |  | $ | 1.04    |  
|                                                                              |  |                                                          |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Weighted average number of common shares outstanding:                         |  |                                                          |         |   |                                    |   |         |      |  |   |         |   |  |   |         |  
|Basic                                                                         |  |                                                          | 36,252  |   |                                    |   | 34,453  |      |  |   | 36,321  |   |  |   | 32,288  |  
|Diluted                                                                       |  |                                                          | 38,351  |   |                                    |   | 36,663  |      |  |   | 38,397  |   |  |   | 34,412  |  
|Dividends declared per share on common stock                                  |  | $                                                        | 0.005   |   |                                    | $ | 0.005   |      |  | $ | 0.01    |   |  | $ | 0.01    |  



See accompanying
condensed notes to consolidated financial statements



4



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##### Table of Contents

BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (UNAUDITED)



|                                                   |  |                                                  |    |             |   |                |  |                  |         |  |               |         |   |                      |   |                                               |   |  |                          |       |  |   |         |   |  |   |         |  
|-------------------------------------------------- |  | ------------------------------------------------ | -- | ----------- | - | -------------- |  | ---------------- | ------- |  | ------------- | ------- | - | -------------------- | - | --------------------------------------------- | - |  | ------------------------ | ----- |  | - | ------- | - |  | - | ------- | -
|                                                   |  | For the Six Months Ended March 31, 2007 and 2006 |   
|                                                   |  | PreferredStock                                   |    | CommonStock |   | Paid-inCapital |  | RetainedEarnings |         |  | TreasuryStock |         |   | DeferredCompensation |   | AccumulatedOtherComprehensive Loss Net of Tax |   |  | TotalStockholdersEquity |      
|                                                   |  | (In thousands)                                   |   
|Balance at September 30, 2006                      |  | $                                                | 10 |             | $ | 374            |  | $                | 503,585 |  | $             | 276,078 |   |                      | $ | (8,556                                        | ) |  | $                        | 2,048 |  | $ | (20,379 | ) |  | $ | 753,160 |  
|Comprehensive income:                              |  |                                                  |    |             |   |                |  |                  |         |  |               |         |   |                      |   |                                               |   |  |                          |       |  |   |         |   |  |   |         |  
|Net income for the six months ended March 31, 2007 |  |                                                  |   |             |   |               |  |                  |        |  |               | 51,772  |   |                      |   |                                              |   |  |                          |      |  |   |        |   |  |   | 51,772  |  
|Other comprehensive income net of tax              |  |                                                  |   |             |   |               |  |                  |        |  |               |        |   |                      |   |                                              |   |  |                          |      |  |   | 7,835   |   |  |   | 7,835   |  
|                                                   |  |                                                  |    |             |   |                |  |                  |         |  |               |         |   |                      |   |                                               |   |  |                          |       |  |   |         |   |  |   |         |  
|Total comprehensive income                         |  |                                                  |   |             |   |               |  |                  |        |  |               |        |   |                      |   |                                              |   |  |                          |      |  |   |        |   |  |   | 59,607  |  
|Payment of dividends                               |  |                                                  |   |             |   |               |  |                  |        |  |               | (635    | ) |                      |   |                                              |   |  |                          |      |  |   |        |   |  |   | (635    | )
|Company stock acquired                             |  |                                                  |   |             |   |               |  |                  |        |  |               |        |   |                      |   | (12,154                                       | ) |  |                          |      |  |   |        |   |  |   | (12,154 | )
|Stock option exercises and restricted stock awards |  |                                                  | 1  |             |   | 3              |  |                  | 4,942   |  |               |        |   |                      |   |                                              |   |  |                          |      |  |   |        |   |  |   | 4,946   |  
|                                                   |  |                                                  |    |             |   |                |  |                  |         |  |               |         |   |                      |   |                                               |   |  |                          |       |  |   |         |   |  |   |         |  
|Balance at March 31, 2007                          |  | $                                                | 11 |             | $ | 377            |  | $                | 508,527 |  | $             | 327,215 |   |                      | $ | (20,710                                       | ) |  | $                        | 2,048 |  | $ | (12,544 | ) |  | $ | 804,924 |  
|                                                   |  |                                                  |    |             |   |                |  |                  |         |  |               |         |   |                      |   |                                               |   |  |                          |       |  |   |         |   |  |   |         |  
|Balance at September 30, 2005                      |  | $                                                | 9  |             | $ | 308            |  | $                | 342,859 |  | $             | 193,372 |   |                      | $ | (7,728                                        | ) |  | $                        | 1,695 |  | $ | (22,899 | ) |  | $ | 507,616 |  
|Comprehensive income:                              |  |                                                  |    |             |   |                |  |                  |         |  |               |         |   |                      |   |                                               |   |  |                          |       |  |   |         |   |  |   |         |  
|Net income for the six months ended March 31, 2006 |  |                                                  |   |             |   |               |  |                  |        |  |               | 35,863  |   |                      |   |                                              |   |  |                          |      |  |   |        |   |  |   | 35,863  |  
|Other comprehensive loss, net of tax               |  |                                                  |   |             |   |               |  |                  |        |  |               |        |   |                      |   |                                              |   |  |                          |      |  |   | (6,671  | ) |  |   | (6,671  | )
|                                                   |  |                                                  |    |             |   |                |  |                  |         |  |               |         |   |                      |   |                                               |   |  |                          |       |  |   |         |   |  |   |         |  
|Total comprehensive income                         |  |                                                  |   |             |   |               |  |                  |        |  |               |        |   |                      |   |                                              |   |  |                          |      |  |   |        |   |  |   | 29,192  |  
|Payment of dividends                               |  |                                                  |   |             |   |               |  |                  |        |  |               | (566    | ) |                      |   |                                              |   |  |                          |      |  |   |        |   |  |   | (566    | )
|Stock offering                                     |  |                                                  |   |             |   | 58             |  |                  | 150,226 |  |               |        |   |                      |   |                                              |   |  |                          |      |  |   |        |   |  |   | 150,284 |  
|Company stock acquired                             |  |                                                  |   |             |   |               |  |                  |        |  |               |        |   |                      |   | (255                                          | ) |  |                          |      |  |   |        |   |  |   | (255    | )
|Deferral of compensation                           |  |                                                  |   |             |   |               |  |                  |        |  |               |        |   |                      |   |                                              |   |  |                          | 106   |  |   |        |   |  |   | 106     |  
|Stock option exercises and restricted stock awards |  |                                                  | 1  |             |   | 3              |  |                  | 4,150   |  |               |        |   |                      |   |                                              |   |  |                          |      |  |   |        |   |  |   | 4,154   |  
|                                                   |  |                                                  |    |             |   |                |  |                  |         |  |               |         |   |                      |   |                                               |   |  |                          |       |  |   |         |   |  |   |         |  
|Balance at March 31, 2006                          |  | $                                                | 10 |             | $ | 369            |  | $                | 497,235 |  | $             | 228,669 |   |                      | $ | (7,983                                        | ) |  | $                        | 1,801 |  | $ | (29,570 | ) |  | $ | 690,531 |  
|                                                   |  |                                                  |    |             |   |                |  |                  |         |  |               |         |   |                      |   |                                               |   |  |                          |       |  |   |         |   |  |   |         |  



See accompanying
condensed notes to consolidated financial statements



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##### Table of Contents

BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)



|                                                                                               |  |                                   |            |   |      |   |            |  
|---------------------------------------------------------------------------------------------- |  | --------------------------------- | ---------- | - | ---- | - | ---------- | -
|                                                                                               |  | For the Six Months EndedMarch 31, |           
|                                                                                               |  | 2007                              |            |   | 2006 |  
|                                                                                               |  | (In thousands)                    |           
|Cash used in operating activities                                                              |  | $                                 | (85,599    | ) |      | $ | (30,882    | )
|                                                                                               |  |                                   |            |   |      |   |            |  
|Cash flows from investing activities:                                                          |  |                                   |            |   |      |   |            |  
|Net increase in loans held in portfolio                                                        |  |                                   | (365,551   | ) |      |   | (1,876,720 | )
|Purchase of investment securities available for sale                                           |  |                                   | (17,908    | ) |      |   | (19,686    | )
|Purchase of FHLB stock and other earning assets                                                |  |                                   | (94,188    | ) |      |   | (98,284    | )
|Purchase of office properties and equipment                                                    |  |                                   | (15,477    | ) |      |   | (8,614     | )
|Proceeds from repayments of investment securities available for sale                           |  |                                   | 61,556     |   |      |   | 16,540     |  
|Proceeds from repayments of mortgage-backed securities available for sale                      |  |                                   | 166,037    |   |      |   | 220,577    |  
|Proceeds from repayments of FHLB stock and other earning assets                                |  |                                   | 78,795     |   |      |   | 65,745     |  
|Proceeds from sale of investment securities available for sale                                 |  |                                   | 57,342     |   |      |   | 3,780      |  
|Proceeds from sale of mortgage-backed securities available for sale                            |  |                                   | 91,225     |   |      |   | 81,406     |  
|Proceeds from sale of real estate owned and other assets                                       |  |                                   | 1,067      |   |      |   | 746        |  
|Proceeds from sale of office properties and equipment                                          |  |                                   | 582        |   |      |   | 29         |  
|                                                                                               |  |                                   |            |   |      |   |            |  
|Net cash used in investing activities                                                          |  |                                   | (36,520    | ) |      |   | (1,614,481 | )
|                                                                                               |  |                                   |            |   |      |   |            |  
|                                                                                               |  |                                  
|Cash flows from financing activities:                                                          |  |                                   |            |   |      |   |            |  
|Net increase in deposits                                                                       |  |                                   | 770,003    |   |      |   | 719,768    |  
|Additions to long-term Federal Home Loan advances                                              |  |                                   | 2,640,000  |   |      |   | 1,240,000  |  
|Repayments of long-term Federal Home Loan advances                                             |  |                                   | (1,880,000 | ) |      |   | (851,035   | )
|Net (decrease) increase in short-term Federal Home Loan advances                               |  |                                   | (470,000   | ) |      |   | 227,000    |  
|Net (decrease) increase in other borrowings                                                    |  |                                   | (755,807   | ) |      |   | 36,864     |  
|Net decrease in advances from borrowers for taxes and insurance                                |  |                                   | (41,247    | ) |      |   | (25,673    | )
|Net proceeds from issuance of trust preferred securities                                       |  |                                   | 52,120     |   |      |   |           |  
|Net proceeds from issuance of stock                                                            |  |                                   | 1,038      |   |      |   | 151,627    |  
|Purchase of treasury stock                                                                     |  |                                   | (12,154    | ) |      |   |           |  
|Dividends paid on common stock                                                                 |  |                                   | (362       | ) |      |   | (329       | )
|Dividends paid on preferred stock                                                              |  |                                   | (273       | ) |      |   | (237       | )
|                                                                                               |  |                                   |            |   |      |   |            |  
|Net cash provided by financing activities                                                      |  |                                   | 303,318    |   |      |   | 1,497,985  |  
|                                                                                               |  |                                   |            |   |      |   |            |  
|                                                                                               |  |                                  
|Increase (decrease) in cash and cash equivalents                                               |  |                                   | 181,199    |   |      |   | (147,378   | )
|Cash and cash equivalents at beginning of period                                               |  |                                   | 66,655     |   |      |   | 238,051    |  
|                                                                                               |  |                                   |            |   |      |   |            |  
|Cash and cash equivalents at end of period                                                     |  | $                                 | 247,854    |   |      | $ | 90,673     |  
|                                                                                               |  |                                   |            |   |      |   |            |  
|                                                                                               |  |                                  
|Supplemental schedule of non-cash investing and financing activities:                          |  |                                   |            |   |      |   |            |  
|Exchange of loans for mortgage-backed securities in loan sales transaction with FNMA and FHLMC |  | $                                 | 79,482     |   |      | $ | 93,934     |  
|Transfer of loans from portfolio to loans held for sale                                        |  | $                                 | 130,207    |   |      | $ | 657,023    |  
|Transfer of loans held for sale to portfolio                                                   |  | $                                 | 34,257     |   |      | $ |           |  
|Transfers from loans to real estate owned                                                      |  | $                                 | 3,576      |   |      | $ |           |  



See accompanying
condensed notes to consolidated financial statements



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



1.    Principles of Consolidation and Basis of Presentation



The accompanying unaudited consolidated financial statements include the accounts of BankUnited Financial Corporation (BankUnited) and its
consolidated subsidiaries, including BankUnited, FSB (the Bank). All significant intercompany transactions and balances associated with consolidated subsidiaries have been eliminated.



The unaudited consolidated financial statements have been prepared in
conformity with Rule 10-01 of Regulation S-X of the Securities and Exchange Commission (the SEC) and therefore do not include information or footnotes necessary for a complete presentation of financial position, results of operations and
cash flows in conformity with generally accepted accounting principles. However, all adjustments (consisting of normal recurring accruals), which, in the opinion of management, are necessary for a fair presentation of the financial statements, have
been included. Operating results for the three and six-month periods ended March 31, 2007 are not necessarily indicative of the results that may be expected for the year ending September 30, 2007. The September 30, 2006 consolidated
statement of financial condition was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. These condensed notes should be read in
conjunction with the Consolidated Financial Statements and Notes thereto included in BankUniteds Annual Report on Form 10-K for the fiscal year ended September 30, 2006.



Certain prior period amounts have been reclassified to conform to the March 31, 2007 consolidated financial statements
presentation.



2.    Impact of Certain Accounting
Pronouncements



FASB Staff Position Nos. FAS 115-1 and FAS 124-1



This FASB Staff Position (FSP) addresses the
determination of when an investment is considered impaired, whether that impairment is other than temporary, and the measurement of an impairment loss. This FSP also includes accounting considerations subsequent to the recognition of other-than
temporary impairment and requires certain disclosures about unrealized losses that have not been recognized as other-than-temporary-impairments. This guidance is effective for reporting periods beginning after December 15, 2005 and was
effective beginning the quarter ended March 31, 2006. BankUnited performs impairment assessment on a quarterly basis.



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
principles. SFAS No. 154 was effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. BankUnited adopted this statement in the fiscal year that began on October 1, 2006, and
will apply it as applicable.



SFAS No. 155



In February 2006, the FASB issued SFAS No. 155 Accounting for
Certain Hybrid 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.



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



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONTINUED



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 was effective for all financial instruments acquired or issued after the beginning of an entitys first fiscal year that begins after September 15, 2006. BankUnited adopted this statement
in the fiscal year that began on October 1, 2006, without any material effect.



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
is effective for an entitys first fiscal year that begins after September 15, 2006. BankUnited elected to continue using the amortization method as the accounting treatment of mortgage servicing rights for new transactions related to
fixed-rate mortgage loans in the fiscal year that began on October 1, 2006.



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 is effective for fiscal years beginning after
December 15, 2006. BankUnited will adopt this statement, as applicable, in its fiscal year beginning October 1, 2007.



Management does not expect this interpretation to have a material effect on BankUniteds financial statements.



SFAS No. 157



In September 2006, the FASB issued SFAS No. 157 Fair Value Measurements. This Statement defines fair value,
establishes a framework for measuring fair value in accordance with generally accepted accounting



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONTINUED



principles, and expands disclosures about fair value measurements. This Statement follows other accounting pronouncements that require or permit fair value
measurements, the FASB having previously concluded in those accounting pronouncements that fair value is the relevant measurement attribute. Accordingly, this Statement does not require any new fair value measurements.



This Statement shall be effective for financial statements issued for fiscal
years beginning after November 15, 2007, and interim periods within those fiscal years. BankUnited will adopt this statement, as applicable, in its fiscal year beginning October 1, 2008.



Management does not expect this statement to have a material effect on
BankUniteds financial statements.



SAB No. 108



In September 2006, the SEC issued Staff Accounting Bulletin No. 108,
(SAB No. 108) Financial StatementsConsidering the Effects of Prior Year Misstatements When Quantifying Misstatements in Current Year Financial Statements.



SAB No. 108 addresses how to quantify the effect of an error on the
financial statements concluding that dual balance sheet and income approach should be used to compute the impact of the amount of a misstatement. Specifically, the amount should be computed using both the rollover (income statement
perspective) and iron curtain (balance sheet perspective) methods.



SAB No. 108 is effective for fiscal years ending after November 15, 2006. BankUnited adopted this statement in its fiscal year that began on October 1, 2006, and will apply it as applicable.



SFAS No. 159



In February 2007, the FASB issued SFAS No. 159 The Fair Value Option for Financial Assets and Financial
LiabilitiesIncluding an Amendment of FASB Statement No. 115.



This Statement permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to
mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. It represents a way to establish economic hedging outside FAS 133 by electing to
recognize at fair value an item being hedged with a free standing derivative with value changes on both items flowing through the income statement.



Most of the provisions of this Statement apply only to entities that elect the fair value option. However, the amendment to FASB Statement No. 115,
Accounting for Certain Investments in Debt and Equity Securities,applies to all entities with available-for-sale and trading securities.



The fair value option established by this Statement permits all entities to choose to measure eligible items at fair value at specified election dates. A
business entity shall report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date.



The fair value option:



| |  |  | May be applied instrument by instrument, with a few exceptions, such as investments otherwise accounted for by the equity method.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------



| |  |  | Is irrevocable (unless a new election date occurs).
| | - |  | ---------------------------------------------------



| |  |  | Is applied only to entire instruments and not to portions of instruments.
| | - |  | -------------------------------------------------------------------------



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONTINUED



This Statement shall be effective for financial statements issued for fiscal years beginning after
November 15, 2007. BankUnited will adopt this Statement, as applicable, in its fiscal year beginning October 1, 2008.



Management does not expect this statement to have a material effect on BankUniteds financial statements.



3.    Investment and Mortgage-backed Securities Available for Sale



Investments Securities Available for Sale



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



|                                                      |  |                      |         |                      |   |                       |  |   |            |   |  |   |        
|----------------------------------------------------- |  | -------------------- | ------- | -------------------- | - | --------------------- |  | - | ---------- | - |  | - | -------
|                                                      |  | As of March 31, 2007
|                                                      |  | AmortizedCost        |         | GrossUnrealizedGains |   | GrossUnrealizedLosses |  |   | Fair Value
|                                                      |  | (In thousands)      
|U.S. government sponsored entity debt securities (1)  |  | $                    | 25,000  |                      | $ |                      |  | $ | (250       | ) |  | $ | 24,750 
|Preferred stock of U.S. government sponsored entities |  |                      | 56,196  |                      |   | 50                    |  |   | (1,033     | ) |  |   | 55,213 
|Trust preferred securities of other issuers           |  |                      | 4,000   |                      |   | 7                     |  |   | (57        | ) |  |   | 3,950  
|Mutual funds and other bonds (2)                      |  |                      | 118,667 |                      |   | 35                    |  |   | (3,604     | ) |  |   | 115,098
|Other equity securities                               |  |                      | 3,097   |                      |   | 409                   |  |   |           |   |  |   | 3,506  
|                                                      |  |                      |         |                      |   |                       |  |   |            |   |  |   |        
|Total                                                 |  | $                    | 206,960 |                      | $ | 501                   |  | $ | (4,944     | ) |  | $ | 202,517
|                                                      |  |                      |         |                      |   |                       |  |   |            |   |  |   |        



|                                                      |  |                          |         |                      |   |                       |  |   |            |   |  |   |        
|----------------------------------------------------- |  | ------------------------ | ------- | -------------------- | - | --------------------- |  | - | ---------- | - |  | - | -------
|                                                      |  | As of September 30, 2006
|                                                      |  | AmortizedCost            |         | GrossUnrealizedGains |   | GrossUnrealizedLosses |  |   | Fair Value
|                                                      |  | (In thousands)          
|U.S. government sponsored entity debt securities (1)  |  | $                        | 70,599  |                      | $ |                      |  | $ | (683       | ) |  | $ | 69,916 
|Preferred stock of U.S. government sponsored entities |  |                          | 95,696  |                      |   | 100                   |  |   | (4,541     | ) |  |   | 91,255 
|Trust preferred securities of other issuers           |  |                          | 23,056  |                      |   | 361                   |  |   | (67        | ) |  |   | 23,350 
|Mutual funds and other bonds (2)                      |  |                          | 116,160 |                      |   | 43                    |  |   | (4,159     | ) |  |   | 112,044
|Other equity securities                               |  |                          | 3,097   |                      |   | 247                   |  |   |           |   |  |   | 3,344  
|                                                      |  |                          |         |                      |   |                       |  |   |            |   |  |   |        
|Total                                                 |  | $                        | 308,608 |                      | $ | 751                   |  | $ | (9,450     | ) |  | $ | 299,909
|                                                      |  |                          |         |                      |   |                       |  |   |            |   |  |   |        



Investment securities
at March 31, 2007, by contractual maturity, are shown below.



|                                       |  |                    |         |            |   |        
|-------------------------------------- |  | ------------------ | ------- | ---------- | - | -------
|                                       |  | Available for Sale
|                                       |  | AmortizedCost      |         | Fair Value
|                                       |  | (In thousands)    
|Due in one year or less                |  | $                  | 28,596  |            | $ | 28,336 
|Due after one year through five years  |  |                    | 5,616   |            |   | 5,597  
|Due after five years through ten years |  |                    | 1,855   |            |   | 1,841  
|Due after ten years                    |  |                    | 37,731  |            |   | 37,353 
|Equity securities                      |  |                    | 133,162 |            |   | 129,390
|                                       |  |                    |         |            |   |        
|Total                                  |  | $                  | 206,960 |            | $ | 202,517
|                                       |  |                    |         |            |   |        

---

|(1) | U.S. government sponsored entities include the Federal National Mortgage Association (FNMA) and the Federal Home Loan Mortgage Corporation (FHLMC).
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------

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



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONTINUED



Mortgage-backed Securities Available for Sale



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



|                                       |  |                      |           |                      |   |                         |  |   |            |   |  |   |          
|-------------------------------------- |  | -------------------- | --------- | -------------------- | - | ----------------------- |  | - | ---------- | - |  | - | ---------
|                                       |  | As of March 31, 2007
|                                       |  | AmortizedCost        |           | GrossUnrealizedGains |   | Gross Unrealized Losses |  |   | Fair Value
|                                       |  | (In thousands)      
|FNMA mortgage-backed securities        |  | $                    | 187,485   |                      | $ | 32                      |  | $ | (5,410     | ) |  | $ | 182,107  
|FHLMC mortgage-backed securities       |  |                      | 55,199    |                      |   |                        |  |   | (898       | ) |  |   | 54,301   
|Collateralized mortgage obligations    |  |                      | 5,454     |                      |   |                        |  |   | (574       | ) |  |   | 4,880    
|Mortgage pass-through certificates (1) |  |                      | 820,696   |                      |   | 774                     |  |   | (8,834     | ) |  |   | 812,636  
|                                       |  |                      |           |                      |   |                         |  |   |            |   |  |   |          
|Total                                  |  | $                    | 1,068,834 |                      | $ | 806                     |  | $ | (15,716    | ) |  | $ | 1,053,924
|                                       |  |                      |           |                      |   |                         |  |   |            |   |  |   |          



|                                       |  |                          |           |                      |   |                         |  |   |            |   |  |   |          
|-------------------------------------- |  | ------------------------ | --------- | -------------------- | - | ----------------------- |  | - | ---------- | - |  | - | ---------
|                                       |  | As of September 30, 2006
|                                       |  | AmortizedCost            |           | GrossUnrealizedGains |   | Gross Unrealized Losses |  |   | Fair Value
|                                       |  | (In thousands)          
|FNMA mortgage-backed securities        |  | $                        | 211,207   |                      | $ | 62                      |  | $ | (7,612     | ) |  | $ | 203,657  
|FHLMC mortgage-backed securities       |  |                          | 63,391    |                      |   | 24                      |  |   | (1,668     | ) |  |   | 61,747   
|Collateralized mortgage obligations    |  |                          | 6,860     |                      |   | 42                      |  |   | (26        | ) |  |   | 6,876    
|Mortgage pass-through certificates (1) |  |                          | 967,207   |                      |   | 396                     |  |   | (13,939    | ) |  |   | 953,664  
|                                       |  |                          |           |                      |   |                         |  |   |            |   |  |   |          
|Total                                  |  | $                        | 1,248,665 |                      | $ | 524                     |  | $ | (23,245    | ) |  | $ | 1,225,944
|                                       |  |                          |           |                      |   |                         |  |   |            |   |  |   |          

---

|(1) | Included in BankUniteds portfolio of mortgage-backed securities as of March 31, 2007 and September 30, 2006, were securities with a fair value of $206 million and
$230 million, respectively, retained from BankUniteds mortgage loans securitization from September 2005.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Mortgage-backed securities at March 31, 2007, by contractual maturity and adjusted for anticipated prepayments, are shown below.



|                                       |  |                    |           |            |   |          
|-------------------------------------- |  | ------------------ | --------- | ---------- | - | ---------
|                                       |  | Available for Sale
|                                       |  | Amortized Cost     |           | Fair Value
|                                       |  | (In thousands)    
|Due in one year or less                |  | $                  | 144,182   |            | $ | 142,170  
|Due after one year through five years  |  |                    | 405,199   |            |   | 399,547  
|Due after five years through ten years |  |                    | 519,453   |            |   | 512,207  
|Due after ten years                    |  |                    |          |            |   |         
|                                       |  |                    |           |            |   |          
|Total                                  |  | $                  | 1,068,834 |            | $ | 1,053,924
|                                       |  |                    |           |            |   |          



Based on the internal
model used by BankUnited, estimated average duration of the mortgage-backed securities portfolio as of March 31, 2007 was 1.06 years. This duration extends to 1.25 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.



11



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONTINUED



The following tables provide information on unrealized losses for investments and mortgage-backed
securities available for sale as of March 31, 2007 and September 30, 2006.



|                                                          |  |                      |        |                      |                      |      |            |       |                       |         |  |            |         |                       |  |   |         |  |   |         |  
|--------------------------------------------------------- |  | -------------------- | ------ | -------------------- | -------------------- | ---- | ---------- | ----- | --------------------- | ------- |  | ---------- | ------- | --------------------- |  | - | ------- |  | - | ------- | -
|                                                          |  | As of March 31, 2007 |       
|                                                          |  | 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               |  | $                    |       |                      | $                    |     |            |       | $                     | 1,943   |  | $          | (57     | )                     |  | $ | 1,943   |  | $ | (57     | )
|U.S. government sponsored entity debt securities (2)      |  |                      |       |                      |                      |     |            |       |                       | 24,750  |  |            | (250    | )                     |  |   | 24,750  |  |   | (250    | )
|Preferred stock of U.S. government sponsored entities (2) |  |                      | 34,610 |                      |                      | (340 | )          |       |                       | 15,553  |  |            | (693    | )                     |  |   | 50,163  |  |   | (1,033  | )
|Mutual funds and other bonds (3)                          |  |                      | 11,796 |                      |                      | (88  | )          |       |                       | 92,225  |  |            | (3,516  | )                     |  |   | 104,021 |  |   | (3,604  | )
|                                                          |  |                      |        |                      |                      |      |            |       |                       |         |  |            |         |                       |  |   |         |  |   |         |  
|Total investment securities                               |  | $                    | 46,406 |                      | $                    | (428 | )          |       | $                     | 134,471 |  | $          | (4,516  | )                     |  | $ | 180,877 |  | $ | (4,944  | )
|                                                          |  |                      |        |                      |                      |      |            |       |                       |         |  |            |         |                       |  |   |         |  |   |         |  
|Mortgage-backed securities:                               |  |                      |        |                      |                      |      |            |       |                       |         |  |            |         |                       |  |   |         |  |   |         |  
|FNMA mortgage-backed securities                           |  | $                    |       |                      | $                    |     |            |       | $                     | 178,558 |  | $          | (5,410  | )                     |  | $ | 178,558 |  | $ | (5,410  | )
|FHLMC mortgage-backed securities                          |  |                      |       |                      |                      |     |            |       |                       | 53,274  |  |            | (898    | )                     |  |   | 53,274  |  |   | (898    | )
|Collateralized mortgage obligations                       |  |                      | 3,786  |                      |                      | (552 | )          |       |                       | 1,094   |  |            | (22     | )                     |  |   | 4,880   |  |   | (574    | )
|Mortgage pass-through certificates                        |  |                      | 36,104 |                      |                      | (280 | )          |       |                       | 633,061 |  |            | (8,554  | )                     |  |   | 669,165 |  |   | (8,834  | )
|                                                          |  |                      |        |                      |                      |      |            |       |                       |         |  |            |         |                       |  |   |         |  |   |         |  
|Total mortgage-backed securities                          |  | $                    | 39,890 |                      | $                    | (832 | )          |       | $                     | 865,987 |  | $          | (14,884 | )                     |  | $ | 905,877 |  | $ | (15,716 | )
|                                                          |  |                      |        |                      |                      |      |            |       |                       |         |  |            |         |                       |  |   |         |  |   |         |  

---

|(1) | These unrealized losses are not considered to be other- than- temporary based on managements evaluation. Impairment is evaluated considering numerous factors, and their
relative significance varies depending on the situation. Factors considered include the length of time and extent to which the market value has been less than cost; the financial condition and near-term prospects of the issuer of the securities; and
the intent and ability to retain the security in order to allow for an anticipated recovery in fair value.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | U.S. Government sponsored entities include FNMA and FHLMC.
|--- | ----------------------------------------------------------

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



|                                                          |  |                          |        |                      |                      |        |            |       |                       |           |  |            |         |                       |  |   |           |  |   |         |  
|--------------------------------------------------------- |  | ------------------------ | ------ | -------------------- | -------------------- | ------ | ---------- | ----- | --------------------- | --------- |  | ---------- | ------- | --------------------- |  | - | --------- |  | - | ------- | -
|                                                          |  | As of September 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               |  | $                        | 1,996  |                      | $                    | (5     | )          |       | $                     | 1,938     |  | $          | (62     | )                     |  | $ | 3,934     |  | $ | (67     | )
|U.S. government sponsored entity debt securities (2)      |  |                          |       |                      |                      |       |            |       |                       | 69,916    |  |            | (683    | )                     |  |   | 69,916    |  |   | (683    | )
|Preferred stock of U.S. government sponsored entities (2) |  |                          | 37,156 |                      |                      | (2,859 | )          |       |                       | 24,361    |  |            | (1,682  | )                     |  |   | 61,517    |  |   | (4,541  | )
|Mutual funds and other bonds (3)                          |  |                          | 8,273  |                      |                      | (166   | )          |       |                       | 91,178    |  |            | (3,993  | )                     |  |   | 99,451    |  |   | (4,159  | )
|                                                          |  |                          |        |                      |                      |        |            |       |                       |           |  |            |         |                       |  |   |           |  |   |         |  
|Total investment securities                               |  | $                        | 47,425 |                      | $                    | (3,030 | )          |       | $                     | 187,393   |  | $          | (6,420  | )                     |  | $ | 234,818   |  | $ | (9,450  | )
|                                                          |  |                          |        |                      |                      |        |            |       |                       |           |  |            |         |                       |  |   |           |  |   |         |  
|Mortgage-backed securities:                               |  |                          |        |                      |                      |        |            |       |                       |           |  |            |         |                       |  |   |           |  |   |         |  
|FNMA mortgage-backed securities                           |  | $                        | 252    |                      | $                    | (1     | )          |       | $                     | 198,578   |  | $          | (7,611  | )                     |  | $ | 198,830   |  | $ | (7,612  | )
|FHLMC mortgage-backed securities                          |  |                          |       |                      |                      |       |            |       |                       | 59,534    |  |            | (1,668  | )                     |  |   | 59,534    |  |   | (1,668  | )
|Collateralized mortgage obligations                       |  |                          |       |                      |                      |       |            |       |                       | 1,355     |  |            | (26     | )                     |  |   | 1,355     |  |   | (26     | )
|Mortgage pass-through certificates                        |  |                          | 20,730 |                      |                      | (154   | )          |       |                       | 862,145   |  |            | (13,785 | )                     |  |   | 882,875   |  |   | (13,939 | )
|                                                          |  |                          |        |                      |                      |        |            |       |                       |           |  |            |         |                       |  |   |           |  |   |         |  
|Total mortgage-backed securities                          |  | $                        | 20,982 |                      | $                    | (155   | )          |       | $                     | 1,121,612 |  | $          | (23,090 | )                     |  | $ | 1,142,594 |  | $ | (23,245 | )
|                                                          |  |                          |        |                      |                      |        |            |       |                       |           |  |            |         |                       |  |   |           |  |   |         |  

---

|(1) | These unrealized losses are not considered to be other- than- temporary based on managements evaluation. Impairment is evaluated considering numerous factors, and their
relative significance varies depending on the situation. Factors considered include the length of time and extent to which the market value has been less than cost; the financial condition and near-term prospects of the issuer of the securities; and
the intent and ability to retain the security in order to allow for an anticipated recovery in fair value.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | U.S. Government sponsored entities include FNMA and FHLMC.
|--- | ----------------------------------------------------------

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



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONTINUED



Proceeds from sales of investment securities were $57 million for the six-month period ended March
31, 2007. Net realized losses from these sales were $551 thousand, which, were mainly related to the sale of preferred of U.S. government sponsored entities.



Proceeds from sales of mortgage-backed securities were $91 million. Realized gain from these sales was $27 thousand.



4.    Loans Receivable



Loans receivable consist of the following:



|                                                          |  |                        |            |   |                          |       |   |        |   |            |                 |  |       |  
|--------------------------------------------------------- |  | ---------------------- | ---------- | - | ------------------------ | ----- | - | ------ | - | ---------- | --------------- |  | ----- | -
|                                                          |  | As of March 31, 2007   |            |   | As of September 30, 2006 |      
|                                                          |  | Amount                 |            |   | Percent of Total         |       |   | Amount |   |            | Percent ofTotal | 
|                                                          |  | (Dollars in thousands) |           
|Real estate loans:                                        |  |                        |            |   |                          |       |   |        |   |            |                 |  |       |  
|One-to-four family residential:                           |  |                        |            |   |                          |       |   |        |   |            |                 |  |       |  
|Residential mortgages                                     |  | $                      | 9,352,166  |   |                          | 79.2  | % |        | $ | 8,967,323  |                 |  | 78.6  | %
|Specialty consumer mortgages                              |  |                        | 676,047    |   |                          | 5.7   |   |        |   | 694,590    |                 |  | 6.1   |  
|                                                          |  |                        |            |   |                          |       |   |        |   |            |                 |  |       |  
|Total one-to-four family residential                      |  |                        | 10,028,213 |   |                          | 84.9  |   |        |   | 9,661,913  |                 |  | 84.7  |  
|Home equity loans and lines of credit                     |  |                        | 397,788    |   |                          | 3.4   |   |        |   | 355,822    |                 |  | 3.1   |  
|Multi-family                                              |  |                        | 80,668     |   |                          | 0.7   |   |        |   | 85,544     |                 |  | 0.8   |  
|Commercial real estate                                    |  |                        | 441,266    |   |                          | 3.7   |   |        |   | 413,637    |                 |  | 3.6   |  
|Construction                                              |  |                        | 152,559    |   |                          | 1.3   |   |        |   | 174,466    |                 |  | 1.5   |  
|Land                                                      |  |                        | 321,670    |   |                          | 2.7   |   |        |   | 337,023    |                 |  | 3.0   |  
|                                                          |  |                        |            |   |                          |       |   |        |   |            |                 |  |       |  
|Total real estate loans                                   |  |                        | 11,422,164 |   |                          | 96.7  |   |        |   | 11,028,405 |                 |  | 96.7  |  
|                                                          |  |                        |            |   |                          |       |   |        |   |            |                 |  |       |  
|Other loans:                                              |  |                        |            |   |                          |       |   |        |   |            |                 |  |       |  
|Commercial                                                |  |                        | 191,376    |   |                          | 1.6   |   |        |   | 194,269    |                 |  | 1.7   |  
|Consumer                                                  |  |                        | 17,624     |   |                          | 0.2   |   |        |   | 17,809     |                 |  | 0.2   |  
|                                                          |  |                        |            |   |                          |       |   |        |   |            |                 |  |       |  
|Total other loans                                         |  |                        | 209,000    |   |                          | 1.8   |   |        |   | 212,078    |                 |  | 1.9   |  
|                                                          |  |                        |            |   |                          |       |   |        |   |            |                 |  |       |  
|Total loans held in portfolio (1)                         |  |                        | 11,631,164 |   |                          | 98.5  |   |        |   | 11,240,483 |                 |  | 98.6  |  
|Unearned discounts, premiums and deferred loan costs, net |  |                        | 212,756    |   |                          | 1.8   |   |        |   | 196,601    |                 |  | 1.7   |  
|Allowance for loan losses                                 |  |                        | (41,827    | ) |                          | (0.3  | ) |        |   | (36,378    | )               |  | (0.3  | )
|                                                          |  |                        |            |   |                          |       |   |        |   |            |                 |  |       |  
|Total loans held in portfolio, net                        |  |                        | 11,802,093 |   |                          | 100.0 | % |        |   | 11,400,706 |                 |  | 100.0 | %
|Mortgage loans held for sale                              |  |                        | 29,309     |   |                          |       |   |        |   | 9,542      |                 |  |       |  
|                                                          |  |                        |            |   |                          |       |   |        |   |            |                 |  |       |  
|Total loans, net                                          |  | $                      | 11,831,402 |   |                          |       |   |        | $ | 11,410,248 |                 |  |       |  
|                                                          |  |                        |            |   |                          |       |   |        |   |            |                 |  |       |  

---

|(1) | As of March 31, 2007, BankUnited had $70.5 million of non-accrual loans and $0.5 million of loans past due more than 90 days and still accruing. As of September 30,
2006, BankUnited had $20.7 million of non-accrual loans and no loans past due more than 90 days and still accruing.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



As of March 31, 2007, the Bank had pledged approximately $8.9 billion of mortgage loans as collateral for advances from the Federal Home Loan Bank of
Atlanta (FHLB). As of September 30, 2006, the Bank had pledged approximately $8.2 billion of mortgage loans as collateral for advances from the FHLB.



13



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONTINUED



The following table provides the composition of BankUniteds one-to-four family residential
loans as of March 31, 2007 and September 30, 2006, including loans held for sale.



|                                                                              |  |                        |            |                  |                          |   |        |   |                 |  |       |  
|----------------------------------------------------------------------------- |  | ---------------------- | ---------- | ---------------- | ------------------------ | - | ------ | - | --------------- |  | ----- | -
|                                                                              |  | As of March 31, 2007   |            |                  | As of September 30, 2006 |  
|                                                                              |  | Amount                 |            | Percent of Total |                          |   | Amount |   | Percent ofTotal | 
|                                                                              |  | (Dollars in thousands) |           
|One-to-four family residential loans:                                         |  |                        |            |                  |                          |   |        |   |                 |  |       |  
|Fixed rate loans                                                              |  | $                      | 1,327,121  |                  | 13.2                     | % |        | $ | 1,273,240       |  | 13.1  | %
|Adjustable rate loans (ARM):                                                  |  |                        |            |                  |                          |   |        |   |                 |  |       |  
|Option ARM (1)                                                                |  |                        | 6,970,961  |                  | 69.3                     |   |        |   | 6,662,052       |  | 68.9  |  
|Non Option ARM                                                                |  |                        | 1,759,440  |                  | 17.5                     |   |        |   | 1,736,163       |  | 18.0  |  
|                                                                              |  |                        |            |                  |                          |   |        |   |                 |  |       |  
|Total ARM loans                                                               |  |                        | 8,730,401  |                  | 86.8                     |   |        |   | 8,398,215       |  | 86.9  |  
|                                                                              |  |                        |            |                  |                          |   |        |   |                 |  |       |  
|Total one-to-four family residential loans, including loans held for sale (2) |  | $                      | 10,057,522 |                  | 100.0                    | % |        | $ | 9,671,455       |  | 100.0 | %
|                                                                              |  |                        |            |                  |                          |   |        |   |                 |  |       |  

---

|(1) | This concentration represents 59.8% of BankUniteds total loans outstanding (including loans held for sale and excluding deferred costs, discounts, premiums and allowance for
loans losses) as of March 31, 2007. As of March 31, 2007, option ARM loans with a balance of $5.9 billion were negatively amortizing with approximately $175.8 million of their principal balances resulting from negative amortization. As of
September 30, 2006, option ARM loans with a balance of $5 billion were negatively amortizing with approximately $89 million of their principal balances resulting from negative amortization. These loans are subject to interest rate caps.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Excluding deferred costs, discounts, premiums and allowance for loan losses.
|--- | ----------------------------------------------------------------------------



Option ARM loans have an interest rate that adjusts periodically, generally on a monthly basis, and allows borrowers different monthly payment options.
The initial minimum monthly payment is generally lower than the amount required for full amortization of the loan and may only increase by 7.5% annually through the fifth year of the loan. The scheduled monthly payment increases after five years to
require full repayment of the loan balance over the remaining term of the loan.



The borrower may pay an amount that covers principal and interest that would reduce the outstanding loan balance in any month, an amount that would pay interest only or an amount that is a minimum monthly payment.



If borrowers elect the option to pay a minimum payment that
may not cover the interest accrued on the loan for the month this would result in deferred interest being added to the balance of the loan. The increase in loan balance over the original loan amount is referred to as negative amortization.
Contractual terms of the option ARM limit the amount that the loan balance can increase through negative amortization to 115% of the original loan amount during the first five years of the loan. Upon reaching this limit, the monthly payment
increases to require full repayment of principal over the remaining term of the loan. The borrower has other options that would allow him or her to pay interest only or a higher amount that would reduce the outstanding loan balance in any month.



The characteristics of the option ARM portfolio as of
March 31, 2007 were as follows:



| |  |  | Option ARM loans represented 59% of the total loan portfolio (including unearned discounts, premiums, and deferred loan costs, and excluding loans held for sale and
allowance for loan losses);
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | $5.9 billion representing 85% of the option ARM loans, had negative amortization of $175.8 million. This amount represented 3.0% of the loan balance on negatively
amortizing loans, or 2.5% of the total option ARM loans outstanding (including loans held for sale and excluding premiums and discounts);
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The average loan-to-value (LTV) of the option ARM portfolio at inception was 73% after adjusting for coverage of Private Mortgage Insurance (PMI);
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------



14



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONTINUED



| |  |  | The average outstanding balance of an option ARM loan in the portfolio, was $310 thousand; and
| | - |  | ----------------------------------------------------------------------------------------------



| |  |  | The average borrower credit score (FICO) was 709.
| | - |  | -------------------------------------------------



5.    Earnings Per Share



The following tables reconcile basic and diluted earnings per share for the three and six months ended March 31, 2007 and 2006.



|                                                    |  |                                                          |        |                                   |   |        |  |      |        |  |   |       
|--------------------------------------------------- |  | -------------------------------------------------------- | ------ | --------------------------------- | - | ------ |  | ---- | ------ |  | - | ------
|                                                    |  | For the Three MonthsEnded March 31,                      |        | For the Six MonthsEnded March 31,
|                                                    |  | 2007                                                     |        | 2006                              |   | 2007   |  | 2006
|                                                    |  | (Dollars and shares in thousands, except per share data)
|Basic earnings per share:                           |  |                                                          |        |                                   |   |        |  |      |        |  |   |       
|Numerator:                                          |  |                                                          |        |                                   |   |        |  |      |        |  |   |       
|Net income                                          |  | $                                                        | 24,404 |                                   | $ | 19,688 |  | $    | 51,772 |  | $ | 35,863
|Preferred stock dividends                           |  |                                                          | 133    |                                   |   | 118    |  |      | 268    |  |   | 237   
|                                                    |  |                                                          |        |                                   |   |        |  |      |        |  |   |       
|Net income available to common stockholders         |  | $                                                        | 24,271 |                                   | $ | 19,570 |  | $    | 51,504 |  | $ | 35,626
|                                                    |  |                                                          |        |                                   |   |        |  |      |        |  |   |       
|Denominator:                                        |  |                                                          |        |                                   |   |        |  |      |        |  |   |       
|Weighted average common shares outstanding          |  |                                                          | 36,252 |                                   |   | 34,453 |  |      | 36,321 |  |   | 32,288
|                                                    |  |                                                          |        |                                   |   |        |  |      |        |  |   |       
|Basic earnings per share                            |  | $                                                        | 0.67   |                                   | $ | 0.57   |  | $    | 1.42   |  | $ | 1.10  
|                                                    |  |                                                          |        |                                  
|Diluted earnings per share:                         |  |                                                          |        |                                   |   |        |  |      |        |  |   |       
|Numerator:                                          |  |                                                          |        |                                   |   |        |  |      |        |  |   |       
|Net income available to common stockholders         |  | $                                                        | 24,271 |                                   | $ | 19,570 |  | $    | 51,504 |  | $ | 35,626
|Plus:                                               |  |                                                          |        |                                   |   |        |  |      |        |  |   |       
|Preferred stock dividends                           |  |                                                          | 133    |                                   |   | 118    |  |      | 268    |  |   | 237   
|                                                    |  |                                                          |        |                                   |   |        |  |      |        |  |   |       
|Diluted net income available to common stockholders |  | $                                                        | 24,404 |                                   | $ | 19,688 |  | $    | 51,772 |  | $ | 35,863
|                                                    |  |                                                          |        |                                   |   |        |  |      |        |  |   |       
|Denominator:                                        |  |                                                          |        |                                   |   |        |  |      |        |  |   |       
|Weighted average common shares outstanding          |  |                                                          | 36,252 |                                   |   | 34,453 |  |      | 36,321 |  |   | 32,288
|Plus:                                               |  |                                                          |        |                                   |   |        |  |      |        |  |   |       
|Stock options and restricted stock                  |  |                                                          | 1,146  |                                   |   | 1,299  |  |      | 1,116  |  |   | 1,215 
|Preferred stock                                     |  |                                                          | 953    |                                   |   | 911    |  |      | 960    |  |   | 909   
|                                                    |  |                                                          |        |                                   |   |        |  |      |        |  |   |       
|Diluted weighted average shares outstanding         |  |                                                          | 38,351 |                                   |   | 36,663 |  |      | 38,397 |  |   | 34,412
|                                                    |  |                                                          |        |                                   |   |        |  |      |        |  |   |       
|Diluted earnings per share(1)                       |  | $                                                        | 0.64   |                                   | $ | 0.54   |  | $    | 1.35   |  | $ | 1.04  

---

|(1) | For the three months ended March 31, 2007, BankUnited did not consider potential common and preferred stock options of 669,954 and 297,500, respectively, in the computation of
diluted earnings per share as they would have been antidilutive.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | For the six months ended March 31, 2007, BankUnited did not consider potential common and preferred stock options of 619,504 and 490,000, respectively, in the computation of
diluted earnings per share as they would have been antidilutive.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONTINUED



6.    Regulatory Capital



The Banks regulatory capital levels as of March 31, 2007 and September 30, 2006 were as follows:



|                                        |  |                        |           |                         |   |          
|--------------------------------------- |  | ---------------------- | --------- | ----------------------- | - | ---------
|                                        |  | As of March 31,2007    |           | As of September 30,2006
|                                        |  | (Dollars in thousands)
|Tier 1 Leverage Capital                 |  |                        |           |                         |   |          
|Amount                                  |  | $                      | 1,058,477 |                         | $ | 990,629  
|Actual Ratio                            |  |                        | 7.6%      |                         |   | 7.3%     
|Well-Capitalized Minimum Ratio(1)       |  |                        | 5.0%      |                         |   | 5.0%     
|Adequately Capitalized Minimum Ratio(1) |  |                        | 4.0%      |                         |   | 4.0%     
|Tier 1 Risk-Based Capital (2)           |  |                        |           |                         |   |          
|Amount                                  |  | $                      | 1,058,477 |                         | $ | 990,629  
|Actual Ratio                            |  |                        | 14.4%     |                         |   | 13.8%    
|Well-Capitalized Minimum Ratio(1)       |  |                        | 6.0%      |                         |   | 6.0%     
|Adequately Capitalized Minimum Ratio(1) |  |                        | 4.0%      |                         |   | 4.0%     
|Total Risk-Based Capital                |  |                        |           |                         |   |          
|Amount                                  |  | $                      | 1,087,359 |                         | $ | 1,013,770
|Actual Ratio                            |  |                        | 14.9%     |                         |   | 14.3%    
|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 adopted to implement the prompt corrective action provisions of the Federal Deposit Insurance Corporation Improvement
Act of 1991.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Tier 1 risk-based capital ratio is the ratio of core capital to risk weighted assets.
|--- | -------------------------------------------------------------------------------------



7.    Comprehensive Income



BankUniteds comprehensive income includes all items which comprise net income, plus other comprehensive income (loss).
For the three and the six months ended March 31, 2007 and 2006, BankUniteds comprehensive income was as follows:



|                                                                                                                                                                                                                                                                             |  |                                      |        |   |                                    |   |        |      |  |   |        |   |  |   |        |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------ | ------ | - | ---------------------------------- | - | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                                                                                                                                                                                                                                                             |  | For the Three Months Ended March 31, |        |   | For the Six Months Ended March 31, |  
|                                                                                                                                                                                                                                                                             |  | 2007                                 |        |   | 2006                               |   |        | 2007 |  |   | 2006   |  
|                                                                                                                                                                                                                                                                             |  | (Dollars in thousands)               |       
|Net income                                                                                                                                                                                                                                                                   |  | $                                    | 24,404 |   |                                    | $ | 19,688 |      |  | $ | 51,772 |   |  | $ | 35,863 |  
|Other comprehensive income (loss), net of tax:                                                                                                                                                                                                                               |  |                                      |        |   |                                    |   |        |      |  |   |        |   |  |   |        |  
|Unrealized gain (loss) arising during the period on securities, net of tax (expense) benefit of ($2,462) and $1,783 for the three months ended
March 31, 2007 and 2006, respectively, and ($4,271) and $3,445 for the six months ended March 31, 2007 and 2006, respectively |  |                                      | 4,573  |   |                                    |   | (3,311 | )    |  |   | 7,932  |   |  |   | (6,398 | )
|Unrealized loss on cash flow hedges, net of tax benefit of $98 and $190 for the three months ended March 31, 2007 and 2006, respectively,
and $208 and $159 for the six months ended March 31, 2007 and 2006, respectively                                                   |  |                                      | (182   | ) |                                    |   | (354   | )    |  |   | (387   | ) |  |   | (295   | )
|Less reclassification adjustment for:                                                                                                                                                                                                                                        |  |                                      |        |   |                                    |   |        |      |  |   |        |   |  |   |        |  
|Realized loss on securities sold included in net income, net of tax benefit of $198 and $0 for the three months ended March 31, 2007 and
2006, respectively, and $184 and $0 for the six months ended March 31, 2007 and 2006, respectively                                  |  |                                      | (368   | ) |                                    |   |       |      |  |   | (340   | ) |  |   |       |  
|Realized gain (loss) on cash flow hedges, net of tax (expense) benefit of ($11) and ($2) for the three months ended March 31, 2007 and
2006, respectively, and ($27) and $12 for the six months ended March 31, 2007 and 2006, respectively                                  |  |                                      | 21     |   |                                    |   | 4      |      |  |   | 50     |   |  |   | (22    | )
|Other                                                                                                                                                                                                                                                                        |  |                                      |       |   |                                    |   | (203   | )    |  |   |       |   |  |   |       |  
|                                                                                                                                                                                                                                                                             |  |                                      |        |   |                                    |   |        |      |  |   |        |   |  |   |        |  
|Total other comprehensive income (loss), net of tax                                                                                                                                                                                                                          |  |                                      | 4,738  |   |                                    |   | (3,466 | )    |  |   | 7,835  |   |  |   | (6,671 | )
|                                                                                                                                                                                                                                                                             |  |                                      |        |   |                                    |   |        |      |  |   |        |   |  |   |        |  
|Comprehensive income                                                                                                                                                                                                                                                         |  | $                                    | 29,142 |   |                                    | $ | 16,222 |      |  | $ | 59,607 |   |  | $ | 29,192 |  
|                                                                                                                                                                                                                                                                             |  |                                      |        |   |                                    |   |        |      |  |   |        |   |  |   |        |  



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONTINUED



8.    Accounting For Derivatives and Hedging Activities



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



Loan Commitments



BankUnited commits to originate one-to-four family residential mortgage loans with potential borrowers at specified interest
rates for short periods of time, usually thirty days. If potential borrowers meet underwriting standards, these loan commitments obligate BankUnited to fund the loans, but do not obligate the potential borrowers to accept the loans. If the borrowers
do not allow the commitments to expire, the loans are funded, and either placed into BankUniteds loan portfolio or held for sale. Based on historical experience, the interest rate environment, and the underlying loan characteristics,
BankUnited estimates the amount of commitments that will ultimately become loans held for sale and accounts for those as derivatives during the commitment period. As derivatives, the changes in the fair value of the commitments are recorded in
current earnings under other non-interest expense with an offset to the consolidated statement of financial condition in other liabilities. Fair values are based solely on the relationship of observable market interest rates and are calculated 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. Hedge accounting was not applied to these contracts in the six-month periods ended March 31, 2007 and March 31, 2006.



Loans Held For Sale



Loans held for sale are accounted for under the lower of cost or market method. Lower of cost or market adjustments are
recorded in earnings under non-interest expense. No adjustments, related to lower of cost or market, were booked in the six-month periods ended March 31, 2007, and March 31, 2006.



Interest Rate Swaps and Caps



At March 31, 2007, BankUnited had outstanding two interest rate cap
contracts used to reduce the risk of rising interest payments associated with specific variable rate debt instruments. These contracts were accounted for as cash flow hedges under SFAS 133.



BankUnited applied hedge accounting based on the short cut method
for interest rate swaps provided for in Statement of Financial Accounting Standards No. 133 for the quarter ended December 31, 2005. BankUnited reviewed its application of the short cut method in accounting for interest rate swaps in the
subsequent quarter based on guidance issued by the SEC in December 2005, and concluded that three hedge transactions outstanding at December 31, 2005, did not meet the requirements set forth in the guidance and that hedge accounting was



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CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONTINUED



precluded for those items in the periods previously applied. BankUnited concluded that the reclassification of these swaps did not materially affect the
results of operations for any period presented and recognized a $242 thousand net charge from prior periods for the quarter ended March 31, 2006. The shortcut method has not been used in subsequent periods.



As of March 31, 2007 there were no interest rate swap agreements outstanding.



The following table summarizes certain information with
respect to the use of derivatives and their impact on BankUniteds statements of income during the three and six months ended March 31, 2007, and 2006:



|                                                                |  |                                     |      |   |                                   |   |      |      |  |   |      |   |  |   |      |  
|--------------------------------------------------------------- |  | ----------------------------------- | ---- | - | --------------------------------- | - | ---- | ---- |  | - | ---- | - |  | - | ---- | -
|                                                                |  | For the Three MonthsEnded March 31, |      |   | For the Six MonthsEnded March 31, |  
|                                                                |  | 2007                                |      |   | 2006                              |   |      | 2007 |  |   | 2006 |  
|                                                                |  | (In thousands)                      |     
|Interest Rate Swaps                                             |  |                                     |      |   |                                   |   |      |      |  |   |      |   |  |   |      |  
|Loss recorded in non-interest income related to cash flow swaps |  | $                                   | (121 | ) |                                   | $ | (914 | )    |  | $ | (318 | ) |  | $ | (914 | )
|Other Derivatives (1)                                           |  |                                     |      |   |                                   |   |      |      |  |   |      |   |  |   |      |  
|(Loss) gain recorded in non-interest expense                    |  |                                     | (82  | ) |                                   |   | 176  |      |  |   | 49   |   |  |   | 74   |  
|                                                                |  |                                     |      |   |                                   |   |      |      |  |   |      |   |  |   |      |  
|Total net loss recorded in earnings due to derivatives          |  | $                                   | (203 | ) |                                   | $ | (738 | )    |  | $ | (269 | ) |  | $ | (840 | )
|                                                                |  |                                     |      |   |                                   |   |      |      |  |   |      |   |  |   |      |  

---

|Note: | A charge of $0 and $4 thousand related to ineffectiveness on cash flow hedges was booked during the three and six-months ended March 31, 2007, respectively. BankUnited
estimates that within the next 12 months $256 thousand will be reclassified out of other comprehensive income as a credit to earnings for cash flow hedges outstanding as of March 31, 2007.
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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



9.    Stock-Based Compensation



At March 31, 2007, BankUnited had certain stock-based compensation
plans approved by shareholders and designed to provide incentives to current and prospective officers, directors and employees of BankUnited and its subsidiaries. Under the plans, BankUnited may award stock options, stock appreciation rights,
restricted stock, restricted stock units and awards in lieu of obligations, dividend equivalents, other stock-based awards and performance awards in each of its classes of stocks. In January 2007, BankUniteds shareholders approved the 2007
Stock Award and Incentive Compensation Plan.



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 (closing price) of the stock on the date of grant. An option may vest over a period
ranging from immediate to nine years.



BankUnited has used the
Black-Sholes 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 Months Ended March 31, 2007 |  | Six Months Ended March 31, 2007
|Expected Volatility    |  | 26.0%                             |  | 26.0%                          
|Expected Dividend      |  | .007% - 1.32%                     |  | .007% - 1.32%                  
|Expected Term in Years |  | 3.9 - 5.0                         |  | 3.9 - 7.0                      
|Risk Free Rate         |  | 4.75                              |  | 4.45% - 4.75%                  



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CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONTINUED



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 term represents the periods 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 grant for the appropriate life of each
option.



The following table presents the activity of
BankUniteds outstanding stock options, for all classes of Common Stock for the six-month period ended March 31, 2007:



|                                        |  |                                   |   |  |                                |       |                                         |      |                           |   |       
|--------------------------------------- |  | --------------------------------- | - |  | ------------------------------ | ----- | --------------------------------------- | ---- | ------------------------- | - | ------
|Common Stock Options                    |  | Number ofShares                   |   |  | WeightedAverage Priceper Share |       | WeightedAverageRemainingContractualTerm |      | Aggregate Intrinsic Value
|                                        |  | (Dollars and shares in thousands)
|Options outstanding, September 30, 2006 |  | 2,305                             |   |  | $                              | 17.73 |                                         |      |                           |   |       
|Options granted                         |  | 243                               |   |  | $                              | 26.82 |                                         |      |                           |   |       
|Options exercised                       |  | (121                              | ) |  | $                              | 8.58  |                                         |      |                           |   |       
|Options forfeited                       |  | (23                               | ) |  | $                              | 21.43 |                                         |      |                           |   |       
|Options expired                         |  | (49                               | ) |  | $                              | 20.49 |                                         |      |                           |   |       
|                                        |  |                                   |   |  |                                |       |                                         |      |                           |   |       
|Options outstanding, March 31, 2007     |  | 2,355                             |   |  | $                              | 19.05 |                                         | 6.03 |                           | $ | 10,435
|                                        |  |                                   |   |  |                                |       |                                         |      |                           |   |       
|Exercisable at March 31, 2007           |  | 1,647                             |   |  | $                              | 16.80 |                                         | 5.29 |                           | $ | 9,833 
|Unvested at March 31, 2007              |  | 708                               |   |  | $                              | 24.27 |                                         | 7.74 |                           | $ | 602   



The following table
presents the activity of BankUniteds outstanding stock options, for Series B Preferred Stock, for the six-month period ended March 31, 2007:



|                                 |  |                                   |  |                                  |       |                                             |      |                           |   |      
|-------------------------------- |  | --------------------------------- |  | -------------------------------- | ----- | ------------------------------------------- | ---- | ------------------------- | - | -----
|Series B Preferred Stock Options |  | Number of Shares                  |  | Weighted Average Price per
Share |       | Weighted Average Remaining Contractual Term |      | Aggregate Intrinsic Value
|                                 |  | (Dollars and shares in thousands)
|Outstanding September 30, 2006   |  | 941                               |  | $                                | 26.75 |                                             |      |                           |   |      
|Granted                          |  |                                  |  |                                  |      |                                             |      |                           |   |      
|Exercised                        |  |                                  |  |                                  |      |                                             |      |                           |   |      
|                                 |  |                                   |  |                                  |       |                                             |      |                           |   |      
|Outstanding March 31, 2007       |  | 941                               |  | $                                | 26.75 |                                             | 4.74 |                           | $ | 8,367
|                                 |  |                                   |  |                                  |       |                                             |      |                           |   |      
|Exercisable at March 31, 2007    |  | 692                               |  | $                                | 23.03 |                                             | 3.73 |                           | $ | 8,058
|Unvested at March 31, 2007       |  | 249                               |  | $                                | 37.07 |                                             | 7.56 |                           | $ | 309  



The following table
presents the values of option grants and exercises for the three-month and six-month periods ended March 31, 2007:



|                                                                                      |  |                                                         |       |                                 |   |      
|------------------------------------------------------------------------------------- |  | ------------------------------------------------------- | ----- | ------------------------------- | - | -----
|                                                                                      |  | Three Months Ended March 31, 2007                       |       | Six Months Ended March 31,
2007
|                                                                                      |  | (Dollars and shares in thousands except per share data)
|Grant date weighted average fair value per share of options granted during the period |  | $                                                       | 7.50  |                                 | $ | 7.56 
|Total intrinsic value of options exercised                                            |  | $                                                       | 1,684 |                                 | $ | 2,025
|Cash received from options exercised                                                  |  | $                                                       | 821   |                                 | $ | 1,038
|Actual tax benefit to be realized from option exercises                               |  | $                                                       | 572   |                                 | $ | 611  



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CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONTINUED



Restricted Stock



Restricted stock awards granted without performance-based restrictions vest in annual installments over periods ranging from
immediate to ten years commencing on the date of the grant. The vesting schedules are intended to encourage officers, directors and employees to make long-term commitments to BankUnited.



In the second quarter of fiscal 2007 the Company awarded 17,716 shares of Common A restricted stock valued at $456 thousand
to vest over three to five years. Fair value for unvested shares is determined based on the closing price of BankUniteds shares on the grant date.



The following table presents the activity of BankUniteds unvested restricted common shares and restricted common stock units for the six-month
period ended March 31, 2007:



|                               |  |                                 |   |  |                                                     |      
|------------------------------ |  | ------------------------------- | - |  | --------------------------------------------------- | -----
|Common Unvested Shares *       |  | Number of Shares (in thousands) |   |  | Weighted Average Price per Share (at date of grant)
|Outstanding September 30, 2006 |  | 477                             |   |  | $                                                   | 25.28
|Granted                        |  | 179                             |   |  |                                                     | 26.70
|Vested                         |  | (59                             | ) |  |                                                     | 27.02
|Forfeited                      |  | (13                             | ) |  |                                                     | 24.77
|                               |  |                                 |   |  |                                                     |      
|Outstanding March 31, 2007     |  | 584                             |   |  | $                                                   | 25.88
|                               |  |                                 |   |  |                                                     |      

---

|* | Including restricted stock units
|- | --------------------------------



The intrinsic value for these awards is $79 thousand and the weighted average life of these awards is 4.3 years.



The following table presents the activity of BankUniteds unvested
Series B Preferred Stock restricted shares, including both, performance and nonperformance-based awards for the six-month period ended March 31, 2007:



|                                  |  |                                 |   |  |                                                     |      
|--------------------------------- |  | ------------------------------- | - |  | --------------------------------------------------- | -----
|Preferred Unvested Shares         |  | Number of Shares (in thousands) |   |  | Weighted Average Price per Share (at date of grant)
|Outstanding at September 30, 2006 |  | 341                             |   |  | $                                                   | 30.98
|Granted                           |  | 105                             |   |  |                                                     | 40.12
|Vested                            |  | (6                              | ) |  |                                                     | 35.75
|                                  |  |                                 |   |  |                                                     |      
|Outstanding at March 31, 2007     |  | 440                             |   |  | $                                                   | 33.06
|                                  |  |                                 |   |  |                                                     |      



The intrinsic value
for these awards is $1.2 million and the weighted average life of the awards is 4.5 years.



Performance-Based Awards



Under the plans the Compensation Committee of BankUniteds Board of Directors has the authority to grant performance awards based on the achievement of pre-set performance goals by a future date. The goals are business-based goals such
as growth in assets, loans and/or deposits; enhancing earnings by achieving certain levels of revenue and/or net income, improving or maintaining quality of assets, and improving net interest margin.



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During the six-month period ended March 31, 2007, the Compensation Committee voted to award
certain executive officers performance awards that require the achievement of goals over future periods based on specified objectives. These awards have performance periods that range from one to two years.



Performance based restricted stock awards are eligible to be voted by the
executive from the date of the award. Dividends are paid only after achievement of performance goals to which the award is subject.



The following table presents the activity of BankUniteds performance-based unvested awards, including both Class A Common Stock and Series B
Preferred Stock, for the six-month period ended March 31, 2007:



|                                  |  |                                 |   |  |                                                     |      
|--------------------------------- |  | ------------------------------- | - |  | --------------------------------------------------- | -----
|Performance Based Unvested Shares |  | Number of Shares (in thousands) |   |  | Weighted Average Price per Share (at date of grant)
|Outstanding at September 30, 2006 |  | 347                             |   |  | $                                                   | 30.17
|Granted                           |  | 133                             |   |  |                                                     | 37.32
|Vested                            |  | (6                              | ) |  |                                                     | 35.75
|                                  |  |                                 |   |  |                                                     |      
|Outstanding at March 31, 2007     |  | 474                             |   |  | $                                                   | 32.08
|                                  |  |                                 |   |  |                                                     |      



The intrinsic value
for these awards is $1.2 million and the weighted average life of the awards is 4.4 years.



10.    Borrowings



Trust preferred securities and subordinated debentures



During the six-month period ended March 31, 2007, BankUnited had a net increase of $54 million in trust preferred securities and subordinated debentures
from $196 million at September 30, 2006 to $250 million. BankUnited operates wholly-owned trust subsidiaries for the purpose of issuing trust preferred securities and investing the proceeds from the sale thereof in junior subordinated deferrable
interest debentures issued by BankUnited. The carrying amount of trust preferred securities and subordinated debentures in BankUniteds Consolidated Statement of Financial Condition was $250 million as of March 31, 2007, and represented trust
preferred securities issued by its consolidated trust subsidiary and the subordinated debentures issued by BankUnited to its non-consolidated trust subsidiaries.



The net increase in trust preferred securities and subordinated debentures reflects primarily four transactions during the
six-month period ended March 31, 2007:



| |  |  | the issuance and sale of $50 million in subordinated debentures to wholly-owned trust subsidiary, BankUnited Statutory Trust X in October 2006
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the issuance and sale of $50 million in subordinated debentures to wholly-owned trust subsidiary, BankUnited Statutory Trust XI in March 2007
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the redemption in March 2007 of trust preferred securities with a balance of $22,880,000 issued by BankUnited to its consolidated subsidiary BankUnited Capital
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the redemption in March 2007 of trust preferred securities with a balance of $25 million issued by BankUnited to its non-consolidated subsidiary BankUnited
Statutory Trust II
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



11.    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



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CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONTINUED



outstanding commercial and standby letters of credit in the amount of $45.6 million and $47.5 million as of March 31, 2007, and September 30, 2006,
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. The credit risk involved in issuing letters of credit is
essentially the same as that involved in extending loan facilities to customers. BankUnited generally holds collateral supporting those commitments if deemed necessary.



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.



12.    Subsequent Events



Issuance of Equity Units



On April 19, 2007, BankUnited entered into an Underwriting Agreement with respect to a registered public offering (the
Offering) of 3,200,000 6.75% HiMEDS Units (the Equity Units) for an aggregate principal amount of $160 million. The underwriters have a 30-day option to purchase up to an additional 480,000 Equity Units, solely to cover
over-allotments, if any.



On April 25, 2007, BankUnited
completed the Offering and received net proceeds of approximately $155,200,000. BankUnited intends to use a portion of the proceeds to buy back shares of its Class A Common Stock. BankUnited also intends to use the proceeds for general
corporate purposes such as expanding operations through new branch offices and operations centers, possible acquisitions, acquisition of debt and equity securities, if available on favorable terms, redemption of outstanding debt and investment in
loans and mortgage-backed or other securities.



The Equity
Units carry a total distribution rate of 6.75%. Each Equity Unit has a stated amount of $50 and is initially comprised of (i) a 3-year purchase contract which will obligate the holder to purchase from BankUnited on May 17, 2010, a certain
number of shares of Bankuniteds Class A Common Stock, for $50; and (ii) a 1/20 undivided beneficial interest in $1,000 principal amount of BankUniteds 6.37% Senior Note due May 17, 2012 (the Notes). Holders of
the Equity Units will be entitled to receive quarterly contract adjustment payments at a rate of 0.38% per year of the stated amount of $50 per Equity Unit. The threshold appreciation price of the Equity Units is $32.76, which represents a
premium of 40% over the BankUnited closing stock price of $23.40 on April 19, 2007.



The Notes have been issued pursuant to an Indenture, dated as of April 18, 2007, as supplemented by a Supplemental Indenture dated as of April 25, 2007. The purchase contracts are being issued pursuant to a
Purchase Contract and Pledge Agreement, dated as of April 25, 2007. Under the terms of the Purchase Contract and Pledge Agreement, the Notes are being pledged as collateral to secure the holders obligation to purchase the shares of common
stock under the purchase contracts. The Notes will be remarketed prior to the purchase contract settlement date pursuant to the terms of the Purchase Contract and Pledge Agreement and Form of Remarketing Agreement.



Common Stock Repurchase



On April 16, 2007, the Board of Directors increased the authorized
repurchase of its Class A Common Stock by 800,000 shares to 4,400,000 leaving a balance of 3,491,018 shares that can be repurchased. This plan does not have an expiration date.



During the quarter ended March 31, 2007, BankUnited repurchased 356,282 shares of its Class A Common Stock at an average
price of $24.85.



During the period of April 27, 2007 to May 8,
2007, BankUnited repurchased 527,100 shares of its Class A Common Stock at an average price of $22.14.



22



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##### Table of Contents

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



As used in this Quarterly Report on Form 10-Q (the Form 10-Q), BankUnited, we,
us and our refers to BankUnited Financial Corporation (BankUnited) and its consolidated subsidiaries, including BankUnited, FSB (the Bank). All significant intercompany transactions and balances
associated with consolidated subsidiaries have been eliminated. The following discussion and analysis and the related financial data present a review of BankUniteds consolidated operating results for the three month and six month periods ended
March 31, 2007 and 2006 and consolidated financial condition as of March 31, 2007. 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.



This 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, credit quality, deposit growth, and other performance
measures;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



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



Actual results or performance could differ
from those implied or contemplated by forward-looking statements. BankUnited wishes 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. These forward-looking statements are subject to certain risks and uncertainties, including, among others: general business and economic conditions, either nationally or regionally; fiscal and monetary policies; significant
weather events such as hurricanes; changes or fluctuations in the interest rate environment; a deterioration in credit quality and/or a reduced demand for credit; reduced deposit flows and loan demand; real estate values and market conditions,
competition from other financial service companies in our markets; legislative or regulatory changes, including, among others, changes in accounting standards, guidelines and policies; the issuance or redemption of additional equity or debt
securities by us; the concentration of operations in south Florida, if Florida business or economic conditions decline; reliance on other companies for products and services; the impact of war and the threat and impact of terrorism; volatility in
the market price of our common stock; and other economic, competitive, servicing capacity, governmental, regulatory and technological factors affecting our operations, price, products and delivery of services. Other factors that could cause actual
results to differ materially are: (i) other risks and uncertainties described from time to time in BankUniteds filings with the SEC, (ii) the risk factors or uncertainties set forth in this Form 10-Q, and (iii) other risks and uncertainties
that have not been identified at this time. Information in this 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



BankUniteds results of operations are dependent primarily on its net interest income, which is the difference between the interest earned on its
assets, primarily its loan and securities portfolios, including the



23



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##### Table of Contents

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 as well as non-interest income, non-interest expenses and income tax expense.



BankUniteds operations, like those of other financial institution holding companies, are affected by BankUniteds asset and liability
management policies, as well as factors beyond BankUniteds control, such as general economic conditions and the monetary and fiscal policies of the federal government. Lending activities are affected by the demand for mortgage financing and
other types of loans, and are thus influenced by interest rates and other factors affecting the 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 for the quarter
ended March 31, 2007 were:



| |  |  | Record second-quarter net income of $24.4 million, up 24% over the same quarter in 2006;
| | - |  | ----------------------------------------------------------------------------------------



| |  |  | Net-interest margin of 2.39%, an increase of 32 basis points from the same quarter last year. Net interest income was the main contributor to the improvement in net
income;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Total assets of $13.9 billion, up 14%, from March 31, 2006 and total loans of $11.8 billion, up 19%, from March 31, 2006; asset growth has been centered
in the residential loan portfolio, which grew by $1.9 billion;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Sale of $360 million in residential loans for a gain of $3.5 million;
| | - |  | ---------------------------------------------------------------------



| |  |  | Total deposits of $6.8 billion, up $1.4 billion, or 26%, from March 31, 2006; and
| | - |  | ---------------------------------------------------------------------------------



| |  |  | Total core deposits of $4.9 billion, up $895 million, or 22%, from March 31, 2006.
| | - |  | ----------------------------------------------------------------------------------



Record net income in the second quarter resulted from growth in earning
assets, higher net interest margin and gains from loan sales. The cyclical slowdown in the housing market is expected to reduce the level of residential loan production and increase the level of non-performing assets in 2007 consistent with our
previously disclosed estimates. However, we do not expect actual losses to significantly increase from the current levels.



BankUnited is implementing a multi-step program to continue its growth in a slower housing market. These plans aim to:



| |  |  | increase residential loans by entering new markets and creating and refining products;
| | - |  | --------------------------------------------------------------------------------------



| |  |  | build the Florida franchise through additional branch expansion;
| | - |  | ----------------------------------------------------------------



| |  |  | increase consumer and commercial lending; and
| | - |  | ---------------------------------------------



| |  |  | manage the cost of deposits and other borrowings.
| | - |  | -------------------------------------------------



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 reported 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.



The
allowance for loan losses is a subjective judgment that management must make regarding the loan portfolio, and is established and maintained at levels that management believes are adequate to cover probable losses resulting from the inability of
borrowers to make required payments on loans. Estimates for loan losses are made by analyzing historical loan losses, current trends in delinquencies and charge-offs, plans for problem loan administration and resolution, the views of regulators,
changes in the size and composition of the loan portfolio, and



24



---

##### Table of Contents

peer group information. In addition, the economic climate and direction, increases or decreases in overall lending rates, political conditions, legislation
directly or indirectly impacting the banking industry, and economic conditions affecting specific geographical areas in which BankUnited conducts business are all considered. Where there is impairment of a specific loan, management obtains
valuations of the property or collateral securing the loan, loan market valuations, and current cash flow projections available to establish specific reserves. Since the calculation of appropriate loan loss allowances relies on managements
estimates and judgments relating to inherently uncertain events, actual results may differ from these estimates. For a more detailed discussion on the allowance for loan losses, see Asset Qualitysection of this report and,
(e) Allowance for Loan Lossesin note (1) Summary of Significant Accounting Policiesto the Notes to Consolidated Financial Statements on page 74 of BankUniteds Annual Report on Form 10-K for the year ended
September 30, 2006.



Several estimates impact mortgage
servicing assets, including the initial valuation of the assets to be recognized upon the sale of residential mortgage loans, the amortization of the assets, and the subsequent periodic valuation of the assets for impairment. The initial and ongoing
valuation and amortization of mortgage servicing rights is significantly impacted by interest rates, prepayment fees, prepayment experience and the credit performance of the underlying loans. An increase in the anticipated prepayment speed of the
serviced portfolio could affect the MSR asset valuation. For a more detailed discussion on MSR, see discussion Item 7A. Quantitative and Qualitative Disclosures About Market Risk, and notes (1) Summary
of Significant Accounting Policiesand (5) Servicing and Transfers of Mortgage Loans to the Notes to Consolidated Financial Statements on pages 56, 76 and 90, respectively of BankUniteds Annual Report on Form 10-K for the year
ended September 30, 2006.



Several assumptions are made in
the determination of share-based compensation. BankUnited utilizes the BlackScholes model to calculate stock-based compensation under SFAS 123R. Estimates of the expected volatility, the expected life of options, and the applicable risk free
interest rate affect the computation of the fair value of options to be expensed. Assumptions are also made as to the expected achievement of performance conditions for performance based stock grants. Estimates of expected forfeiture rates are made
for both options and restricted stock grants. For a more detailed discussion of stock based compensation see notes (1) Summary of Significant Accounting Policieson page 77 and note (13) Stock-Based Compensation and Other Benefit
Plans on page 102, respectively, of BankUniteds Annual Report on Form 10-K for the year ended September 30, 2006, and (9) Stock-Based Compensationof this report.



Accounting Pronouncements Issued and Not Yet Adopted



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



25



---

##### Table of Contents

RESULTS OF OPERATIONS



For the Three Months Ended March 31, 2007 Compared to the Same Period in 2006



General



Net income for the three months ended March 31, 2007 was $24.4 million, up 24% from $19.7 million for the same quarter last year. Basic and diluted
earnings were $0.67 and $0.64 per share, respectively, for the quarter, up from $0.57 and $0.54 per share, respectively, for the same quarter last year.



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



|                           |  |                                          |        |        |   |        |  |   |        |  |       |  
|-------------------------- |  | ---------------------------------------- | ------ | ------ | - | ------ |  | - | ------ |  | ----- | -
|                           |  | For the three monthsended March 31,      |        | Change |  
|                           |  | 2007                                     |        | 2006   |   | $      |  | % |       
|                           |  | (In thousands, except per share amounts) |       
|Net interest income        |  | $                                        | 82,340 |        | $ | 59,754 |  | $ | 22,586 |  | 37.80 | %
|Provision for loan losses  |  |                                          | 4,000  |        |   | 2,300  |  |   | 1,700  |  | 73.91 | %
|Non-interest income        |  |                                          | 10,153 |        |   | 7,412  |  |   | 2,741  |  | 36.98 | %
|Non-interest expense       |  |                                          | 51,326 |        |   | 35,372 |  |   | 15,954 |  | 45.10 | %
|                           |  |                                          |        |        |   |        |  |   |        |  |       |  
|Income before taxes        |  |                                          | 37,167 |        |   | 29,494 |  |   | 7,673  |  | 26.02 | %
|Income taxes               |  |                                          | 12,763 |        |   | 9,806  |  |   | 2,957  |  | 30.16 | %
|                           |  |                                          |        |        |   |        |  |   |        |  |       |  
|Net income                 |  | $                                        | 24,404 |        | $ | 19,688 |  | $ | 4,716  |  | 23.95 | %
|                           |  |                                          |        |        |   |        |  |   |        |  |       |  
|Basic earnings per share   |  | $                                        | 0.67   |        | $ | 0.57   |  | $ | 0.10   |  | 17.54 | %
|Diluted earnings per share |  | $                                        | 0.64   |        | $ | 0.54   |  | $ | 0.10   |  | 18.52 | %



26



---

##### Table of Contents

Analysis of Net Interest Income



Yields Earned and Rates Paid



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



|                                                                    |  |                                      |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|------------------------------------------------------------------- |  | ------------------------------------ | ---------- | - | -------- | - | ---------- |  | ---- | -------------- |  | - | ---------- | - | ---------- | - | ------- |  | ---- | -
|                                                                    |  | For the Three Months Ended March 31, |           
|                                                                    |  | 2007                                 |            |   | 2006     |  
|                                                                    |  | AverageBalance                       |            |   | Interest |   | Yield/Rate |  |      | AverageBalance |  |   | Interest   |   | Yield/Rate |  
|                                                                    |  | (Dollars in thousands)               |           
|Interest-earning assets:                                            |  |                                      |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|Loans receivable, net(1)                                            |  | $                                    | 11,865,916 |   |          | $ | 216,240    |  | 7.31 | %              |  | $ | 9,373,969  |   |            | $ | 141,479 |  | 6.06 | %
|Mortgage-backed securities                                          |  |                                      | 1,106,623  |   |          |   | 13,337     |  | 4.82 | %              |  |   | 1,459,649  |   |            |   | 16,293  |  | 4.46 | %
|Short-term investments(2)                                           |  |                                      | 32,609     |   |          |   | 397        |  | 4.94 | %              |  |   | 31,963     |   |            |   | 335     |  | 4.25 | %
|Investment securities and FHLB stock                                |  |                                      | 520,279    |   |          |   | 7,068      |  | 5.48 | %              |  |   | 499,403    |   |            |   | 6,285   |  | 5.06 | %
|                                                                    |  |                                      |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|Total interest-earning assets                                       |  |                                      | 13,525,427 |   |          |   | 237,042    |  | 7.03 | %              |  |   | 11,364,984 |   |            |   | 164,392 |  | 5.80 | %
|                                                                    |  |                                      |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|Interest-bearing liabilities:                                       |  |                                      |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|Transaction and money market                                        |  |                                      | 500,592    |   |          |   | 4,022      |  | 3.26 | %              |  |   | 390,688    |   |            |   | 2,172   |  | 2.25 | %
|Savings                                                             |  |                                      | 1,420,039  |   |          |   | 15,922     |  | 4.55 | %              |  |   | 1,272,818  |   |            |   | 11,163  |  | 3.56 | %
|Certificates of deposits                                            |  |                                      | 4,349,957  |   |          |   | 54,397     |  | 5.07 | %              |  |   | 3,171,118  |   |            |   | 31,397  |  | 4.02 | %
|Trust preferred securities and subordinated debentures              |  |                                      | 251,529    |   |          |   | 5,822      |  | 9.26 | %              |  |   | 195,095    |   |            |   | 3,812   |  | 7.82 | %
|Senior notes (3)                                                    |  |                                      | 120,000    |   |          |   | 1,070      |  | 3.57 | %              |  |   | 120,000    |   |            |   | 1,070   |  | 3.57 | %
|FHLB advances and other borrowings                                  |  |                                      | 5,948,716  |   |          |   | 73,469     |  | 5.01 | %              |  |   | 5,421,407  |   |            |   | 55,024  |  | 4.12 | %
|                                                                    |  |                                      |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|Total interest-bearing liabilities                                  |  | $                                    | 12,590,833 |   |          | $ | 154,702    |  | 4.98 | %              |  | $ | 10,571,126 |   |            | $ | 104,638 |  | 4.01 | %
|                                                                    |  |                                      |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|Excess of interest-earning assets over interest-bearing liabilities |  | $                                    | 934,594    |   |          |   |            |  |      |                |  | $ | 793,858    |   |            |   |         |  |      |  
|                                                                    |  |                                      |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|Net interest income                                                 |  |                                      |            |   |          | $ | 82,340     |  |      |                |  |   |            |   |            | $ | 59,754  |  |      |  
|                                                                    |  |                                      |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|Interest rate spread                                                |  |                                      |            |   |          |   |            |  | 2.05 | %              |  |   |            |   |            |   |         |  | 1.79 | %
|Effect of non-interest bearing sources                              |  |                                      |            |   |          |   |            |  | 0.34 | %              |  |   |            |   |            |   |         |  | 0.28 | %
|                                                                    |  |                                      |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|Net interest margin                                                 |  |                                      |            |   |          |   |            |  | 2.39 | %              |  |   |            |   |            |   |         |  | 2.07 | %
|                                                                    |  |                                      |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|Ratio of interest-earning assets to interest-bearing liabilities    |  |                                      | 107.42     | % |          |   |            |  |      |                |  |   | 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. Loan yields reflect any
acceleration of premium amortization, or discount accretion resulting from early repayment of loans during the year. The yields are annualized and are not calculated on a tax equivalent basis.

|(1) | Includes average balances of loans held for sale of $218.3 million and $55.8 million for the three months ended March 31, 2007 and 2006, respectively. Interest income arising
from loans held for sale is included in interest on loans and fees in BankUniteds consolidated statement of operations as well as BankUniteds calculations of interest rate spread and net interest margin. Also includes average
non-accruing loans of $64.2 million and $9.7 million for the three months ended March 31, 2007 and 2006, respectively.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



27



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##### Table of Contents

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

|(3) | Rates on these instruments differ from contractual terms due to the amortization of deferred cost.
|--- | --------------------------------------------------------------------------------------------------



Rate/Volume Analysis



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



|                                                       |  |                                                         |        |                          |                |   |        |  |   |        |  
|------------------------------------------------------ |  | ------------------------------------------------------- | ------ | ------------------------ | -------------- | - | ------ |  | - | ------ | -
|                                                       |  | For the Three Month Period EndedMarch 31, 2007 vs. 2006 |       
|                                                       |  | Increase (Decrease)Due to                               |        | TotalIncrease/(Decrease) |               
|                                                       |  | Changes inVolume                                        |        |                          | Changesin Rate |  
|                                                       |  | (Dollars in thousands)                                  |       
|Interest income attributable to:                       |  |                                                         |        |                          |                |   |        |  |   |        |  
|Loans receivable, net(1)                               |  | $                                                       | 36,637 |                          |                | $ | 38,124 |  | $ | 74,761 |  
|Mortgage-backed securities                             |  |                                                         | (3,940 | )                        |                |   | 984    |  |   | (2,956 | )
|Short-term investments(2)                              |  |                                                         | 7      |                          |                |   | 55     |  |   | 62     |  
|Investment securities and FHLB stock                   |  |                                                         | 356    |                          |                |   | 427    |  |   | 783    |  
|                                                       |  |                                                         |        |                          |                |   |        |  |   |        |  
|Total interest-earning assets                          |  |                                                         | 33,060 |                          |                |   | 39,590 |  |   | 72,650 |  
|                                                       |  |                                                         |        |                          |                |   |        |  |   |        |  
|Interest expense attributable to:                      |  |                                                         |        |                          |                |   |        |  |   |        |  
|Transaction and money market                           |  |                                                         | 611    |                          |                |   | 1,240  |  |   | 1,851  |  
|Savings                                                |  |                                                         | 1,291  |                          |                |   | 3,468  |  |   | 4,759  |  
|Certificates of deposit                                |  |                                                         | 11,671 |                          |                |   | 11,328 |  |   | 22,999 |  
|Trust Preferred Securities and subordinated debentures |  |                                                         | 1,103  |                          |                |   | 907    |  |   | 2,010  |  
|Senior notes(3)                                        |  |                                                         |       |                          |                |   |       |  |   |       |  
|FHLB advances and other borrowings                     |  |                                                         | 5,352  |                          |                |   | 13,093 |  |   | 18,445 |  
|                                                       |  |                                                         |        |                          |                |   |        |  |   |        |  
|Total interest-bearing liabilities                     |  |                                                         | 20,028 |                          |                |   | 30,036 |  |   | 50,064 |  
|                                                       |  |                                                         |        |                          |                |   |        |  |   |        |  
|Increase in net interest income                        |  | $                                                       | 13,032 |                          |                | $ | 9,554  |  | $ | 22,586 |  
|                                                       |  |                                                         |        |                          |                |   |        |  |   |        |  

---

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

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

|(3) | Rates on these instruments differ from contractual terms due to the amortization of deferred cost.
|--- | --------------------------------------------------------------------------------------------------



Net Interest Income.    Net interest income is the most significant component of our revenues.
Our ability to grow net interest income is dependent on loan demand and 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 $82.3 million for the quarter ended March 31, 2007. This represents an increase of $22.6
million, or 38%, over the $59.8 million reported for the same quarter of fiscal 2006. The net interest margin improved to 2.39% for the quarter ended March 31, 2007 from 2.07% for the same quarter of fiscal 2006.



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



28



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##### Table of Contents

balance of the loans. Deferred interest resulting in negative amortization, where the loan balance exceeds the original loan balance, amounted to $46 million
for the quarter ended March 31, 2007, compared to $16 million for the quarter ended March 31, 2006.



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, the faster repricing of ARM loans than deposits and programs related to loan retention.



Average earning assets for the quarter ended March 31, 2007 increased by $2.2 billion, or 19%, from the same quarter in the last fiscal year.
Growth was centered in higher yield average loans that represented 88% of earning assets for the quarter ended March 31, 2007 as compared to 82% for the same quarter of fiscal 2006.



The net interest spread rose to 2.05% for the quarter ended March 31, 2007 from 1.79% for the same quarter in fiscal
2006. The change in net interest income, net interest spread and net interest margin is partly attributable to improvement in the yield on loans, which exceeded the increased cost of interest bearing liabilities, to the growth in earning assets,
which was primarily centered in loans, and to the increase in non-interest bearing sources of funds. The overall yield on interest earning assets increased by 123 basis points, while the overall rates paid on interest bearing liabilities increased
by 97 basis points, resulting in an improvement in the interest rate spread of 26 basis points for the quarter ended March 31, 2007 compared to the same period in fiscal 2006. The issuance of $151 million in equity in January 2006, earnings
retention and growth in other non-interest bearing sources of funding contributed 6 basis points of the 32 basis point improvement in the net interest margin.



Other factors affecting the yield improvement on assets included prepayment fees that increased from $3.0 million for the quarter ended
March 31, 2006 to $6.2 million for the quarter ended March 31, 2007.



Prepayments on residential mortgage loans reduce loan interest income as the net deferred cost amortization is accelerated with the prepayment. For the quarter ended March 31, 2007, the constant prepayment rate
(CPR) was 15.5%, as compared to 15.9% for the quarter ended March 31, 2006. The slower prepayment rate also contributed to the increase in the net interest margin for the year as the impact of deferred cost amortization lessened slightly.



Interest expense for the quarter ended March 31, 2007
included a $0.6 million deferred origination cost write-off incurred to call $48 million of trust preferred securities during the quarter ended March 31, 2007. See Liabilitieson the FINANCIAL CONDITIONof this report.



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 $4.0 million for the
three months ended March 31, 2007 represented an increase of 74% compared to $2.3 million for the same period in fiscal 2006. The provision reflects loan portfolio growth, net charge-offs for the quarter, and increases in residential
delinquencies and non-performing loans.



Non-performing loans
to total loans increased to 0.60% as of March 31, 2007, compared to 0.11% as of March 31, 2006. The allowance for loan losses as a percentage of total loans was 0.35% as of March 31, 2007 compared to 0.31% as of March 31, 2006 and
0.32% at September 30, 2006. See Asset Quality for more information on BankUniteds measure of its asset quality.



29



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##### Table of Contents

Analysis of Non-Interest Income and Expenses



Non-Interest Income



The following table provides a comparison for each of the categories of
non-interest income for the quarters ended March 31, 2007 and 2006.



|                                                               |  |                                      |        |   |      |   |       |        |  |   |       |   |  |        |  
|-------------------------------------------------------------- |  | ------------------------------------ | ------ | - | ---- | - | ----- | ------ |  | - | ----- | - |  | ------ | -
|                                                               |  | For The Three Months Ended March 31, |        |   |      |   |       |        | 
|                                                               |  | 2007                                 |        |   | 2006 |   |       | Change | 
|                                                               |  | (Dollars in thousands)               |       
|Non-interest income:                                           |  |                                      |        |   |      |   |       |        |  |   |       |   |  |        |  
|Loan servicing fees                                            |  | $                                    | 1,782  |   |      | $ | 1,705 |        |  | $ | 77    |   |  | 4.5    | %
|Amortization of mortgage servicing rights                      |  |                                      | (811   | ) |      |   | (841  | )      |  |   | 30    |   |  | 3.6    |  
|Impairment of mortgage servicing rights                        |  |                                      | (133   | ) |      |   | (330  | )      |  |   | 197   |   |  | 59.7   |  
|Loan fees                                                      |  |                                      | 1,265  |   |      |   | 954   |        |  |   | 311   |   |  | 32.6   |  
|Deposit fees                                                   |  |                                      | 1,510  |   |      |   | 1,338 |        |  |   | 172   |   |  | 12.9   |  
|Other fees                                                     |  |                                      | 697    |   |      |   | 706   |        |  |   | (9    | ) |  | (1.3   | )
|Net loss on sale of investments and mortgage-backed securities |  |                                      | (566   | ) |      |   |      |        |  |   | (566  | ) |  | (100.0 | )
|Net gain on sale of loans and other assets                     |  |                                      | 3,474  |   |      |   | 1,872 |        |  |   | 1,602 |   |  | 85.6   |  
|Insurance and investment services income                       |  |                                      | 1,320  |   |      |   | 1,312 |        |  |   | 8     |   |  | 0.6    |  
|Loss on swaps                                                  |  |                                      | (121   | ) |      |   | (914  | )      |  |   | 793   |   |  | 86.8   |  
|Other                                                          |  |                                      | 1,736  |   |      |   | 1,610 |        |  |   | 126   |   |  | 7.8    |  
|                                                               |  |                                      |        |   |      |   |       |        |  |   |       |   |  |        |  
|Total non-interest income                                      |  | $                                    | 10,153 |   |      | $ | 7,412 |        |  | $ | 2,741 |   |  | 37.0   | %
|                                                               |  |                                      |        |   |      |   |       |        |  |   |       |   |  |        |  



Total non-interest
income of $10.2 million for the quarter ended March 31, 2007 represented an increase of 37% from the quarter ended March 31, 2006.



Net gain on sale of loans accounted for the majority, or 58%, of the increase in total non-interest income for the quarter. Net gain on the sale of
residential loans of $3.5 million for the quarter ended March 31, 2007 represented a $1.6 million increase from the gain reported for the quarter ended March 31, 2006. BankUnited sold $360 million of residential loans during the quarter
ended March 31, 2007 compared to $424 million during the quarter ended March 31, 2006.



Net loss on the sale of investments of $593 thousand was mainly related to the sale of preferred stock of U.S. government sponsored entities. Net gain on sale of mortgage-backed securities was $27 thousand.



Loan servicing fee income, net of amortization and impairment,
totaled $838 thousand, represented an increase of $304 thousand from the quarter ended March 31, 2006. The increase is attributable to an impairment charge of $133 thousand for the quarter ended March 31, 2007, compared to a $330 thousand
impairment charge taken in the quarter ended March 31, 2006.



Loss on swaps for the quarter was $121 thousand compared to $914 thousand related to the settlement of swap transactions for the quarter ended March 31, 2006. For a detailed discussion, see Note (10)Accounting for
Derivatives and Hedging Activities of BankUniteds Annual Report on Form 10-K for the year ended September 30, 2006.



Other categories of non-interest income reflected a combined increase of $608 thousand, or 22%, of the increase in total non-interest income for the
quarter ended March 31, 2007.



30



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##### Table of Contents

Non-Interest Expense



The following table provides a comparison for each of the categories of non-interest expense for the quarters ended
March 31, 2007 and 2006:



|                                       |  |                                |        |      |   |        |  |   |        |  |      |  
|-------------------------------------- |  | ------------------------------ | ------ | ---- | - | ------ |  | - | ------ |  | ---- | -
|                                       |  | For The 3 MonthsEndedMarch 31, |        |      |   |        | 
|                                       |  | 2007                           |        | 2006 |   | Change | 
|                                       |  | (Dollars in thousands)         |       
|Non-interest expenses:                 |  |                                |        |      |   |        |  |   |        |  |      |  
|Employee compensation and benefits     |  | $                              | 26,551 |      | $ | 17,811 |  | $ | 8,740  |  | 49.1 | %
|Occupancy and equipment                |  |                                | 9,551  |      |   | 7,355  |  |   | 2,196  |  | 29.9 |  
|Telecommunications and data processing |  |                                | 2,933  |      |   | 2,336  |  |   | 598    |  | 25.6 |  
|Professional fees-legal and accounting |  |                                | 1,842  |      |   | 1,417  |  |   | 425    |  | 30.0 |  
|Advertising and promotion expense      |  |                                | 2,243  |      |   | 1,664  |  |   | 579    |  | 34.8 |  
|Other operating expenses               |  |                                | 8,206  |      |   | 4,789  |  |   | 3,416  |  | 71.3 |  
|                                       |  |                                |        |      |   |        |  |   |        |  |      |  
|Total non-interest expenses            |  | $                              | 51,326 |      | $ | 35,372 |  | $ | 15,954 |  | 45.1 | %
|                                       |  |                                |        |      |   |        |  |   |        |  |      |  



Non-interest expense
for the quarter ended March 31 2007, increased by $16 million, or 45.1%, from the same quarter of fiscal 2006. This increase reflects BankUniteds continued expansion of its branch network, and operations support. The branch network
grew to 80 branches at March 31, 2007, from 71 branches at March 31, 2006. Compensation expense for the quarter ended March 31, 2007 was affected by lower deferred loan origination costs, which decreased to $6.1 million for the quarter ended
March 31, 2007, a decrease of $3.5 million from $9.6 million for the quarter ended March 31, 2006. This decrease was due to reduced loan production, which was down 44.2% from the quarter ended March 31, 2006. Lease expense increased by $848
thousand, or 27%, to $4.05 million for the quarter ended March 31, 2007 from $3.20 million for the quarter ended March 31, 2006; which, reflects the increase of nine branches in the last twelve months.



Other operating expenses include a $1.2 million charge in redemption fees
incurred to call $48 million of trust preferred securities, and a $0.8 million increase in deposit insurance premiums resulting from the FDICs implementation of a revised assessment and pricing system for calendar year 2007. See Liabilitieson the FINANCIAL CONDITIONof this report.



For the Six Months
Ended March 31, 2007 Compared to the Same Period in 2006



General



Net income for the six months ended March 31, 2007
was $51.8 million, up 44.4% from $35.9 million for the same period last year. Basic and diluted earnings were $1.42 and $1.35 per share, respectively, for the six-month period, up from $1.10 and $1.04 per share, respectively, for the same period
last year.



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



|                           |  |                                          |         |        |   |         |  |   |        |  |      |  
|-------------------------- |  | ---------------------------------------- | ------- | ------ | - | ------- |  | - | ------ |  | ---- | -
|                           |  | For the six monthsended March 31,        |         | Change |  
|                           |  | 2007                                     |         | 2006   |   | $       |  | % |       
|                           |  | (In thousands, except per share amounts) |        
|Net interest income        |  | $                                        | 161,135 |        | $ | 111,066 |  | $ | 50,069 |  | 45.1 | %
|Provision for loan losses  |  |                                          | 8,000   |        |   | 4,600   |  |   | 3,400  |  | 73.9 | %
|Non-interest income        |  |                                          | 21,743  |        |   | 15,085  |  |   | 6,658  |  | 44.1 | %
|Non-interest expense       |  |                                          | 96,373  |        |   | 67,804  |  |   | 28,569 |  | 42.1 | %
|                           |  |                                          |         |        |   |         |  |   |        |  |      |  
|Income before taxes        |  |                                          | 78,505  |        |   | 53,747  |  |   | 24,758 |  | 46.1 | %
|Income taxes               |  |                                          | 26,733  |        |   | 17,884  |  |   | 8,849  |  | 49.5 | %
|                           |  |                                          |         |        |   |         |  |   |        |  |      |  
|Net income                 |  | $                                        | 51,772  |        | $ | 35,863  |  | $ | 15,909 |  | 44.4 | %
|                           |  |                                          |         |        |   |         |  |   |        |  |      |  
|Basic earnings per share   |  | $                                        | 1.42    |        | $ | 1.10    |  | $ | 0.32   |  | 29.1 | %
|Diluted earnings per share |  | $                                        | 1.35    |        | $ | 1.04    |  | $ | 0.31   |  | 29.8 | %



31



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##### Table of Contents

Analysis of Net Interest Income



Yields Earned and Rates Paid



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



|                                                                    |  |                                    |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|------------------------------------------------------------------- |  | ---------------------------------- | ---------- | - | -------- | - | ---------- |  | ---- | -------------- |  | - | ---------- | - | ---------- | - | ------- |  | ---- | -
|                                                                    |  | For the Six Months Ended March 31, |           
|                                                                    |  | 2007                               |            |   | 2006     |  
|                                                                    |  | Average Balance                    |            |   | Interest |   | Yield/Rate |  |      | AverageBalance |  |   | Interest   |   | Yield/Rate |  
|                                                                    |  | (Dollars in thousands)             |           
|Interest-earning assets:                                            |  |                                    |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|Loans, net(1)                                                       |  | $                                  | 11,823,646 |   |          | $ | 428,055    |  | 7.24 | %              |  | $ | 8,913,209  |   |            | $ | 262,488 |  | 5.89 | %
|Mortgage-backed securities                                          |  |                                    | 1,151,510  |   |          |   | 27,107     |  | 4.71 | %              |  |   | 1,517,121  |   |            |   | 32,923  |  | 4.34 | %
|Short-term investments(2)                                           |  |                                    | 35,752     |   |          |   | 928        |  | 5.20 | %              |  |   | 32,366     |   |            |   | 632     |  | 3.92 | %
|Investment securities and FHLB stock                                |  |                                    | 541,268    |   |          |   | 14,781     |  | 5.47 | %              |  |   | 489,548    |   |            |   | 11,876  |  | 4.86 | %
|                                                                    |  |                                    |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|Total interest-earning assets                                       |  |                                    | 13,552,176 |   |          |   | 470,871    |  | 6.95 | %              |  |   | 10,952,244 |   |            |   | 307,919 |  | 5.63 | %
|                                                                    |  |                                    |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|Interest-bearing liabilities:                                       |  |                                    |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|Transaction and money market                                        |  |                                    | 470,355    |   |          |   | 7,312      |  | 3.12 | %              |  |   | 388,759    |   |            |   | 3,958   |  | 2.04 | %
|Savings                                                             |  |                                    | 1,376,919  |   |          |   | 30,714     |  | 4.47 | %              |  |   | 1,235,666  |   |            |   | 20,908  |  | 3.39 | %
|Certificates of deposits                                            |  |                                    | 4,166,779  |   |          |   | 104,034    |  | 5.01 | %              |  |   | 3,050,195  |   |            |   | 59,038  |  | 3.88 | %
|Trust preferred securities and subordinated debentures              |  |                                    | 248,827    |   |          |   | 10,865     |  | 8.73 | %              |  |   | 195,279    |   |            |   | 7,575   |  | 7.76 | %
|Senior notes(3)                                                     |  |                                    | 120,000    |   |          |   | 2,133      |  | 3.56 | %              |  |   | 120,000    |   |            |   | 2,139   |  | 3.57 | %
|FHLB advances and other borrowings                                  |  |                                    | 6,206,546  |   |          |   | 154,678    |  | 5.00 | %              |  |   | 5,237,490  |   |            |   | 103,235 |  | 3.95 | %
|                                                                    |  |                                    |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|Total interest-bearing liabilities                                  |  | $                                  | 12,589,426 |   |          | $ | 309,736    |  | 4.93 | %              |  | $ | 10,227,389 |   |            | $ | 196,853 |  | 3.86 | %
|                                                                    |  |                                    |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|Excess of interest-earning assets over interest-bearing liabilities |  | $                                  | 962,750    |   |          |   |            |  |      |                |  | $ | 724,855    |   |            |   |         |  |      |  
|                                                                    |  |                                    |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|Net interest income                                                 |  |                                    |            |   |          | $ | 161,135    |  |      |                |  |   |            |   |            | $ | 111,066 |  |      |  
|                                                                    |  |                                    |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|Interest rate spread                                                |  |                                    |            |   |          |   |            |  | 2.02 | %              |  |   |            |   |            |   |         |  | 1.77 | %
|Effect of non-interest bearing sources                              |  |                                    |            |   |          |   |            |  | 0.35 | %              |  |   |            |   |            |   |         |  | 0.25 | %
|                                                                    |  |                                    |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|Net Interest Margin                                                 |  |                                    |            |   |          |   |            |  | 2.37 | %              |  |   |            |   |            |   |         |  | 2.02 | %
|                                                                    |  |                                    |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|Ratio of interest-earning assets to interest-bearing liabilities    |  |                                    | 107.65     | % |          |   |            |  |      |                |  |   | 107.09     | % |            |   |         |  |      |  
|                                                                    |  |                                    |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  

---

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 $242.3 million and $34.7 million for the six months ended March 31, 2007 and 2006, respectively. Interest income arising
from loans held for sale is included in interest on loans and fees in BankUniteds consolidated statement of operations as well as BankUniteds calculations of interest rate spread and net interest margin. Also includes average
non-accruing loans of $49.5 million and $9.8 million for the six months ended March 31, 2007 and 2006, respectively.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



32



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##### Table of Contents

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

|(3) | Rates on these instruments differ from contractual terms due to the amortization of deferred cost.
|--- | --------------------------------------------------------------------------------------------------



Rate/Volume Analysis



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



|                                                       |  |                                                       |        |   |                |   |        |                          |  |   |         |  
|------------------------------------------------------ |  | ----------------------------------------------------- | ------ | - | -------------- | - | ------ | ------------------------ |  | - | ------- | -
|                                                       |  | For the Six Month Period EndedMarch 31, 2007 vs. 2006 |       
|                                                       |  | Increase (Decrease)Due to                             |        |   |                |  
|                                                       |  | Changes inVolume                                      |        |   | Changesin Rate |   |        | TotalIncrease/(Decrease) | 
|                                                       |  | (Dollars in thousands)                                |       
|Interest income attributable to:                       |  |                                                       |        |   |                |   |        |                          |  |   |         |  
|Loans, net (1)                                         |  | $                                                     | 84,022 |   |                | $ | 81,545 |                          |  | $ | 165,567 |  
|Mortgage-backed securities                             |  |                                                       | (7,934 | ) |                |   | 2,118  |                          |  |   | (5,816  | )
|Short-term investments (2)                             |  |                                                       | 66     |   |                |   | 230    |                          |  |   | 296     |  
|Investment securities and FHLB stock                   |  |                                                       | 1,342  |   |                |   | 1,563  |                          |  |   | 2,905   |  
|                                                       |  |                                                       |        |   |                |   |        |                          |  |   |         |  
|Total interest-earning assets                          |  |                                                       | 77,496 |   |                |   | 85,456 |                          |  |   | 162,952 |  
|                                                       |  |                                                       |        |   |                |   |        |                          |  |   |         |  
|Interest expense attributable to:                      |  |                                                       |        |   |                |   |        |                          |  |   |         |  
|Transaction and money market                           |  |                                                       | 831    |   |                |   | 2,523  |                          |  |   | 3,354   |  
|Savings                                                |  |                                                       | 2,390  |   |                |   | 7,416  |                          |  |   | 9,806   |  
|Certificates of deposit                                |  |                                                       | 21,612 |   |                |   | 23,384 |                          |  |   | 44,996  |  
|Trust Preferred Securities and subordinated debentures |  |                                                       | 2,077  |   |                |   | 1,213  |                          |  |   | 3,290   |  
|Senior notes (3)                                       |  |                                                       |       |   |                |   | (6     | )                        |  |   | (6      | )
|FHLB advances and other borrowings                     |  |                                                       | 19,101 |   |                |   | 32,342 |                          |  |   | 51,443  |  
|                                                       |  |                                                       |        |   |                |   |        |                          |  |   |         |  
|Total interest-bearing liabilities                     |  |                                                       | 46,011 |   |                |   | 66,872 |                          |  |   | 112,883 |  
|                                                       |  |                                                       |        |   |                |   |        |                          |  |   |         |  
|Increase (decrease) in net interest income             |  | $                                                     | 31,485 |   |                | $ | 18,584 |                          |  | $ | 50,069  |  
|                                                       |  |                                                       |        |   |                |   |        |                          |  |   |         |  

---

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

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

|(3) | Rates on these instruments differ from contractual terms due to the amortization of deferred cost.
|--- | --------------------------------------------------------------------------------------------------



Net Interest Income.    Net interest income before provision for loan losses was $161.1 million
for the six months ended March 31, 2007, increasing by $50 million, or 45%, from $111.1 million for the same period in 2006. The net interest margin improved to 2.37% for the period, from 2.02% for the same fiscal period in fiscal 2006. The
overall yield on interest earning assets increased by 132 basis points, while the overall rates paid on interest bearing liabilities increased by 107 basis points, resulting in an improvement in the interest rate spread of 25 basis points for the
six months ended March 31, 2007 compared to the same period in fiscal 2006.



The improvement in net interest income is attributable primarily to the growth in earning assets, the change in earning asset mix, and an improved net interest rate spread. Average earning assets for the six-month
period increased by $2.6 billion, or 24%, from the same period of fiscal 2006. Growth was centered in loans, which are the highest-yielding earning assets. Average loans represented 87% of earning assets for the six months ended March 31, 2007
as compared to 81% in the same period in fiscal 2006.



33



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##### Table of Contents

The net interest spread rose to 2.02% for the six months ended March 31, 2007 from 1.77% for the
same period in fiscal 2006. The change in net interest income, net interest spread and net interest margin is partly attributable to improvement in the yield on loans, which exceeded the increased cost of interest bearing liabilities and to the
growth in earning assets, which was primarily centered in loans. The issuance of $151 million in equity in January 2006, earnings retention and growth in other non-interest bearing sources of funding contributed 10 basis points of the 35 basis point
improvement in the net interest margin.



Factors affecting the
yield improvement on assets included prepayment fees on loans that increased to $12.1 million for the six-month period ended March 31, 2007 from $5.0 million for the six-month period 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 six months ended March 31, 2007, the CPR was 15.5% as compared to 16.5% for the quarter ended March 31, 2006. The
slower prepayment rate contributed to the increase in the net interest margin for the six-month period ended March 31, 2007.



Interest expense included a $0.6 million deferred origination cost write-off incurred to call $48 million of trust preferred securities during the
six-months ended March 31, 2007. See Liabilitieson the FINANCIAL CONDITIONof this report.



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 $8.0 million and $4.6 million for the six-month periods ended March 31, 2007 and 2006, respectively. Net
charge-offs for the six months ended March 31, 2007 were $2.6 million compared to net recoveries of $0.2 million for the same period in fiscal 2006. The provision for the six-month period reflects loan portfolio growth, net charge-offs for the
year, and increases in residential delinquencies and non-performing loans. See Asset Qualityfor information on BankUniteds allowance for loan losses.



Analysis of Non-Interest Income and Expenses



|                                                               |  |                                   |        |   |                     |   |        |   |  |   |       |   |  |        |  
|-------------------------------------------------------------- |  | --------------------------------- | ------ | - | ------------------- | - | ------ | - |  | - | ----- | - |  | ------ | -
|                                                               |  | For the Six MonthsEnded March 31, |        |   | Increase/(Decrease) |  
|                                                               |  | 2007                              |        |   | 2006                |   |       
|                                                               |  | (Dollars in thousands)            |       
|Non-interest income:                                           |  |                                   |        |   |                     |   |        |   |  |   |       |   |  |        |  
|Loan servicing fees                                            |  | $                                 | 3,729  |   |                     | $ | 3,158  |   |  | $ | 571   |   |  | 18.1   | %
|Amortization of mortgage servicing rights                      |  |                                   | (1,668 | ) |                     |   | (1,727 | ) |  |   | 59    |   |  | 3.4    |  
|Impairment of mortgage servicing rights                        |  |                                   | (965   | ) |                     |   | (330   | ) |  |   | (635  | ) |  | (192.4 | )
|Loan fees                                                      |  |                                   | 2,339  |   |                     |   | 1,663  |   |  |   | 676   |   |  | 40.6   |  
|Deposit fees                                                   |  |                                   | 2,984  |   |                     |   | 2,655  |   |  |   | 329   |   |  | 12.4   |  
|Other fees                                                     |  |                                   | 1,369  |   |                     |   | 1,347  |   |  |   | 22    |   |  | 1.6    |  
|Net loss on sale of investments and mortgage-backed securities |  |                                   | (524   | ) |                     |   |       |   |  |   | (524  | ) |  | (100.0 | )
|Net gain on sale of loans and other assets                     |  |                                   | 9,069  |   |                     |   | 3,762  |   |  |   | 5,307 |   |  | 141.1  |  
|Insurance and investment services income                       |  |                                   | 2,272  |   |                     |   | 2,212  |   |  |   | 60    |   |  | 2.7    |  
|Losses on swaps                                                |  |                                   | (318   | ) |                     |   | (914   | ) |  |   | 596   |   |  | (65.2  | )
|Other                                                          |  |                                   | 3,456  |   |                     |   | 3,259  |   |  |   | 197   |   |  | 6.0    |  
|                                                               |  |                                   |        |   |                     |   |        |   |  |   |       |   |  |        |  
|Total non-interest income                                      |  | $                                 | 21,743 |   |                     | $ | 15,085 |   |  | $ | 6,658 |   |  | 44.1   | %
|                                                               |  |                                   |        |   |                     |   |        |   |  |   |       |   |  |        |  



Total non-interest
income was $21.7 million for the six-month period ended March 31, 2007, a 44.1% increase from $15.1 million for the same period in fiscal 2006.



BankUniteds portfolio of residential loans serviced for others was $1.5 billion as of March 31, 2007 compared to $1.7 billion as of
March 31, 2006. Servicing fee income net of amortization and impairment was $1.1 million for both of the six-month periods ended March 31, 2007, and March 31, 2006.



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Loan fees, deposit fees and other fees were $6.7 million for the six-month period ended March 31,
2007, up 18% from $5.7 million for the same period in fiscal 2006.



Net gain on the sale of loans of $9.1 million for the six months ended March 31, 2007 accounted for the majority, or 80%, of the increase in total non-interest income, and represented a $5.3 million increase from the gain reported for
the same period in fiscal 2006. BankUnited sold $905 million of residential loans during the six months ended March 31, 2007, compared to $671 million during the six months ended March 31, 2006.



Net loss on the sale of investments of $551 thousand was mainly related to
the sale of preferred stock of U.S. government sponsored entities. Net gain on the sale of mortgage-backed securities was $27 thousand.



|                                        |  |                                   |        |          |   |        |  |   |        |  |      |  
|--------------------------------------- |  | --------------------------------- | ------ | -------- | - | ------ |  | - | ------ |  | ---- | -
|                                        |  | For the Six MonthsEnded March 31, |        | Increase |  
|                                        |  | 2007                              |        | 2006     |  
|                                        |  | (Dollars in thousands)            |       
|Non-interest expenses:                  |  |                                   |        |          |   |        |  |   |        |  |      |  
|Employee compensation and benefits      |  | $                                 | 50,837 |          | $ | 34,572 |  | $ | 16,265 |  | 47.0 | %
|Occupancy and equipment                 |  |                                   | 18,107 |          |   | 14,298 |  |   | 3,809  |  | 26.6 |  
|Telecommunications and data processing  |  |                                   | 5,764  |          |   | 4,461  |  |   | 1,303  |  | 29.2 |  
|Advertising and promotion expense       |  |                                   | 4,018  |          |   | 3,062  |  |   | 956    |  | 31.2 |  
|Professional fees- legal and accounting |  |                                   | 3,459  |          |   | 2,913  |  |   | 546    |  | 18.7 |  
|Other operating expenses                |  |                                   | 14,188 |          |   | 8,498  |  |   | 5,690  |  | 67.0 |  
|                                        |  |                                   |        |          |   |        |  |   |        |  |      |  
|Total non-interest expenses             |  | $                                 | 96,373 |          | $ | 67,804 |  | $ | 28,569 |  | 42.1 | %
|                                        |  |                                   |        |          |   |        |  |   |        |  |      |  



Non-interest expense
increased by $28.6 million, or 42.1%, for the six months ended March 31, 2007, compared to the same period in fiscal 2006. This increase reflects the companys continued expansion of its mortgage origination, branch network, and operations
support. The branch network grew to 80 branches at March 31, 2007, from 71 branches at March 31, 2006. Compensation expense was affected by lower deferred loan origination costs, which decreased to $13.5 million for the quarter ended March 31, 2007,
a decrease of $4.2 million from $17.7 million for the quarter ended March 31, 2006. This decrease was due to reduced loan production, which was down 27.9% for the six months ended March 31, 2007 as compared to the same period in fiscal 2006.
Lease expense increased by $1.7 million, or 28%, to $7.7 million for the quarter ended March 31, 2007 from $6.1 million for the quarter ended March 31, 2006; which, reflects the increase of nine branches in the last twelve months.



Other operating expenses include a $1.2 million charge in redemption fees
incurred to call $48 million of trust preferred securities and a $0.8 million increase in deposit insurance premiums resulting from the FDICs implementation of a revised assessment and pricing system for calendar year 2007. See Liabilitieson the FINANCIAL CONDITIONof this report.



LIQUIDITY



BankUniteds objective in managing liquidity is to
maintain sufficient sources of available liquid assets 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.



The Bank has a borrowing line available at the Federal Home Loan Bank of
Atlanta (FHLB) secured by eligible real estate loans. BankUnited has additional borrowing capacity through securities sold under repurchase agreements with various counterparts. Short-term borrowing facilities are also available through
fed funds purchased from other financial institutions.



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From time to time, BankUnited utilizes its access to capital markets and may raise capital through equity
or debt offerings. BankUnited has also utilized trust preferred and subordinated debt issuances to provide a source of capital for the Bank. During the six-month period ended March 31, 2007, BankUnited raised $100 million through the issuance
of trust preferred securities, of which $50 million were issued in October 2006 and $50 million in March 2007, and also redeemed $48 million of trust preferred securities.



Significant sources and uses of funds



BankUniteds assets grew by $372 million during the six months ended March 31, 2007, primarily through loan growth of $407 million after loan
sales of $360 million. BankUnited funded its asset and loan growth primarily through deposit growth of $770 million. FHLB advances increased by $290 million while other borrowings declined by $704 million.



BankUnited assets grew by $1.5 billion during the six months ended
March 31, 2006, primarily through loan growth of $1.9 billion after loan sales of $672 million during the period. BankUnited funded its asset and loan growth through deposit growth of $720 million, an increase in FHLB advances of $616 million,
and an equity issuance of $151 million in January 2006.



FINANCIAL CONDITION



Assets



Loans.    Net portfolio loans comprise the major
earning asset of BankUnited and increased to $11.8 billion at March 31, 2007 from $11.4 billion at September 30, 2006. Portfolio loans are centered in first mortgage residential loans that amounted to $10.1 billion, or 85%, of the net
portfolio at March 31, 2007, an increase of $366 million, or 3.80%, from September 30, 2006.



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 representing 4% or more of total residential loans.



|                                 |  |                       |        |                 |                         |   |        |   |                 |  |        |  
|-------------------------------- |  | --------------------- | ------ | --------------- | ----------------------- | - | ------ | - | --------------- |  | ------ | -
|Residential loans by state       |  | As of March 31,2007   |        |                 | As of September 30,2006 |  
|                                 |  | Amount                |        | Percent ofTotal |                         |   | Amount |   | Percent ofTotal | 
|                                 |  | (Dollars in millions) |       
|Florida                          |  | $                     | 5,938  |                 | 59.04                   | % |        | $ | 5,998           |  | 62.03  | %
|California                       |  |                       | 663    |                 | 6.59                    |   |        |   | 569             |  | 5.88   |  
|Illinois                         |  |                       | 596    |                 | 5.93                    |   |        |   | 614             |  | 6.35   |  
|Arizona                          |  |                       | 577    |                 | 5.74                    |   |        |   | 491             |  | 5.08   |  
|New Jersey                       |  |                       | 485    |                 | 4.82                    |   |        |   | 395             |  | 4.07   |  
|Virginia                         |  |                       | 435    |                 | 4.32                    |   |        |   | 406             |  | 4.20   |  
|Other (states with less than 4%) |  |                       | 1,364  |                 | 13.56                   |   |        |   | 1,198           |  | 12.39  |  
|                                 |  |                       |        |                 |                         |   |        |   |                 |  |        |  
|Total residential loans          |  | $                     | 10,058 |                 | 100.00                  | % |        | $ | 9,671           |  | 100.00 | %



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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 representing 3.5% or more of total residential loans. Non-residential loans are originated from the Florida lending offices and are included in the Florida totals.



|                                   |  |                       |        |                  |                          |   |        |   |                  |  |        |  
|---------------------------------- |  | --------------------- | ------ | ---------------- | ------------------------ | - | ------ | - | ---------------- |  | ------ | -
|Total loans by state               |  | As of March 31, 2007  |        |                  | As of September 30, 2006 |  
|                                   |  | Amount                |        | Percent of Total |                          |   | Amount |   | Percent of Total | 
|                                   |  | (Dollars in millions) |       
|Florida                            |  | $                     | 7,530  |                  | 64.58                    | % |        | $ | 7,571            |  | 67.30  | %
|California                         |  |                       | 663    |                  | 5.68                     |   |        |   | 569              |  | 5.06   |  
|Illinois                           |  |                       | 596    |                  | 5.11                     |   |        |   | 614              |  | 5.46   |  
|Arizona                            |  |                       | 577    |                  | 4.95                     |   |        |   | 491              |  | 4.37   |  
|New Jersey                         |  |                       | 485    |                  | 4.16                     |   |        |   | 395              |  | 3.50   |  
|Virginia                           |  |                       | 435    |                  | 3.73                     |   |        |   | 406              |  | 3.61   |  
|Other (states with less than 3.5%) |  |                       | 1,374  |                  | 11.79                    |   |        |   | 1,204            |  | 10.70  |  
|                                   |  |                       |        |                  |                          |   |        |   |                  |  |        |  
|Total loans                        |  | $                     | 11,660 |                  | 100.00                   | % |        | $ | 11,250           |  | 100.00 | %



As of March 31,
2007, commercial real estate loans, including multi-family, construction and land loans, amounted to $996 million, or 8.4%, of the net loan portfolio. Commercial real estate loans decreased by $15 million, or 1.4%, from September 30, 2006.
Total portfolio loans secured by real estate represented 97% of the net loan portfolio as of March 31, 2007, and also, as of September 30, 2006.



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 59% and 58% of the total loan portfolio (including unearned discounts, premiums, and deferred loan costs, and excluding loans held for sale and allowance for loan losses), outstanding as of
March 31, 2007 and September 30, 2006, respectively.



As of March 31, 2007, option ARM loans with a balance of $5.9 billion, representing 85% of the option ARM portfolio, had $176 million of their principal balances above their original principal balance as a result of negative
amortization. As of September 30, 2006, option ARM loans with a balance of $5.0 billion, representing 75% of the option ARM portfolio, had negative amortization of $89.5 million.



As of March 31, 2007, the average balance of an option ARM loan was $310 thousand and the average LTV ratio based on
the initial appraisal of the collateral was 79% before considering PMI. Generally, loans produced with LTVs greater than 80% require PMI. As of March 31, 2007, the average LTV ratio based on the initial appraisal of the collateral for the
option ARM loan portfolio including PMI was 73%. As of March 31, 2007, the weighted average FICO score for BankUniteds option ARM loans was 709.



See Note(4) Loans Held in Portfolioto the accompanying condensed notes to consolidated financial statements and business section of the 10-K
at September 30, 2006.



Liabilities



Deposits.    Deposits increased by $770
million, or 12.7%, to $6.8 billion at March 31, 2007 from $6.1 billion at September 30, 2006. Growth was centered in certificates of deposit which grew by $602 million.



Core deposits.    Deposits including certificates
of deposits of $100,000 and less, checking, savings and money market accounts increased by $895 million, of 22% to $4.9 billion at March 31, 2007 from $4.0 billion at March 31, 2006.



Securities sold under agreements to repurchase.    Securities sold under agreements to
repurchase (repos) decreased by $756 million , or 70.9%, to $311 million at March 31, 2007 from $1,066 million at September 30, 2006, as FHLB advances offered more attractive rates for similar maturities.



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FHLB advances.    FHLB advances increased by $290 million, or 5.6%, to
$5.5 billion at March 31, 2007, from $5.2 billion at September 30, 2006.



Trust preferred securities and subordinated debentures.    As of March 31, 2007, BankUnited had a net increase of $54 million from $196 million at September 30, 2006 to $250
million in other borrowings. BankUnited operates wholly-owned trust subsidiaries for the purpose of issuing trust preferred securities and investing the proceeds from the sale thereof in junior subordinated deferrable interest debentures issued by
BankUnited. The carrying amount of trust preferred securities and subordinated debentures in BankUniteds Consolidated Statement of Financial Condition was $250 million as of March 31, 2007, and represented trust preferred securities
issued by its consolidated trust subsidiary and the subordinated debentures issued by BankUnited to its non-consolidated trust subsidiary.



The net increase in trust preferred securities and subordinated debentures reflects primarily four transactions during the six-month period ended
March 31, 2007:



| |  |  | the issuance and sale of $50 million in subordinated debentures to BankUniteds wholly-owned trust subsidiary, BankUnited Statutory Trust X, in October 2006;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the issuance and sale of $50 million in subordinated debentures to BankUniteds wholly-owned trust subsidiary, BankUnited Statutory Trust XI, in March 2007;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the redemption in March 2007 of $22.9 million of trust preferred securities issued by BankUniteds consolidated subsidiary, BankUnited Capital; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the redemption in March 2007 of $25 million of trust preferred securities issued by BankUniteds non-consolidated subsidiary BankUnited Statutory Trust II.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------



See Note(9) Borrowingsto the
notes to consolidated financial statements and business section of the 10-K at September 30, 2006.



Advance payments by borrowers for taxes and insurance.    Advance payments by borrowers for taxes and insurance decreased by
$41.2 million, or 44.5%, to $51.5 million as of March 31, 2007 from $92.7 million at September 30, 2006. This decrease reflects tax and insurance payments made by BankUnited on behalf of borrowers during the six-month period ended
March 31, 2007.



Asset Quality



At March 31, 2007, non-performing assets totaled $74.1 million, as
compared to $21.5 million at September 30, 2006. Expressed as a percentage of total assets, non-performing assets were 0.53% as of March 31, 2007, as compared to 0.16% as of September 30, 2006. Changes in the residential real estate
markets resulted in an increased level of non-performing residential loans at March 31, 2007. Based on current trends in our residential loan portfolio, we expect to continue seeing an increase in non-performing assets consistent with our
previously disclosed estimates. However, we do not expect actual losses to significantly increase from the current levels.



Non-performing loans consist of (i) non-accrual loans; (ii) accruing loans more than 90 days contractually past due as to interest or principal
and (iii) loans that have been substantially restructured because of deterioration in the financial condition of the borrower. Generally, BankUnited places loans on non-accrual status when more than 90 days past due. When a loan is placed on
non-accrual status, BankUnited reverses all accrued and uncollected interest.



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##### Table of Contents

The following table sets forth additional information concerning BankUniteds non-performing assets
at March 31, 2007 and September 30, 2006.



|                                                                  |  |                        |        |   |                   |   |        |  
|----------------------------------------------------------------- |  | ---------------------- | ------ | - | ----------------- | - | ------ | -
|                                                                  |  | March 31,    2007      |        |   | September 30,2006 |  
|                                                                  |  | (Dollars in thousands) |       
|Non-accrual loans                                                 |  | $                      | 70,474 |   |                   | $ | 20,740 |  
|Loans past due 90 days and still accruing                         |  |                        | 471    |   |                   |   |       |  
|                                                                  |  |                        |        |   |                   |   |        |  
|Total non-performing loans                                        |  |                        | 70,945 |   |                   |   | 20,740 |  
|Real estate owned                                                 |  |                        | 3,138  |   |                   |   | 729    |  
|                                                                  |  |                        |        |   |                   |   |        |  
|Total non-performing assets                                       |  | $                      | 74,083 |   |                   | $ | 21,469 |  
|                                                                  |  |                        |        |   |                   |   |        |  
|Allowance for loan losses                                         |  | $                      | 41,827 |   |                   | $ | 36,378 |  
|                                                                  |  |                        |        |   |                   |   |        |  
|Non-performing assets as a percentage of total assets             |  |                        | 0.53   | % |                   |   | 0.16   | %
|Non-performing loans as a percentage of total loans               |  |                        | 0.60   | % |                   |   | 0.18   | %
|Allowance for loan losses as a percentage of total loans          |  |                        | 0.35   | % |                   |   | 0.32   | %
|Allowance for loan losses as a percentage of non-performing loans |  |                        | 58.96  | % |                   |   | 175.40 | %



During the six months
ended March 31, 2007, BankUnited reduced its exposure on a troubled commercial real estate lending relationship with total loan balances of $17.3 million at September 30, 2006. In December 2006, a $7.0 million loan was sold at a discount
of $1.3 million, which was charged off. In January 2007, BankUnited further reduced this exposure by selling a $7.3 million loan at a discount of $1.3 million. Specific impairment reserves were established in the quarters ended December 31,
2006 and September 30, 2006, respectively, based on then available information. A $3 million non-performing loan remains from this credit relationship and for which a specific impairment reserve has been established. See Note
(19) Subsequent Events to the notes to consolidated financial statements of the 10-K at September 30, 2006.



For the six months ended March 31, 2007, the provision for loan losses totaled $8.0 million compared to $4.6 million for the six months ended
March 31, 2006. Net charge-offs were $2.6 million, or an annualized rate of 0.04% of average portfolio loans. Included in charge-offs is the aforementioned $2.6 million loss on $14.3 million commercial real estate loan. Net residential
charge off were $77 thousand.



During the six months ended
March 31, 2007, management performed an evaluation of delinquency trends in its residential portfolio in addition to normal asset quality analysis and initiated measures to increase collection efforts. Based on its review of portfolio quality,
management increased the allowance for loan losses to a level it believes to be appropriate given the composition of its loan portfolio, which, as of March 31, 2007, was 96.7% secured by real estate.



39



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The following table sets forth the change in BankUniteds allowance for loan losses for the three
months and six months ended March 31, 2007 and 2006.



|                                                            |  |                                     |        |   |                                   |   |        |      |  |   |        |   |  |   |        |  
|----------------------------------------------------------- |  | ----------------------------------- | ------ | - | --------------------------------- | - | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                                            |  | For the Three Months EndedMarch 31, |        |   | For the Six Months EndedMarch 31, |  
|                                                            |  | 2007                                |        |   | 2006                              |   |        | 2007 |  |   | 2006   |  
|                                                            |  | (In thousands)                      |       
|Allowance for loan losses, balance (at beginning of period) |  | $                                   | 39,192 |   |                                   | $ | 28,646 |      |  | $ | 36,378 |   |  | $ | 25,755 |  
|Provisions for loan losses                                  |  |                                     | 4,000  |   |                                   |   | 2,300  |      |  |   | 8,000  |   |  |   | 4,600  |  
|Loans charged off:                                          |  |                                     |        |   |                                   |   |        |      |  |   |        |   |  |   |        |  
|One-to-four family residential                              |  |                                     | (78    | ) |                                   |   |       |      |  |   | (112   | ) |  |   |       |  
|Construction and land                                       |  |                                     | (1,321 | ) |                                   |   |       |      |  |   | (2,651 | ) |  |   |       |  
|Commercial                                                  |  |                                     | (131   | ) |                                   |   | (493   | )    |  |   | (162   | ) |  |   | (493   | )
|                                                            |  |                                     |        |   |                                   |   |        |      |  |   |        |   |  |   |        |  
|Total loans charged off(1)                                  |  |                                     | (1,530 | ) |                                   |   | (493   | )    |  |   | (2,925 | ) |  |   | (493   | )
|                                                            |  |                                     |        |   |                                   |   |        |      |  |   |        |   |  |   |        |  
|Recoveries:                                                 |  |                                     |        |   |                                   |   |        |      |  |   |        |   |  |   |        |  
|One-to-four family residential                              |  |                                     | 1      |   |                                   |   |       |      |  |   | 35     |   |  |   |       |  
|Commercial                                                  |  |                                     | 89     |   |                                   |   | 117    |      |  |   | 260    |   |  |   | 707    |  
|Consumer                                                    |  |                                     | 75     |   |                                   |   | 5      |      |  |   | 79     |   |  |   | 6      |  
|                                                            |  |                                     |        |   |                                   |   |        |      |  |   |        |   |  |   |        |  
|Total recoveries(1)                                         |  |                                     | 165    |   |                                   |   | 122    |      |  |   | 374    |   |  |   | 713    |  
|                                                            |  |                                     |        |   |                                   |   |        |      |  |   |        |   |  |   |        |  
|Allowance for loan losses, balance (at end of period)       |  | $                                   | 41,827 |   |                                   | $ | 30,575 |      |  | $ | 41,827 |   |  | $ | 30,575 |  
|                                                            |  |                                     |        |   |                                   |   |        |      |  |   |        |   |  |   |        |  

---

|(1) | Net annualized charge-offs (recoveries) as a percentage of average total portfolio loans (including premiums and discounts) were 0.05% and 0.008% for the three months ended
March 31, 2007 and 2006, respectively; and 0.04% and (0.005%) for the six months ended March 31, 2007 and 2006, respectively.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



The following table sets forth BankUniteds allocation of the allowance
for loan losses by category as of March 31, 2007 and September 30, 2006.



|                                                |  |                |        |                   |   |       
|----------------------------------------------- |  | -------------- | ------ | ----------------- | - | ------
|                                                |  | March 31, 2007 |        | September 30,2006
|                                                |  | (In thousands)
|Balance at the end of the period applicable to: |  |                |        |                   |   |       
|One-to-four family residential                  |  | $              | 14,100 |                   | $ | 9,558 
|Home equity loans and lines of credit           |  |                | 4,998  |                   |   | 3,971 
|Multi-family                                    |  |                | 645    |                   |   | 684   
|Commercial real estate                          |  |                | 6,258  |                   |   | 6,316 
|Construction and land                           |  |                | 3,793  |                   |   | 4,092 
|Commercial                                      |  |                | 7,006  |                   |   | 7,613 
|Consumer                                        |  |                | 780    |                   |   | 785   
|Unallocated                                     |  |                | 4,247  |                   |   | 3,359 
|                                                |  |                |        |                   |   |       
|Total allowance for loan losses                 |  | $              | 41,827 |                   | $ | 36,378
|                                                |  |                |        |                   |   |       



|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, 2006, under Item 7a,
Quantitative and Qualitative Disclosures about Market Risk, provides detailed quantitative and qualitative disclosures about market risk and should be referenced for information thereon.



Risks Associated with Changing Interest
Rates.    As a financial intermediary, BankUnited invests in various types of interest-earning assets (primarily loans, mortgage-backed securities, and investment securities), which are funded largely by interest-bearing
liabilities (primarily deposits, FHLB advances, securities sold under agreements to repurchase, senior notes, and trust preferred securities and subordinated debentures). Such financial instruments have varying levels of sensitivity to changes in
market interest rates, which creates interest rate risk for BankUnited. Accordingly, BankUniteds net interest income, the most significant component of its net income, is subject to



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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 to the accompanying condensed notes to consolidated financial statements.



Derivative and Hedging Activities.    BankUnited
uses derivative instruments as part of its interest rate risk management activities to reduce risks associated with its loan origination and borrowing activities. Derivatives used for interest rate risk management include various interest rate swaps
and caps, and other derivatives that relate to the pricing of specific on-balance sheet instruments and forecasted transactions. In accordance 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.



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



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



As required by SEC rules, an evaluation of the effectiveness of the design and operation of BankUniteds disclosure controls and procedures was
carried out by BankUnited, as of the end of the period covered by this report, under the supervision and with the participation of BankUniteds management, including the Chief Executive Officer and Chief Financial Officer. Based on that
evaluation, the Chief Executive Officer and Chief Financial Officer concluded that BankUniteds disclosure controls and procedures were effective as of March 31, 2007.



These disclosure controls and procedures provide reasonable assurance that the information required to be disclosed by
BankUnited in reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms and that such information is accumulated and communicated to management to allow
timely decisions regarding required disclosures. BankUnited may make changes to its disclosure controls and procedures periodically, as management reviews the design and effectiveness on a continuing basis. No change in internal control over
financial reporting occurred during the quarter ended March 31, 2007 that has materially affected, or is likely to materially affect, such internal control over financial reporting. A controls system, no matter how well designed and operated, cannot
provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.



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##### Table of Contents

PART IIOTHER INFORMATION



|Item 1a. | RISK FACTORS
|-------- | ------------



The following risk factors represent changes and additions to, and should be read in conjunction with, Item 1A. Risk Factors
contained in BankUniteds Annual Report on Form 10-K for the fiscal year ended September 30, 2006.



Negative events in certain geographic areas could adversely affect us.



Most of the loans in the BankUnited portfolio are secured by real estate. Most of these loans are secured by properties in
Florida. Negative conditions in the real estate markets where collateral for BankUniteds commercial real estate or mortgage loans is located could adversely affect the BankUniteds borrowers ability to repay and the value of the
collateral. Real estate values are affected by various factors, including changes in general or regional economic conditions, governmental rules or policies and natural disasters such as hurricanes. Additionally, BankUniteds borrowers could be
confronted with increased insurance costs, resulting from hurricanes and other natural disasters, which could negatively impact their ability to make the required payments. Some of BankUniteds depositors and borrowers are citizens of other
countries, including countries of Europe, Central and South America and the Caribbean, who are in the process of moving to the United States or have second homes in the United States. These loans are secured by property located in the United States,
primarily in Florida, and generally carry a lower LTV ratio than loans to domestic residents. The value of the underlying property provides a source of liquidation in the United States but the consumers ability to make his or her monthly
payments may be affected by factors such as foreign exchange rates, capital outflow limitations, and other political and economic risks associated with the country of residence. Changes in the United States laws and regulations affecting residents
from those countries could also adversely affect us if they result in a significant loss of deposits, increased loan defaults or a decreased market for our products. BankUnited endeavors to limit its risk through its underwriting criteria on these
loans.



Changes in economic conditions could cause an increase in
delinquencies and non-performing assets, including loan charge-offs, and depress our income and growth.



BankUniteds loan portfolios includes many real estate secured loans, demand for which may decrease during economic downturns as a result of, among
other things, an increase in unemployment, a decrease in real estate values, a slowdown in housing price appreciation or increases in interest rates. These factors could depress BankUniteds earnings and consequently BankUniteds financial
condition because:



| |  |  | customers may not want or need the products and services offered by BankUnited;
| | - |  | -------------------------------------------------------------------------------



| |  |  | borrowers may not be able to repay their loans;
| | - |  | -----------------------------------------------



| |  |  | the value of the collateral securing BankUniteds loans to borrowers may decline; and
| | - |  | -------------------------------------------------------------------------------------



| |  |  | the quality of BankUniteds loan portfolio may decline.
| | - |  | -------------------------------------------------------



Any of the latter four scenarios could cause an increase in delinquencies and non-performing assets or require BankUnited to
charge-off a percentage of its loans and/or increase its provision for loan losses, which would reduce its income.



In order to limit BankUniteds credit risk, certain of its loans require borrowers to purchase credit enhancements such as private mortgage
insurance. Fraud or misrepresentation could result in the denial of the mortgage insurance claims, which could increase BankUniteds potential loss on a property. Repeated denials of claims or the financial failure of one of BankUniteds
mortgage insurance providers could have a negative affect on its earnings.



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##### Table of Contents

BankUnited is exposed to credit risk from the sale of mortgage loans.



BankUnited retains limited exposure from the sale of mortgage loans.
BankUnited makes standard representations and warranties to the purchasers. If individual mortgages are found to have not complied with the representations and warranties, BankUnited may be required to repurchase the loans. The standard
representations and warranties do not assure against credit risk associated with the loans.



BankUniteds earnings could be adversely impacted by incidences of fraud and compliance failures that are not within its direct control.



BankUnited is subject to fraud and compliance risk in connection with the
origination of mortgage loans. Fraud risk includes the intentional misstatement of information in property appraisals or other underwriting documentation provided to BankUniteds by third parties. Compliance risk is the risk that loans are not
originated in compliance with applicable laws and regulations and BankUniteds standards. There can be no assurance that BankUnited can prevent or detect acts of fraud or violation of law or BankUniteds compliance standards by the third
parties that it deals with. Repeated incidences of fraud or compliance failures adversely impact the performance of BankUnited portfolio and could require it to repurchase such loans which were sold in the secondary market.



BankUnited grants loans under reduced documentation programs. The standard
industry guidelines of these programs may not require information about borrowers income and/or assets to be submitted or verified. To the extent borrowers overstate their income and/or assets, the ability of borrowers to repay their
loans maybe impaired which could adversely affect the quality of BankUniteds loan portfolio.



Recent developments in the mortgage market may affect our ability to originate loans and the profitability of loans in BankUniteds pipeline.



The mortgage lending industry has experienced a significant increase in
delinquencies in recent months. The decline in credit quality is most noteworthy among subprime lenders. While BankUnited limits loans with credit scores below 620, except for Community Reinvestment Act loans, and has maintained its delinquency
levels below industry standards, recent reports of credit quality, financial solvency and other problems among subprime lenders has resulted in volatility in the price of BankUniteds common stock. If the subprime segment continues to have
problems in the future and/or credit quality problems spread to other industry segments, including lenders who make reduced documentation loans to prime credit quality borrowers, there could be a prolonged decrease in the demand for
BankUniteds loans in the secondary market, adversely affecting its earnings and negatively impacting the price of its common stock.



BankUniteds operations could be harmed by a challenging legal climate.



Class action or other litigation against lenders in certain regions or related to particular products, services or practices
may arise from time to time, even if the activities subject to complaint are not unlawful. Such claims may be brought, for example, under state or federal consumer protection laws. The damages and penalties claimed in these types of matters can be
substantial. BankUnited may also be adversely affected by the actions of its brokers, or if another company in its industry engages in criticized practices. Negative publicity may result in more regulation and legislative scrutiny of industry
practices, as well as more litigation, which may further increase its cost of doing business and adversely affect its profitability by impeding its ability to market its products, requiring BankUnited to change them or increasing the regulatory
burdens under which it operates.



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##### Table of Contents

|Item 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|------- | -----------------------------------------------------------



|                                          |  |                                           |  |                                     |       |                                                                                        |         |                                                                                                                   |           |    
|----------------------------------------- |  | ----------------------------------------- |  | ----------------------------------- | ----- | -------------------------------------------------------------------------------------- | ------- | ----------------------------------------------------------------------------------------------------------------- | --------- | ---
|ISSUER PURCHASES OF EQUITY
SECURITIES (a) | 
|Period                                    |  | TotalNumber of Shares (or
Units)Purchased |  | AveragePrice Paidper Share(or Unit) |       | Total Number ofShares (or Units)Purchased as Partof
PubliclyAnnouncedPlans or Programs |         | Maximum Number(or ApproximateDollar Value) ofShares (or Units) thatMay Yet BePurchased Under
thePlans or Programs |          
|02/01/2007 to 02/28/2007                  |  | 331,282                                   |  | $                                   | 24.96 |                                                                                        | 883,982 |                                                                                                                   | 2,716,018 |    
|03/01/2007 to 03/31/2007                  |  | 25,000                                    |  | $                                   | 23.45 |                                                                                        | 908,982 |                                                                                                                   | 2,691,018 | (b)
|Total                                     |  | 356,282                                   |  | $                                   | 24.85 |                                                                                        |         |                                                                                                                   |           |    



|a. | On October 24, 2002 the Board of Directors authorized the repurchase of up to 1,000,000 shares of Class A Common Stock. On October 26, 2006, January 23, 2007, and
April 16, 2007, the Board of Directors increased the total number of shares which the Company was authorized to repurchase to 3,000,000 shares, 3,600,000 shares and 4,400,000 shares, respectively. This plan does not have an expiration date.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|b. | During the period from April 1, 2007 to May 8, 2007, BankUnited repurchased 527,100 shares of its Class A Common Stock at an average price of $22.14 leaving a balance of 2,963,918
shares that could be repurchased as of May 8, 2007.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



At the annual meeting of stockholders of BankUnited held on January 23, 2007, the stockholders voted on the election of three directors to Class II of
BankUniteds Board of Directors, the election of one director to Class III of the Companys Board of Directors, the approval of the BankUnited Financial Corporation 2007 Stock Award and Incentive Plan (the 2007 Plan), and the
approval of an amendment to the registrants Articles of Incorporation to increase the number of authorized shares of Class A Common Stock from 60,000,000 shares to 100,000,000 shares.



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



|              |  |           |  |               
|------------- |  | --------- |  | --------------
|              |  | Votes For |  | Votes Withheld
|Lawrence Blum |  | 5,862,712 |  | 210,256       
|Lauren Camner |  | 5,604,914 |  | 468,055       
|Bradley Weiss |  | 6,013,755 |  | 59,214        



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



|                 |  |           |  |               
|---------------- |  | --------- |  | --------------
|                 |  | Votes For |  | Votes Withheld
|Dr. Albert Smith |  | 6,000,599 |  | 72,360        



The stockholders voted
to approve the 2007 Plan as follows:



|          |  |               |  |                 
|--------- |  | ------------- |  | ----------------
|Votes
For |  | Votes Against |  | Votes Abstaining
|3,621,161 |  | 2,031,323     |  | 1,979           



The stockholders voted
to approve the amendment to the registrants Articles of Incorporation as follows:



|          |  |               |  |                 
|--------- |  | ------------- |  | ----------------
|Votes
For |  | Votes Against |  | Votes Abstaining
|5,665,977 |  | 404,102       |  | 2,890           



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##### Table of Contents

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



|            |  |                                                                                                                                                                                                                                                                                                                                           
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Exhibit Title                                                                                                                                                                                                                                                                                                                             
|1.1         |  | Underwriting Agreement dated April 19, 2007, between BankUnited and the Underwriters named therein (Exhibit 1.1 to BankUniteds Current Report on Form 8-K, as filed with the SEC on April
25, 2007).                                                                                                                                     
|            | 
|4.1         |  | Purchase Contract and Pledge Agreement, dated as of April 25, 2007, between BankUnited and The Bank of New York, as Purchase Contract Agent, and The Bank of New York, as Collateral Agent,
Custodial Agent and Securities Intermediary (Exhibit 4.1 to BankUniteds Current Report on Form 8-K, as filed with the SEC on April 25, 2007).
|            | 
|4.2         |  | Supplemental Indenture No. 1 between BankUnited and The Bank of New York, as Trustee, dated as of April 25, 2007 (Exhibit 4.2 to BankUniteds Current Report on Form 8-K, as filed with
the SEC on April 25, 2007).                                                                                                                       
|            | 
|4.3         |  | Form of Remarketing Agreement (Exhibit 4.3 to BankUniteds Current Report on Form 8-K, as filed with the SEC on April 25, 2007).                                                                                                                                                                                                          
|            | 
|4.4         |  | Form of Corporate HiMED Unit Certificate (included as an appendix to Exhibit 4.1 to BankUniteds Current Report on Form 8-K, as filed with the SEC on April 25, 2007).                                                                                                                                                                    
|            | 
|4.5         |  | Form of Senior Note due May 17, 2012 (included as an appendix to Exhibit 4.2 to BankUniteds Current Report on Form 8-K, as filed with the SEC on April 25, 2007).                                                                                                                                                                        
|            | 
|8.1         |  | Tax Opinion and Consent of Cadwalader, Wickersham & Taft LLP, dated April 25, 2007 (Exhibit 8.1 to BankUniteds Current Report on Form 8-K, as filed with the SEC on April 25,
2007).                                                                                                                                                     
|            | 
|23.1        |  | Consent of Cadwalader, Wickersham & Taft LLP (included an appendix to Exhibit 8.1 to BankUniteds Current Report on Form 8-K, as filed with the SEC on April 25,
2007).                                                                                                                                                                   
|            | 
|31.1        |  | Certification of the Chief Executive Officer pursuant to Section 302, of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                  
|            | 
|31.2        |  | Certification of the Chief Financial Officer pursuant to Section 302, of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                  
|            | 
|32          |  | Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.                                                                                                                                                       



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##### Table of Contents

SIGNATURES



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



BANKUNITED FINANCIAL CORPORATIONBy:

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




Date: May 9, 2007



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##### Table of Contents

Exhibit Index



|               |  |                                                                                                                                                                                    
|-------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit Number |  | Description                                                                                                                                                                        
|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.



47