##### Table of Contents

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, 2003



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



255
Alhambra Circle, Coral Gables, Florida 33134

(Address of principal executive offices) (Zip Code)



(305) 569-2000

(Registrants telephone number, including area code)



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



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



The number of shares outstanding of the registrants common stock at the close of business on April 29, 2003 was 25,080,425 shares of Class A Common Stock, $.01 par value, and 536,562 shares of
Class B Common Stock, $.01 par value.



This Form
10-Q contains 36 pages.

The Index to Exhibits appears on page 36.



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##### Table of Contents

BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



FORM 10-Q REPORT FOR THE QUARTER ENDED MARCH 31, 2003



TABLE OF CONTENTS



|                                                                                                                       |  | Page No.
|---------------------------------------------------------------------------------------------------------------------- |  | --------
|PART IFINANCIAL INFORMATION                                                                                           |  |         
|                                                                                                                      
|Item 1.    Financial Statements                                                                                        |  |         
|                                                                                                                      
|Consolidated Statements of Financial Condition as of March 31, 2003 (unaudited) and September 30, 2002                 |  | 3       
|                                                                                                                      
|Consolidated Statements of Operations (unaudited) for the Three and Six Months Ended March 31, 2003 and March 31, 2002 |  | 4       
|                                                                                                                      
|Consolidated Statements of Stockholders Equity (unaudited) for the Six Months Ended March 31, 2003 and March 31, 2002 |  | 5       
|                                                                                                                      
|Consolidated Statements of Cash Flows (unaudited) for the Six Months Ended March 31, 2003 and March 31, 2002           |  | 6       
|                                                                                                                      
|Condensed Notes to Consolidated Financial Statements (unaudited)                                                       |  | 7       
|                                                                                                                      
|Item 2.    Managements Discussion and Analysis of Financial Condition and Results of Operations                       |  | 13      
|                                                                                                                      
|Item 3.    Quantitative and Qualitative Disclosures about Market Risk                                                  |  | 30      
|                                                                                                                      
|Item 4.    Controls and Procedures                                                                                     |  | 32      
|                                                                                                                      
|PART IIOTHER INFORMATION                                                                                              |  |         
|                                                                                                                      
|Item 6.    Exhibits and Reports on Form 8-K                                                                            |  | 32      



2



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION



|                                                                                                                                                                                                                                                                                                                                              |  | March 31, 2003                            |           |   | September 30, 2002 |    
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------- | --------- | - | ------------------ | ---
|                                                                                                                                                                                                                                                                                                                                              |  | (Dollars in thousands, except share data) |          
|Assets:                                                                                                                                                                                                                                                                                                                                       |  |                                           |           |   |                    |    
|Cash                                                                                                                                                                                                                                                                                                                                          |  | $                                         | 84,980    |   |                    | $  
|Federal Home Loan Bank overnight deposits                                                                                                                                                                                                                                                                                                     |  |                                           | 285       |   |                    |    
|Federal funds sold and securities purchased under agreements to resell                                                                                                                                                                                                                                                                        |  |                                           | 2,398     |   |                    |    
|Investments available for sale, at fair value                                                                                                                                                                                                                                                                                                 |  |                                           | 211,635   |   |                    |    
|Mortgage-backed securities available for sale, at fair value                                                                                                                                                                                                                                                                                  |  |                                           | 1,967,638 |   |                    |    
|Loans receivable, net                                                                                                                                                                                                                                                                                                                         |  |                                           | 3,729,780 |   |                    |    
|Mortgage loans held for sale (fair value of approximately $328,948 and $284,239 at March
31, 2003 and September 30, 2002, respectively)                                                                                                                                                                                                       |  |                                           | 323,568   |   |                    |    
|Other earning assets                                                                                                                                                                                                                                                                                                                          |  |                                           | 100,522   |   |                    |    
|Office properties and equipment, net                                                                                                                                                                                                                                                                                                          |  |                                           | 17,145    |   |                    |    
|Real estate owned                                                                                                                                                                                                                                                                                                                             |  |                                           | 4,765     |   |                    |    
|Accrued interest receivable                                                                                                                                                                                                                                                                                                                   |  |                                           | 30,457    |   |                    |    
|Mortgage servicing rights                                                                                                                                                                                                                                                                                                                     |  |                                           | 9,119     |   |                    |    
|Goodwill                                                                                                                                                                                                                                                                                                                                      |  |                                           | 28,353    |   |                    |    
|Bank-owned life insurance                                                                                                                                                                                                                                                                                                                     |  |                                           | 74,591    |   |                    |    
|Prepaid expenses and other assets                                                                                                                                                                                                                                                                                                             |  |                                           | 24,910    |   |                    |    
|                                                                                                                                                                                                                                                                                                                                              |  |                                           |           |   |                    |    
|Total assets                                                                                                                                                                                                                                                                                                                                  |  | $                                         | 6,610,146 |   |                    | $  
|                                                                                                                                                                                                                                                                                                                                              |  |                                           |           |   |                    |    
|Liabilities and Stockholders Equity:                                                                                                                                                                                                                                                                                                         |  |                                           |           |   |                    |    
|Liabilities:                                                                                                                                                                                                                                                                                                                                  |  |                                           |           |   |                    |    
|Deposits                                                                                                                                                                                                                                                                                                                                      |  | $                                         | 3,072,212 |   |                    | $  
|Securities sold under agreements to repurchase                                                                                                                                                                                                                                                                                                |  |                                           | 532,761   |   |                    |    
|Advances from Federal Home Loan Bank                                                                                                                                                                                                                                                                                                          |  |                                           | 2,009,271 |   |                    |    
|Senior notes                                                                                                                                                                                                                                                                                                                                  |  |                                           | 200,000   |   |                    |    
|Company obligated mandatorily redeemable trust preferred securities of subsidiary trusts
holding solely junior subordinated deferrable interest debentures of BankUnited                                                                                                                                                                      |  |                                           | 260,463   |   |                    |    
|Interest payable                                                                                                                                                                                                                                                                                                                              |  |                                           | 14,357    |   |                    |    
|Advance payments by borrowers for taxes and insurance                                                                                                                                                                                                                                                                                         |  |                                           | 21,805    |   |                    |    
|Liability for securities purchased pending settlement                                                                                                                                                                                                                                                                                         |  |                                           | 90,651    |   |                    |    
|Accrued expenses and other liabilities                                                                                                                                                                                                                                                                                                        |  |                                           | 39,040    |   |                    |    
|                                                                                                                                                                                                                                                                                                                                              |  |                                           |           |   |                    |    
|Total liabilities                                                                                                                                                                                                                                                                                                                             |  |                                           | 6,240,560 |   |                    |    
|                                                                                                                                                                                                                                                                                                                                              |  |                                           |           |   |                    |    
|Stockholders Equity:                                                                                                                                                                                                                                                                                                                         |  |                                           |           |   |                    |    
|Preferred Stock, Authorized shares10,000,000. Issued sharesNoncumulative
Convertible Preferred Stock, Series B724,007 and 574,007 at March 31, 2003 and September 30, 2002, respectively; Outstanding sharesNoncumulative Convertible Preferred Stock Series B697,287 and 547,287 at March 31, 2003 and
September 30, 2002, respectively |  |                                           | 7         |   |                    |    
|Class A Common Stock, $0.01 par value. Authorized shares60,000,000.
Issued shares25,370,596 and 25,008,515 at March 31, 2003 and September 30, 2002, respectively. Outstanding shares25,037,596 and 24,675,515 at March 31, 2003 and September 30, 2002, respectively                                                                      |  |                                           |           |   |                    |    
|                                                                                                                                                                                                                                                                                                                                              |  | 254                                       |           |   |                    | 250
|Class B Common Stock, $0.01 par value. Authorized shares3,000,000. Issued
shares580,262 and 536,562, at March 31, 2003 and September 30, 2002, respectively. Outstanding shares536,562 at March 31, 2003 and September 30, 2002.                                                                                                           |  |                                           | 6         |   |                    |    
|Additional paid-in capital                                                                                                                                                                                                                                                                                                                    |  |                                           | 257,207   |   |                    |    
|Retained earnings                                                                                                                                                                                                                                                                                                                             |  |                                           | 95,800    |   |                    |    
|Common Treasury Stock376,700 and 333,000 shares at March 31, 2003 and September
30, 2002, respectively                                                                                                                                                                                                                                       |  |                                           | (3,279    | ) |                    |    
|Preferred Treasury Stock26,720 shares                                                                                                                                                                                                                                                                                                        |  |                                           | (528      | ) |                    |    
|Deferred compensation and option shares                                                                                                                                                                                                                                                                                                       |  |                                           | 697       |   |                    |    
|Accumulated other comprehensive income                                                                                                                                                                                                                                                                                                        |  |                                           | 19,422    |   |                    |    
|                                                                                                                                                                                                                                                                                                                                              |  |                                           |           |   |                    |    
|Total stockholders equity                                                                                                                                                                                                                                                                                                                    |  |                                           | 369,586   |   |                    |    
|                                                                                                                                                                                                                                                                                                                                              |  |                                           |           |   |                    |    
|Total liabilities and stockholders equity                                                                                                                                                                                                                                                                                                    |  | $                                         | 6,610,146 |   |                    | $  
|                                                                                                                                                                                                                                                                                                                                              |  |                                           |           |   |                    |    



See
accompanying condensed notes to consolidated financial statements



3



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##### Table of Contents

BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONSOLIDATED STATEMENTS OF OPERATIONS



|                                                                                  |  | For the Three Months Ended March 31,                     |        | For the Six Months Ended March 31,
|--------------------------------------------------------------------------------- |  | -------------------------------------------------------- | ------ | ----------------------------------
|                                                                                  |  | 2003                                                     |        | 2002                              
|                                                                                  |  | (Dollars and shares in thousands, except per share data)
|Interest income:                                                                  |  |                                                          |        |                                   
|Interest and fees on loans                                                        |  | $                                                        | 58,421 |                                   
|Interest on mortgage-backed securities                                            |  |                                                          | 19,296 |                                   
|Interest on short-term investments                                                |  |                                                          | 110    |                                   
|Interest and dividends on long-term investments and other interest-earning assets |  |                                                          | 3,463  |                                   
|                                                                                  |  |                                                          |        |                                   
|Total interest income                                                             |  |                                                          | 81,290 |                                   
|                                                                                  |  |                                                          |        |                                   
|Interest expense:                                                                 |  |                                                          |        |                                   
|Interest on deposits                                                              |  |                                                          | 21,112 |                                   
|Interest on borrowings                                                            |  |                                                          | 24,754 |                                   
|Preferred dividends of subsidiary trusts                                          |  |                                                          | 5,259  |                                   
|                                                                                  |  |                                                          |        |                                   
|Total interest expense                                                            |  |                                                          | 51,125 |                                   
|                                                                                  |  |                                                          |        |                                   
|Net interest income before provision for loan losses                              |  |                                                          | 30,165 |                                   
|Provision for loan losses                                                         |  |                                                          | 1,250  |                                   
|                                                                                  |  |                                                          |        |                                   
|Net interest income after provision for loan losses                               |  |                                                          | 28,915 |                                   
|                                                                                  |  |                                                          |        |                                   
|Non-interest income:                                                              |  |                                                          |        |                                   
|Service fees on loans                                                             |  |                                                          | 56     |                                   
|Service fees on deposits                                                          |  |                                                          | 991    |                                   
|Service fees other                                                                |  |                                                          | 312    |                                   
|Insurance and investment services income                                          |  |                                                          | 626    |                                   
|Net gain on sale of investments and mortgage-backed securities                    |  |                                                          | 158    |                                   
|Net gain on sale of loans and other assets                                        |  |                                                          | 1,702  |                                   
|Other                                                                             |  |                                                          | 2,212  |                                   
|                                                                                  |  |                                                          |        |                                   
|Total non-interest income                                                         |  |                                                          | 6,057  |                                   
|                                                                                  |  |                                                          |        |                                   
|Non-interest expenses:                                                            |  |                                                          |        |                                   
|Employee compensation and benefits                                                |  |                                                          | 9,708  |                                   
|Occupancy and equipment                                                           |  |                                                          | 3,005  |                                   
|Telecommunications and data processing                                            |  |                                                          | 1,209  |                                   
|Advertising and promotion expense                                                 |  |                                                          | 1,256  |                                   
|Professional fees-legal and accounting                                            |  |                                                          | 1,200  |                                   
|Loan servicing expense                                                            |  |                                                          | 362    |                                   
|Insurance                                                                         |  |                                                          | 289    |                                   
|Other operating expenses                                                          |  |                                                          | 4,282  |                                   
|                                                                                  |  |                                                          |        |                                   
|Total non-interest expenses                                                       |  |                                                          | 21,311 |                                   
|                                                                                  |  |                                                          |        |                                   
|Income before income taxes                                                        |  |                                                          | 13,661 |                                   
|Provision for income taxes                                                        |  |                                                          | 4,055  |                                   
|                                                                                  |  |                                                          |        |                                   
|Net income                                                                        |  | $                                                        | 9,606  |                                   
|                                                                                  |  |                                                          |        |                                   
|                                                                                 
|Earnings Per Share:                                                               |  |                                                          |        |                                   
|Basic earnings per share                                                          |  | $                                                        | 0.37   |                                   
|Diluted earnings per share                                                        |  | $                                                        | 0.35   |                                   
|Weighted average number of common shares outstanding:                             |  |                                                          |        |                                   
|Basic                                                                             |  |                                                          | 25,539 |                                   
|Diluted                                                                           |  |                                                          | 27,710 |                                   



See
accompanying condensed notes to consolidated financial statements



4



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY



|                                                   |  | For the Six Months Ended March 31, 2003 and 2002 |  
|-------------------------------------------------- |  | ------------------------------------------------ | -
|                                                   |  | Preferred Stock                                  |  
|                                                   |  | (In thousands)                                   |  
|Balance at September 30, 2002                      |  | $                                                | 6
|Comprehensive income:                              |  |                                                  |  
|Net income for the nine months ended June 30, 2002 |  |                                                  | 
|Other comprehensive income, net of tax             |  |                                                  | 
|                                                   |  |                                                  |  
|Total comprehensive income                         |  |                                                  | 
|Payments of dividends on preferred stock           |  |                                                  | 
|Deferred Compensation Obligation                   |  |                                                  | 
|Purchase of Stock                                  |  |                                                  | 
|Issuance of stock, stock options and other awards  |  |                                                  | 1
|                                                   |  |                                                  |  
|Balance at March 31, 2003                          |  | $                                                | 7
|                                                   |  |                                                  |  
|                                                  
|                                                   |  | Preferred Stock                                  |  
|                                                   |  | (In thousands)                                   |  
|Balance at September 30, 2001                      |  | $                                                | 4
|Comprehensive income:                              |  |                                                  |  
|Net income for the nine months ended June 30, 2002 |  |                                                  | 
|Other comprehensive loss, net of tax               |  |                                                  | 
|                                                   |  |                                                  |  
|Total comprehensive income                         |  |                                                  | 
|Payments of dividends on preferred stock           |  |                                                  | 
|Deferred Compensation Obligation                   |  |                                                  | 
|Purchase of Stock                                  |  |                                                  | 
|Issuance of stock, stock options and other awards  |  |                                                  | 2
|                                                   |  |                                                  |  
|Balance at March 31, 2002                          |  | $                                                | 6
|                                                   |  |                                                  |  



See
accompanying condensed notes to consolidated financial statements



5



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONSOLIDATED STATEMENTS OF CASH FLOWS



|                                                                          |  | For the Six Months Ended March 31, |           
|------------------------------------------------------------------------- |  | ---------------------------------- | ----------
|                                                                          |  | 2003                               |           
|                                                                          |  | (In thousands)                     |           
|Cash flows used in operating activities                                   |  | $                                  | (351,123  
|Cash flows from investing activities:                                     |  |                                    |           
|Other net decreases (increases) in loans                                  |  |                                    | 28,864    
|Purchase of investment securities available for sale                      |  |                                    | (77,461   
|Purchase of mortgage-backed securities available for sale                 |  |                                    | (1,225,953
|Purchase of other earning assets                                          |  |                                    | (59,248   
|Purchase of bank-owned life insurance                                     |  |                                    | (20,000   
|Purchase of office properties and equipment                               |  |                                    | (1,698    
|Proceeds from repayments of investment securities available for sale      |  |                                    |          
|Proceeds from repayments of mortgage-backed securities held to maturity   |  |                                    |          
|Proceeds from repayments of mortgage-backed securities available for
sale |  |                                    | 491,334   
|Proceeds from repayments of other earning assets                          |  |                                    | 49,450    
|Proceeds from sale of investment securities available for sale            |  |                                    | 40,892    
|Proceeds from sale of mortgage-backed securities available for sale       |  |                                    | 274,078   
|Proceeds from sale of real estate owned                                   |  |                                    | 919       
|                                                                          |  |                                    |           
|Net cash used in investing activities                                     |  |                                    | (498,823  
|                                                                          |  |                                    |           
|Cash flows from financing activities:                                     |  |                                    |           
|Net increase in deposits                                                  |  |                                    | 96,041    
|Net increase in Federal Home Loan Bank advances                           |  |                                    | 203,182   
|Net increase (decrease) in other borrowings                               |  |                                    | 177,719   
|Guarantee fees for senior notes                                           |  |                                    | (113      
|Decrease in advances from borrowers for taxes and insurance               |  |                                    | (18,788   
|Redemption of trust preferred securities                                  |  |                                    | (46,501   
|Net proceeds from issuance of trust preferred securities                  |  |                                    | 51,080    
|Net proceeds from issuance of stock                                       |  |                                    | 2,857     
|Purchase of Series B Preferred Stock                                      |  |                                    |          
|Dividends paid on preferred stock                                         |  |                                    | (158      
|                                                                          |  |                                    |           
|Net cash provided by financing activities                                 |  |                                    | 465,319   
|                                                                          |  |                                    |           
|(Decrease) increase in cash and cash equivalents                          |  |                                    | (384,627  
|Cash and cash equivalents at beginning of period                          |  |                                    | 472,290   
|                                                                          |  |                                    |           
|Cash and cash equivalents at end of period                                |  | $                                  | 87,663    
|                                                                          |  |                                    |           
|Supplemental disclosure of non-cash investing and financing activities:   |  |                                    |           
|Securitization of loans receivable and mortgage loans held for sale       |  | $                                  | 286,132   
|Transfer of loans to real estate owned                                    |  | $                                  | 2,825     
|Securities purchased pending settlement                                   |  | $                                  | 90,651    



See
accompanying condensed notes to consolidated financial statements



6



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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



1.    Basis of Presentation and Principles of Consolidation



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



The unaudited consolidated financial statements have been prepared in conformity with Rule 10-01 of
Regulation S-X of the Securities and Exchange Commission and therefore do not include information or footnotes necessary for a complete presentation of financial position, results of operations and cash flows in conformity with generally accepted
accounting principles. However, all adjustments (consisting of normal recurring accruals), which, in the opinion of management, are necessary for a fair presentation of the financial statements, have been included. Operating results for the
six-month period ended March 31, 2003 are not necessarily indicative of the results that may be expected for the year ending September 30, 2003. For further information, refer to the Consolidated Financial Statements and Notes thereto included in
BankUniteds Annual Report on Form 10-K for the fiscal year ended September 30, 2002.



Certain prior period amounts have been reclassified to conform to the March 31, 2003 consolidated financial statements.



2.    Significant Accounting Policies



During the quarter ended March 31, 2002, BankUnited adopted
accounting policies pursuant to Statement of Financial Accounting Standards (SFAS) No. 148, Accounting for Stock Based CompensationTransition and Disclosure. See note 10. Impact of New Accounting
Pronouncements for a discussion of the requirements of SFAS No. 148 and note 11. Stock Options for the new disclosure required by SFAS No. 148.



7



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3.    Earnings Per Share



The following tables reconcile basic and diluted earnings per share for the three and six months ended March 31, 2003 and 2002.



|                                                               |  | For the Three Months ended March 31,                     |        | For the Six Months ended March 31,
|-------------------------------------------------------------- |  | -------------------------------------------------------- | ------ | ----------------------------------
|                                                               |  | 2003                                                     |        | 2002                              
|                                                               |  | (Dollars and shares in thousands, except per share data)
|Basic earnings per share:                                      |  |                                                          |        |                                   
|Numerator:                                                     |  |                                                          |        |                                   
|Net income                                                     |  | $                                                        | 9,606  |                                   
|Preferred stock dividends                                      |  |                                                          | 79     |                                   
|                                                               |  |                                                          |        |                                   
|Net income available to common stockholders                    |  | $                                                        | 9,527  |                                   
|                                                               |  |                                                          |        |                                   
|Denominator:                                                   |  |                                                          |        |                                   
|Weighted average common shares outstanding                     |  |                                                          | 25,539 |                                   
|                                                               |  |                                                          |        |                                   
|Basic earnings per share                                       |  | $                                                        | 0.37   |                                   
|                                                               |  |                                                          |        |                                   
|Diluted earnings per share:                                    |  |                                                          |        |                                   
|Numerator:                                                     |  |                                                          |        |                                   
|Net income available to common stockholders                    |  | $                                                        | 9,527  |                                   
|Plus:                                                          |  |                                                          |        |                                   
|Convertible preferred stock dividends                          |  |                                                          | 79     |                                   
|                                                               |  |                                                          |        |                                   
|Diluted net income available to common stockholders            |  | $                                                        | 9,606  |                                   
|                                                               |  |                                                          |        |                                   
|Denominator:                                                   |  |                                                          |        |                                   
|Weighted average common shares outstanding                     |  |                                                          | 25,539 |                                   
|Plus:                                                          |  |                                                          |        |                                   
|Number of common shares from the conversion of options         |  |                                                          | 1,088  |                                   
|Number of common shares from the conversion of preferred stock |  |                                                          | 1,083  |                                   
|                                                               |  |                                                          |        |                                   
|Diluted weighted average shares outstanding                    |  |                                                          | 27,710 |                                   
|                                                               |  |                                                          |        |                                   
|Diluted earnings per share                                     |  | $                                                        | 0.35   |                                   
|                                                               |  |                                                          |        |                                   



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



Diluted earnings per share is calculated under the treasury stock method by dividing net income by the
weighted average number of shares of common outstanding, assuming conversion of outstanding convertible preferred stock from the beginning of the period and the exercise of stock options. Such adjustments to net income and the weighted average
number of shares of common stock are made only when such adjustments dilute earnings per share.



8



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|4. |  | Company Obligated Mandatorily Redeemable Trust Preferred Securities of Subsidiary Trusts Holding Solely Junior Subordinated Deferrable Interest Debentures of
BankUnited
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------



BankUnited
Statutory Trust IV, BankUnited Statutory Trust V, and BankUnited Statutory Trust VI are wholly owned trust subsidiaries (Trust Subsidiaries) of BankUnited which were created under Connecticut law during the six months ended March 31,
2003 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 Junior Subordinated Debentures). The Trust
Preferred Securities were issued and sold in private placement offerings. All of the proceeds from the sale of the Trust Preferred Securities and the common securities issued by the Trust Subsidiaries are invested in Junior Subordinated Debentures,
which are the sole assets of the Trust Subsidiaries. The Trust Subsidiaries pay preferential cumulative cash distributions on the Trust Preferred Securities at the same rate as the distributions paid by BankUnited on the Junior Subordinated
Debentures held by the Trust Subsidiaries. Taken together, the undertakings made by BankUnited with respect to the Trust Preferred Securities constitute a full and unconditional guarantee by BankUnited of the obligations of the Trust Preferred
Securities.



The following table provides
information on the issuances of Trust Preferred Securities by BankUnited during the six months ended March 31, 2003:



|                              |  | Original                          |        |                          |   |                                    
|----------------------------- |  | --------------------------------- | ------ | ------------------------ | - | -----------------------------------
|                              |  | Trust Preferred Securities Issued |        | Common Securities Issued |   | Junior Subordinated Debentures Held
|                              |  | (Dollars in thousands)            |        |                          |   |                                    
|BankUnited Statutory Trust IV |  | $                                 | 20,000 |                          | $ | 619                                
|BankUnited Statutory Trust V  |  |                                   | 15,000 |                          |   | 464                                
|BankUnited Statutory Trust VI |  |                                   | 17,640 |                          |   | 546                                
|                              |  |                                   |        |                          |   |                                    
|                              |  | $                                 | 52,640 |                          | $ | 1,629                              
|                              |  |                                   |        |                          |   |                                    



|(1) |  | The annual rate adjusts quarterly not to exceed 11.90% prior to November 15, 2007.
|--- |  | ----------------------------------------------------------------------------------

|(2) |  | The annual rate adjusts quarterly not to exceed 11.75% prior to December 26, 2007.
|--- |  | ----------------------------------------------------------------------------------

|(3) |  | The annual rate is fixed at 4.41% until June 26, 2003, upon which time rates adjust quarterly not to exceed 11.75% prior to March 26, 2008.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------



On February 26, 2003 BankUnited
Financial Corporation announced that it would redeem all of the 9.60% Junior Subordinated Debentures held by its trust subsidiary, BankUnited Capital II, and BankUnited Capital II would redeem all of its outstanding 9.60% Cumulative Trust Preferred
Securities (Nasdaq: BKUNZ). The Trust Preferred Securities were redeemed on March 28, 2003 at a price of $25.00 per share plus accumulated and unpaid interest.



9



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|5. |  | Treasury Stock
|-- |  | --------------



The following table provides information on Treasury Stock held by BankUnited as of March 31, 2003 and September 30, 2002:



|                                                                                       |  | March 31, 2003 |        |   | September 30, 2002 |  
|-------------------------------------------------------------------------------------- |  | -------------- | ------ | - | ------------------ | -
|                                                                                       |  | (In thousands) |       
|Common Treasury Stock:                                                                 |  |                |        |   |                    |  
|Class A Common333,000 shares                                                          |  | $              | (2,794 | ) |                    | $
|Class B Common20,440 shares                                                           |  |                | (316   | ) |                    |  
|Class B Common (held in Rabbi Trust)23,260 shares                                     |  |                | (169   | ) |                    |  
|                                                                                       |  |                |        |   |                    |  
|Total Common Treasury Stock                                                            |  | $              | (3,279 | ) |                    | $
|                                                                                       |  |                |        |   |                    |  
|Preferred Treasury Stock:                                                              |  |                |        |   |                    |  
|Noncumulative Convertible Preferred Stock, Series B(held in Rabbi Trust)26,720
shares |  | $              | (528   | ) |                    | $
|                                                                                       |  |                |        |   |                    |  
|Total Treasury Stock                                                                   |  | $              | 3,807  |   |                    | $
|                                                                                       |  |                |        |   |                    |  



In the
first quarter of fiscal 2003, the Chief Executive Officer (CEO) surrendered 20,440 shares of Class B Common Stock to BankUnited as consideration for the exercise of 43,700 shares of Class B Common Stock. The 20,440 shares surrendered had
a value of $316 thousand and are reflected in treasury stock in the equity section of BankUniteds Consolidated Statement of Financial Condition. The shares due to the CEO upon the option exercise, were 23,260 shares of Class B Common Stock
with a value of $169 thousand, which have been deferred by the CEO are being held in a trust established by BankUnited. These shares are reflected in treasury stock in the equity section of BankUniteds Consolidated Statement of Financial
Condition. The obligation to deliver the shares to the CEO is also reflected in the equity section of BankUniteds Consolidated Statement of Financial Condition in deferred compensation.



6.    Regulatory Capital



The Office of Thrift Supervision (OTS) requires
that the Bank meet minimum regulatory, core and risk-based capital requirements. Currently, the Bank exceeds all regulatory capital requirements. The Banks required, actual and excess regulatory capital levels as of March 31, 2003 and 2002
were as follows:



|                   |  | Regulatory Capital    
|------------------ |  | ----------------------
|                   |  | Required              
|                   |  | 2003                  
|                   |  | (Dollars in thousands)
|Core capital       |  | $                     
|                   |  |                       
|Risk based capital |  | $                     
|                   |  |                       



10



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7.    Comprehensive Income



BankUniteds comprehensive income includes all items which comprise net income after preferred stock dividends, plus other comprehensive income. For the three months and six months ended March 31, 2003 and 2002,
BankUniteds other comprehensive income (loss) was as follows:



|                                                                                                                                                                                                                                                                              |  | For the Three Months Ended March 31, |        |   | For the Six Months Ended March 31, |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------ | ------ | - | ---------------------------------- | -
|                                                                                                                                                                                                                                                                              |  | 2003                                 |        |   | 2002                               |  
|                                                                                                                                                                                                                                                                              |  | (In thousands)                       |       
|Net income                                                                                                                                                                                                                                                                    |  | $                                    | 9,606  |   |                                    | $
|Other comprehensive income (loss), net of tax:                                                                                                                                                                                                                                |  |                                      |        |   |                                    |  
|Unrealized income (loss) arising during the period on securities, net of tax expense
(benefit) of $2,382 and $(2,008) for the three months ended March 31, 2003 and 2002, respectively and $1,233 and $(5,896) for the six months ended March 31, 2003 and 2002, respectively |  |                                      | 4,235  |   |                                    |  
|Unrealized losses on cash flow hedges, net of tax benefit of $85 and $169 for the three
and six months ended March 31, 2003, respectively                                                                                                                                     |  |                                      | (144   | ) |                                    |  
|Less reclassification adjustment for:                                                                                                                                                                                                                                         |  |                                      |        |   |                                    |  
|Amortization of unrealized losses on transferred securities, net of tax expense of $15
and $38 for the three and six months ended March 31, 2002, respectively                                                                                                                |  |                                      |       |   |                                    |  
|Realized gains on securities sold included in net income, net of tax expense of $20 for
the three months ended March 31, 2002, and $569 and $340 for the six months ended March 31, 2003 and 2002, respectively                                                               |  |                                      |       |   |                                    |  
|                                                                                                                                                                                                                                                                              |  |                                      |        |   |                                    |  
|Total other comprehensive income (loss), net of tax                                                                                                                                                                                                                           |  |                                      | 4,091  |   |                                    |  
|                                                                                                                                                                                                                                                                              |  |                                      |        |   |                                    |  
|Comprehensive income                                                                                                                                                                                                                                                          |  | $                                    | 13,697 |   |                                    | $
|                                                                                                                                                                                                                                                                              |  |                                      |        |   |                                    |  



8.    Accounting For Derivatives and Hedging Activities



BankUnited expects $62 thousand of the amounts currently reported in other comprehensive income related to cash flow hedges to be
reclassified into earnings within the next twelve months.



During the three months ended March 31, 2003, BankUnited settled an interest rate swap which was used to hedge the 9.60% Cumulative Trust Preferred Securities issued by BankUnited Capital II. This settlement was made in conjunction
with the redemption of the 9.60% Trust Preferred Securities which took place simultaneously and resulted in a gain of $87 thousand. See footnote 3.  Company Obligated Mandatorily Redeemable Trust Preferred Securities of Subsidiary Trust
Holding Solely Junior Subordinated Deferrable Interest Debentures of BankUnited in the Financial Statements for a further discussion of the redemption of the BankUnited Capital II securities.



9.    Commitments and Contingencies



Standby letters of credit are conditional commitments issued
by BankUnited to guarantee the performance of a customer to a third party. BankUnited had outstanding standby letters of credit in the amount of $8.4 million and $8.0 million as of March 31, 2003 and September 30, 2002, respectively.
Approximately $1.5 million of the standby letters of credit outstanding at March 31, 2003 were issued subsequent to December 31, 2002. BankUniteds exposure to credit loss in the event of non-performance by the other party to the financial
instrument for standby letters of credit is represented by the contractual amounts of those instruments. BankUnited uses the same credit policies in establishing conditional obligations as those for on-balance sheet instruments. The credit risk
involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. Collateral held varies but may include cash, accounts receivable, inventory, equipment, marketable



11



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##### Table of Contents

securities and property. Since certain letters of credit are expected to expire without being drawn upon, they do not necessarily represent
future cash requirements.



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



10.    Impact of New
Accounting Pronouncements



SFAS No. 145



In May of 2002, the Financial Accounting
Standards Board (FASB) issued SFAS No. 145, Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections as of April 2002. Under SFAS No. 4, all gains and losses from
extinguishment of debt were required to be aggregated and, if material, classified as an extraordinary item, net of related income tax effect. This was an exception to Accounting Principals Board Opinion No. 30, Reporting the Results of
OperationsReporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions (APB No. 30), which defines extraordinary items as events and
transactions that are distinguished by their unusual nature and by the infrequency of their occurrence.



SFAS No. 145 eliminates Statement No. 4 and, thus, the exception to applying APB No. 30 to all gains and losses related to extinguishments
of debt (other than extinguishment of debt to satisfy sinking-fund requirements). As a result gains and losses from extinguishment of debt should be classified as extraordinary items only if they meet the criteria in APB No. 30. Applying APB No. 30
will distinguish transactions that are part of an entitys recurring operations from those that are unusual or infrequent in nature or that meet the criteria for classification as an extraordinary item. The provisions of SFAS No. 145 related to
the rescission of Statement No. 4 shall be applied in fiscal years beginning after May 15, 2002. BankUnited adapted the provisions of SFAS No. 145 related to the rescission of Statement No. 4 beginning October 1, 2002, which resulted in a
reclassification of extraordinary item to non-interest income in the consolidated statement of operations.



SFAS No. 148



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



As permitted by SFAS No. 123,
BankUnited continues to follow the intrinsic value method of accounting for stock-based compensation under the provisions of Accounting Principles Board (APB) No. 25, Accounting for Stock Issued to Employees. Accordingly, the
alternative methods of transition for the fair value based method of accounting for stock-based employee compensation provided by SFAS No. 148 do not apply to BankUnited. BankUnited is required under the provisions of SFAS No. 148 amending SFAS 123
and APB No. 28, Interim Financial Reporting, to provide additional disclosures in both annual and interim financial statements. See note11. Stock Options for required interim disclosures.



12



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##### Table of Contents



11.    Stock Options



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



|                                                                                                                                                    |  | For the Three Months Ended March 31, |       |   | For the Six Months Ended March 31, |  
|--------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------ | ----- | - | ---------------------------------- | -
|                                                                                                                                                    |  | 2003                                 |       |   | 2002                               |  
|                                                                                                                                                    |  | (Dollars in thousands)               |      
|Net income, as reported                                                                                                                             |  | $                                    | 9,606 |   |                                    | $
|Deduct: Total stock-based employee compensation expense determined under the fair value based method for all awards, net of related tax effects (1) |  |                                      | (407  | ) |                                    |  
|                                                                                                                                                    |  |                                      |       |   |                                    |  
|Pro forma net income                                                                                                                                |  | $                                    | 9,199 |   |                                    | $
|                                                                                                                                                    |  |                                      |       |   |                                    |  
|Earnings per share:                                                                                                                                 |  |                                      |       |   |                                    |  
|Basicas reported                                                                                                                                   |  | $                                    | 0.37  |   |                                    | $
|                                                                                                                                                    |  |                                      |       |   |                                    |  
|Basicpro forma                                                                                                                                     |  | $                                    | 0.36  |   |                                    | $
|                                                                                                                                                    |  |                                      |       |   |                                    |  
|                                                                                                                                                   
|Dilutedas reported                                                                                                                                 |  | $                                    | 0.35  |   |                                    | $
|                                                                                                                                                    |  |                                      |       |   |                                    |  
|Dilutedpro forma                                                                                                                                   |  | $                                    | 0.33  |   |                                    | $
|                                                                                                                                                    |  |                                      |       |   |                                    |  

---

|(1) |  | The fair value of each option has been estimated on the date of the grant using the Black Scholes option pricing model.
|--- |  | -----------------------------------------------------------------------------------------------------------------------



12.    Related Party Transactions



The Bank, as an insured depository institution as defined
under Section 3 of the Federal Deposit Investment Act, extends loans to entities in which its directors have significant interests. As of March 31, 2003, there were approximately $3.5 million in loans receivable from an entity in which a director
had interests. As of September 30, 2002 there were approximately $1 million in loans receivables from entities in which two directors had interests. These loans and their terms have been reviewed and approved by the Banks board of directors.



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



As used in this Form 10-Q, BankUnited, we, us and our refers to BankUnited and its
subsidiaries on a consolidated basis. The following discussion and analysis and the related financial data present a review of BankUniteds consolidated operating results for the three and six-month periods ended March 31, 2003 and 2002 and
consolidated financial condition as of March 31, 2003. This discussion and analysis should be read in conjunction with the Consolidated Financial Statements and Notes thereto contained in BankUniteds Annual Report on Form 10-K for the year
ended September 30, 2002.



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



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



13



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



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



BankUnited cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made, and
are not historical facts. Actual results may differ materially from the results discussed in these forward looking statements due to the following factors, among other things: general economic conditions, either nationally or regionally; 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; competition from other financial services companies in our markets; legislative or regulatory
changes, including changes in accounting standards, guidelines and policies; changes in the regulation of financial services companies; the issuance of additional equity or debt securities; the concentration of operations in south Florida, if the
Florida economy or real estate values decline; and the threat and impact of war and terrorism. BankUnited cautions that the foregoing factors are not exclusive. BankUnited does not undertake, and specifically disclaims any obligations, to publicly
release the result of any updates which might be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.



Critical Accounting Policies



BankUniteds financial position and results of
operations are impacted by managements application of accounting policies involving judgments made to arrive at the carrying value of certain assets. Managements greatest challenge in implementing its policies is the need to make
estimates about the effect of matters that are inherently less than certain. Critical accounting policies applied by BankUnited are those that relate to the loan portfolio, which includes the allowance for loan losses and the valuation of mortgage
servicing rights pertaining to the sale of, or securitization of mortgage loans. A variety of estimates impact the carrying value of the loan portfolio, including the amount of the allowance for loan losses, the placement of loans on non-accrual
status, and the valuation of loans held for sale and mortgage servicing rights.



For a more detailed discussion on these critical accounting policies, see Critical Accounting Policies on page 21 of BankUniteds Annual Report on Form 10-K for the year ended
September 30, 2002.





Recent Developments



On February 3, 2003, BankUnited announced the addition of Sharon A. Brown as an independent member of its Board of Directors. Ms. Brown will serve on the Audit Committee and will qualify as an
audit committee financial expert in compliance with rules adopted by the Securities and Exchange Commission. Ms. Brown is Director of Alumni and External Affairs for the University of Miami School of Business Administration and
previously served as Assistant Dean for Administration and Development. Ms. Brown was a partner at Coopers & Lybrand, where she worked for 25 years, prior to joining the University of Miami in 1992. At Coopers & Lybrand, Ms. Browns
clients included financial institutions, non-profit organizations and major organizations in government and education. She advised senior management on accounting, auditing, financial, and operations issues, and developed expertise in financial
reporting, internal control reviews, major financing, acquisition reviews and other areas. She became a partner of that firm in 1979. Ms. Brown is a member of the Audit Committee of the School Board of Miami-Dade County, and served on the
five-member citizen board appointed by Governor Chiles in 1998 to oversee the financial recovery of the City of Miami. Ms. Brown is a long-standing member of the Florida Institute of Certified Public Accountants where she has chaired various
committees, including County Agency Audits, State and Local Government, Relations with Financial Institutions, and Structure and Governance. She also served as the organizations President in 1986. The Florida House of Representatives
recognized Ms. Brown for her service as president of the FICPA and for having devoted most of her professional career to improving the quality and integrity of local governmental audits.



14



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##### Table of Contents



BankUnited
announced on February 3, 2003 that it was added to the S&P Small Cap 600 GICS (Global Industry Classification Standard) Banks sub-industry after the close of trading on Tuesday, February 4, 2003. The S&P SmallCap 600 Index consists of 600
domestic stocks chosen for market size, liquidity and industry group representation.



BankUnited believes that the branch network will continue to play a vital role in building banking relationships and toward this objective has opened its 41st branch location during the 2nd quarter of
fiscal 2003 in the Broward County community of Wilton Manors. In addition, BankUnited opened a wholesale lending office in the state of Maryland just after quarter-end.



Shortly following the close of the quarter ended March 31, 2003, BankUnited launched its micro-market
strategy for the retail banking operation. The initiative, which divided the companys marketplace into eleven micro markets, is designed to provide BankUnited customers with an even greater level of high-touch service and to enhance community
ties. Emphasizing that it is a true market-driven strategy, the company has empowered its micro-market managers with enhanced decision-making abilities, greater latitude in community sponsorship and involvement, and customer-centric promotions and
product bundles. This should prove to be a highly effective approach in our efforts to build true long-term, loyal, banking relationships. By offering our customers the advantages of community-bank service, localized decision-making, and
market-savvy bankers backed by our asset strength and broad product array, we hope to change the banking landscape in our markets. We intend to continue to carve a niche for ourselves by offering more products and services than our community bank
competitors, and more high-touch, personalized and flexible service than our larger regional competitors.



RESULTS OF OPERATIONS



For the Three Months Ended March 31, 2003 Compared to the Same Period in 2002



General



Net income was $9.6 million for the three months ended March 31, 2003, a 28% increase compared to $7.5 million for the same period in 2002. Basic and diluted earnings per share for the quarter were $0.37 and $0.35, respectively,
versus $0.29 and $0.28, respectively, for the same period in 2002. This improvement reflects an increase in net interest income of $1.7 million, a reduction of provision for loan losses of $1.2 million, an increase in non-interest income of $1.6
million, and a reduction of income tax provision of $560 thousand. This was offset by an increase in non-interest expense of $3 million.



Analysis of Net Interest Income



The following discussion of net interest income should be reviewed in conjunction with theYields Earned and Rates Paidand
Rate/Volume Analysistables.



Net
interest income represents the difference between income on interest-earning assets and expense on interest-bearing liabilities. 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 annualized interest income or expense for the period by the average balance of the appropriate
balance sheet item during the period. Net interest margin is calculated by dividing annualized net interest income by each category of average interest-earning assets. Non-accrual loans are included in asset balances for the appropriate period,
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 regulatory requirements. The yields and net interest margins
have been calculated on a pre-tax basis.



15



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##### Table of Contents



Yields Earned and Rates
Paid



|                                                                    |  | For the Three Months Ended March 31, |          
|------------------------------------------------------------------- |  | ------------------------------------ | ---------
|                                                                    |  | 2003                                 |          
|                                                                    |  | AverageBalance                       |          
|                                                                    |  | (Dollars in thousands)               |          
|Interest-earning assets:                                            |  |                                      |          
|Loans receivable, net(2)                                            |  | $                                    | 4,013,507
|Mortgage-backed securities                                          |  |                                      | 1,793,259
|Short-term investments(3)                                           |  |                                      | 12,623   
|Long-term investments and FHLB stock(4)                             |  |                                      | 296,332  
|                                                                    |  |                                      |          
|Total interest-earning assets                                       |  | $                                    | 6,115,721
|                                                                    |  |                                      |          
|Interest-bearing liabilities:                                       |  |                                      |          
|NOW/Money market                                                    |  | $                                    | 578,844  
|Savings                                                             |  |                                      | 706,397  
|Certificates of deposit                                             |  |                                      | 1,786,009
|Trust preferred securities(5)                                       |  |                                      | 289,142  
|Senior notes                                                        |  |                                      | 200,000  
|FHLB advances and other borrowings                                  |  |                                      | 2,380,854
|                                                                    |  |                                      |          
|Total interest-bearing liabilities                                  |  | $                                    | 5,941,246
|                                                                    |  |                                      |          
|Excess of interest-earning assets over interest-bearing liabilities |  | $                                    | 174,475  
|                                                                    |  |                                      |          
|Net interest income                                                 |  |                                      |          
|                                                                    |  |                                      |          
|Interest rate spread                                                |  |                                      |          
|                                                                    |  |                                      |          
|Net interest margin                                                 |  |                                      |          
|                                                                    |  |                                      |          
|Ratio of interest-earning assets to interest-bearing liabilities    |  |                                      | 102.94   
|                                                                    |  |                                      |          

---

|(1) |  | 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-earnings assets and interest-bearing liabilities, respectively, during the three-month periods ended March 31, 2003 and 2002 and do not include any estimates of the effect that accelerated amortization of premiums would have on the yields
earned.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) |  | Includes average non-accruing loans of $33.6 million and $26.9 million for the three months ended March 31, 2003 and 2002, respectively. The yields on loans
receivable, net include amortization of loan fees.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) |  | Short-term investments include FHLB overnight deposits, federal funds sold, and securities purchased under agreements to resell.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------

|(4) |  | Long-term investments include agency securities, and trust preferred securities of other issuers.
|--- |  | -------------------------------------------------------------------------------------------------

|(5) |  | Interest and rates include the effect of interest rate swaps.
|--- |  | -------------------------------------------------------------



16



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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. For each category of
interest-earning assets and interest-bearing liabilities, information is provided on the 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); (iii) changes in rate/volume (change in rate multiplied by change in volume); and (iv) total changes in rate and volume.



|                                           |  | For the three month period ended March 31,2003 vs. 2002 |       
|------------------------------------------ |  | ------------------------------------------------------- | ------
|                                           |  | Increase (Decrease) Due to                              |       
|                                           |  | Changes in Volume                                       |       
|                                           |  | (Dollars in thousands)                                  |       
|Interest income attributable to:           |  |                                                         |       
|Loans receivable, net                      |  | $                                                       | 1,757 
|Mortgage-backed securities                 |  |                                                         | 12,253
|Short-term investments(1)                  |  |                                                         | (81   
|Long-term investments and FHLB stock(2)    |  |                                                         | 1,168 
|                                           |  |                                                         |       
|Total interest-earning assets              |  | $                                                       | 15,097
|                                           |  |                                                         |       
|Interest expense attributable to:          |  |                                                         |       
|NOW/Money market                           |  | $                                                       | 731   
|Savings                                    |  |                                                         | 11    
|Certificates of deposit                    |  |                                                         | 304   
|Trust preferred securities(3)              |  |                                                         | 1,749 
|Senior notes                               |  |                                                         |      
|FHLB advances and other borrowings         |  |                                                         | 8,017 
|                                           |  |                                                         |       
|Total interest-bearing liabilities         |  |                                                         | 10,812
|                                           |  |                                                         |       
|Increase (decrease) in net interest income |  | $                                                       | 4,285 
|                                           |  |                                                         |       

---

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

|(2) |  | Long-term investments include agency securities, and trust preferred securities of other issuers.
|--- |  | -------------------------------------------------------------------------------------------------

|(3) |  | Includes the effect of interest rate swaps.
|--- |  | -------------------------------------------



BankUnited continued to experience a high level of mortgage loan pre-payments as a consequence of historically low mortgage rates during
the quarter ended March 31, 2003. Although we produced record residential loan production of $539 million during the quarter, including consumer mortgage loans originated through the branch network, those loans were originated at rates less than the
rates of loans which were paid off. This coupled with market-driven competitive deposit pricing, has resulted in a decrease of our net interest margin to 1.96% this quarter as compared to 2.20% for the same period in the prior year, and 2.04% in the
previous quarter.



The effect of pre-payments was
felt strongly by BankUnited particularly in the area of loans serviced by others (LSBOs), which were purchased several years ago. The LSBOs portfolio has pre-paid at a rate more than double that of the banks self-originated
residential portfolio, and now has a balance of $385 million. BankUnited anticipates continued rapid pre-payments and substantial depletion of this portfolio over the next several quarters, which will continue to have an adverse effect on the
companys interest-rate margin until reaching its end. Notwithstanding the high pre-payment levels, BankUniteds self-originated total loan portfolio showed growth of $183 million over the quarter ended December 31, 2002. BankUnited
expects that it will continue to be able to offset the LBSO run-off with BankUnited-originated loans and that this strategy will help strengthen the interest margin over time.



The average balance of Mortgage-Backed Securities increased significantly during the three months ended March
31, 2003. This increase generated sufficient interest income due to changes in volume to help offset the



17



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margin compression experienced during the quarter. These securities were purchased at the end of the quarter ended December 31, 2002. The
result was an increase in net interest income of $1.7 million for the three months ended March 31, 2003 as compared to 2002.



Analysis of Non-Interest Income and Expenses



|                                                              |  | For the Three Months Ended March 31, |       |      |   |        |  |  
|------------------------------------------------------------- |  | ------------------------------------ | ----- | ---- | - | ------ |  | -
|                                                              |  | 2003                                 |       | 2002 |   | Change | 
|                                                              |  | (Dollars in thousands)               |      
|Non-interest income:                                          |  |                                      |       |      |   |        |  |  
|Service fees on loans(1)                                      |  | $                                    | 56    |      | $ | 635    |  | $
|Service fees on deposits                                      |  |                                      | 991   |      |   | 819    |  |  
|Service fees on other                                         |  |                                      | 312   |      |   | 237    |  |  
|Insurance and investment services income                      |  |                                      | 626   |      |   | 1,084  |  |  
|Net gain on sale of investment and mortgage-backed securities |  |                                      | 158   |      |   | 52     |  |  
|Net gain on sale of loans and other assets                    |  |                                      | 1,702 |      |   | 921    |  |  
|Other                                                         |  |                                      | 2,212 |      |   | 664    |  |  
|                                                              |  |                                      |       |      |   |        |  |  
|Total non-interest income                                     |  | $                                    | 6,057 |      | $ | 4,412  |  | $
|                                                              |  |                                      |       |      |   |        |  |  

---

|(1) |  | Includes loan servicing fees, net of amortization of servicing rights and loan fees.
|--- |  | ------------------------------------------------------------------------------------



Non-interest income reached $6.1 million for the three months ended March 31, 2003, which is an increase of
$1.6 million over the same period in the prior year. The decrease in service fees on loans, net of $579 thousand includes an increase in servicing fee income of $183 thousand, an increase in amortization of mortgage servicing rights of $675 thousand
and a decrease in loan fees of $87 thousand. The increase in amortization of mortgage servicing rights is largely the result of a high level of pre-payments occurring during the three months in the current low interest rate environment. The increase
in service fees on deposits of 21.0% is the direct result of growth in core deposits, particularly non-interest bearing accounts. We expect continued improvement in generating service fees as we focus on expanding our banking office system and
implementing our micro-market strategy.



BankUnited realized $1.9 million from the sale of assets, in the form of loans and securitized loans which were originated for sale. Also included in other non-interest income was a life insurance benefit payment of
$1.1 million.



|                                       |  | For the Three Months Ended March 31, |        |      |   |        |  |  
|-------------------------------------- |  | ------------------------------------ | ------ | ---- | - | ------ |  | -
|                                       |  | 2003                                 |        | 2002 |   | Change | 
|                                       |  | (Dollars in thousands)               |       
|Non-interest expenses:                 |  |                                      |        |      |   |        |  |  
|Employee compensation and benefits     |  | $                                    | 9,708  |      | $ | 7,635  |  | $
|Occupancy and equipment                |  |                                      | 3,005  |      |   | 2,692  |  |  
|Telecommunications and data processing |  |                                      | 1,209  |      |   | 1,154  |  |  
|Advertising and promotion expense      |  |                                      | 1,256  |      |   | 1,725  |  |  
|Professional feeslegal and accounting |  |                                      | 1,200  |      |   | 1,241  |  |  
|Loan servicing expense(1)              |  |                                      | 362    |      |   | 809    |  |  
|Insurance                              |  |                                      | 289    |      |   | 269    |  |  
|Other operating expenses               |  |                                      | 4,282  |      |   | 2,792  |  |  
|                                       |  |                                      |        |      |   |        |  |  
|Total non-interest expenses            |  | $                                    | 21,311 |      | $ | 18,317 |  | $
|                                       |  |                                      |        |      |   |        |  |  

---

|(1) |  | Loan servicing expense relates to LSBOs.
|--- |  | ----------------------------------------



Non-interest expenses increased by $3 million for the three months ended March 31, 2003 compared to the same period in 2002. As BankUnited
continues to expand its operations, it is expected that non-interest expenses



18



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may increase. The largest portion of the increase for the period ended March 31, 2003 was $2.1 million in employee and benefits. There were
689 full time equivalent employees at March 31, 2003 as compared to 610 at March 31, 2002. The reduction in advertising and promotion expense of $469 thousand during the three months ended March 31, 2003 compared to the prior year reflects
managements intention to minimize such expenditures until they could be aligned with BankUniteds micro market strategy for the retail banking operation. Management expects that advertising expenditures may increase, as well as the return
on those expenditures as BankUnited heads in that strategic direction. Loan servicing fees are decreasing as the LSBOs run off. In addition, a $1.8 million charge was recorded in other operating expense during the three months ended March 31,
2003 related to the redemption of BankUniteds 9.60% Trust Preferred Securities. Excluding the increase in employee compensation of $2.1 million and the $1.8 million charge related to the redemption of Trust Preferred Securities, non-interest
expenses have decreased, demonstrating our efforts to reduce such costs. Management continues to institute expense control programs while allowing for expenditures that will enhance infrastructure and promote growth.



The decrease in the provision for income taxes of $560
thousand for the three months ended March 31, 2003, compared to 2002, reflects a change in BankUniteds effective tax rate due to the non-taxable nature of a life insurance benefit payment of $1.1 million received in the second quarter of
fiscal 2003 as well as tax planning strategies.



For the Six
Months Ended March 31, 2003 Compared to the Same Period in 2002.



General



Net income for
the first six months of fiscal 2003 was $18.4 million compared to $14.4 million for the same period last year, a 28% increase. Basic and diluted earnings per share for the six months ended March 31, 2003, were $0.72 and $0.67, respectively, versus
$0.57 and $0.54, respectively, for the same period in the prior year. This represents increases of 26% and 24% for basic and diluted earnings per share, respectively. This improvement reflects an increase in net interest income of $3.8 million, a
reduction of provision for loan losses of $2.9 million, an increase in non-interest income of $2.9 million, offset by an increase in non-interest expense of $4.8 million and an increase of income tax provision of $756 thousand.



19



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##### Table of Contents



Analysis of Net Interest
Income



Yields Earned and Rates Paid



|                                                                    |  | For the Six Months Ended March 31, |          
|------------------------------------------------------------------- |  | ---------------------------------- | ---------
|                                                                    |  | 2003                               |          
|                                                                    |  | Average Balance                    |          
|                                                                    |  | (Dollars in thousands)             |          
|Interest-earning assets:                                            |  |                                    |          
|Loans receivable, net(2)                                            |  | $                                  | 4,021,920
|Mortgage-backed securities                                          |  |                                    | 1,496,505
|Short-term investments(3)                                           |  |                                    | 13,287   
|Long-term investments and FHLB stock(4)                             |  |                                    | 277,137  
|                                                                    |  |                                    |          
|Total interest-earning assets                                       |  | $                                  | 5,808,849
|                                                                    |  |                                    |          
|Interest-bearing liabilities:                                       |  |                                    |          
|NOW/Money markets                                                   |  | $                                  | 538,914  
|Savings                                                             |  |                                    | 721,189  
|Certificates of deposit                                             |  |                                    | 1,765,628
|Trust Preferred Securities(5)                                       |  |                                    | 277,003  
|Senior notes                                                        |  |                                    | 200,000  
|FHLB advances and other borrowings                                  |  |                                    | 2,109,009
|                                                                    |  |                                    |          
|Total interest-bearing liabilities                                  |  | $                                  | 5,611,743
|                                                                    |  |                                    |          
|Excess of interest-earning assets over interest-bearing liabilities |  | $                                  | 197,106  
|                                                                    |  |                                    |          
|Net interest income                                                 |  |                                    |          
|                                                                    |  |                                    |          
|Interest rate spread                                                |  |                                    |          
|                                                                    |  |                                    |          
|Net interest margin                                                 |  |                                    |          
|                                                                    |  |                                    |          
|Ratio of interest-earning assets to interest-bearing liabilities    |  |                                    | 103.51   
|                                                                    |  |                                    |          

---

|(1) |  | 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-earnings assets and interest-bearing liabilities, respectively, during the six-month periods ended March 31, 2003 and 2002 and do not include any estimates of the effect that accelerated amortization of purchased premiums would have on the
yields earned.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) |  | Includes average non-accruing loans of $31.5 million and $28.1 million for the six months ended March 31, 2003 and 2002, respectively.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------

|(3) |  | Short-term investments include FHLB overnight deposits, federal funds sold, and securities purchased under agreements to resell.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------

|(4) |  | Long-term investments agency securities, and trust preferred securities by other issuers.
|--- |  | -----------------------------------------------------------------------------------------

|(5) |  | Interest and rates include the effect of interest rate swaps.
|--- |  | -------------------------------------------------------------



20



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##### Table of Contents



Rate/Volume Analysis



|                                        |  | For the six month period ended March 31, 2003 vs. 2002 |       
|--------------------------------------- |  | ------------------------------------------------------ | ------
|                                        |  | Increase (Decrease) Due to                             |       
|                                        |  | Changes in Volume                                      |       
|                                        |  | (Dollars in thousands)                                 |       
|Interest income attributable to:        |  |                                                        |       
|Loans receivable, net                   |  | $                                                      | 4,491 
|Mortgage-backed securities              |  |                                                        | 17,158
|Short-term investments(1)               |  |                                                        | (88   
|Long-term investments and FHLB stock(2) |  |                                                        | 1,962 
|                                        |  |                                                        |       
|Total interest-earning assets           |  |                                                        | 23,523
|                                        |  |                                                        |       
|Interest expense attributable to:       |  |                                                        |       
|NOW/Money Market                        |  |                                                        | 1,347 
|Savings                                 |  |                                                        | 528   
|Certificates of deposit                 |  |                                                        | 313   
|Trust Preferred Securities(3)           |  |                                                        | 3,147 
|Senior notes                            |  |                                                        | 0     
|FHLB advances and other borrowings      |  |                                                        | 10,756
|                                        |  |                                                        |       
|Total interest-bearing liabilities      |  |                                                        | 16,091
|                                        |  |                                                        |       
|Increase in net interest income         |  | $                                                      | 7,432 
|                                        |  |                                                        |       

---

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

|(2) |  | Long-term investments include agency securities, and trust preferred securities by other issuers.
|--- |  | -------------------------------------------------------------------------------------------------

|(3) |  | Includes the effect of interest rate swaps.
|--- |  | -------------------------------------------



As indicated in the discussion of results for the three months ended March 31, 2003, the high levels of residential loan pre-payments
resulting from historically low mortgage rates, coupled with market-driven competitive deposit pricing, has resulted in compression of the net interest margin. The net interest margin for the six months ended March 31, 2003 was of 2.00% compared to
2.15% for the same period in the prior year. The effect of pre-payments was especially evident in the area of LSBOs, which were purchased several years ago. This portfolio, which stood at $687 million at September 30, 2002, has pre-paid at a rate
more than double that of the banks self-originated residential portfolio, and now has a balance of $385 million. BankUnited anticipates continued rapid pre-payments and substantial depletion of this portfolio over the next several quarters,
which will continue to have an adverse effect on the companys interest-rate margin until reaching its end. BankUnited will continue to offset the LSBO run-off with BankUnited originated loans and expects this strategy to help strengthen the
interest rate margin over time. Despite the negative impacts of pre-payments, BankUnited was able to generate $4.5 million in additional interest income from additional loan volume.



The interest income generated from an increase in average mortgage-backed securities for the six months ended
March 31, 2003 compared to 2002 helped to reduce margin compression by generating an additional $12.3 million in interest income. While interest expense decreased significantly for the six months ended March 31, 2003 compared to 2002 due
to lower deposit and borrowing rates, competition prevented BankUnited from significantly lowering rates on deposits to offset the reduction of yield on its assets. There was also an increase in interest expense of $1.6 from FHLB advances fueled
mostly by an increase in average balances. BankUnited utilizes advances from the FHLB to fund growth mostly in the loan and securities portfolios.



21



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Analysis of Non-Interest
Income and Expenses



|                                                              |  | For the Six Months Ended March 31 |        |      |  
|------------------------------------------------------------- |  | --------------------------------- | ------ | ---- | -
|                                                              |  | 2003                              |        | 2002 |  
|                                                              |  | (Dollars in thousands)            |       
|Non-interest income:                                          |  |                                   |        |      |  
|Service fees on loans(1)                                      |  | $                                 | 308    |      | $
|Service fees on deposits                                      |  |                                   | 2,020  |      |  
|Service fees on other                                         |  |                                   | 604    |      |  
|Insurance and investment service income                       |  |                                   | 1,320  |      |  
|Net gain on sale of investment and mortgage-backed securities |  |                                   | 755    |      |  
|Net gain on sale of loans and other assets                    |  |                                   | 3,768  |      |  
|Other                                                         |  |                                   | 3,022  |      |  
|                                                              |  |                                   |        |      |  
|Total non-interest income                                     |  | $                                 | 11,797 |      | $
|                                                              |  |                                   |        |      |  

---

|(1) |  | Includes loan servicing fees, net of amortization of servicing assets and loan fees.
|--- |  | ------------------------------------------------------------------------------------



Non-interest income reached $11.8 million for the six months ended March 31, 2003, which is an increase of
$2.9 million over the same period in the prior year. The decrease in service fees on loans, net of $748 thousand includes an increase in servicing fee income of $317 thousand, an increase in amortization of mortgage servicing rights of $1.2 million
and an increase in loan fees of $149 thousand. The increase in amortization of mortgage servicing rights is largely the result of increased levels of pre-payments occurring during the six months in the current low interest rate environment. The
increase in service fees on deposits of 23.5% is the direct result of growth in core deposits, particularly non-interest bearing accounts. As we focus on expanding our banking office system and implementing our micro-market strategy, we expect
continued improvement in these categories.



BankUnited realized gains of $3.1 million from the sale of assets, in the form of loans and securitized loans, which were originated for sale. Also included in other non-interest income was a life insurance benefit payment of
$1.1 million.



|                                       |  | For the Six Months Ended March 31 |        |      |  
|-------------------------------------- |  | --------------------------------- | ------ | ---- | -
|                                       |  | 2003                              |        | 2002 |  
|                                       |  | (Dollars in thousands)            |       
|Non-interest expenses:                 |  |                                   |        |      |  
|Employee compensation and benefits     |  | $                                 | 18,369 |      | $
|Occupancy and equipment                |  |                                   | 5,953  |      |  
|Telecommunications and data processing |  |                                   | 2,419  |      |  
|Advertising and promotion expense      |  |                                   | 2,443  |      |  
|Professional feeslegal and accounting |  |                                   | 2,347  |      |  
|Loan servicing expense(1)              |  |                                   | 847    |      |  
|Insurance                              |  |                                   | 569    |      |  
|Other operating expenses               |  |                                   | 6,599  |      |  
|                                       |  |                                   |        |      |  
|Total non-interest expenses            |  | $                                 | 39,546 |      | $
|                                       |  |                                   |        |      |  

---

|(1) |  | Loan servicing expenses relate to LSBOs.
|--- |  | ----------------------------------------



Non-interest expense increased by $4.8 million for the six months ended March 31, 2003 compared to the same period in 2002. The largest
portion of the increase was due to increases in employee compensation and benefits. It was expected that employee compensation and benefits would increase as BankUnited invests in key personnel, including senior executives hired in fiscal 2003,
hires branch personnel for our new banking centers, adds sales and service personnel, absorbs an increase in health care costs of over 30%, and as commissions increase from higher production volumes for loans, deposits and other products.
A significant number of the new employees were hired to support residential mortgage lending. Occupancy increased as we opened two branch



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offices during the first six months of fiscal 2003 and a residential loan operations center. The reduction in advertising and promotion
expense of $837 thousand during the six months ended March 31, 2003 compared to the prior year reflects managements intention to minimize such expenditures until they could be aligned with BankUniteds micro market strategy for the retail
banking operation. Management expects advertising expenditures to increase, as well as the return on those expenditures as BankUnited heads in that strategic direction. Loan servicing fees are decreasing as LSBOs run off. In addition, a $1.8 million
charge was recorded in other operating expenses during the second quarter of fiscal 2003 related to the redemption of BankUniteds 9.60% Cumulative Trust Preferred Securities. Excluding the increase in employee compensation of $4.0 million and
the $1.8 million charge related to the redemption of Trust Preferred Securities, non-interest expenses have decreased, demonstrating our efforts to reduce such costs. Management continues to institute expense control programs while allowing for
expenditures that will enhance infrastructure and promote growth.



The increase in the provision for income taxes of $756 thousand for the three months ended March 31, 2003, compared to 2002, reflects an increase in taxable income but also reflects a change in BankUniteds effective
tax rate due to the non-taxable nature of a life insurance benefit payment of $1.1 million received in the second quarter of fiscal 2003 as well as tax planning strategies.



LIQUIDITY



BankUniteds objective in managing liquidity is to meet all cash flow requirements, including those from operating activities,
customer demands on deposits and debt obligations, in a cost-effective manner. This objective is achieved through the implementation of BankUniteds Asset/Liability Management Policy, which also strives to maintain earnings performance
consistent with long-term goals and within acceptable levels of risk, while satisfying regulatory capital requirements. For information on the capital requirements that must be maintained by BankUnited, see note 6. Regulatory Capital to the
Accompanying Condensed Notes to Consolidated Financial Statements.



In managing liquidity, BankUnited analyzes various sources of short-term funding used to meet short-term demands. In addition to funds provided by operating activities, BankUnited also relies on funds provided by both
investing and financing activities. Funds provided by investing activities include: proceeds from the sale and/or maturities of investments, mortgage-backed securities, and securitized loans. Funds provided by financing activities include: deposits
from customers, advances from the FHLB, proceeds from securities sold under agreements to repurchase and other borrowings, issuances of trust preferred securities, and issuance of stock.



Cash and cash equivalents decreased by approximately $385 million for the six months ended March 31, 2003, to
$88 million versus $472 million at September 30, 2002. The relatively large cash and cash equivalent balance at the end of fiscal 2002 anticipated funding investments in mortgage-backed securities during fiscal 2003. The net increase in the
mortgage-backed securities portfolio of $831 million was funded in part with this decrease in cash and cash equivalents. Other means of funding the increase in mortgage-backed securities came from an increase in deposits and additional borrowings
from securities sold under agreements to repurchase and FHLB advances. See the discussion below on sources and uses of funds.



Cash used in operating activities for the six months ended March 31, 2003 was $351 million. The most significant items in that figure
include net income of $18.4 million, the funding of loans originated for sale of $433 million, and proceeds from the sale of loans of $49 million.



Significant sources of funds from investing activities for the six months ended March 31, 2003 include payments on loans, investment, and
mortgage-backed securities of $1.3 billion, $49 million, and $491 billion, respectively, and proceeds from the sale of loans, investments, and mortgage-backed securities of $49 million, $41 million and $274 million, respectively.



Significant sources of funds provided by financing activities
include: a net increase in deposits, FHLB advances, and other borrowings of $96 million, $203 million, and $178 million, respectively. In addition, BankUnited received $51 million through the issuance of trust preferred securities.



Significant uses of funds in investing activities for the six
months ended March 31, 2003 included; funding $1.5 billion in loans, and purchasing $1.2 billion and $77 million in mortgage-backed and investment securities.



23



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In addition, BankUnited purchased $59 million of other earning assets and $20 million of bank-owned life insurance.



Significant uses of funds in financing activities for the six
months ended March 31, 2003 include the redemption of 9.60% Trust Preferred Securities of $46 million. BankUnited anticipates retiring additional high-interest debt through funds raised through additional equity or debt offerings in the near future.



On March 11, 2002, BankUnited Financial
Corporation requested that Moodys Investor Services withdraw its ratings of the Companys subsidiaries, BankUnited FSB, BankUnited Capital, BankUnited Capital II and BankUnited Capital III, which were involved in the issue of certain
indebtedness, including trust preferred securities. This request followed BankUniteds recent call for redemption of its 9.60% Cumulative Trust Preferred Securities (Nasdaq: BKUNZ), which had been rated by Moodys. Certain of its other
trust preferred securities, also previously rated by Moodys, may be called, in whole or in part, in the near future.



As of March 31, 2003, BankUnited had $556 million in investments and mortgage-backed securities pledged against securities sold under
agreements to repurchase with an outstanding balance of $533 million.



As of March 31, 2003 BankUnited had approximately $562 million in additional borrowing capacity not including funds that may be raised through additional debt or equity offerings.



BankUnited is not aware of any events, or uncertainties, which
may impede liquidity in the short or long-term.



FINANCIAL
CONDITION



The following is a
discussion of significant changes from September 30, 2002 to March 31, 2003 in the Statement of Financial Condition. For a discussion of changes in cash and cash equivalents, see LIQUIDITY.



Assets continue to grow, and now total $6.6 billion versus
$6.0 billion at September 30, 2002. The Bank is maintaining its strong capital position well in excess of regulatory requirements, with core and risk-based capital ratios of 7.5% and 16.9%, respectively.



Assets



Investments available for saleInvestments available for sale increased by $40 million or 23.3%,
to $212 million at March 31, 2003. This increase is the net result of $77 million in purchases and $39 million in sales which resulted in a gain of $1.4 million. In addition, there was an increase of $2 million due to an adjustment for the
changes in fair value as of March 31, 2003. Included in the purchases of $77 million were investments in agency notes and preferred securities of $55 million, and trust preferred securities issued by others of $19 million. The sales of $39 million
includes $25 million of agency notes, $10.5 million of trust preferred securities of other issuers by others, and the balance of $3.5 million from the sale of equity securities.



Mortgage-backed securities available for saleMortgage-backed securities available for sale
increased by $831 million or 73.1%, to just under $2.0 billion at March 31, 2003. This net increase is primarily the result of purchases of $1.3 billion, including $91 million pending settlement, and securitizations of $286 million. This was offset
with repayments of $491 million, and sales of $274 million of securities created through the securitization of residential mortgage loans. The sales of $274 million resulted in losses of $684 thousand which is reflected in net gain on sale of
investments and mortgage-backed securities in the consolidated statement of operations. In addition, there was a reduction due to the amortization of premiums and discounts of $6.7 million, and an increase of $1.1 million due to change in fair value
as of March 31, 2003. The relatively high level of amortization of premiums and discounts during the six-month period is the result of increased levels of pre-payments occurring in the current low interest rate environment.



LoansLoans receivable, net (including loans held
for sale) increased by $61 million to $4.1 billion at March 31, 2003. This net increase stems primarily from funding loans in the amount of $1.5 billion, offset by repayments of $ 1.1 billion, securitizations of $286 million, and sales of $45
million. The sales resulted in gains of $3.8 million, which also includes activity in connection with the securitization of loans.



24



---

##### Table of Contents



Mortgage
servicing rightsMortgage servicing rights increased by $2.4 million to $9.1 million at March 31, 2003. This net increase is the result of recognizing $5.2 million in servicing rights upon the sale of loans which will continue to be
serviced by BankUnited. This increase was offset by the amortization of $2.8 million resulting mostly from acceleration in prepayments as a result of the low interest rate environment.



Other earning assetsOther earning assets increased by $9.8 million to $101 million at March 31,
2003. This category consists primarily of FHLB stock, which must be purchased in proportion to advances received from the FHLB.



Bank-owned life insuranceBank-owned life insurance increased by $21 million due to additional purchases of coverage under the
policies of $20 million and a net increase in the cash surrender value of $1.4 million.



Liabilities



DepositsDeposits grew by $96 million to $3.1 billion as of March 31, 2003. As a result of BankUniteds increased efforts to attract transaction accounts through business relationships, the deposit mix
continues to shift towards core deposits. Core deposits, which include checking, savings, and money market accounts provide BankUnited with funds at a lower cost than time deposits. This is most evident by a sharp increase in non-interest bearing
deposits of $28 million or 24% compared to September 30, 2002. The total increase in core deposits for the six months ended March 31, 2003 was $72 million, compared to $24 million for time deposits. BankUnited believes that the expansion of the
branch network will continue to play a vital role in building banking relationships. Coupled with BankUniteds micro-market strategy, management expects the branch network to facilitate a further shift in deposit mix towards core deposits.



Securities sold under agreements to
repurchaseSecurities sold under agreements to repurchase increased by $179 million to reach $533 million as of March 31, 2003. BankUnited utilized these borrowings primarily, to fund the increase of mortgage-backed securities and loans.



Advances from Federal Home Loan
BankFHLB advances increased by $203 million to reach $2 billion as of March 31, 2003. BankUnited utilized these advances primarily, to fund the purchase of mortgage-backed securities.



Trust Preferred SecuritiesTrust preferred
securities increased by $6.7 million, to $260 million at March 31, 2002. The net increase of $6.7 million is primarily the result of $51 million of net proceeds received from the issuance by BankUnited Statutory Trust IV, BankUnited Statutory
Trust V, and BankUnited Statutory Trust VI offset by the redemption in the second quarter of fiscal 2003 of $46 million in 9.60% trust preferred securities issued by BankUnited Capital II (see note 4. Company Obligated Mandatorily
Redeemable Trust Preferred Securities of Subsidiary Trusts Holding Solely Junior Subordinated Deferrable Interest Debentures of BankUnited of the Accompanying Condensed Notes to Consolidated Financial Statements). The redemption resulted in the
write off of approximately $1.8 million, which was recorded in the same period. In addition, there was an increase of $311 thousand as a result of an adjustment as required by Statement of Financial Accounting Standards No. 133, Accounting for
Derivative Instruments and Hedging Activities. See note 8. Accounting for Derivatives and Hedging Activities of the Accompanying Condensed Notes to Consolidated Financial Statements for a full description of this transaction.



Asset Quality



Non-performing assets as of March 31, 2003 were $42.6
million, which represents an increase of $10.9 million, or 34%, from $31.7 million as of September 30, 2002.



BankUnited places great importance on safeguarding its credit quality, and supports this through high credit standards and a centralized
credit policy area. Second quarter results, however, indicated a sharp increase in non-performing loans as a percentage of total loans primarily as a result of one commercial credit that BankUnited expects to be resolved next quarter. BankUnited
expects no additional impairment associated with this particular credit. BankUniteds allowance for loan losses as a percentage of total loans is currently at 0.53% as of March 31, 2003, up from 0.51% as of September 30, 2002.



25



---

##### Table of Contents



The following
table sets forth additional information concerning BankUniteds non-performing assets at March 31, 2003 and September 30, 2002.



|                                                                               |  | March 31, 2003         |        |   | September 30, 2002 |  
|------------------------------------------------------------------------------ |  | ---------------------- | ------ | - | ------------------ | -
|                                                                               |  | (Dollars in thousands) |       
|Non-accrual loans                                                              |  | $                      | 36,931 |   |                    | $
|Restructured loans                                                             |  |                        | 311    |   |                    |  
|Loans past due 90 days and still accruing(1)                                   |  |                        |       |   |                    |  
|                                                                               |  |                        |        |   |                    |  
|Total non-performing loans                                                     |  |                        | 37,242 |   |                    |  
|Non-accrual tax certificates                                                   |  |                        | 537    |   |                    |  
|Real estate owned                                                              |  |                        | 4,765  |   |                    |  
|                                                                               |  |                        |        |   |                    |  
|Total non-performing assets                                                    |  | $                      | 42,544 |   |                    | $
|                                                                               |  |                        |        |   |                    |  
|Allowance for losses on tax certificates                                       |  | $                      | 606    |   |                    | $
|Allowance for loan losses                                                      |  |                        | 21,662 |   |                    |  
|                                                                               |  |                        |        |   |                    |  
|Total allowance                                                                |  | $                      | 22,268 |   |                    | $
|                                                                               |  |                        |        |   |                    |  
|Non-performing assets as a percentage of total assets                          |  |                        | 0.64   | % |                    |  
|Non-performing loans as a percentage of total loans                            |  |                        | 0.91   | % |                    |  
|Allowance for loan losses as a percentage of total loans                       |  |                        | 0.53   | % |                    |  
|Allowance for loan losses as a percentage of non-performing loans              |  |                        | 58.17  | % |                    |  
|Total allowance as a percentage of non-performing assets                       |  |                        | 52.34  | % |                    |  
|Net annualized year-to-date charge-offs as a percentage of average total loans |  |                        | 0.06   | % |                    |  



BankUniteds allowance for loan losses is established and maintained based upon managements evaluation of the risks inherent in BankUniteds loan portfolio, including the economic trends and other conditions in
specific geographic areas as they relate to the nature of BankUniteds portfolio.



The following table sets forth the change in BankUniteds allowance for loan losses for the three and six months ended March 31, 2003 and 2002.



|                                                            |  | For the Three Months Ended |   |  | For the Six Months Ended |       
|----------------------------------------------------------- |  | -------------------------- | - |  | ------------------------ | ------
|                                                            |  | March 31, 2003             |   |  | March 31, 2002           |       
|                                                            |  | (In thousands)             |  
|Allowance for loan losses, balance (at beginning of period) |  | $20,853                    |   |  | $                        | 17,684
|Provisions for loan losses                                  |  | 1,250                      |   |  |                          | 2,450 
|Loans charged off :                                         |  |                            |   |  |                          |       
|One-to-four family residential mortgages(1)                 |  | (88                        | ) |  |                          | (248  
|Commercial real estate                                      |  |                           |   |  |                          | (887  
|Commercial business                                         |  | (339                       | ) |  |                          | (1,187
|Consumer(1)                                                 |  | (44                        | ) |  |                          | (19   
|                                                            |  |                            |   |  |                          |       
|Total loans charged off                                     |  | (471                       | ) |  |                          | (2,341
|                                                            |  |                            |   |  |                          |       
|Recoveries                                                  |  |                            |   |  |                          |       
|Commercial business                                         |  | 22                         |   |  |                          | 32    
|Consumer(1)                                                 |  | 8                          |   |  |                          | 6     
|                                                            |  |                            |   |  |                          |       
|Total recoveries                                            |  | 30                         |   |  |                          | 38    
|                                                            |  |                            |   |  |                          |       
|                                                            |  |                            |   |  |                          |       
|                                                            |  |                            |   |  |                          |       
|Allowance for loan losses, balance (at end of period)       |  | $21,662                    |   |  | $                        | 17,831
|                                                            |  |                            |   |  |                          |       

---

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



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The following
table sets forth BankUniteds allocation of the allowance for loan losses by category as of March 31, 2003 and September 30, 2002.



|                                                |  | March 31,2003  |        | September 30,2002
|----------------------------------------------- |  | -------------- | ------ | -----------------
|                                                |  | (In thousands)
|Balance at the end of the period applicable to: |  |                |        |                  
|One-to-four family residential mortgages(1)     |  | $              | 4,489  |                  
|Multi-family residential mortgages              |  |                | 415    |                  
|Commercial real estate                          |  |                | 4,888  |                  
|Construction                                    |  |                | 1,532  |                  
|Land                                            |  |                | 745    |                  
|Commercial business                             |  |                | 5,119  |                  
|Consumer(1)                                     |  |                | 2,171  |                  
|Unallocated                                     |  |                | 2,303  |                  
|                                                |  |                |        |                  
|Total allowance for loan losses                 |  | $              | 21,662 |                  
|                                                |  |                |        |                  

---

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



Loan Portfolio



The following table sets forth the composition of
BankUniteds loan portfolio, including loans held for sale, at March 31, 2003 and September 30, 2002.



|                                                         |  | March 31, 2003         |           |   | September 30, 2002  |      
|-------------------------------------------------------- |  | ---------------------- | --------- | - | ------------------- | -----
|                                                         |  | Amount                 |           |   | Percent of Total(1) |      
|                                                         |  | (Dollars in thousands) |          
|Mortgage loans:                                          |  |                        |           |   |                     |      
|One-to-four family residential mortgages(2)              |  | $                      | 3,122,413 |   |                     | 83.7 
|Multi-family residential mortgages                       |  |                        | 35,334    |   |                     | 1.0  
|Commercial real estate                                   |  |                        | 178,576   |   |                     | 4.8  
|Construction                                             |  |                        | 137,554   |   |                     | 3.7  
|Land                                                     |  |                        | 25,230    |   |                     | 0.7  
|                                                         |  |                        |           |   |                     |      
|Total mortgage loans                                     |  |                        | 3,499,107 |   |                     | 93.9 
|                                                         |  |                        |           |   |                     |      
|Other loans:                                             |  |                        |           |   |                     |      
|Commercial business                                      |  |                        | 112,900   |   |                     | 3.0  
|Consumer(2)                                              |  |                        | 105,936   |   |                     | 2.8  
|                                                         |  |                        |           |   |                     |      
|Total other loans                                        |  |                        | 218,836   |   |                     | 5.8  
|                                                         |  |                        |           |   |                     |      
|Total loans                                              |  |                        | 3,717,943 |   |                     | 99.7 
|Unearned discounts, premiums and deferred loan fees, net |  |                        | 33,499    |   |                     | 0.9  
|Allowance for loan losses                                |  |                        | (21,662   | ) |                     | (0.6 
|                                                         |  |                        |           |   |                     |      
|Loans held for investment, net                           |  | $                      | 3,729,780 |   |                     | 100.0
|                                                         |  |                        |           |   |                     |      
|Mortgage loans held for sale                             |  |                        | 323,568   |   |                     |      
|                                                         |  |                        |           |   |                     |      
|Total loans, net                                         |  | $                      | 4,053,348 |   |                     |      
|                                                         |  |                        |           |   |                     |      

---

|(1) |  | Percent of Total is calculated using Loans held for investment, net in the denominator.
|--- |  | -----------------------------------------------------------------------------------------

|(2) |  | Specialty consumer mortgage loans originated through our branch network are included in one-to-four family residential loans.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------



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Securities Portfolio



Investments



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



|                                            |  | March 31, 2003
|------------------------------------------- |  | --------------
|                                            |  | Amortized Cost
|                                            |  | (In thousands)
|U.S. government agency securities           |  | $             
|Equity securities                           |  |               
|Trust preferred securities of other issuers |  |               
|Other(1)                                    |  |               
|                                            |  |               
|Total                                       |  | $             
|                                            |  |               



|                                           
|-------------------------------------------
|                                           
|                                           
|                                           
|U.S. government agency securities          
|Equity securities                          
|Trust preferred securities of other issuers
|Other(1)                                   
|                                           
|Total                                      
|                                           

---

|(1) |  | Other includes mutual funds, preferred stock of FHLMC, and bonds.
|--- |  | -----------------------------------------------------------------



Investment securities available for sale as of March 31, 2003 and September 30, 2002, by contractual
maturity, are shown below.



|                                       |  | March 31, 2003  |         | September 30, 2002
|-------------------------------------- |  | --------------- | ------- | ------------------
|                                       |  | Amortized Cost  |         | Fair Value        
|                                       |  | ( In thousands)
|Due in one year or less                |  | $               |        |                   
|Due after one year through five years  |  |                 | 6,009   |                   
|Due after five years through ten years |  |                 | 77,740  |                   
|Due after ten years                    |  |                 | 123,407 |                   
|Equity securities                      |  |                 | 880     |                   
|                                       |  |                 |         |                   
|Total                                  |  | $               | 208,036 |                   
|                                       |  |                 |         |                   



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Mortgage-Backed Securities



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



|                                    |  | March 31, 2003
|----------------------------------- |  | --------------
|                                    |  | Amortized Cost
|                                    |  | (In thousands)
|GNMA mortgage-backed securities     |  | $             
|FNMA mortgage-backed securities     |  |               
|FHLMC mortgage-backed securities    |  |               
|Collateralized mortgage obligations |  |               
|Mortgage pass-through certificates  |  |               
|                                    |  |               
|Total                               |  | $             
|                                    |  |               



|                                    |  | September 30, 2002
|----------------------------------- |  | ------------------
|                                    |  | Amortized Cost    
|                                    |  | (In thousands)    
|GNMA mortgage-backed securities     |  | $                 
|FNMA mortgage-backed securities     |  |                   
|FHLMC mortgage-backed securities    |  |                   
|Collateralized mortgage obligations |  |                   
|Mortgage pass-through certificates  |  |                   
|                                    |  |                   
|Total                               |  | $                 
|                                    |  |                   



Mortgage-backed securities available for sale as of March 31, 2003 and September 30, 2002, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to
call or prepay obligations with or without call or prepayment penalties.



|                                       |  | March 31, 2003 |           | September 30, 2002
|-------------------------------------- |  | -------------- | --------- | ------------------
|                                       |  | Amortized Cost |           | Fair Value        
|                                       |  | (In thousands)
|Due in one year or less                |  | $              | 43        |                   
|Due after one year through five years  |  |                | 486       |                   
|Due after five years through ten years |  |                | 23,683    |                   
|Due after ten years                    |  |                | 1,915,542 |                   
|                                       |  |                |           |                   
|Total                                  |  | $              | 1,939,754 |                   
|                                       |  |                |           |                   



When
BankUnited securitizes and sells residential mortgage loans, it retains mortgage servicing rights and securities, which are considered retained interests in the securitized loans. Gain or loss on the sale of the receivables depends in part on the
previous carrying amount of the financial assets involved in the transfer, allocated between the assets sold and the retained interests based on their relative fair value at the date of the transfer. Fair value is derived from current market
information and assumptions for similar products. The investors in the securitized assets have no recourse to BankUnited for failure of debtors to pay when due.



During the six months ended March 31, 2003, BankUnited securitized $286 million of residential mortgage
loans. These loans were securitized with Federal National Mortgage Association (FNMA) and Federal Home Loan Mortgage Corporatopn (FHLMC) and transferred into BankUniteds mortgage-backed securities available for sale
portfolio. During the same period BankUnited sold $275 million of securitized loans,



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recognizing net gains of $2.7 million. In connection with the sale of the securitized loans during the six months ended March 31, 2003,
BankUnited retained mortgage servicing rights with a fair value of $4.7 million. At March 31, 2003, BankUniteds retained interests from securitized loans, not including mortgage servicing rights, had a fair value of $74.1 million.



When BankUnited retains servicing
responsibilities from these securitization transactions, it receives annual servicing fees approximating 0.25% of the outstanding receivable balance.



The value of the retained interest is subject to prepayment risk on the transferred financial assets, and the general level of interest
rates. At March 31, 2003, key economic assumptions and the sensitivity of the current fair value of securities remaining from securitizations to immediate 10% and 20% adverse changes in those assumptions are as follows:



|                                                    |  | Retained Securities    |       
|--------------------------------------------------- |  | ---------------------- | ------
|                                                    |  | (Dollars in thousands) |       
|Carrying amount (fair value) of retained securities |  | $                      | 74,072
|Weighted average life in years                      |  |                        | 1.5   
|Annual prepayment assumption                        |  |                        | 24.93 
|Impact on fair value of 10% adverse change          |  | $                      | (400  
|Impact on fair value of 20% adverse change          |  | $                      | (609  
|Annual cash flow discount rate                      |  |                        | 2.25  
|Impact on fair value of 10% adverse change          |  | $                      | (396  
|Impact on fair value of 20% adverse change          |  | $                      | (764  



Credit
losses do not affect the valuation due to FNMAs and FHLMCs full guarantee to BankUnited for losses on loans collateralizing the securities.



The sensitivities presented above are hypothetical and are presented for informational purposes only. As the amounts indicate, the fair
values due to a variation in any assumption generally cannot be extrapolated because the relationship of the change in any assumption to the change in fair value may not be linear. The effect of a change in a particular assumption on the fair value
of the retained securities is calculated without considering the changes in other assumptions. However, changes in one assumption may result in changes in another.



The total principal amount of loans underlying the retained securities at March 31, 2003 was $70.7 million,
none of which was 60 days or more past due. There were no credit losses during the six months ended March 31, 2003 from the loans underlying the retained securities outstanding at March 31, 2003.



Related Party Transactions



The Bank, as an insured depository institution as defined
under Section 3 of the Federal Deposit Investment Act, extends loans to entities in which its directors have significant interests. As of March 31, 2003, there were approximately $3.5 million in loans receivable from an entity in which a director
has interests. As of September 30, 2002 there were approximately $1 million in loans receivables from entities in which two directors had interests. These loans were made in the ordinary course of business, were made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for comparable transactions with persons, and did not involve more than the normal risk of collectibility or present other unfavorable features. These loans and their terms
have been reviewed and approved by the Banks board of directors.



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, 2002, under Item 7a, Quantitative and Qualitative Disclosures about Market Risk,
provides detailed



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quantitative and qualitative disclosures about market risk and should be referenced for information thereon. In addition, the following
discussion addresses the sources and effects of developments during the six months ended March 31, 2003 which related to risks associated with investments and mortgage-backed securities.



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, senior notes, and
Trust Preferred Securities). Such financial instruments have varying levels of sensitivity to changes in market interest rates, which creates interest rate risk for BankUnited. Accordingly, BankUniteds net interest income, the most significant
component of its net income, is subject to substantial volatility due to changes in interest rates or market yield curves, particularly if there are differences, or gaps, in the re-pricing frequencies of its interest-earning assets and the
interest-bearing liabilities which fund them. BankUnited monitors such interest rate gaps and seeks to manage its interest rate risk by adjusting the re-pricing frequencies of its interest-earning assets and interest-bearing liabilities.
Additionally, BankUnited utilizes, on a limited basis, derivative financial instruments designed to reduce the interest rate risks associated with its interest-earning assets and interest-bearing liabilities.



Risks Associated with Investments and Mortgage-Backed
Securities.BankUnited purchases fixed and adjustable rate mortgage-backed securities and other securities for liquidity, yield and risk management purposes. Changes in market interest rates associated with
BankUniteds investments and mortgage-backed securities could have a material adverse effect on BankUniteds carrying value of its securities. Such changes in the carrying value of mortgage-backed securities and other securities classified
as available-for-sale would be reflected, net of taxes, as a component of stockholders equity. See note7. Comprehensive Incometo the Accompanying Condensed Notes to Consolidated Financial StatementsandManagements Discussion and Analysis of Financial Condition and Results of OperationsSecurities Portfolio.



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



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



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



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



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ITEM 4.    
CONTROLS AND PROCEDURES



An evaluation of the effectiveness of the design and operation of BankUniteds disclosure controls and procedures was carried out by BankUnited, within 90 days prior to the filing date of 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 have been designed and are being operated in a manner that provides reasonable assurance that the information required to be disclosed by BankUnited in reports filed under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported within the time periods specified in the SECs rules and forms. 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. Subsequent to the date of the most recent evaluation of BankUniteds internal
controls, there were no significant changes in BankUniteds internal controls or in other factors that could significantly affect the internal controls, including any corrective actions with regard to significant deficiencies and material
weaknesses.



PART IIOTHER INFORMATION



ITEM 6.    
EXHIBITS AND REPORTS ON FORM 8-K



(a)  Exhibits.



| | 3.1 |  | BankUnited Financial Corporations Articles of Incorporation as amended.
| | --- |  | ------------------------------------------------------------------------



| | 10.1 |  | Form of Change in Control Agreement between BankUnited Financial Corporation and Robert Marsden.*
| | ---- |  | -------------------------------------------------------------------------------------------------



| | 10.2 |  | Form of Change in Control Agreement between BankUnited Financial Corporation and Carlos Fernandez-Guzman.*
| | ---- |  | ----------------------------------------------------------------------------------------------------------



| | 10.3 |  | Form of Change in Control Agreement between BankUnited Financial Corporation and Douglas Sawyer.*
| | ---- |  | -------------------------------------------------------------------------------------------------



| | 10.4 |  | Form of change in Control Agreement between BankUnited Financial Corporation and Roberta Kressel.*
| | ---- |  | --------------------------------------------------------------------------------------------------



| | 99.1 |  | 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.
| | ---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

|* |  | Contract with Management
|- |  | ------------------------



(b)  Reports on Form 8-K.



None



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SIGNATURES



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



BANKUNITED FINANCIAL CORPORATION



/s/  Humberto L. Lopez

By:

Humberto L. Lopez

Senior Executive Vice President and Chief Financial Officer



Date:    May 02, 2003



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I, Alfred R.
Camner, certify that:



1.  I have reviewed this quarterly report on Form 10-Q of BankUnited Financial Corporation;



2.  Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;



3.  Based on my knowledge, the
financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in
this quarterly report;



4.  The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:



a)  designed such disclosure controls
and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being
prepared;



b)  evaluated the
effectiveness of the registrants disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the Evaluation Date); and



c)  presented in this quarterly report our
conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;



5.  The registrants other certifying officer and I have disclosed, based on our most recent evaluation, to
the registrants auditors and the audit committee of registrants board of directors:



a)  all significant deficiencies in the design or operation of internal controls which could adversely affect the registrants ability to record, process, summarize and report financial
data and have identified for the registrants auditors any material weaknesses in internal controls; and



b)  any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrants internal controls; and



6.  The registrants other certifying officer and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.



Date: May 02, 2003



/s/  Alfred R. CamnerAlfred R. Camner Chairman of the Board and Chief Executive Officer




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##### Table of Contents



I, Humberto L.
Lopez, certify that:



1.  I have reviewed this quarterly report on Form 10-Q of BankUnited Financial Corporation;



2.  Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;



3.  Based on my knowledge, the
financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in
this quarterly report;



4.  The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:



a)  designed such disclosure controls
and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being
prepared;



b)  evaluated the
effectiveness of the registrants disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the Evaluation Date); and



c)  presented in this quarterly report our
conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;



5.  The registrants other certifying officer and I have disclosed, based on our most recent evaluation, to
the registrants auditors and the audit committee of registrants board of directors:



a)  all significant deficiencies in the design or operation of internal controls which could adversely affect the registrants ability to record, process, summarize and report financial
data and have identified for the registrants auditors any material weaknesses in internal controls; and



b)  any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrants internal controls; and



6.  The registrants other certifying officer and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.



Date: May 02, 2003



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




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BANKUNITED FINANCIAL CORPORATION AND SUBSIDIARIES



FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2003



INDEX TO EXHIBITS



|Exhibit No. |  | Numbered Page                                                                                             
|----------- |  | ----------------------------------------------------------------------------------------------------------
|3.1         |  | BankUnited Financial Corporations Articles of Incorporation as amended.                                  
|10.1        |  | Form of Change in Control Agreement between BankUnited Financial Corporation and Robert Marsden.*         
|10.2        |  | Form of Change in Control Agreement between BankUnited Financial Corporation and Carlos
Fernandez-Guzman.*
|10.3        |  | Form of Change in Control Agreement between BankUnited Financial Corporation and Douglas Sawyer.*         
|10.4        |  | Form of change in Control Agreement between BankUnited Financial Corporation and Roberta Kressel.*        
|99.1        |  | Certifications of Chief Executive Officer and Chief Financial Officer.                                    

---

|* |  | Contract with Management.
|- |  | -------------------------



36