UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





Form 10-Q/A





(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, 2008

or



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

Commission File No. 1-13921





BankUnited Financial
Corporation

(Exact name of registrant as specified in its charter)







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

255 Alhambra Circle, Coral Gables, Florida 33134

(Address of principal executive offices) (Zip Code)

(305) 569-2000

(Registrants telephone number, including area code)





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

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

Large accelerated filer   ̈    Accelerated filer  x    Non-accelerated filer   ̈    Smaller
reporting company   ̈

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

The number of shares outstanding of the registrants common stock at the close of business on April 30, 2008 was 35,170,983 shares of
Class A Common Stock, $0.01 par value, and 479,734 shares of Class B Common Stock, $0.01 par value.

This Form 10-Q/A contains 38
pages.

The Index to Exhibits appears on page 38.









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EXPLANATORY NOTE

BankUnited Financial Corporation (the Company) is filing this Amendment No. 2 on Form 10-Q/A to amend its Form 10-Q for the fiscal quarter ended March 31, 2008, as filed on May 12, 2008 and
subsequently amended on June 13, 2008, to correct a statement in the original filing which implied that the Company commenced underwriting to the fully indexed rate in April 2008. The Company underwrote to the fully indexed rate prior to that date.
The corrected disclosure appears in the first paragraph of the subsection Credit Standards in Item 2 on page 5. Except with respect to this change, this Form 10-Q/A does not modify or update any other disclosures set forth in the
Form 10-Q. Additionally, this Form 10-Q/A does not provide an update or discussion of any other developments in the Companys business subsequent to the Form 10-Q.



2



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|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

As used in this Quarterly Report on Form 10-Q/A (the Form 10-Q/A), BankUnited, we, us and our
refers to BankUnited Financial Corporation (BankUnited) and its consolidated subsidiaries, including BankUnited, FSB (the Bank). All significant intercompany transactions and balances associated with consolidated subsidiaries
have been eliminated. The following discussion and analysis and the related financial data present a review of BankUniteds consolidated operating results for the three month and six month periods ended March 31, 2008 and 2007 and
consolidated financial condition as of March 31, 2008 and as of September 30, 2007. This discussion and analysis should be read in conjunction with the Consolidated Financial Statements and Notes thereto contained in BankUniteds
Annual Report on Form 10-K.

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



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



| |  |  | Expansion or reduction of operations, including operations relating to banking offices and markets and our products and services; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------



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

Actual results or performance could differ from those implied or contemplated by forward-looking
statements. BankUnited wishes to caution readers not to place undue reliance on any forward-looking statements, which speak only as of the date made, and are not historical facts or guarantees of future performance. These forward-looking statements
are subject to certain risks and uncertainties, including, among others: general business and economic conditions, either nationally or regionally; fiscal and monetary policies; significant weather events such as hurricanes; changes or fluctuations
in the interest rate environment; a deterioration in credit quality and/or a reduced demand for credit; reduced deposit flows and loan demand; real estate values and market conditions, competition from other financial service companies in our
markets; servicing capacities; legislative or regulatory changes, including, among others, changes in accounting standards, guidelines and policies; the issuance or redemption of additional equity or debt; the concentration of operations in Florida,
if Florida business or economic conditions continue to decline; reliance on other companies for products and services; the impact of war and the threat and impact of terrorism; volatility in the market price of our common stock; and other economic,
competitive, governmental, regulatory and technological factors affecting our operations, price, products and delivery of services. Other factors that could cause actual results to differ materially are: (i) other risks and uncertainties
described from time to time in BankUniteds filings with the SEC, (ii) the risk factors or uncertainties set forth in this Form 10-Q, and (iii) other risks and uncertainties that have not been identified at this time. Information in
this Form 10-Q is as of the dates, and for the periods, indicated. BankUnited does not undertake, and specifically disclaims any obligation, to publicly update or revise any forward-looking statements to reflect the occurrence of anticipated or
unanticipated events or circumstances after the date of such statements, whether as the result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in or
incorporated by reference into this report might not occur.

Overview

Our results of operations are dependent primarily on net interest income, which is the difference between the interest earned on assets, (primarily our loan and securities portfolios,) and our cost of funds, which
consists of the interest paid on our deposits and borrowings. Our results of operations are also affected by our provision for loan losses, the performance of our investments, gain or loss on the sale of loans, other non-interest income,
non-interest expenses and income taxes.

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

Non-performing loans and real estate owned (REO) continued to increase during the quarter ended March 31, 2008,
and are expected to increase throughout fiscal 2008. During the three and six months ended March 31, 2008, BankUnited recorded a provision for loan



3



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losses of $98 million and $163 million, respectively, reflecting a rising level of non-performing loans, recent experience, and continued difficulty in the
housing markets, particularly in regions impacted by housing price decreases. We may record larger provisions for loan losses during the remaining quarters of fiscal 2008, if deemed appropriate.

The disruption in the housing market has also impacted our investments and mortgage backed securities held for sale. Many of BankUniteds
investments are directly or indirectly influenced by the performance of mortgage loans. Similar to the deterioration in loans, assets backed by mortgage loans have exhibited negative performance. As a consequence, certain of BankUniteds
holdings in preferred stock issued by entities active in the mortgage market and debt securities backed by mortgage loans were deemed to be other than temporarily impaired and an impairment charge of $26 million was recorded during the three months
ended March 31, 2008. Continued deterioration or adverse performance in the mortgage market may require additional impairment charges in future periods.

The continuing depreciation of housing prices throughout the country, particularly in certain geographic regions, is reflected in the deterioration of our loan portfolio, reduced loan production and the results of
operations for the quarter ended March 31, 2008. While BankUnited is not, and has not been, a subprime lender, like other lenders throughout the residential mortgage industry, our asset quality has been negatively affected by market conditions.
Additionally, significant deterioration of the bond market and secondary market for residential mortgage loans has put pressure on financial institutions to find alternative sources of liquidity. The resultant competition for retail deposits has
kept deposit prices from moving down as much as the reduction in Federal Funds and other market rates. The market dislocations have impacted both sides of our statement of financial condition.

On April 2, 2008, the FHLB of Atlanta notified all of its customers that it will increase the discount it applies to residential first mortgage
collateral, effective May 1, 2008. As a result, our collateral requirement has been increased by 20% effectively reducing availability under our line of credit with the FHLB Atlanta. In response to the notification of the new requirement
we provided additional collateral to maintain our credit availability. See Liquidity and Capital Resources for more information.

We
have taken the following actions to address the challenges presented by the current residential mortgage crisis:

Repositioning the
Company

Our management team is developing a multi-year strategic plan to gradually transition BankUnited to a retail commercial bank with the goal of
improving shareholder return while maintaining a well-capitalized model. This program is underway.

We have taken the following steps to implement this
plan:



| |  |  | We are reducing the size of the balance sheet, thereby bolstering capital ratios;
| | - |  | ---------------------------------------------------------------------------------



| |  |  | We have significantly downsized the wholesale residential business;
| | - |  | -------------------------------------------------------------------



| |  |  | We continue to strengthen our risk management programs; and
| | - |  | -----------------------------------------------------------



| |  |  | We have launched a major expense reduction program.
| | - |  | ---------------------------------------------------

Strengthening Capital and Shrinking the Balance Sheet



| |  |  | We continue to maintain a strong capital position in excess of regulatory requirements. Core and risk-based capital ratios were 7.8% and 14.6%, respectively, at
March 31, 2008, and we plan to maintain capital levels at or above the regulatory well-capitalized level.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Additional tangible equity support will be provided by the mandatory conversion of our $184 million HiMEDS equity units to common equity in May 2010 at a minimum
price of $23.40 per share.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | During the quarter, we continued to reduce the size of the balance sheet, thereby bolstering capital ratios. We are shrinking our residential loan balances by
lowering production and shifting to originating loans which conform to agency requirements and are thus more saleable. At the same time we will continue to consider other asset and liability management strategies that may be appropriate, including
the acquisition of other earning assets. This product mix change supports our decision to shrink the balance sheet so that we relieve pressure on capital and boost capital ratios.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | On May 6, 2008, we filed a preliminary proxy statement with the SEC asking our shareholders to approve an increase in the authorized number of shares. An
increase in the authorized number of shares will provide us with the flexibility to raise capital through a variety of possible transactions.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Wholesale Residential Restructuring



| |  |  | We have made a strategic decision to significantly reduce our wholesale residential mortgage business. In January 2008, we closed four of our nine sales offices
that were located in Arizona, California, Colorado and Oregon. In addition, we have consolidated our nine operations centers to three, which will provide the Company with greater efficiencies. In total, we have reduced our wholesale residential
staff by more than 45%.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



4



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| |  |  | We have transitioned to selling more loans into the secondary market rather than retaining the majority for portfolio.
| | - |  | ----------------------------------------------------------------------------------------------------------------------



| |  |  | We have also significantly altered our residential loan production mix to comprise more than 50% saleable residential mortgage loans, mainly conforming agency,
which are sold to FNMA, FHLMC, and other conduits.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Going forward, wholesale lending will remain part of our business although in a smaller capacity. Its size and growth will be determined by the profitability models
installed in the second quarter of fiscal 2008.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Credit Standards





| |  |  | BankUniteds underwriting standards have been substantially consistent with the inter-agency lending guidelines even before their issuance in October 2006. We
are not a subprime lender and we do not make piggyback loans in which a borrower is made a second mortgage simultaneously with a first mortgage. We have underwritten to the fully indexed rate since at least 2006 and have followed strict policies for
outside appraisals combined with internal appraisal reviews, unlike some lenders in the industry.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Reduced documentation loans undergo a reasonableness test on income. At March 31, 2008, except for $126.5 million of community reinvestment act loans and
$16 million of other loans, loans originated with loan-to-value ratios (LTVs) over 80% required the purchase of mortgage insurance.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Several years ago, we began to restrict the number of residential loans for luxury high-rise condominiums, including downtown Miami. Additionally, we have not
been involved in any construction lending for high-rise condominiums in downtown Miami.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | We have been addressing the rise in non-performing assets, and have strengthened our risk management and loss mitigation programs accordingly. We remain
focused on managing exposure to the loans that we deem to be most at risk.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Expense-Reduction Program



| |  |  | Downsizing the wholesale residential business will have a positive impact on expenses, excluding one-time charges.
| | - |  | ------------------------------------------------------------------------------------------------------------------



| |  |  | Expenses related to credit collections and other REO have increased and may continue to increase, thus offsetting expense reductions.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The changes we implement as a result of our strategic plan, complemented by the expense reduction programs we have initiated, are expected to have a more tangible
effect in future quarters.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Company is unlikely to receive any material relief from the impact of current market
conditions until housing prices have declined to their lowest levels. We anticipate that may happen in the next 18 to 24 months at best. Unlike other asset types, which reprice very quickly, housing prices adjust very slowly. As a result, we believe
the anticipated market correction will be slow. Since we anticipate that the market environment will continue to be challenging, we intend to continue concentrating during fiscal 2008 on absorbing the growth of the last two years, achieving
efficiencies in all of our business lines and executing expense control measures.



5



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The following tables represent a summary of key performance measures for the three and six months ended
March 31, 2008 and 2007:



|                                                                      |  |                                          |            |   |        |   |            |   |  |   |            |    |  |         |   
|--------------------------------------------------------------------- |  | ---------------------------------------- | ---------- | - | ------ | - | ---------- | - |  | - | ---------- | -- |  | ------- | --
|                                                                      |  | For the period ended March 31,           |            |   | Change |  
|                                                                      |  | 2008                                     |            |   | 2007   |   |            | $ |  |   | %          |   
|                                                                      |  | (In thousands, except per share amounts) |           
|Key results of operations measures (for the three months)             |  |                                          |            |   |        |   |            |   |  |   |            |    |  |         |   
|Net interest income                                                   |  | $                                        | 71,764     |   |        | $ | 82,340     |   |  | $ | (10,576    | )  |  | (12.8   | )%
|Net interest margin                                                   |  |                                          | 2.05       | % |        |   | 2.39       | % |  |   | (.34       | )% |  | (14.2   | )%
|Provision for loan losses                                             |  | $                                        | 98,000     |   |        | $ | 4,000      |   |  | $ | 94,000     |    |  | 2,350.0 | % 
|Gain on sale of loans                                                 |  | $                                        | 2,096      |   |        | $ | 3,474      |   |  | $ | (1,378     | )  |  | (39.7   | )%
|Net (loss) income                                                     |  | $                                        | (65,781    | ) |        | $ | 24,404     |   |  | $ | (90,185    | )  |  | (369.6  | )%
|Diluted (loss) earnings per share                                     |  | $                                        | (1.88      | ) |        | $ | 0.64       |   |  | $ | (2.52      | )  |  | (393.75 | )%
|Key results of operations measures (for the six months)               |  |                                          |            |   |        |   |            |   |  |   |            |    |  |         |   
|Net interest income                                                   |  | $                                        | 145,922    |   |        | $ | 161,135    |   |  | $ | (15,213    | )  |  | (9.4    | )%
|Net interest margin                                                   |  |                                          | 2.08       | % |        |   | 2.37       | % |  |   | (.29       | )% |  | (12.2   | )%
|Provision for loan losses                                             |  | $                                        | 163,000    |   |        | $ | 8,000      |   |  | $ | 155,000    |    |  | 1,937.5 | % 
|Gain on sale of loans                                                 |  | $                                        | 4,365      |   |        | $ | 9,069      |   |  | $ | (4,704     | )  |  | (51.9   | )%
|Net (loss) income                                                     |  | $                                        | (91,285    | ) |        | $ | 51,772     |   |  | $ | (143,057   | )  |  | (276.3  | )%
|Diluted (loss) earnings per share                                     |  | $                                        | (2.61      | ) |        | $ | 1.35       |   |  | $ | (3.96      | )  |  | (293.3  | )%
|Key financial condition measures (at period end)                      |  |                                          |            |   |        |   |            |   |  |   |            |    |  |         |   
|Total assets                                                          |  | $                                        | 14,344,267 |   |        | $ | 13,943,375 |   |  | $ | 400,892    |    |  | 2.9     | % 
|Total loan portfolio (1)                                              |  | $                                        | 12,532,392 |   |        | $ | 11,843,920 |   |  | $ | 688,472    |    |  | 5.8     | % 
|Allowance for loan losses                                             |  | $                                        | (202,315   | ) |        | $ | (41,827    | ) |  | $ | (160,488   | )  |  | 383.7   | % 
|Total deposits                                                        |  | $                                        | 6,935,322  |   |        | $ | 6,844,135  |   |  | $ | 91,187     |    |  | 1.3     | % 
|Total borrowings                                                      |  | $                                        | 6,545,780  |   |        | $ | 6,145,080  |   |  | $ | 400,700    |    |  | 6.5     | % 
|Key asset quality measures                                            |  |                                          |            |   |        |   |            |   |  |   |            |    |  |         |   
|Total non performing loans                                            |  | $                                        | 608,546    |   |        | $ | 70,945     |   |  | $ | 537,601    |    |  | 757.8   | % 
|Non-performing loans as a percentage of total loans held in portfolio |  |                                          | 4.86       | % |        |   | .60        | % |  |   | 4.26       | %  |  | 710.0   | % 
|Total net charge-offs QTD                                             |  | $                                        | 13,343     |   |        | $ | 1,365      |   |  | $ | 11,978     |    |  | 877.5   | % 
|Net annualized QTD charge-offs as a % of QTD average loans (2)        |  |                                          | 0.42       | % |        |   | 0.04       | % |  |   | 0.38       | %  |  | 950.0   | % 
|Total net charge-offs YTD                                             |  | $                                        | 19,308     |   |        | $ | 2,551      |   |  | $ | 16,757     |    |  | 656.9   | % 
|Net annualized YTD charge-offs as a % of YTD average loans (2)        |  |                                          | 0.42       | % |        |   | 0.04       | % |  |   | 0.27       | %  |  | 675.0   | % 
|Other key performance measures                                        |  |                                          |            |   |        |   |            |   |  |   |            |    |  |         |   
|Total loan originations QTD                                           |  | $                                        | 707,612    |   |        | $ | 1,030,567  |   |  | $ | (322,955   | )  |  | (31.3   | )%
|Total residential originations QTD (3)                                |  | $                                        | 470,953    |   |        | $ | 866,491    |   |  | $ | (395,538   | )  |  | (45.6   | )%
|Total conforming loans QTD                                            |  | $                                        | 326,580    |   |        | $ | 56,519     |   |  | $ | 270,061    |    |  | 477.8   | % 
|Total loan originations YTD                                           |  | $                                        | 1,393,723  |   |        | $ | 2,355,646  |   |  | $ | (961,923   | )  |  | (40.8   | )%
|Total residential originations YTD (3)                                |  | $                                        | 978,714    |   |        | $ | 2,016,619  |   |  | $ | (1,037,905 | )  |  | (51.5   | )%
|Total conforming loans YTD                                            |  | $                                        | 667,412    |   |        | $ | 565,388    |   |  | $ | 102,024    |    |  | 18.0    | % 



|(1) | Including unearned discounts, premiums and deferred loan costs.
|--- | ---------------------------------------------------------------

|(2) | QTD defined as quarter-to-date; YTD defined as year-to-date
|--- | -----------------------------------------------------------

|(3) | Excluding specialty consumer mortgages originated at the branches. Specialty consumer mortgages are residential mortgage loans that are originated primarily through customer
relationships at our neighborhood branch banking offices, compared to those originated through our wholesale residential mortgage loan production offices.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Our net loss for the quarter ended March 31, 2008 was also affected by the reduced profitability for our payment option loans due to reduced demand in the secondary market and further tightening of our credit
standards. The crisis in the subprime lending market has generated substantial speculation and concern in the financial markets that the same level of mortgage delinquencies and write-downs of securities will occur with respect to lower
documentation loans and payment option loans. While BankUnited has applied many of the principles now required by banking regulators for non-traditional loans such as payment option loans for a period that precedes adoption of the inter-agency
guidance, and has historically employed conservative underwriting criteria on lower documentation



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loans, the generalized concern in the secondary markets has reduced the acceptance for sale of payment option loans. We did not sell any payment option loans
into the secondary market in the quarter ended March 31, 2008, compared to $502 million sold during the quarter ended March 31, 2007.

Increased competition in agency-qualified mortgages will potentially reduce profits in this sector. A large number of lenders have pulled out of alternative-documentation (Alt-A) and jumbo lending leaving the majority of their resources
focused on producing conforming agency loans that are saleable to FNMA and FHLMC. Alt-A loans are primarily credit-score driven, since the candidates for these loans tend to lack proof of income from traditional employment. Jumbo loans are mortgage
loans with loan amounts exceeding the conforming loan limits set by the Office of Federal Housing Enterprise Oversight (OFHEO), and, therefore, not eligible to be purchased, guaranteed or securitized by FNMA or FHLMC. OFHEO sets the conforming loan
limit size on an annual basis. Cost management will be critical to remaining competitive and profitable in this space.

Critical Accounting Estimates

Our financial position and results of operations are impacted by managements application of accounting policies involving
judgments made to arrive at the carrying value of certain assets. In implementing our policies, management must make estimates and assumptions about the effect of matters that are inherently less than certain. Actual results could differ
significantly from these estimates, which could materially affect the reported amounts of our assets, liabilities, income and expenses. Critical accounting estimates made by management include those that relate to the allowance for loan losses, the
carrying amount of investments, mortgage-backed securities available for sale, and stock based compensation.

Allowance for loan
losses

The allowance for loan losses is a subjective judgment that management must make regarding the loan portfolio, and is
established and maintained at levels that management believes are adequate to cover probable losses resulting from the inability of borrowers to make required payments on loans. Estimates for loan losses are made by analyzing historical loan losses,
current trends in delinquencies and charge-offs, plans for problem loan administration and resolution, the views of regulators, changes in the size and composition of the loan portfolio, and peer group information. In addition, the economic climate
and direction, increases or decreases in overall lending rates, political conditions, legislation directly or indirectly impacting the banking industry, mortgage insurance and economic conditions affecting specific geographical areas in which
BankUnited conducts business are all considered. We transfer a portion of our credit risk on residential loans by requiring mortgage insurance on a portion of our loans. Where there is a question as to the impairment of a non-homogenous loan,
management obtains valuations of the property or collateral securing the loan, and current financial information of the borrower, including financial statements, when available. Since the calculation of appropriate loan loss allowances relies on
managements estimates and judgments relating to inherently uncertain events, actual results may differ from these estimates. For a more detailed discussion on the allowance for loan losses, see the Asset Qualitysection of this report
and, (e) Allowance for Loan Losses in note (1) Summary of Significant Accounting Policiesto the Notes to Consolidated Financial Statements on page 85 of BankUniteds Annual Report on Form 10-K for the year ended
September 30, 2007.

Investments and mortgage-backed securities available for sale

Several estimates impact the periodic valuation of investments and mortgage-backed securities, which are carried at fair value. Generally, the bank
uses third party pricing services to assist management in estimating the fair value of its securities. For a limited number of securities for which third party pricing is not available, the bank uses internal valuation models to calculate fair
value. The vast majority of our investments and mortgage-backed securities were purchased prior to 2004, and as such, have relatively short remaining lives. For a more detailed discussion on investment securities and mortgage-backed securities
available for sale, see note (3) Investments and Mortgage-Backed Securities Available for Saleto the accompanying Notes to Consolidated Financial Statements.

Stock-Based Compensation

Several assumptions are made in the determination of stock-based
compensation. BankUnited utilizes the BlackScholes model to calculate stock-based compensation under SFAS No. 123R. Estimates of expected volatility, expected life of options, applicable risk free interest rate affect the computation of
the fair value of options to be expensed. Assumptions are also made as to the expected achievement of performance conditions for performance based stock grants. Estimates of expected forfeiture rates are made for both options and stock grants. For a
more detailed discussion of stock based compensation see notes (1) Summary of Significant Accounting Policiesand (9) Stock-Based Compensation and Other Benefit Plans to the accompanying Notes to Consolidated Financial
Statements.

Accounting Pronouncements Issued and Not Yet Adopted

For information about accounting pronouncements issued but not yet adopted, see the discussion in Note(2) Impact of Certain Accounting Pronouncementsto the accompanying Notes to Consolidated Financial
Statements.



7



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RESULTS OF OPERATIONS

Comparison of Operating Results for the Three Months Ended March 31, 2008 and 2007

General

BankUnited reported a net loss of $65.8 million for the three months ended March 31, 2008, compared to net income of $24.4 million for the quarter
ended March 31, 2007. Basic and diluted (loss) earnings per share were $(1.88) and $(1.88), respectively, for the quarter ended March 31, 2008 as compared to $0.67 and $0.64, respectively, for the same quarter last year.

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



|                                     |  |                                          |          |        |      |   |        |  |   |          |   |  |         |   
|------------------------------------ |  | ---------------------------------------- | -------- | ------ | ---- | - | ------ |  | - | -------- | - |  | ------- | --
|                                     |  | For the three monthsended March 31,      |          | Change |     
|                                     |  | 2008                                     |          |        | 2007 |   | $      |  |   | %        |  
|                                     |  | (In thousands, except per share amounts) |         
|Net interest income                  |  | $                                        | 71,764   |        |      | $ | 82,340 |  | $ | (10,576  | ) |  | (12.84  | )%
|Provision for loan losses            |  |                                          | 98,000   |        |      |   | 4,000  |  |   | 94,000   |   |  | 2,350.0 | % 
|Non-interest income                  |  |                                          | 7,473    |        |      |   | 10,153 |  |   | (2,680   | ) |  | (26.40  | )%
|Impairment of securities             |  |                                          | (25,677  | )      |      |   |       |  |   | (25,677  | ) |  | N.A.    |   
|Non-interest expense                 |  |                                          | 57,166   |        |      |   | 51,326 |  |   | 5,840    |   |  | 11.38   | % 
|                                     |  |                                          |          |        |      |   |        |  |   |          |   |  |         |   
|(Loss) income before taxes           |  |                                          | (101,606 | )      |      |   | 37,167 |  |   | (138,773 | ) |  | (373.38 | )%
|(Benefit) provision for income taxes |  |                                          | (35,825  | )      |      |   | 12,763 |  |   | (48,588  | ) |  | (380.69 | )%
|                                     |  |                                          |          |        |      |   |        |  |   |          |   |  |         |   
|Net (loss) income                    |  | $                                        | (65,781  | )      |      | $ | 24,404 |  | $ | (90,185  | ) |  | (369.55 | )%
|                                     |  |                                          |          |        |      |   |        |  |   |          |   |  |         |   
|Basic (loss) earnings per share      |  | $                                        | (1.88    | )      |      | $ | 0.67   |  | $ | (2.55    | ) |  | (380.60 | )%
|Diluted (loss) earnings per share    |  | $                                        | (1.88    | )      |      | $ | 0.64   |  | $ | (2.52    | ) |  | (393.75 | )%

Net Interest Income

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



8



---

|                                                                    |  |                                      |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|------------------------------------------------------------------- |  | ------------------------------------ | ---------- | - | -------- | - | ---------- |  | ---- | -------------- |  | - | ---------- | - | ---------- | - | ------- |  | ---- | -
|                                                                    |  | For the Three Months Ended March 31, |           
|                                                                    |  | 2008                                 |            |   | 2007     |  
|                                                                    |  | AverageBalance                       |            |   | Interest |   | Yield/Rate |  |      | AverageBalance |  |   | Interest   |   | Yield/Rate |  
|                                                                    |  | (Dollars in thousands)               |           
|Interest-earning assets:                                            |  |                                      |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|Loans receivable, net(1)(2)                                         |  | $                                    | 12,594,474 |   |          | $ | 204,011    |  | 6.49 | %              |  | $ | 11,865,916 |   |            | $ | 216,240 |  | 7.31 | %
|Mortgage-backed securities                                          |  |                                      | 811,101    |   |          |   | 11,228     |  | 5.54 | %              |  |   | 1,106,623  |   |            |   | 13,337  |  | 4.82 | %
|Short-term investments(2)                                           |  |                                      | 64,650     |   |          |   | 499        |  | 3.11 | %              |  |   | 32,609     |   |            |   | 397     |  | 4.94 | %
|Investment securities and FHLB stock                                |  |                                      | 436,385    |   |          |   | 6,330      |  | 5.82 | %              |  |   | 520,279    |   |            |   | 7,068   |  | 5.48 | %
|                                                                    |  |                                      |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|Total interest-earning assets                                       |  |                                      | 13,906,610 |   |          |   | 222,068    |  | 6.39 | %              |  |   | 13,525,427 |   |            |   | 237,042 |  | 7.03 | %
|                                                                    |  |                                      |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|Interest-bearing liabilities:                                       |  |                                      |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|Transaction and money market                                        |  |                                      | 693,895    |   |          |   | 5,388      |  | 3.12 | %              |  |   | 500,592    |   |            |   | 4,022   |  | 3.26 | %
|Savings                                                             |  |                                      | 1,486,311  |   |          |   | 14,009     |  | 3.79 | %              |  |   | 1,420,039  |   |            |   | 15,922  |  | 4.55 | %
|Certificates of deposits                                            |  |                                      | 4,483,241  |   |          |   | 53,700     |  | 4.82 | %              |  |   | 4,349,957  |   |            |   | 54,397  |  | 5.07 | %
|Trust preferred securities and subordinated debentures(4)           |  |                                      | 237,261    |   |          |   | 4,257      |  | 7.18 | %              |  |   | 251,529    |   |            |   | 5,822   |  | 9.26 | %
|Senior notes(5)(6)                                                  |  |                                      | 316,500    |   |          |   | 4,558      |  | 5.76 | %              |  |   | 120,000    |   |            |   | 1,070   |  | 3.57 | %
|FHLB advances and other borrowings                                  |  |                                      | 5,921,464  |   |          |   | 68,392     |  | 4.65 | %              |  |   | 5,948,716  |   |            |   | 73,469  |  | 5.01 | %
|                                                                    |  |                                      |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|Total interest-bearing liabilities                                  |  | $                                    | 13,138,672 |   |          | $ | 150,304    |  | 4.60 | %              |  | $ | 12,590,833 |   |            | $ | 154,702 |  | 4.98 | %
|                                                                    |  |                                      |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|Excess of interest-earning assets over interest-bearing liabilities |  | $                                    | 767,938    |   |          |   |            |  |      |                |  | $ | 934,594    |   |            |   |         |  |      |  
|                                                                    |  |                                      |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|Net interest income                                                 |  |                                      |            |   |          | $ | 71,764     |  |      |                |  |   |            |   |            | $ | 82,340  |  |      |  
|                                                                    |  |                                      |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|Interest rate spread                                                |  |                                      |            |   |          |   |            |  | 1.79 | %              |  |   |            |   |            |   |         |  | 2.05 | %
|Effect of non-interest bearing sources                              |  |                                      |            |   |          |   |            |  | 0.26 | %              |  |   |            |   |            |   |         |  | 0.34 | %
|                                                                    |  |                                      |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|Net interest margin                                                 |  |                                      |            |   |          |   |            |  | 2.05 | %              |  |   |            |   |            |   |         |  | 2.39 | %
|                                                                    |  |                                      |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|Ratio of interest-earning assets to interest-bearing liabilities    |  |                                      | 105.84     | % |          |   |            |  |      |                |  |   | 107.42     | % |            |   |         |  |      |  
|                                                                    |  |                                      |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  



Note: The yields and rates along with the corresponding interest rate spread and net interest margin represent the yields earned and rates paid on BankUniteds interest-earning assets and interest-bearing liabilities, respectively, for
the periods presented. Loan yields reflect any acceleration of premium amortization or discount accretion resulting from early repayment of loans during the year. The yields are calculated on a pre-tax basis.

|(1) | Includes average balances of loans held for sale of $146.6 million and $218.3 million for the quarters ended March 31, 2008 and 2007, respectively. Interest income arising from
loans held for sale is included in interest on loans and fees in BankUniteds consolidated statement of operations, as well as BankUniteds calculations of interest rate spread and net interest margin. Also includes average balances of
non-accruing loans of $534.2 million and $64.2 million for the quarters ended March 31, 2008 and 2007, respectively.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Interest on loans receivable includes $37.0 million and $46.0 million for the three months ended March 31, 2008 and 2007, respectively, arising from negative amortization of payment
loans.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

|(4) | Includes the effect of interest rate caps. See Note (8) Accounting for Derivatives and Hedging Activities to Notes to Consolidated Financial Statements.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Includes convertible senior notes. Rates on these instruments differ from contractual terms due to the amortization of deferred cost.
|--- | -------------------------------------------------------------------------------------------------------------------------------------

|(6) | Includes HIMEDS Units senior notes and junior subordinated debentures.
|--- | ----------------------------------------------------------------------

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 changes attributable to: (i) changes in volume
(change in volume multiplied by prior year rate); (ii) changes in rate (change in rate multiplied by prior year volume); and (iii) changes in rate/volume (change in rate multiplied by change in volume, which are allocated to rate).



9



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|                                                           |  |                                                         |        |   |                          |   |         |   |  |   |         |  
|---------------------------------------------------------- |  | ------------------------------------------------------- | ------ | - | ------------------------ | - | ------- | - |  | - | ------- | -
|                                                           |  | For the Three Month Period EndedMarch 31, 2008 vs. 2007 |       
|                                                           |  | Increase (Decrease)Due to                               |        |   | TotalIncrease/(Decrease) |  
|                                                           |  | Changes inVolume                                        |        |   | Changesin Rate           |   |        
|                                                           |  | (Dollars in thousands)                                  |       
|Interest income attributable to:                           |  |                                                         |        |   |                          |   |         |   |  |   |         |  
|Loans receivable, net (1)                                  |  | $                                                       | 6,148  |   |                          | $ | (18,377 | ) |  | $ | (12,229 | )
|Mortgage-backed securities                                 |  |                                                         | (3,562 | ) |                          |   | 1,453   |   |  |   | (2,109  | )
|Short-term investments (2)                                 |  |                                                         | 394    |   |                          |   | (292    | ) |  |   | 102     |  
|Investment securities and FHLB stock                       |  |                                                         | (1,020 | ) |                          |   | 282     |   |  |   | (738    | )
|                                                           |  |                                                         |        |   |                          |   |         |   |  |   |         |  
|Total interest-earning assets                              |  |                                                         | 1,960  |   |                          |   | (16,934 | ) |  |   | (14,974 | )
|                                                           |  |                                                         |        |   |                          |   |         |   |  |   |         |  
|                                                           |  |                                                         |       
|Interest expense attributable to:                          |  |                                                         |        |   |                          |   |         |   |  |   |         |  
|Transaction and money market                               |  |                                                         | 1,566  |   |                          |   | (200    | ) |  |   | 1,366   |  
|Savings                                                    |  |                                                         | 749    |   |                          |   | (2,661  | ) |  |   | (1,912  | )
|Certificates of deposit                                    |  |                                                         | 1,681  |   |                          |   | (2,378  | ) |  |   | (697    | )
|Trust preferred securities and subordinated debentures (3) |  |                                                         | (330   | ) |                          |   | (1,235  | ) |  |   | (1,565  | )
|Senior notes (4)                                           |  |                                                         | 1,751  |   |                          |   | 1,737   |   |  |   | 3,488   |  
|FHLB advances and other borrowings (3)                     |  |                                                         | (339   | ) |                          |   | (4,739  | ) |  |   | (5,078  | )
|                                                           |  |                                                         |        |   |                          |   |         |   |  |   |         |  
|Total interest-bearing liabilities                         |  |                                                         | 5,078  |   |                          |   | (9,476  | ) |  |   | (4,398  | )
|                                                           |  |                                                         |        |   |                          |   |         |   |  |   |         |  
|Increase (decrease) in net interest income                 |  | $                                                       | (3,118 | ) |                          | $ | (7,458  | ) |  | $ | (10,576 | )
|                                                           |  |                                                         |        |   |                          |   |         |   |  |   |         |  



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

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

|(3) | Includes the effect of interest rate caps. See Note (8) Accounting for Derivatives and Hedging Activities to Notes to Consolidated Financial Statements.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Includes interest expense on convertible senior notes issued in February and March 2004, and interest expense on senior notes outstanding up until their maturity in February 2034.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

Net interest income before provision for loan
losses was $71.8 million for the quarter ended March 31, 2008. This represents a decrease of $10.6 million, or 13%, from the $82.3 million reported for the same quarter of fiscal 2007. The net interest margin decreased in the quarter ended
March 31, 2008 to 2.05% from 2.39% for the same quarter of fiscal year 2007. The overall yield on interest earning assets decreased by 64 basis points, while the overall rates paid on interest bearing liabilities decreased by 38 basis points,
resulting in a decrease in the interest rate spread of 26 basis points for the quarter ended March 31, 2008 as compared to the same quarter of fiscal year 2007. Interest income on loans includes deferred interest on payment option loans where
periodic payments do not cover the amount of interest earned contractually and where the uncollected interest is added to the principal balance of the loans. Deferred interest resulting in negative amortization, where the loan balance exceeds the
original loan balance, amounted to $354 million at March 31, 2008 compared to $176 million at March 31, 2007.

Declining overall
market interest rates (including the Monthly Treasury Average, MTA), growth in non-performing loans and increasing liability costs has significantly reduced net interest income and the net interest margin. The MTA index is the
twelve-month moving average of the monthly average yield on U.S. Treasury Securities with a constant maturity of one year. Partially offsetting the decrease in net interest margin is the increase in average earning assets at March 31, 2008 by
$382.0 million, or 3% compared to the quarter ended March 31, 2007. The increase in average earning assets was centered in higher average loans receivable that represent 91% of earning assets at March 31, 2008 as compared to 88% at
March 31, 2007. Based on the previously discussed strategy of reducing significantly our residential mortgage business and the size of our balance sheet, we expect our average earning assets to decrease in the next 12 months.

The net interest margin for the quarter ended March 31, 2008 was 2.05%. The adverse impact on the net interest margin of the carrying costs of
non-performing loans was 51 basis points.



10



---

The net interest margin fell to 2.05% for the quarter ended March 31, 2008 from 2.39% for the same
quarter of fiscal 2007. The change in net interest income, net interest spread and net interest margin was mainly due to the increased cost of interest bearing liabilities, the decrease in the yield on loans and the effect on rates of the lower MTA.

Other factors affecting the yield decrease on assets include prepayment fees that decreased from $6.2 million in the quarter ended
March 31, 2007 to $2.2 million in the quarter ended March 31, 2008. Prepayments on residential mortgage loans reduce loan interest income as the net deferred cost amortization is accelerated with the prepayment. For the quarter ended
March 31, 2008, the constant prepayment rate (CPR) was 10.2% as compared to 15.5% for the quarter ended March 31, 2007. The slower prepayment rate partially offset the decrease in the net interest margin for the year.

Provision for Loan Losses

The provision for loan losses was $98 million for the three months ended March 31, 2008, compared to $4.0 million for the three months ended March 31, 2007 and reflects the amount required to record the
allowance for loan losses at an adequate level at March 31, 2008. The provision largely reflected more severe deterioration in the residential housing market, particularly in specific markets in California and Florida. Management continuously
updates the assumptions used in the model to incorporate multiple and more precise factors regarding unprecedented consumer behavior, housing price deterioration and increased foreclosures. Total nonperforming assets including loans held for sale
were $682 million, or 4.75% of total assets at March 31, 2008 compared to $431 million, or 2.99%, at December 31, 2007 and $209 million, or 1.39% at September 30, 2007. Payment option loans represented the majority of the increase,
amounting to $150 million at September 30, 2007, and $512 million at March 31, 2008. Increases in residential real estate-related nonperforming assets due to the effects of the weakened housing industry, housing price deterioration, and consumer
behavior, especially with respect to payment option loans, contributed to the level of provision. See discussion in Overview, Asset Qualityand Note (4) Loans Held in Portfolio to the Consolidated Financial Statements for
information on BankUniteds allowance for loan losses.

Non-interest Income

The following table provides a comparison for each of the categories of non-interest income for the quarters ended March 31, 2008 and 2007.



|                                                               |  |                                     |         |   |      |   |        |        |  |   |         |   |  |        |   
|-------------------------------------------------------------- |  | ----------------------------------- | ------- | - | ---- | - | ------ | ------ |  | - | ------- | - |  | ------ | --
|                                                               |  | For the Three MonthsEnded March 31, |         |   |      |   |        |        | 
|                                                               |  | 2008                                |         |   | 2007 |   |        | Change | 
|                                                               |  | (Dollars in thousands)              |        
|Non-interest income:                                           |  |                                     |         |   |      |   |        |        |  |   |         |   |  |        |   
|Loan servicing fees                                            |  | $                                   | 1,432   |   |      | $ | 1,782  |        |  | $ | (350    | ) |  | (19.6  | )%
|Amortization of mortgage servicing rights                      |  |                                     | (1,737  | ) |      |   | (811   | )      |  |   | (926    | ) |  | (114.2 | ) 
|Impairment of mortgage servicing rights                        |  |                                     | (624    | ) |      |   | (133   | )      |  |   | (491    | ) |  | (369.2 | ) 
|Loan fees                                                      |  |                                     | 1,395   |   |      |   | 1,265  |        |  |   | 130     |   |  | 10.3   |   
|Deposit fees                                                   |  |                                     | 1,719   |   |      |   | 1,510  |        |  |   | 209     |   |  | 13.8   |   
|Other fees                                                     |  |                                     | 723     |   |      |   | 697    |        |  |   | 26      |   |  | 3.7    |   
|Net gain on sale of investments and mortgage-backed securities |  |                                     | 341     |   |      |   | (566   | )      |  |   | 907     |   |  | (160.2 | ) 
|Other-than-temporary impairment on investment securities       |  |                                     | (25,677 | ) |      |   |       |        |  |   | (25,677 | ) |  | (100.0 | ) 
|Net gain on sale of loans and other assets                     |  |                                     | 2,096   |   |      |   | 3,474  |        |  |   | (1,378  | ) |  | (39.7  | ) 
|Insurance and investment services income                       |  |                                     | 1,969   |   |      |   | 1,320  |        |  |   | 649     |   |  | 49.2   |   
|Loss on swaps                                                  |  |                                     |        |   |      |   | (121   | )      |  |   | 121     |   |  | 100.0  |   
|Loss on loans held for sale                                    |  |                                     | (2,017  | ) |      |   |       |        |  |   | (2,017  | ) |  | 100.0  |   
|Other                                                          |  |                                     | 2,176   |   |      |   | 1,736  |        |  |   | 440     |   |  | 25.3   |   
|                                                               |  |                                     |         |   |      |   |        |        |  |   |         |   |  |        |   
|Total non-interest (loss) income                               |  | $                                   | (18,204 | ) |      | $ | 10,153 |        |  | $ | (28,357 | ) |  | (279.3 | )%
|                                                               |  |                                     |         |   |      |   |        |        |  |   |         |   |  |        |   

Total non-interest income for the quarter ended March 31, 2008 includes other than temporary
impairment charges of $25.6 million. Excluding other than temporary impairment, non-interest income for the three months ended March 31, 2008 was $7.5 million and reflects a decrease of $2.7 million, or 26.4%, from the quarter ended
March 31, 2007.

During the quarter ended March 31, 2008, BankUnited recorded other than temporary impairment charges of $25.7
million, including $8.9 million relating to certain preferred stock of U.S. government sponsored entities, $16.2 million relating to certain mortgage backed securities and $350,000 relating to a corporate debt security. Each of these securities has
had significant unrealized losses for the past 12 months. Evaluation of these securities in the future and other securities which had temporary declines in value as of March 31, 2008, could lead to a determination that additional other than
temporary impairments have occurred.

The preferred stock was written down to market value due to uncertainty of the timing and potential
for market recovery of the issuers, which are government sponsored entities. The mortgage backed securities represent five subordinate classes of BankUniteds 2005 securitization. Based on cash flow projections of the underlying mortgages as of
March 31, 2008, and assuming that current loss



11



---

trends continue, BankUnited estimated that loss projections could completely erode the value of the two most subordinate classes, and significantly erode the
next three most subordinate classes. As of March 31, 2008, BankUnited continued to hold securities with an aggregate fair value of $124.0 million and unrealized losses of $33.2 million arising from the 2005 securitization. BankUnited reviewed
the projected losses, cash flows, and coverage levels of these securities. Additionally, the length of time these securities have had unrealized losses was considered. Based on the conclusion that cash flows are adequate to fully amortize these
securities and BankUniteds ability and intent to hold them until recovery, which could be maturity, they were not deemed other than temporarily impaired as of March 31, 2008.

Net gain on the sale of loans of $2.1 million for the quarter ended March 31, 2008 represented a $1.4 million decrease from the gain reported for
the quarter ended March 31, 2007 and reflected lower volume of origination and sale of loans in secondary market during the quarter ended March 31, 2008. For the three months ended March 31, 2008, we did not sell any option ARM loans
compared to $502 million sold for the three months ended March 31, 2007. Reduced demand in the secondary market for these loans late in fiscal 2007 was the primary reason for the decline. However, we continue to originate fixed and adjustable
loan products for sale in the secondary market to government sponsored entities and other conduits. During the three months ended March 31, 2008, we sold $143.5 million of conforming agency loans to government sponsored entities compared to
$4.7 million for the three months ended March 31, 2007.

Loan servicing fee income, net of amortization and impairment, decreased by
$1.8 million for the quarter ended March 31, 2008 from the quarter ended March 31, 2007. Due to an increase in constant prepayment rate speeds in conforming agency loans we recorded an impairment of $624,000 for the three months ended
March 31, 2008.

Non-Interest Expense

The following table provides a comparison for each of the categories of non-interest expense for the quarter ended March 31, 2008 and 2007:



|                                       |  |                                     |        |      |   |        |  |   |       |   |  |          |  
|-------------------------------------- |  | ----------------------------------- | ------ | ---- | - | ------ |  | - | ----- | - |  | -------- | -
|                                       |  | For the Three Months EndedMarch 31, |        |      |   |        |  |  
|                                       |  | 2008                                |        | 2007 |   | Change | 
|                                       |  | (Dollars in thousands)              |       
|Non-interest expense:                  |  |                                     |        |      |   |        |  |   |       |   |  |          |  
|Employee compensation and benefits     |  | $                                   | 26,857 |      | $ | 26,551 |  | $ | 306   |   |  | 1.2      | %
|Occupancy and equipment                |  |                                     | 10,502 |      |   | 9,551  |  |   | 951   |   |  | 10.0     |  
|Telecommunications and data processing |  |                                     | 3,478  |      |   | 2,933  |  |   | 545   |   |  | 18.6     |  
|Real estate owned expenses             |  |                                     | 2,284  |      |   | 14     |  |   | 2,270 |   |  | 16,214.3 |  
|Professional fees                      |  |                                     | 2,865  |      |   | 1,842  |  |   | 1,023 |   |  | 55.5     |  
|Advertising and promotion expense      |  |                                     | 1,369  |      |   | 2,243  |  |   | (874  | ) |  | (39.0    | )
|Other operating expenses               |  |                                     | 9,811  |      |   | 8,192  |  |   | 1,619 |   |  | 19.8     |  
|                                       |  |                                     |        |      |   |        |  |   |       |   |  |          |  
|Total non-interest expense             |  | $                                   | 57,166 |      | $ | 51,326 |  | $ | 5,840 |   |  | 11.4     | %
|                                       |  |                                     |        |      |   |        |  |   |       |   |  |          |  

Non-interest expense increased by $5.8 million, or 11.4%, for the second quarter of fiscal 2008
compared to the same quarter in fiscal 2007. The increase in occupancy and equipment reflects the full impact of the expansion of our branch network during fiscal 2007. The increase in other operating expenses of $5.9 million, or 72%, from the first
quarter of fiscal 2007, includes an increase of $519,000 in FDIC premiums and $2.3 million in expenses related to foreclosed real estate expenses and losses on sales of these properties. Given the lower anticipated growth in the number of branches
during fiscal 2008, these expenses are expected to continue to increase but at lower rate in the remainder of fiscal 2008.

REO expenses
include operating costs, writedowns to fair value subsequent to repossession and gain or loss on the disposition of real estate acquired through foreclosure. These costs have increased due to increased volume of foreclosures and are likely to
continue to increase throughout fiscal year 2008 and 2009. REO amounted to $3.1 million, $27.7 million, and $73.4 million at March 31, 2007, September 30, 2007 and March 31, 2008, respectively.

For the Six Months Ended March 31, 2008 Compared to the Same Period in 2007

General

Net loss for the six months ended March 31, 2008 was $91.3 million compared to net
income of $51.8 million for the same period last year. Basic and diluted loss were $(2.61) and $(2.61) per share, respectively, for the six-month period, compared to earnings of $1.42 and $1.35 per share, respectively, for the same period last year.



12



---

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



|                           |  |                                          |          |        |      |   |         |  |   |          |   |  |         |   
|-------------------------- |  | ---------------------------------------- | -------- | ------ | ---- | - | ------- |  | - | -------- | - |  | ------- | --
|                           |  | For the Six Monthsended March 31,        |          | Change |     
|                           |  | 2008                                     |          |        | 2007 |   | $       |  |   | %        |  
|                           |  | (In thousands, except per share amounts) |         
|Net interest income        |  | $                                        | 145,922  |        |      | $ | 161,135 |  | $ | (15,213  | ) |  | (9.44   | )%
|Provision for loan losses  |  |                                          | 163,000  |        |      |   | 8,000   |  |   | 155,000  |   |  | 1937.50 | % 
|Non-interest income        |  |                                          | (11,586  | )      |      |   | 21,743  |  |   | (6,802   | ) |  | 31.3    | % 
|Impairment of securities   |  |                                          | (26,527  | )      |      |   |        |  |   | (26,527  | ) |  | (100.0  | )%
|Non-interest expense       |  |                                          | 112,189  |        |      |   | 96,373  |  |   | 15,816   |   |  | 16.41   | % 
|                           |  |                                          |          |        |      |   |         |  |   |          |   |  |         |   
|Income before taxes        |  |                                          | (140,853 | )      |      |   | 78,505  |  |   | (219,358 | ) |  | (279.42 | )%
|Income taxes               |  |                                          | (49,568  | )      |      |   | 26,733  |  |   | (76,301  | ) |  | (285.42 | )%
|                           |  |                                          |          |        |      |   |         |  |   |          |   |  |         |   
|Net income                 |  | $                                        | (91,285  | )      |      | $ | 51,772  |  | $ | (143,057 | ) |  | (276.32 | )%
|                           |  |                                          |          |        |      |   |         |  |   |          |   |  |         |   
|Basic earnings per share   |  | $                                        | (2.61    | )      |      | $ | 1.42    |  | $ | (4.03    | ) |  | (283.80 | )%
|Diluted earnings per share |  | $                                        | (2.61    | )      |      | $ | 1.35    |  | $ | (3.96    | ) |  | (293.33 | )%

Analysis of Net Interest Income

Yields Earned and Rates Paid

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



13



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|                                                                    |  |                                    |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|------------------------------------------------------------------- |  | ---------------------------------- | ---------- | - | -------- | - | ---------- |  | ---- | -------------- |  | - | ---------- | - | ---------- | - | ------- |  | ---- | -
|                                                                    |  | For the Six Months Ended March 31, |           
|                                                                    |  | 2008                               |            |   | 2007     |  
|                                                                    |  | AverageBalance                     |            |   | Interest |   | Yield/Rate |  |      | AverageBalance |  |   | Interest   |   | Yield/Rate |  
|                                                                    |  | (Dollars in thousands)             |           
|Interest-earning assets:                                            |  |                                    |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|Loans, net(1)                                                       |  | $                                  | 12,652,466 |   |          | $ | 423,910    |  | 6.70 | %              |  | $ | 11,823,646 |   |            | $ | 428,055 |  | 7.24 | %
|Mortgage-backed securities                                          |  |                                    | 849,517    |   |          |   | 22,844     |  | 5.38 | %              |  |   | 1,151,510  |   |            |   | 27,107  |  | 4.71 | %
|Short-term investments(3)                                           |  |                                    | 79,762     |   |          |   | 1,570      |  | 3.94 | %              |  |   | 35,752     |   |            |   | 928     |  | 5.20 | %
|Investment securities and FHLB stock                                |  |                                    | 447,361    |   |          |   | 12,989     |  | 5.81 | %              |  |   | 541,268    |   |            |   | 14,781  |  | 5.47 | %
|                                                                    |  |                                    |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|Total interest-earning assets                                       |  |                                    | 14,029,106 |   |          |   | 461,313    |  | 6.58 | %              |  |   | 13,552,176 |   |            |   | 470,871 |  | 6.95 | %
|                                                                    |  |                                    |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|                                                                    |  |                                    |            |   |          |  
|Interest-bearing liabilities:                                       |  |                                    |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|Transaction and money market                                        |  |                                    | 661,632    |   |          |   | 11,005     |  | 3.33 | %              |  |   | 470,355    |   |            |   | 7,312   |  | 3.12 | %
|Savings                                                             |  |                                    | 1,512,216  |   |          |   | 31,652     |  | 4.19 | %              |  |   | 1,376,919  |   |            |   | 30,714  |  | 4.47 | %
|Certificates of deposits                                            |  |                                    | 4,499,529  |   |          |   | 111,205    |  | 4.94 | %              |  |   | 4,166,779  |   |            |   | 104,034 |  | 5.01 | %
|Trust preferred securities and subordinated debentures              |  |                                    | 237,261    |   |          |   | 9,005      |  | 7.59 | %              |  |   | 248,827    |   |            |   | 10,865  |  | 8.73 | %
|Senior notes(4)                                                     |  |                                    | 316,500    |   |          |   | 9,132      |  | 5.77 | %              |  |   | 120,000    |   |            |   | 2,133   |  | 3.56 | %
|FHLB advances and other borrowings                                  |  |                                    | 5,963,988  |   |          |   | 143,392    |  | 4.81 | %              |  |   | 6,206,546  |   |            |   | 154,678 |  | 5.00 | %
|                                                                    |  |                                    |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|Total interest-bearing liabilities                                  |  | $                                  | 13,191,126 |   |          | $ | 315,391    |  | 4.78 | %              |  | $ | 12,589,426 |   |            | $ | 309,736 |  | 4.93 | %
|                                                                    |  |                                    |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|                                                                    |  |                                    |            |   |          |  
|Excess of interest-earning assets over interest-bearing liabilities |  | $                                  | 837,980    |   |          |   |            |  |      |                |  | $ | 962,750    |   |            |   |         |  |      |  
|                                                                    |  |                                    |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|Net interest income                                                 |  |                                    |            |   |          | $ | 145,922    |  |      |                |  |   |            |   |            | $ | 161,135 |  |      |  
|                                                                    |  |                                    |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|Interest rate spread                                                |  |                                    |            |   |          |   |            |  | 1.79 | %              |  |   |            |   |            |   |         |  | 2.02 | %
|Effect of non-interest bearing sources                              |  |                                    |            |   |          |   |            |  | 0.29 | %              |  |   |            |   |            |   |         |  | 0.35 | %
|                                                                    |  |                                    |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|Net interest margin                                                 |  |                                    |            |   |          |   |            |  | 2.08 | %              |  |   |            |   |            |   |         |  | 2.37 | %
|                                                                    |  |                                    |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  
|Ratio of interest-earning assets to interest-bearing liabilities    |  |                                    | 106.35     | % |          |   |            |  |      |                |  |   | 107.65     | % |            |   |         |  |      |  
|                                                                    |  |                                    |            |   |          |   |            |  |      |                |  |   |            |   |            |   |         |  |      |  



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

|(1) | Includes average balances of loans held for sale of $168.3 million and $242.3 million for the six months ended March 31, 2008 and 2007, respectively. Interest income arising
from loans held for sale is included in interest on loans and fees in BankUniteds consolidated statement of operations as well as BankUniteds calculations of interest rate spread and net interest margin. Also includes average
non-accruing loans of $418.2 million and $49.5 million for the six months ended March 31, 2008 and 2007, respectively.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Interest on loans receivable includes $83.8 million and $86.7 million for the six months ended March 31, 2008 and 2007, respectively, arising from negative amortization of payment
option loans.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

|(4) | Rates on these instruments differ from contractual terms due to the amortization of deferred cost.
|--- | --------------------------------------------------------------------------------------------------

Rate/Volume Analysis

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



14



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|                                                       |  |                                                       |        |   |                          |   |         |   |  |   |         |  
|------------------------------------------------------ |  | ----------------------------------------------------- | ------ | - | ------------------------ | - | ------- | - |  | - | ------- | -
|                                                       |  | For the Six Month Period EndedMarch 31, 2008 vs. 2007 |       
|                                                       |  | Increase (Decrease)Due to                             |        |   | TotalIncrease/(Decrease) |  
|                                                       |  | Changes inVolume                                      |        |   | Changesin Rate           |   |        
|                                                       |  | (Dollars in thousands)                                |       
|Interest income attributable to:                       |  |                                                       |        |   |                          |   |         |   |  |   |         |  
|Loans, net (1)                                         |  | $                                                     | 18,701 |   |                          | $ | (22,846 | ) |  | $ | (4,145  | )
|Mortgage-backed securities                             |  |                                                       | (7,109 | ) |                          |   | 2,846   |   |  |   | (4,263  | )
|Short-term investments (2)                             |  |                                                       | 1,145  |   |                          |   | (503    | ) |  |   | 642     |  
|Investment securities and FHLB stock                   |  |                                                       | (2,306 | ) |                          |   | 514     |   |  |   | (1,792  | )
|                                                       |  |                                                       |        |   |                          |   |         |   |  |   |         |  
|Total interest-earning assets                          |  |                                                       | 10,431 |   |                          |   | (19,989 | ) |  |   | (9,558  | )
|                                                       |  |                                                       |        |   |                          |   |         |   |  |   |         |  
|                                                       |  |                                                       |       
|Interest expense attributable to:                      |  |                                                       |        |   |                          |   |         |   |  |   |         |  
|Transaction and money market                           |  |                                                       | 2,982  |   |                          |   | 711     |   |  |   | 3,693   |  
|Savings                                                |  |                                                       | 3,026  |   |                          |   | (2,088  | ) |  |   | 938     |  
|Certificates of deposit                                |  |                                                       | 8,331  |   |                          |   | (1,160  | ) |  |   | 7,171   |  
|Trust Preferred Securities and subordinated debentures |  |                                                       | (505   | ) |                          |   | (1,355  | ) |  |   | (1,860  | )
|Senior notes (3)                                       |  |                                                       | 3,493  |   |                          |   | 3,506   |   |  |   | 6,999   |  
|FHLB advances and other borrowings                     |  |                                                       | (6,062 | ) |                          |   | (5,224  | ) |  |   | (11,286 | )
|                                                       |  |                                                       |        |   |                          |   |         |   |  |   |         |  
|Total interest-bearing liabilities                     |  |                                                       | 11,265 |   |                          |   | (5,610  | ) |  |   | 5,655   |  
|                                                       |  |                                                       |        |   |                          |   |         |   |  |   |         |  
|Increase (decrease) in net interest income             |  | $                                                     | (834   | ) |                          | $ | (14,379 | ) |  | $ | (15,213 | )
|                                                       |  |                                                       |        |   |                          |   |         |   |  |   |         |  



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

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

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

Net Interest Income .Net interest income before provision for loan losses was $145.9 million for the six months ended March 31, 2008,
decreasing by $15 million, or 9%, from $161.1 million for the same period in 2007. The net interest margin decreased to 2.08% for the period, from 2.37% for the same fiscal period in fiscal 2007. The overall yield on interest earning assets
decreased by 37 basis points, while the overall rates paid on interest bearing liabilities decreased by 15 basis points, resulting in a decrease in the interest rate spread of 52 basis points for the six months ended March 31, 2008 compared to
the same period in fiscal 2007.

The decrease in net interest income is attributable primarily to the lower yield on interest earning
assets. This decrease was affected further by an increase in average nonaccrual loans of $369 million. Average earning assets for the six-month period increased by $477 million, or 4%, from the same period of fiscal 2007. Growth was centered in
loans, which are the highest-yielding earning assets. Average loans represented 90% of earning assets for the six months ended March 31, 2008 as compared to 87% in the same period in fiscal 2007.

Interest income attributable to loans receivable for the six months ended March 31, 2008 decreased $4 million compared to the same period in fiscal
2007. Of the $424 million interest income attributable to loans receivable for the six months ended March 31, 2008, $83 million was derived from deferred interest.

Of the $428 million interest income attributable to loans receivable for the six months ended March 31, 2007, $87 million was derived from deferred interest.

The net interest margin fell to 2.08% for the six months ended March 31, 2008 from 2.37% for the same period in fiscal 2007. Declining overall
market rates and growth in non-performing loans resulted in a 9% decrease in net interest income. The yield on loans declined by 54 basis points, and was the most significant contributing factor to the decline in net interest income. Higher average
earning assets in 2008 compared to 2007, and lower utilization of FHLB advances, partly off set the decline in interest income from loans. The adverse impact on the net interest margin of the carrying costs of nonaccrual loans was 42 basis points.



15



---

Factors affecting the yield improvement on assets included prepayment fees on loans that decreased to
$5.1 million for the six-month period ended March 31, 2008 from $12.1 million for the six-month period ended March 31, 2007. Prepayments on residential mortgage loans reduce loan interest income as the net deferred cost amortization
is accelerated with the prepayment. For the six months ended March 31, 2008, the CPR was 10.2% as compared to 15.5% for the six months ended March 31, 2007.

Provision for Loan Losses. BankUnited records a provision for loan losses as a charge to income in amounts necessary to adjust the allowance for loan losses as determined by management through its review
of asset quality. The provision for loan losses was $163 million and $8.0 million for the six-month periods ended March 31, 2008 and 2007, respectively. Total non-performing loans, including loans held for sale were $682 million at March 31,
2008, compared to $209 million at September 30, 2007. Payment option non-performing loans increased from $150 million at September 30, 2007 to $512 million at March 31, 2008. Severe deterioration in the residential housing markets over the past four
quarters, particularly in Florida and California, have resulted in higher foreclosures and housing price declines. See Asset Qualityfor information on BankUniteds allowance for loan losses.

Analysis of Non-Interest Income and Expenses



|                                                               |  |                                  |         |   |                     |   |        |   |  |   |         |   |  |        |   
|-------------------------------------------------------------- |  | -------------------------------- | ------- | - | ------------------- | - | ------ | - |  | - | ------- | - |  | ------ | --
|                                                               |  | For the Six MonthsEndedMarch 31, |         |   | Increase/(Decrease) |  
|                                                               |  | 2008                             |         |   | 2007                |   |       
|                                                               |  | (Dollars in thousands)           |        
|Non-interest income:                                           |  |                                  |         |   |                     |   |        |   |  |   |         |   |  |        |   
|Loan servicing fees                                            |  | $                                | 2,840   |   |                     | $ | 3,729  |   |  | $ | (889    | ) |  | (23.8  | )%
|Amortization of mortgage servicing rights                      |  |                                  | (2,585  | ) |                     |   | (1,668 | ) |  |   | (917    | ) |  | (55.0  | ) 
|Impairment of mortgage servicing rights                        |  |                                  | (3,258  | ) |                     |   | (965   | ) |  |   | (2,293  | ) |  | (237.6 | ) 
|Loan fees                                                      |  |                                  | 2,433   |   |                     |   | 2,339  |   |  |   | 94      |   |  | 4.0    |   
|Deposit fees                                                   |  |                                  | 3,316   |   |                     |   | 2,984  |   |  |   | 332     |   |  | 11.1   |   
|Other fees                                                     |  |                                  | 1,386   |   |                     |   | 1,369  |   |  |   | 17      |   |  | 1.2    |   
|Net loss on sale of investments and mortgage-backed securities |  |                                  | 342     |   |                     |   | (524   | ) |  |   | 866     |   |  | (165.3 | ) 
|Other-than-temporary impairment on investment securities       |  |                                  | (26,527 | ) |                     |   |       |   |  |   | (26,527 | ) |  | N.A.   |   
|Net gain on sale of loans and other assets                     |  |                                  | 4,365   |   |                     |   | 9,069  |   |  |   | (4,704  | ) |  | (51.9  | ) 
|Insurance and investment services income                       |  |                                  | 3,394   |   |                     |   | 2,272  |   |  |   | 1,122   |   |  | 49.4   |   
|Losses on swaps                                                |  |                                  |        |   |                     |   | (318   | ) |  |   | 318     |   |  | 100.0  |   
|Losses on loans held for sale                                  |  |                                  | (2,017  | ) |                     |   |       |   |  |   | (2,017  | ) |  | (100.0 | ) 
|Other                                                          |  |                                  | 4,725   |   |                     |   | 3,456  |   |  |   | 1,269   |   |  | 36.7   |   
|                                                               |  |                                  |         |   |                     |   |        |   |  |   |         |   |  |        |   
|Total non-interest income                                      |  | $                                | (11,586 | ) |                     | $ | 21,743 |   |  | $ | (33,329 | ) |  | (153.3 | )%
|                                                               |  |                                  |         |   |                     |   |        |   |  |   |         |   |  |        |   

Total non-interest income for the six-month period ended March 31, 2008, includes other than
temporary impairment charges of $26.5 million. Excluding other than temporary impairment, non-interest income for the six-months ended March 31, 2008 was $14.9 million and reflects a decrease of $6.8 million or 31.3% from the same period in
fiscal 2007.

BankUniteds portfolio of residential loans serviced for others was $1.8 billion as of March 31, 2008 compared to
$1.5 billion as of March 31, 2007. Servicing fee income net of amortization and impairment was a net loss of $3.0 million for the six-month period ended March 31, 2008, and $1.1 million for the six-month period ended March 31, 2007.



16



---

Loan fees, deposit fees and other fees were $7.1 million for the six-month period ended March 31,
2008, up 6% from $6.7 million for the same period in fiscal 2007.

Net gain on the sale of loans, was $4.4 million for the six months
ended March 31, 2008 compared to $9.1 million for the six months ended March 31, 2007, reflecting the decline in loan originations and sales. BankUnited sold $658 million of residential loans during the six months ended March 31,
2008, compared to $905 million during the six months ended March 31, 2007.



|                                        |  |                                  |         |          |   |        |  |   |        |   |  |         |  
|--------------------------------------- |  | -------------------------------- | ------- | -------- | - | ------ |  | - | ------ | - |  | ------- | -
|                                        |  | For the Six MonthsEndedMarch 31, |         | Increase |  
|                                        |  | 2008                             |         | 2007     |  
|                                        |  | (Dollars in thousands)           |        
|Non-interest expense:                   |  |                                  |         |          |   |        |  |   |        |   |  |         |  
|Employee compensation and benefits      |  | $                                | 54,418  |          | $ | 50,837 |  | $ | 3,581  |   |  | 7.0     | %
|Occupancy and equipment                 |  |                                  | 20,973  |          |   | 18,107 |  |   | 2,866  |   |  | 15.8    |  
|Telecommunications and data processing  |  |                                  | 6,815   |          |   | 5,764  |  |   | 1,051  |   |  | 18.2    |  
|Real estate owned expenses              |  |                                  | 3,436   |          |   | 64     |  |   | 3,372  |   |  | 5,268.8 |  
|Advertising and promotion expense       |  |                                  | 3,033   |          |   | 4,018  |  |   | (985   | ) |  | (24.5   | )
|Professional fees- legal and accounting |  |                                  | 6,380   |          |   | 3,459  |  |   | 2,921  |   |  | 84.4    |  
|Other operating expenses                |  |                                  | 17,134  |          |   | 14,124 |  |   | 3,010  |   |  | 21.3    |  
|                                        |  |                                  |         |          |   |        |  |   |        |   |  |         |  
|Total non-interest expense              |  | $                                | 112,189 |          | $ | 96,373 |  | $ | 15,816 |   |  | 16.4    | %
|                                        |  |                                  |         |          |   |        |  |   |        |   |  |         |  

Non-interest expense increased by $15.8 million, or 16.4%, for the six months ended March 31,
2008, compared to the same period in fiscal 2007. This increase reflects the companys continued expansion of its branch network and operations support. The branch network grew to 86 branches at March 31, 2008, from 80 branches at
March 31, 2007 and 71 at March 31, 2006. This branch expansion resulted in increases in compensation expense, as well as occupancy expense.

REO expenses include operating costs, writedowns to fair value subsequent to repossession and gain or loss on the disposition of real estate required through foreclosure. These costs have increased due to increased
volume of foreclosures, and are likely to continue to increase throughout fiscal year 2008 and 2009. REO amounted to $3.1 million, $27.7 million, and $73.4 million at March 31, 2007, September 30, 2007, and March 31, 2008, respectively.

LIQUIDITY

Liquidity and Capital Resources

BankUniteds objective in managing liquidity is to maintain sufficient resources of available liquid assets to address both short and long-term
business funding needs such as loan demand, investment purchases, deposit fluctuations, and debt service requirements. In doing so, BankUnited maintains an overall liquidity position that has an aggregate amount of readily accessible and marketable
assets, cash flow and borrowing capacity to meet unexpected deposit outflows and/or increases in loan demand. Cash levels may vary but are maintained at levels required by regulation and necessary to meet the projected anticipated needs for business
operations.

Rapid balance sheet growth over the last several years required sufficient access to wholesale funding. Approximately 50% of
funding needs were generally met with retail deposits and the other half was obtained through borrowings from the Federal Home Loan Bank of Atlanta (FHLB) and through repurchase agreements. Because the FHLB will lend BankUnited up to 50% of total
assets, the Company would from time to time increase its cash position by drawing on funds from the FHLB and use this excess cash to fund asset growth in subsequent weeks. In an environment where assets were growing rapidly and consistently,
building a cash position to fund future growth maximized borrowing capacity at the FHLB and therefore helped to sustain sources of liquidity as well as fund assets. As excess capital was used to fund assets, this position would decline until the
Company again increased its cash position from FHLB funds. This replenishment usually occurred near the end of each quarter based on an assessment of the Companys needs for the coming quarter.

As of March 31, 2008, BankUnited had available borrowing capacity of $1.136 billion at the FHLB, compared to $850 million as of December 31,
2007. Borrowing capacity is based on total assets at the prior quarter end as well as the amount of pledged collateral adjusted by a discount percentage. The increase at March 31, 2008 reflects the impact of the increase in total assets
applicable to the March 31, 2008 capacity (the prior quarter ended December 31, 2007). As of March 31, 2008, BankUnited had pledged eligible real estate loans and securities totaling $8.8 billion as collateral for borrowing from the
FHLB.

On April 2, 2008, the FHLB notified all of its customers that it would increase the discount it applies to residential first
mortgage collateral, effective May 1, 2008. Simultaneously, we were notified that the FHLBs internal matrix category of the Companys risk had been re-evaluated. This resulted in an increase of 13 percentage points
to the discount of 20% applied to our underlying pledged collateral. This resulted in a 20% increase in the pledging requirements in response to the notification of the new requirement, the Company pledged additional collateral against which it
could borrow. As of May 2, 2008, pledged collateral was $9.2 billion and available capacity for additional advances from the FHLB after these changes was approximately $357 million.



17



---

Borrowing capacity at the FHLB reflects whole loans and mortgage backed securities that as of
March 31, 2008 and May 2, 2008 were pledged to the FHLB. Delinquent loans are not eligible to serve as collateral for FHLB advances and further increases in required collateral have an adverse impact on borrowing capacity. In the next 12
months, growing credit concerns in the U.S. financial markets could result in further changes to the funding availability for BankUnited at the FHLB. Simultaneously, access to credit lines through securities sold under repurchase agreements could be
reduced as well. Should borrowing capacity at the FHLB be reduced, the Company would expect to increase its relative reliance on deposits. The Company may deposit raise rates and increase retail balances, as necessary or appropriate although at some
cost to the Companys net interest margin.

In addition to the borrowing line available at the FHLB, BankUnited has additional
borrowing capacity through securities sold under repurchase agreements with various parties which were $135 million as of March 31, 2008. Short-term borrowing facilities are also available through Federal funds purchased from other financial
institutions.

From time to time, we utilize our access to capital markets to raise capital through equity offerings. We have also utilized
trust preferred and subordinated debt issuances to provide a source of capital for the Bank.

As it became clear last fall that credit and
liquidity markets were undergoing substantial changes, the Company strategically reduced its expectations for balance sheet growth. This change in outlook curtailed the need for additional wholesale borrowing. As such, there was no longer a need to
build excess cash positions as before. Additionally, as the depths of the liquidity crisis became apparent, the Company recognized that, although retail deposits were increasingly expensive, prudent liquidity management warranted an increased
reliance on retail deposit balances.

In managing liquidity and seeking to increase earnings, the Company has intentionally allowed some
high cost non-core deposit balances to run off of the balance sheet. Competition in our deposit markets has been significant as a number of large banking companies have continued to grow their balance sheets. This incremental growth has been largely
funded with retail deposits. The result of this growth has been deposit costs that are higher than wholesale funding rates by as much as 100 basis points. By focusing on multi-service clients, and true core relationships, the Company has been able
to retain sufficient deposit balances at yields closer to wholesale funding rates.

BankUnited believes that current borrowing capacity at
the FHLB, under repurchase agreements, and through Federal funds purchased is sufficient to meet anticipated funding needs. If that capacity is reduced, this would leave retail deposits as the primary source of funding. Given the relative cost of
these funds, liability costs could increase substantially.

Significant sources and uses of funds

BankUniteds assets decreased by $702 million in the six months ended March 31, 2008, from September 30, 2007, mainly due to a decrease in
cash and cash equivalents of $351 million, decrease in investment securities available for sale of $167 million and a decrease in total loans (loan portfolio and loans held for sale) of $70 million. The decrease in assets was offset by a combined
decrease in borrowings of $543 million and increase of deposits of $50 million.

BankUniteds assets grew by $372 million during the
six months ended March 31, 2008, from September 30, 2007, primarily through loan growth of $407 million after. BankUnited funded its asset and loan growth through deposit growth of $770 million. FHLB advances increased by $290 million
while other borrowings declined by $704 million.

FINANCIAL CONDITION

Assets

Loans.

Total net portfolio loans comprise the major earning asset of the Bank and decreased to $12.3 billion at March 31, 2008 from $12.6 billion at
September 30, 2007. Loans are centered in first mortgage residential loans, including specialty consumer mortgages, that amounted to $10.5 billion and represented 85% of the net loan portfolio at March 31, 2008, a decrease of $289
million, or 2.8%, from September 30, 2007.

Commercial real estate loans, including multi-family, construction, and land loans,
increased by $72 million, or 7.0% during the six months ended March, 31, 2008. Commercial loans increased by $12 million, or 6.5%, and home equity loans and lines of credit increased by $51 million, or 12.7% during the second quarter of fiscal 2008.
Other consumer loans decreased by $1.4 million, or 8.3%, during the second quarter of fiscal 2008.

BankUnited is transitioning to selling
more loans into the secondary market rather than maintaining the majority for the portfolio. Our current originations conform to the guidelines and terms of various FNMA and FHLMC programs to make them eligible for sale to these entities. These
sales include both fixed rate loans and ARM loans without payment options. We have not sold payment-option ARMs in the secondary market since March 2007.



18



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During the first quarter of the 2008 fiscal year, we shifted the focus of our residential loan
originations to a Select-My-Payment product. This represented a change from the previous three years when we focused primarily on producing monthly payment option ARM loan product that adjusts interest rates on a monthly basis, maintains a fixed
minimum payment for a year and limits annual minimum required payment increases. Our Select-My-Payment product is available with a fixed interest rate for a period of either three or five years and then becomes an adjustable rate loan. This is a
payment option product. This loan generally requires a minimum cash payment of approximately 3% to 4% in interest per month.

During the
fourth quarter of fiscal 2007, in light of certain liquidity and credit events in the financial markets, we elected to limit the growth, and possibly decrease the size of our residential loan balances. Accordingly, we further refined our production
mix to originate a higher proportion of saleable product, particularly to FNMA and FHLMC, as well as other conduits. Concurrently, we limited the origination of the Select-My-Payment product.

Total originations of residential loans, including our specialty consumer mortgage product, totaled $550 million for the second quarter of fiscal 2008,
down from $893 million, or 38%, from the second quarter of fiscal 2007.

Originations of conforming agency loans totaled $327 million for
the second quarter of fiscal 2008, up from $57 million for the second quarter of fiscal 2007, representing 69% and 6%, respectively, of all residential loan originations.

Originations of Select-My-Payment loans totaled $48.6 million for the second quarter of fiscal 2008, down from $121.4 million for the second quarter of fiscal 2007, representing 8.8% and 13.6%, respectively, of all
residential loan originations.

Originations of monthly payment option ARM loans totaled $1.8 million for the second quarter of fiscal
2008, down from $637.5 million for the second quarter of fiscal 2007, representing 0.3% and 71.4%, respectively, of all residential loan originations.

Total residential loans

Significant characteristics of our total residential loans at March 31,
2008 included:



| |  |  | The average outstanding balance of a one-to-four family residential loan was $292,000.
| | - |  | --------------------------------------------------------------------------------------



| |  |  | Forty-three percent of our one-to four family residential loans were underwritten based on borrower stated income and asset verification and an additional 9% were
underwritten with no verification of either borrower income or assets. While these loans generally represent more risk than full documentation products, we seek to mitigate that risk by requiring higher credit scores, lower LTVs,
lower-debt-to-income ratios and additional employment/business information.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Sixty-one percent of our one-to-four family residential portfolio was concentrated in loans secured by properties located in the state of Florida.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The weighted-average LTV using current balance of the residential loan portfolio and appraised value at the time of origination was 75.2% after adjusting for MI
coverage.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The average borrower FICO credit score at time of origination was 709.
| | - |  | ----------------------------------------------------------------------

Residential payment option loans

Significant characteristics of the payment option portfolio as of March 31, 2008 were as follows:



| |  |  | Payment option loans represented 59% of total loans (including loans held for sale and excluding unearned premiums, discounts and deferred loan costs and allowance
for loan losses).
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | $6.7 billion, or 91%, of the $7.4 billion in payment option loans had negative amortization of $354 million. This amount represented 4.8% of the total payment
option loans outstanding.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The weighted average loan-to-value ratio (LTV) using current balance of the payment option portfolio and valuation of origination was 77.1% after
adjusting for mortgage insurance (MI) coverage.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The average outstanding balance of a payment option loan in the portfolio was $327,000.
| | - |  | ---------------------------------------------------------------------------------------



| |  |  | The average borrower credit score and appraised value at the time of origination was 708.
| | - |  | -----------------------------------------------------------------------------------------

Starting in February 2008, we commenced a program for identifying and reviewing loans expected to reach 115% of their original loan balance within the
succeeding two quarters. These loans are evaluated by assessing credit reports to identify increases in late payments and incoming credit applications; reviewing current credit scores versus the score reported at origination; reviewing any change in
employment status; and obtaining Automated Valuation Models (AVM). Automated Valuation Models are obtained on the collateral and credit scores of the borrowers are evaluated for changes since the loans origination. This analysis is primarily
done to develop loss mitigation strategies.

Contractual terms of our payment option loans limit the amount that the loan balance may
increase to 115% of the original balance. At the earlier of five years or upon reaching the maximum level of negative amortization, the loan is required to be repaid on a fully amortizing basis over the remaining term. At March 31, 2008, 76% of
our borrowers were electing a minimum payment option that generates negative amortization. As of March 31, 2008, payment option loans which had been recast are set forth below:



19



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|                                |  |          |  |   |        |                 |  |   |     |        |   |        |  |   |  |     |  |   |       
|------------------------------- |  | -------- |  | - | ------ | --------------- |  | - | --- | ------ | - | ------ |  | - |  | --- |  | - | ------
|Period                          |  | 115% Cap |  |   |        | Five-Year Limit |  |   |     | Totals
|($ in thousands)                |  | #        |  | $ |        |                 |  | # |     | $      |   |        |  | # |  | $  
|Prior to October 1, 2007        |  |         |  |   |       |                 |  |   | 86  |        | $ | 24,118 |  |   |  | 86  |  | $ | 24,118
|Quarter ended December 31, 2007 |  | 4        |  | $ | 1,699  |                 |  |   | 15  |        |   | 4,003  |  |   |  | 19  |  |   | 5,702 
|Quarter ended March 31, 2008    |  | 41       |  |   | 13,580 |                 |  |   | 18  |        |   | 4,010  |  |   |  | 59  |  |   | 17,590
|                                |  |          |  |   |        |                 |  |   |     |        |   |        |  |   |  |     |  |   |       
|Totals                          |  | 45       |  | $ | 15,279 |                 |  |   | 119 |        | $ | 32,131 |  |   |  | 164 |  | $ | 47,410
|                                |  |          |  |   |        |                 |  |   |     |        |   |        |  |   |  |     |  |   |       

Based upon the original appraisal none of the loans listed above had LTVs of 100% or more when
reamortized at 115% of the original loan balance. Loans that reach 115% of the original balance have a contractual reset as set forth in the original documents. Such loans are not considered refinancings and are not re-evaluated under current
underwriting standards. We believe that the limited number of loans that have reached the 115% level has not been sufficient to establish any clear trends. As of March 31, 2008, 40 of the 45 loans recast as a result of reaching 115% of the
original balance, representing 88% of the total amount outstanding, were current.

Loans that have recast as a result of reaching five
years also do not exhibit any significant trends. Of the 119 total loans, 112, representing 84% of the total amount outstanding, were current as of March 31, 2008.

As of March 31, 2008, BankUnited estimates that payment option loans will reset based on reaching 115% of the original loan balance or reaching its fifth year anniversary as set forth below (amounts in millions):



|                                       |  |        |        
|-------------------------------------- |  | ------ | -------
|Period                                 |  | Amount
|Three months ending June 30, 2008      |  | $      | 31.0   
|Three months ending September 30, 2008 |  | $      | 59.8   
|Year ending September 30, 2009         |  | $      | 908.0  
|Year ending September 30, 2010         |  | $      | 2,460.0

These estimates assume that monthly payments continue at the average payment amount over the life
of the loan since inception, and that the MTA index continues to decline.

The minimum time period over which a payment option loan can
reach the 115% cap can vary significantly based on customer behavior and the level of interest rates. The Company estimates that a payment option loan (i) originated in January 2006, (ii) reflecting minimum payments by the borrower each
month, and (iii) carrying interest rates equal to actual historical fully-indexed rates through March 31, 2008, and projected rates based on managements forecast of the MTA rates subsequent to March 31, 2008, would not reach the
115% cap prior to the end of five years from the date of inception and thus would be recast in January 2011. Keeping all other assumptions constant, except that the interest rate is assumed to increase to the highest historical rate during the
period from January 2006 to March 31, 2008, and then remain at that level, the same loan is estimated to reach the 115% cap approximately in 33 months after inception.

The Companys policy is to obtain mortgage insurance on all loans originated with an LTV greater than 80% at origination. The mortgage insurance
coverage is loan-specific. BankUnited does not have mortgage insurance on posted loan basis. Mortgage insurance is obtained for a fixed percentage of each insured loan, including any increase in the loan due to negative amortization. This practice,
in combination with a maximum balance of 115% of the original loan amount, is intended to reduce the likelihood of a loan reaching an LTV greater than 100% using the original appraisal. Loans that are fully recast when they reach 115% of the
original loan balance retain mortgage insurance coverage, if they were originated with mortgage insurance. For each loan with mortgage insurance, the mortgage insurance policy covers a predetermined percentage (generally ranging from 12% to 35%) of
the outstanding balance. The percentage of the outstanding balance of the recast loan that is covered is unchanged from the percentage covered at origination, although the dollar amount of the loan not covered by mortgage insurance may increase
proportionately as a result of the higher loan balance. Since April 2006 the increase in the loan balance that may not be covered by mortgage insurance due to negative amortization is considered in the original underwriting which anticipates that
borrowers will elect minimum payments and that negative amortization will occur.

The various risks of our loan portfolio are mitigated by
our underwriting requirements, which include credit qualifications and LTV ratios directly correlated to potential risk. In almost all circumstances, loans originated with LTV ratios greater than 80% require the purchase of mortgage insurance. The
following table sets forth the credit scores of our one-to-four family residential portfolio at March 31, 2008:



20



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|               |  |        |  
|-------------- |  | ------ | -
|CREDIT SCORES  |  | 2008   |  
|Below 620      |  | 0.57   | %
|620 to 639     |  | 2.60   |  
|640 to 659     |  | 8.25   |  
|660 to 709     |  | 43.31  |  
|710 to 759     |  | 30.54  |  
|760 or Greater |  | 14.73  |  
|               |  |        |  
|Total          |  | 100.00 | %
|               |  |        |  

The following table provides details of our one-to-four family residential loans by documentation
type at March 31, 2008 ($ in thousands):



|                                                                                    |  |                                        |           |   |                                                   |   |           |                                           |  |   |                 |   |  |       |         |   |  |   |           |  
|----------------------------------------------------------------------------------- |  | -------------------------------------- | --------- | - | ------------------------------------------------- | - | --------- | ----------------------------------------- |  | - | --------------- | - |  | ----- | ------- | - |  | - | --------- | -
|Attribute                                                                           |  | FULLDOCUMENTATIONEMPLOYMENTVERIFIED(2) |           |   | STATEDINCOME /VERIFIEDASSETSEMPLOYMENTVERIFIED(2) |   |           | REDUCEDDOCUMENTATIONEMPLOYMENTVERIFIED(2) |  |   | NODOCUMENTATION |   |  | Total |        
|Total Portfolio(1)                                                                  |  | $                                      | 1,696,877 |   |                                                   | $ | 4,222,552 |                                           |  | $ | 2,966,108       |   |  | $     | 884,828 |   |  | $ | 9,770,365 |  
|Percentage of Total Portfolio                                                       |  |                                        | 17.4      | % |                                                   |   | 43.2      | %                                         |  |   | 30.4            | % |  |       | 9.1     | % |  |   | 100       | %
|Weighted Average Credit Score of the Document Type                                  |  |                                        | 703       |   |                                                   |   | 709       |                                           |  |   | 707             |   |  |       | 719     |   |  |   | 709       |  
|Percentage of the Document Type with Mortgage Insurance (MI)                        |  |                                        | 9.6       | % |                                                   |   | 19.6      | %                                         |  |   | 26.2            | % |  |       | 9.5     | % |  |   | 19        | %
|Weighted Average LTV Document Type (Before MI Adjustment and using current balance) |  |                                        | 77.1      | % |                                                   |   | 80.1      | %                                         |  |   | 80.5            | % |  |       | 77.2    | % |  |   | 79.4      | %
|Weighted Average LTV Document Type (After MI Adjustment and using current balance)  |  |                                        | 74.9      | % |                                                   |   | 75.6      | %                                         |  |   | 74.7            | % |  |       | 75.2    | % |  |   | 75.2      | %



One-to-four family residential loans

|(1) | Total one-to-four family residential loans balance excludes unearned premiums and discounts, deferred loan costs, specialty consumer mortgages, loans held for sale and the
allocation of loans in process.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | For these loans, employment is verified and an assessment is made of the reasonableness of the level of income noted for the type of position verified.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------



21



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The following table provides details of our one-to-four family residential payment option portfolio by
documentation type at March 31, 2008 ($ in thousands);



|                                                                                       |  |                                        |         |   |                                                   |   |           |                                           |  |   |                 |   |  |       |           |   |  |   |           |  
|-------------------------------------------------------------------------------------- |  | -------------------------------------- | ------- | - | ------------------------------------------------- | - | --------- | ----------------------------------------- |  | - | --------------- | - |  | ----- | --------- | - |  | - | --------- | -
|Attribute                                                                              |  | FULLDOCUMENTATIONEMPLOYMENTVERIFIED(2) |         |   | STATEDINCOME /VERIFIEDASSETSEMPLOYMENTVERIFIED(2) |   |           | REDUCEDDOCUMENTATIONEMPLOYMENTVERIFIED(2) |  |   | NODOCUMENTATION |   |  | Total |          
|Total Portfolio(1)                                                                     |  | $                                      | 912,637 |   |                                                   | $ | 3,348,119 |                                           |  | $ | 2,966,108       |   |  | $     | 2,293,330 |   |  | $ | 7,334,804 |  
|Percentage of Total Portfolio                                                          |  |                                        | 12.4    | % |                                                   |   | 45.6      | %                                         |  |   | 30.4            | % |  |       | 31.3      | % |  |   | 100       | %
|Weighted Average Credit Score of the Document Type(3)                                  |  |                                        | 699     |   |                                                   |   | 708       |                                           |  |   | 707             |   |  |       | 706       |   |  |   | 708       |  
|Percentage of the Document Type with Mortgage Insurance                                |  |                                        | 14.4    | % |                                                   |   | 22.6      | %                                         |  |   | 26.2            | % |  |       | 31.6      | % |  |   | 23.1      | %
|Weighted Average LTV Document Type (Before MI Adjustment and using current balance)(3) |  |                                        | 81.7    | % |                                                   |   | 82.6      | %                                         |  |   | 80.5            | % |  |       | 83.5      | % |  |   | 82.2      | %
|Weighted Average LTV Document Type (After MI Adjustment and using current balance)(3)  |  |                                        | 78.4    | % |                                                   |   | 77.4      | %                                         |  |   | 74.7            | % |  |       | 76.5      | % |  |   | 77.1      | %



Payment option portfolio

|(1) | Total payment option portfolio balance excludes unearned premiums and discounts, deferred loan costs, specialty consumer mortgages, loans held for sale and the allocation of
loans in process.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | For these loans, employment is verified and an assessment is made of the reasonableness of the level of income noted for the type of position verified.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Credit score and LTV are at loan origination.
|--- | ---------------------------------------------

The
following table provides details of our one-to-four family residential loans (excluding unearned premiums and discounts, deferred loan costs, specialty consumer mortgages, loans held for sale and the allocation of loans in process) by calendar year
originated, as of March 31, 2008:



|              |  |                     |  
|------------- |  | ------------------- | -
|Vintage       |  | Percent ofPortfolio |  
|2008          |  | 1.3                 | %
|2007          |  | 21.3                | %
|2006          |  | 36.1                | %
|2005          |  | 22.1                | %
|2004          |  | 10.6                | %
|2003 or prior |  | 8.6                 | %



22



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The following table provides details of one-to-four family residential loans by state (excluding unearned
premiums and discounts, and deferred loan costs) including both portfolio loans and loans held for sale:



|                                              |  |                       |        |                 |                         |   |        |   |                 |  |        |  
|--------------------------------------------- |  | --------------------- | ------ | --------------- | ----------------------- | - | ------ | - | --------------- |  | ------ | -
|One-to-four family residential loans by state |  | As of March 31,2008   |        |                 | As of September 30,2007 |  
|                                              |  | Amount                |        | Percent ofTotal |                         |   | Amount |   | Percent ofTotal | 
|                                              |  | (Dollars in millions) |       
|Florida (1)                                   |  | $                     | 5,908  |                 | 55.09                   | % |        | $ | 6,033           |  | 55.50  | %
|California                                    |  |                       | 881    |                 | 8.22                    |   |        |   | 872             |  | 8.02   |  
|Arizona                                       |  |                       | 668    |                 | 6.23                    |   |        |   | 668             |  | 6.15   |  
|Illinois                                      |  |                       | 602    |                 | 5.61                    |   |        |   | 626             |  | 5.76   |  
|New Jersey                                    |  |                       | 549    |                 | 5.12                    |   |        |   | 553             |  | 5.09   |  
|Virginia                                      |  |                       | 466    |                 | 4.35                    |   |        |   | 475             |  | 4.37   |  
|Other (states with less than 4%)              |  |                       | 1,650  |                 | 15.38                   |   |        |   | 1,642           |  | 15.11  |  
|                                              |  |                       |        |                 |                         |   |        |   |                 |  |        |  
|Total one-to-four family residential loans    |  | $                     | 10,724 |                 | 100.00                  | % |        | $ | 10,869          |  | 100.00 | %
|                                              |  |                       |        |                 |                         |   |        |   |                 |  |        |  



|(1) | As of March 31, 2008, 55% of the collateral for Florida residential loans was located in the three southeastern counties of Miami-Dade, Broward and Palm Beach.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

Total loans

The following table provides details of total loans by state (excluding unearned premiums and discounts, and deferred loan costs by state) including both portfolio loans and loans held for sale. Non-residential loans are originated from the
Florida lending offices.



|                                   |  |                       |        |                 |                         |   |        |   |                 |  |        |  
|---------------------------------- |  | --------------------- | ------ | --------------- | ----------------------- | - | ------ | - | --------------- |  | ------ | -
|Total loans by state               |  | As of March 31,2008   |        |                 | As of September 30,2007 |  
|                                   |  | Amount                |        | Percent ofTotal |                         |   | Amount |   | Percent ofTotal | 
|                                   |  | (Dollars in millions) |       
|Florida                            |  | $                     | 7,660  |                 | 61.33                   | % |        | $ | 7,710           |  | 61.39  | %
|California                         |  |                       | 881    |                 | 7.06                    |   |        |   | 872             |  | 6.94   |  
|Arizona                            |  |                       | 668    |                 | 5.35                    |   |        |   | 668             |  | 5.32   |  
|Illinois                           |  |                       | 602    |                 | 4.82                    |   |        |   | 626             |  | 4.98   |  
|New Jersey                         |  |                       | 549    |                 | 4.40                    |   |        |   | 553             |  | 4.40   |  
|Virginia                           |  |                       | 466    |                 | 3.73                    |   |        |   | 475             |  | 3.78   |  
|Other (states with less than 3.5%) |  |                       | 1,663  |                 | 13.31                   |   |        |   | 1,656           |  | 13.19  |  
|                                   |  |                       |        |                 |                         |   |        |   |                 |  |        |  
|Total loans                        |  | $                     | 12,489 |                 | 100.00                  | % |        | $ | 12,560          |  | 100.00 | %
|                                   |  |                       |        |                 |                         |   |        |   |                 |  |        |  

As of March 31, 2008, approximately $12.1 billion, or 98.1%, of loans excluding unearned
premiums, discounts, deferred loan costs and allowance for loan losses, including loans held for sale, were secured by real property. Loans secured by properties in Florida were $7.4 billion, or 59.6% of all secured loans as of March 31, 2008,
compared to $7.7 billion, or 61.4%, as of September 30, 2007. Due to this concentration, regional economic circumstances in Florida could affect the level of our non-performing loans. As of March 31, 2008, no other state represented more
than 8% of our loan portfolio secured by real estate.

As of March 31, 2008 and September 30, 2007, approximately $1.4 billion,
or 11%, and $1.5 billion, or 12%, respectively, of our loan portfolio consisted of first mortgage loans to non-resident aliens, all of which were secured by domestic property. The majority of these loans were secured by single-family residences
located in Florida. Loans to non-resident aliens may involve a greater degree of risk than single-family residential mortgage loans to resident borrowers. The ability to obtain access to the borrower is more limited for non-resident aliens, as is
the ability to attach or verify assets located in foreign countries. We have attempted to minimize these risks through our underwriting standards for such loans, including generally requiring lower LTV ratios and qualification based on verifiable
assets located in the United States.



23



---

Liabilities

Deposits

Deposits decreased from $7.09 billion at September 30, 2007 to
$6.94 billion at March 31, 2008 and funded 48% of BankUniteds total assets at March 31, 2008. The net decrease in deposits occurred in interest bearing deposits that decreased by $148 million. Core deposits, defined as checking,
money market, and saving deposits, as well as time deposits of $100 thousand and less, decreased from $5.09 billion at September 30, 2007 to $5.05 billion as of March 31, 2008, and represented 73% of total deposits.

FHLB advances

FHLB advances decreased by $0.4 billion from $6.2 billion at September 30, 2007 to $5.9 billion at March 31, 2008 and funded 41% of our total assets at March 31, 2008. The maturity of advances
is managed by BankUnited as part of our asset and liability management process.

Securities sold under agreements to
repurchase.

Securities sold under agreements to repurchase (repos) decreased from $143 million at
September 30, 2007 to $123 million at March 31, 2008.

ASSET QUALITY

Commencing in fiscal 2007, as housing values continued to significantly decrease, BankUnited has continuously tightened its credit guidelines on programs
and products offered by the Company. BankUnited has raised minimum credit scores and lowered LTVs for all collateral occupancy types. The Company raised payment rates on all option ARM loans. Also, during the second quarter of 2008, BankUnited
ceased originating stated income, reduced documentation or no documentation loans. Additionally, non-owner occupied properties are no longer eligible collateral for new loans.

Non-Performing Assets

Non-performing loans consist of (i) non-accrual loans;
(ii) accruing loans more than 90 days contractually past due as to interest or principal; and (iii) loans that have been restructured because of deterioration in the financial condition of the borrower. In accordance with Office of Thrift
Supervision (OTS) guidelines we place residential loans on non-accrual status when four payments have been missed . When a loan is placed on non-accrual status, we reverse all accrued and uncollected interest since the last payment
received from the borrower. This policy is applicable for all residential mortgage loans, including payment option ARM loans. For payment option ARM loans, reversal of interest represents the amount of interest accrued since the last payment. In
accordance with the loan agreements, interest not paid due to a borrowers election to pay an amount less than a fully amortizing amount becomes part of the principal balance and is subsequently not subject to reversal. This election can only
be made when the loan is current.

At March 31, 2008, non-performing assets totaled $682.0 million, as compared to $208.6 million at
September 30, 2007. Expressed as a percentage of total assets, non-performing assets were 4.75% as of March 31, 2008 as compared to 1.39% as of September 30, 2007. Non-performing payment option loans increased from $149.7 million at
September 30, 2007 to $512.3 million at March 31, 2008, representing 85% of the total increase in non-performing loans. The increase in the level of non-performing assets is impacted by the downturn in economic conditions and housing
markets, particularly in certain geographic areas that have suffered price decreases. The overall level of non-performing assets is expected to continue increasing during fiscal 2008. See Allowance for Loan Losses for additional discussion of
non-performing assets and the Companys allowance policy.

As part of our analysis of the residential loan portfolio, management
reviews and analyzes the rate of occurrence of the following eight characteristics in the non-performing loan portfolio in relation to these occurrences in the performing portfolio as of the end of each quarter.

These characteristics are:



|                              |  |                                           
|----------------------------- |  | ------------------------------------------
|Product                       |  | Collateral Type                           
|Vintage (year of origination) |  | Collateral Usage (e.g., primary residence)
|Geography                     |  | Documentation Type                        
|Credit Score                  |  | Loan to value (LTV) ratio                 

Significant differences between non-performing loans and performing loans as of March 31,
2008 occur in three of these characteristics:



| |  |  | The occurrence of payment option loans in the non-performing loan category at March 31, 2008 was 89% while the occurrence of payment option loans in the total
residential loan portfolio was 69%.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



24



---

| |  |  | Loans with LTVs over 80% at origination were present in the non-performing portfolio at the rate of 39% while comprising 19% of the residential loan portfolio. The
Company requires mortgage insurance for all loans originated with an LTV over 80%, thereby mitigating a portion of the loss exposure on these loans.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Loans originated in 2006 represented 58% of the loans in the non-performing category and comprised 36% of the residential portfolio.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------

These non-performing loans, particularly those originated in 2006, were originated during a period of relatively high housing values. As the nation
continues to experience the current economic downturn, the housing industry is expected to continue experiencing downward pressure on home prices and possible increases in unemployment, causing financial stress on borrowers. While it is not possible
to predict the levels and timing of future increases in non-performing loans with certainty, this asset deterioration is expected to continue through fiscal 2008.

Our analysis suggests that the increased level of non-performing loans has not occurred as a result of a particular event but has stemmed from declines in housing prices coupled with the financial over-extension of
borrowers.

The following table sets forth information concerning our non-performing assets at the dates indicated:



|                                                                           |  |                        |         |   |                   |   |         |  
|-------------------------------------------------------------------------- |  | ---------------------- | ------- | - | ----------------- | - | ------- | -
|                                                                           |  | March 31,2008          |         |   | September 30,2007 |  
|                                                                           |  | (Dollars in thousands) |        
|Non-accrual loans:                                                         |  |                        |         |   |                   |   |         |  
|One-to-four family residential:                                            |  |                        |         |   |                   |   |         |  
|Payment option                                                             |  | $                      | 512,313 |   |                   | $ | 149,749 |  
|Non-payment option                                                         |  |                        | 62,049  |   |                   |   | 22,894  |  
|                                                                           |  |                        |         |   |                   |   |         |  
|Total one-to-four family                                                   |  |                        | 574,362 |   |                   |   | 172,643 |  
|Home equity loans and lines of credit                                      |  |                        | 6,011   |   |                   |   | 2,251   |  
|Multi-family                                                               |  |                        |        |   |                   |   |        |  
|Commercial real estate                                                     |  |                        | 27,637  |   |                   |   | 5,593   |  
|Construction                                                               |  |                        |        |   |                   |   |        |  
|Land                                                                       |  |                        |        |   |                   |   |        |  
|Commercial                                                                 |  |                        | 236     |   |                   |   | 232     |  
|Consumer                                                                   |  |                        | 9       |   |                   |   | 91      |  
|                                                                           |  |                        |         |   |                   |   |         |  
|Total non-accrual loans                                                    |  |                        | 608,255 |   |                   |   | 180,810 |  
|Accruing loans more than 90 days past due as to interest or principal      |  |                        | 271     |   |                   |   | 23      |  
|                                                                           |  |                        |         |   |                   |   |         |  
|Total non-performing loans                                                 |  |                        | 608,526 |   |                   |   | 180,833 |  
|Repossessed assets other than REO                                          |  |                        | 8       |   |                   |   | 51      |  
|Real estate owned(1)                                                       |  |                        | 73,428  |   |                   |   | 27,681  |  
|                                                                           |  |                        |         |   |                   |   |         |  
|Total non-performing assets                                                |  | $                      | 681,962 |   |                   | $ | 208,565 |  
|                                                                           |  |                        |         |   |                   |   |         |  
|Allowance for loan losses                                                  |  | $                      | 202,315 |   |                   | $ | 58,623  |  
|                                                                           |  |                        |         |   |                   |   |         |  
|Non-performing assets as a percentage of total assets                      |  |                        | 4.75    | % |                   |   | 1.39    | %
|Non-performing loans as a percentage of total loans held in portfolio      |  |                        | 4.86    | % |                   |   | 1.43    | %
|Allowance for loan losses as a percentage of total loans held in portfolio |  |                        | 1.61    | % |                   |   | 0.46    | %
|Allowance for loan losses as a percentage of non-performing loans          |  |                        | 33.25   | % |                   |   | 32.42   | %
|Net charge-offs as a percentage of average total loans (annualized)        |  |                        | 0.42    | % |                   |   | 0.08    | %



|(1) | We are not aware of any significant liability or contingent liability related to REO or loans that may be foreclosed.
|--- | ---------------------------------------------------------------------------------------------------------------------



25



---

The following table presents the changes in our non-performing loans during the first six months of fiscal 2008:



|                                                                         |                        |             |         |                |  |       |  
|------------------------------------------------------------------------ | ---------------------- | ----------- | ------- | -------------- |  | ----- | -
|                                                                         |                        | Total Loans |        
|                                                                         | DollarAmount           |             |         | Number ofLoans | 
|                                                                         | (Dollars in thousands) |            
|Non-performing loans at September 30, 2007                               |                        | $           | 180,833 |                |  | 588   |  
|Loans placed on non-accrual status                                       |                        |             | 568,676 |                |  | 1,755 |  
|Loans past due 90 days and still accruing                                |                        |             | 571     |                |  | 6     |  
|Loans past due 90 days and still accruing and transferred to non-accrual |                        |             | (201    | )              |  | (4    | )
|Loans past due 90 days.... transferred to accrual                        |                        |             | (87     | )              |  | (1    | )
|Foreclosed loans transferred to REO                                      |                        |             | (79,137 | )              |  | (229  | )
|Loan amounts charged off                                                 |                        |             | (5,794  | )              |  | (68   | )
|Loans returned to accrual status or paid in full                         |                        |             | (56,315 | )              |  | (213  | )
|                                                                         |                        |             |         |                |  |       |  
|Non-performing loans at March 31, 2008                                   |                        | $           | 608,546 |                |  | 1,834 |  
|                                                                         |                        |             |         |                |  |       |  

The following tables present one-to-four family residential non-performing loans by documentation
type as of March 31, 2008 and September 30, 2007:

(Dollars in Thousands)



|                                                                                  |  |                                         |           |   |                                                   |   |           |                                            |  |   |                 |   |  |       |         |   |  |   |           |  
|--------------------------------------------------------------------------------- |  | --------------------------------------- | --------- | - | ------------------------------------------------- | - | --------- | ------------------------------------------ |  | - | --------------- | - |  | ----- | ------- | - |  | - | --------- | -
|                                                                                  |  | FULLDOCUMENTATIONEMPLOYMENTVERIFIED (2) |           |   | STATEDINCOME/VERIFIEDASSETSEMPLOYMENTVERIFIED (2) |   |           | REDUCEDDOCUMENTATIONEMPLOYMENTVERIFIED
(2) |  |   | NODOCUMENTATION |   |  | Total |        
|                                                                                  |  |                                         |           |  
|ONE-TO-FOUR FAMILYRESIDENTIAL LOANS                                               |  |                                         |           |   |                                                   |   |           |                                            |  |   |                 |   |  |       |         |   | 
|                                                                                  |  |                                         |           |   |                                                  
|As of March 31, 2008                                                              |  |                                         |           |   |                                                   |   |           |                                            |  |   |                 |   |  |       |         |   |  |   |           |  
|Total Portfolio(1)                                                                |  | $                                       | 1,696,877 |   |                                                   | $ | 4,222,552 |                                            |  | $ | 2,966,108       |   |  | $     | 884,828 |   |  | $ | 9,770,365 |  
|Percentage of Total Portfolio                                                     |  |                                         | 17.4      | % |                                                   |   | 43.2      | %                                          |  |   | 30.4            | % |  |       | 9.0     | % |  |   | 100       | %
|Non-Performing Loans                                                              |  | $                                       | 54,581    |   |                                                   | $ | 255,056   |                                            |  | $ | 207,812         |   |  | $     | 49,628  |   |  | $ | 567,077   |  
|Percentage of Non-Performing Loans                                                |  |                                         | 9.6       | % |                                                   |   | 45        | %                                          |  |   | 36.6            | % |  |       | 8.8     | % |  |   | 100       | %
|Non-Performing Loans as a Percentage of Total Portfolio                           |  |                                         | 0.56      | % |                                                   |   | 2.61      | %                                          |  |   | 2.13            | % |  |       | 0.51    | % |  |   | 5.81      | %
|                                                                                  |  |                                         |           |   |                                                  
|Total Payment Option Loans                                                        |  | $                                       | 912,637   |   |                                                   | $ | 3,348,119 |                                            |  | $ | 2,293,330       |   |  | $     | 780,719 |   |  | $ | 7,334,805 |  
|Percentage of Total Portfolio                                                     |  |                                         | 9.3       | % |                                                   |   | 34.3      | %                                          |  |   | 23.5            | % |  |       | 8.0     | % |  |   | 75.1      | %
|Percentage of Total Payment Option Loans                                          |  |                                         | 12.4      | % |                                                   |   | 45.6      | %                                          |  |   | 31.3            | % |  |       | 10.7    | % |  |   | 100       | %
|Non-Performing Payment Option Loans                                               |  | $                                       | 45,165    |   |                                                   | $ | 231,332   |                                            |  | $ | 192,255         |   |  | $     | 43,562  |   |  | $ | 512,313   |  
|Percentage of Non-Performing Payment Option Loans                                 |  |                                         | 8.8       | % |                                                   |   | 45.2      | %                                          |  |   | 37.5            | % |  |       | 8.5     | % |  |   | 100       | %
|Non-Performing Payment Option Loans as a Percentage of Total Portfolio            |  |                                         | 0.46      | % |                                                   |   | 2.37      | %                                          |  |   | 1.97            | % |  |       | 0.45    | % |  |   | 5.24      | %
|Non-Performing Payment Option Loans as a Percentage of Total Payment Option Loans |  |                                         | 0.62      | % |                                                   |   | 3.15      | %                                          |  |   | 2.62            | % |  |       | 0.59    | % |  |   | 6.98      | %



One-to-four family residential loans

|(1) | Total one-to-four family residential portfolio balance excludes unearned discounts, premiums and deferred loan costs, and the allocation of loans in process. Also excludes specialty
consumer mortgages which totaled $749 million at March 31, 2008.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | For these loans employment is verified and a reasonableness test is applied to the level of income noted to the type of position verified.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------



26



---

The following table presents non-performing loans by documentation type as of September 30, 2007:

(Dollars in Thousands)



|                                                                                  |  |                                         |           |   |                                                   |   |           |                                            |  |   |                 |   |  |       |         |   |  |   |            |  
|--------------------------------------------------------------------------------- |  | --------------------------------------- | --------- | - | ------------------------------------------------- | - | --------- | ------------------------------------------ |  | - | --------------- | - |  | ----- | ------- | - |  | - | ---------- | -
|                                                                                  |  | FULLDOCUMENTATIONEMPLOYMENTVERIFIED (2) |           |   | STATEDINCOME/VERIFIEDASSETSEMPLOYMENTVERIFIED (2) |   |           | REDUCEDDOCUMENTATIONEMPLOYMENTVERIFIED
(2) |  |   | NODOCUMENTATION |   |  | Total |        
|ONE-TO-FOUR FAMILYRESIDENTIAL LOANS                                               |  |                                         |           |   |                                                   |   |           |                                            |  |   |                 |   |  |       |         |   | 
|                                                                                  |  |                                         |           |   |                                                  
|As of September 30, 2007                                                          |  |                                         |           |   |                                                   |   |           |                                            |  |   |                 |   |  |       |         |   |  |   |            |  
|Total Portfolio(1)                                                                |  | $                                       | 1,836,250 |   |                                                   | $ | 4,233,866 |                                            |  | $ | 3,118,721       |   |  | $     | 934,023 |   |  | $ | 10,122,860 |  
|Percentage of Total Portfolio                                                     |  |                                         | 18        | % |                                                   |   | 42        | %                                          |  |   | 31              | % |  |       | 9       | % |  |   | 100        | %
|Non-Performing Loans                                                              |  | $                                       | 20,080    |   |                                                   | $ | 77,702    |                                            |  | $ | 55,399          |   |  | $     | 18,400  |   |  | $ | 171,581    |  
|Percentage of Non-Performing Loans                                                |  |                                         | 12        | % |                                                   |   | 45        | %                                          |  |   | 32              | % |  |       | 11      | % |  |   | 100        | %
|Non-Performing Loans as a Percentage of Total Portfolio                           |  |                                         | 0.20      | % |                                                   |   | 0.77      | %                                          |  |   | 0.55            | % |  |       | 0.18    | % |  |   | 1.69       | %
|                                                                                  |  |                                         |           |   |                                                  
|Total Payment Option Loans                                                        |  | $                                       | 972,616   |   |                                                   | $ | 3,363,325 |                                            |  | $ | 2,416,687       |   |  | $     | 842,323 |   |  | $ | 7,594,951  |  
|Percentage of Total Portfolio                                                     |  |                                         | 10        | % |                                                   |   | 33        | %                                          |  |   | 24              | % |  |       | 8       | % |  |   | 75         | %
|Percentage of Total Payment Option Loans                                          |  |                                         | 13        | % |                                                   |   | 44        | %                                          |  |   | 32              | % |  |       | 11      | % |  |   | 100        | %
|Non-Performing Payment Option Loans                                               |  | $                                       | 16,927    |   |                                                   | $ | 67,150    |                                            |  | $ | 52,541          |   |  | $     | 13,130  |   |  | $ | 149,748    |  
|Percentage of Non-Performing Payment Option Loans                                 |  |                                         | 11        | % |                                                   |   | 45        | %                                          |  |   | 35              | % |  |       | 9       | % |  |   | 100        | %
|Non-Performing Payment Option Loans as a Percentage of Total Portfolio            |  |                                         | 0.17      | % |                                                   |   | 0.66      | %                                          |  |   | 0.52            | % |  |       | 0.13    | % |  |   | 1.48       | %
|Non-Performing Payment Option Loans as a Percentage of Total Payment Option Loans |  |                                         | 0.22      | % |                                                   |   | 0.88      | %                                          |  |   | 0.69            | % |  |       | 0.17    | % |  |   | 1.96       | %



One-to-four family residential loans

|(1) | Total one-to-four family residential portfolio balance excludes unearned discounts, premiums and deferred loan costs, and the allocation of loans in process. Also excludes specialty
consumer mortgages which totaled $698 million at September 30, 2007.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | For these loans employment is verified and a reasonableness test is applied to the level of income noted to the type of position verified.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------



27



---

At March 31, 2008 and September 30, 2007, of our non-performing residential one-to four family
assets, 53% were located in Florida. The following table summarizes by major geographic area our one-to-four family residential non-performing assets at the dates indicated:



|                                     |                     |                    |         |     |       |        |                           |                           |                   |                   |   |         |  |     |  
|------------------------------------ | ------------------- | ------------------ | ------- | --- | ----- | ------ | ------------------------- | ------------------------- | ----------------- | ----------------- | - | ------- |  | --- | -
|(dollars in thousands)               |                     | March 31, 2008     |        
|                                     | Non-PerformingLoans |                    | REO     |     | Other |        | TotalNon-PerformingAssets |                           | % ofRelatedAssets |                  
|One-to-four family residential       |                     |                    |         |     |       |        |                           |                           |                   |                   |   |         |  |     |  
|Florida                              |                     | $                  | 321,520 |     | $     | 20,628 |                           | $                         | 8                 |                   | $ | 342,156 |  | 53  | %
|California                           |                     |                    | 62,222  |     |       | 10,794 |                           |                           |                   |                   |   | 73,016  |  | 11  | %
|Arizona                              |                     |                    | 43,468  |     |       | 10,553 |                           |                           |                   |                   |   | 54,021  |  | 8   | %
|Illinois                             |                     |                    | 27,342  |     |       | 1,862  |                           |                           |                   |                   |   | 29,204  |  | 5   | %
|Virginia                             |                     |                    | 24,398  |     |       | 11,058 |                           |                           |                   |                   |   | 35,456  |  | 5   | %
|New Jersey                           |                     |                    | 26,510  |     |       |       |                           |                           |                   |                   |   | 26,510  |  | 4   | %
|All other states                     |                     |                    | 68,902  |     |       | 18,533 |                           |                           |                   |                   |   | 87,435  |  | 14  | %
|                                     |                     |                    |         |     |       |        |                           |                           |                   |                   |   |         |  |     |  
|Total One-to-four family residential |                     | $                  | 574,362 |     | $     | 73,428 |                           | $                         | 8                 |                   | $ | 647,798 |  | 100 | %
|                                     |                     |                    |         |     |       |        |                           |                           |                   |                   |   |         |  |     |  
|                                     |                    
|                                     |                     | September 30, 2007 |        
|(dollars in thousands)               |                     | Non-PeformingLoans |         | REO |       | Other  |                           | TotalNon-PerformingAssets |                   | % ofRelatedAssets |  
|One-to-four family residential       |                     |                    |         |     |       |        |                           |                           |                   |                   |   |         |  |     |  
|Florida                              |                     | $                  | 96,651  |     | $     | 10,050 |                           |                           | 50                |                   | $ | 106,751 |  | 53  | %
|California                           |                     |                    | 13,645  |     |       | 2,582  |                           |                           |                   |                   |   | 16,227  |  | 8   | %
|Arizona                              |                     |                    | 10,535  |     |       | 2,850  |                           |                           |                   |                   |   | 13,385  |  | 7   | %
|Illinois                             |                     |                    | 9,202   |     |       | 2,573  |                           |                           |                   |                   |   | 11,775  |  | 6   | %
|Virginia                             |                     |                    | 9,647   |     |       | 2,574  |                           |                           |                   |                   |   | 12,221  |  | 6   | %
|New Jersey                           |                     |                    | 6,540   |     |       | 558    |                           |                           |                   |                   |   | 7,098   |  | 4   | %
|All other states                     |                     |                    | 26,423  |     |       | 6,495  |                           |                           |                   |                   |   | 32,918  |  | 16  | %
|                                     |                     |                    |         |     |       |        |                           |                           |                   |                   |   |         |  |     |  
|Total One-to-four family residential |                     | $                  | 172,643 |     | $     | 27,682 |                           | $                         | 50                |                   | $ | 200,375 |  | 100 | %
|                                     |                     |                    |         |     |       |        |                           |                           |                   |                   |   |         |  |     |  

Loss Mitigation

In addition to tightening is credit and underwriting standards as discussed above, the company has taken measures to minimize the occurrence of loss in its residential one-to-four family portfolio. Any action considered is evaluated on a
loan-by-loan basis and only employed where the evaluation suggests the mitigation is appropriate. The Company has employed several loss mitigation strategies as discussed below;

Modifications

Modifications are utilized to migrate a borrower from one loan product to another. Currently, most
modifications involve a borrower exiting a payment option ARM loan and entering into one of the Companys existing loan products. Modifications are initiated by the borrower. The Company reviews payment history and conducts a credit check, and
if the borrower meets requirements, the modification is made. Requirements include not more than one delinquency in the past 12 months, and no material derogatory credit issues. No concessions are made to the borrower during this process. The
Company has modified approximately 352 loans aggregating approximately $123 million in loan balances during the six months ended March 31, 2008.

Outreach Program

The outreach program targets borrowers who are approaching the reset point of their payment option loan. Some borrowers
remain in the fully indexed payment option ARM product at the reset time, and some inquire about other product alternatives. The borrower may initiate the contact, or may respond to various outreach attempts from the Company which are made within
six months of the projected reset point. Credit reviews are conducted to determine whether a borrower appears capable of servicing one of the existing loan products that does not have a negative amortization feature. If so, the loan may be modified
into another loan product. No concessions are granted for these modified loans. Approximately 24 loans with an aggregate balance of $8.2 million have been modified in connection with the outreach program as March 31, 2008.

Letter Agreements

Borrowers who experience short-term income
interruptions or shortages may be considered for the Companys letter agreement program. In this program, the Company may advance 1-4 monthly payments and enter into a letter agreement with the borrower for the repayment of the amounts advanced
over 18-36 months, or at the end of the loan term. Advances under letter agreements are applied against the borrowers scheduled monthly payments due for the 1-4 months covered by the letter agreement. No modifications are made to the loan agreement,
including the interest rate and repayment terms. If a borrower defaults on any payment, the loan is placed on nonaccrual. During the six months ended March 31, 2008, 81 letter agreements had been executed, providing for $454,000 in advances and
covering loans with an aggregate unpaid principal balance of $26.2 million.



28



---

Loss Mitigation

Loss
mitigation loans includes loans for which the Company has granted a concession, usually in the form of a below market interest rate, to enable the borrower to service the debt and forestall more significant collection action. As of March 31,
2008, this activity was not significant.



29



---

Real Estate Owned

The following table presents the changes in our REO during the second quarter of fiscal 2008:



|                                                                                       |                        |                  |         |                     |  |     |  
|-------------------------------------------------------------------------------------- | ---------------------- | ---------------- | ------- | ------------------- |  | --- | -
|REO roll forward                                                                       |                        | Total Properties |        
|                                                                                       | DollarAmount           |                  |         | Number ofProperties | 
|                                                                                       | (Dollars in thousands) |                 
|Properties at September 30, 2007                                                       |                        | $                | 27,681  |                     |  | 93  |  
|Transfers from loan portfolio at estimated net realizable value (after charge-off) (1) |                        |                  | 63,147  |                     |  | 233 |  
|Additional write-down to fair value                                                    |                        |                  | (143    | )                   |  |    |  
|Sales (2)                                                                              |                        |                  | (17,257 | )                   |  | (60 | )
|                                                                                       |                        |                  |         |                     |  |     |  
|Total Properties at March 31, 2008 (3)                                                 |                        | $                | 73,428  |                     |  | 266 |  
|                                                                                       |                        |                  |         |                     |  |     |  



|(1) | Includes properties that we acquired before loans were in non-accruing status, net of $15.0 million in charge-offs.
|--- | -------------------------------------------------------------------------------------------------------------------

|(2) | Includes losses on sales of $328,000.
|--- | -------------------------------------

|(3) | Of the total $73.4 million in REO at March 31, 2008, approximately $21.5 million had $4.6 million in mortgage insurance coverage.
|--- | ---------------------------------------------------------------------------------------------------------------------------------

The following table provides details of REO by state:



|                                  |                        |                     |                 |  |                         |        |  |                 |        |  |        |  
|--------------------------------- | ---------------------- | ------------------- | --------------- |  | ----------------------- | ------ |  | --------------- | ------ |  | ------ | -
|Real Estate Owned by state        |                        | As of March 31,2008 |                 |  | As of September 30,2007 |       
|                                  | Amount                 |                     | Percentof Total |  |                         | Amount |  | Percentof Total |       
|                                  | (Dollars in thousands) |                    
|Florida                           |                        | $                   | 20,665          |  | 28.14                   | %      |  | $               | 10,050 |  | 36.31  | %
|Virginia                          |                        |                     | 11,076          |  | 15.08                   |        |  |                 | 2,574  |  | 9.30   |  
|California                        |                        |                     | 10,797          |  | 14.70                   |        |  |                 | 2,582  |  | 9.33   |  
|Arizona                           |                        |                     | 10,555          |  | 14.37                   |        |  |                 | 2,850  |  | 10.29  |  
|Other (states with less than 10%) |                        |                     | 20,335          |  | 27.71                   |        |  |                 | 9,625  |  | 34.77  |  
|                                  |                        |                     |                 |  |                         |        |  |                 |        |  |        |  
|Total REO                         |                        | $                   | 73,428          |  | 100.00                  | %      |  | $               | 27,681 |  | 100.00 | %
|                                  |                        |                     |                 |  |                         |        |  |                 |        |  |        |  

Real estate acquired through foreclosure has increased from $729,000 at September 30, 2006, to
$27.7 million at September 30, 2007 and $73.4 million at March 31, 2008. The increase over this period is reflective of the increased levels of residential loan defaults noted throughout the nation, and especially in Florida. The Company expects
loan defaults to continue and possibly increase for the remainder of fiscal 2008 and into fiscal 2009, resulting in further additions to REO.

From October 1, 2007 through March 31, 2008, the Company sold approximately 60 foreclosed properties resulting in sales proceeds of $17.3 million, compared to approximately 20 properties resulting in sales proceeds of $4.5 million during
the entire 6 year period ended September 30, 2007. The Company has observed that the average time from repossession of foreclosed real estate until the sale of the property has been approximately six months for the first six months of fiscal year
2008, compared to seven months for prior years sales. The relatively low level of activity in periods prior to October 1, 2007 and the relative strength of the real estate markets during those periods have the potential to distort comparisons
to more recent activity.

Realized sales proceeds from sales of REO during the three months ended December 31, 2007 and the three and six
months ended March 31, 2008, plus mortgage insurance proceeds applicable to some of the properties sold during these periods, amounted to approximately 96%, 93% and 94% of the carrying value of the properties sold during those periods, respectively.
Net losses on the sale of REO totaled $323,000, $725,000, and $1.0 million, for the three months ended December 31, 2007, and the three and six months ended March 31, 2008, respectively. Writedowns due to declines in fair value amounted to $0,
$176,000, and $176,000 for the three months ended December 31, 2007, and the three and six months ended March 31, 2008, respectively.

While the Company has not seen any clearly discernible trends in the period of time it has taken to sell REO over the past six months, the realization percentage as noted above has declined 3 percentage points. Current market conditions
have increasingly reflected greater default rates, as well as significant housing price declines in the geographic markets where the Company has made loans. These market conditions are likely to result in lower sales prices, longer marketing periods
to sell, or both, for future real estate owned activity, which could result in greater charge-offs at the time REO is acquired, and greater losses due to impairment of value during the period REO is held until disposal. Additionally, greater
activity may also result in greater maintenance and repair costs associated with the holding and disposal of REO. As a result of higher default rates and greater foreclosure activity, the Company has increased staff dedicated to managing this
activity.

Allowance for Loan Losses

BankUniteds allowance for loan losses is established and maintained at a level management deems prudent and adequate to cover probable losses on loans based upon a periodic evaluation of current information relating to the risks
inherent in BankUniteds loan portfolio. In evaluating the allowance for loan losses, management evaluates both quantitative and qualitative elements. When evaluating loan loss allowances, management reviews performing and non-performing loans
separately. The various elements evaluated in establishing the allowance, and how they are applied to each portion of the loan portfolio, are as follows:



| |  |  | An allowance for loan losses present in the performing portion of the loan portfolio is established. This allowance is established based on historical loan loss
analysis supplemented by peer loss analysis, current levels of delinquency, recent trends in delinquencies, trends in property values, concentrations of credit and other conditions deemed relevant in specific geographical markets.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



30



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| |  |  | An allowance for estimated losses on various pools of non-performing or internally criticized loans is established. This allowance is established based on an
evaluation of each of the portfolio components using an internal loan grading system. Historical loan losses, current trends in delinquencies and charge-offs, peer group analysis, geographic concentrations, and other factors deemed relevant are
considered. Additionally, for one-to-four family residential loans, historical loan losses are separately calculated for loans with and without mortgage insurance policies, and a blended loss rate is applied to determine the level of allowance.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | An allowance is established for losses based on specific valuations of underlying collateral for loans past due 180 days or more and secured by residential real
estate. This specific allowance is based on the appraised value of the collateral less costs to sell. The amount of allowance may be reduced due to the existence of loan-specific mortgage insurance which could be claimed in the event the specific
loan is subject to foreclosure and repossession.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | An allowance is established for losses based upon specific evaluations of impaired loans in accordance with Statement of Financial Accounting Standard,
(SFAS) No. 114, Accounting by Creditors for Impairment of a Loan. Impaired loans are non-consumer and non-residential loans which BankUnited believes it is probable that BankUnited will be unable to collect all amounts
due according to the contractual terms of the loan agreement. Impaired loans are evaluated individually based on an examination of the current financial information of the borrower and an estimate of the fair value of the collateral, if the loan is
collateral dependent. If the carrying value of any of these loans is greater than the estimated net realizable value of the property or of the collateral securing these loans, a reserve is established for the difference.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | An unallocated allowance for a qualitative, risk management assessment is established. This allowance represents managements assessment of general loss
potential in delinquent loans and the uncertainty associated with historical loan loss factors that do not fully reflect the loss potential inherent in the total loan portfolio. Managements assessment considers conditions that are not directly
related to credit risks and are inherent in specific loan products (due to the imprecision in credit loss estimation techniques). The conditions evaluated in connection with the unallocated allowance include industry conditions, recent loan
portfolio performance, changes in underwriting criteria, and the regulatory and public policy environment.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

All loss
allowances are established for performing loans and pools of non-performing loans in accordance with SFAS No. 5, Accounting for Contingencies. The identification of impaired loans is conducted in conjunction with the review of the
adequacy of the allowance for loan losses. Loss allowances are established for specifically identified impaired loans based on the fair value of the underlying collateral in accordance with SFAS No. 114, Accounting by Creditors for
Impairment of a Loan.

Additions to the allowance are made by provisions charged to current operations. The allowance is decreased by
charge-offs due to losses and increased by recoveries.

The Company originates payment option ARM loans which are held in the loan
portfolio. These loans give borrowers the option of making minimum payments which do not cover the full amount of interest due and result in increases in the loan balances due to negative amortization. An important feature of these loans is that at
the earlier of five years after origination or the point at which the unpaid principal balance reaches 115% of the original principal balance due to negative amortization the loan is recast at which time the borrower is required to make fully
amortizing payments. The Company considers this feature as part of its underwriting evaluation of the loan. In addition, the Companys policy is to obtain mortgage insurance on all loans originated with an LTV greater than 80% at loan
origination. Mortgage insurance is obtained for a fixed percentage of each insured loan, including any increase in the loan due to negative amortization. The Company obtains mortgage insurance ranging from 12% to 35% of the loan amount. This
practice, in combination with a maximum balance of 115% of the original loan amount, reduces the probability of a loan reaching an LTV greater than 100% using the original appraisal; however, it is possible that a decline in the value of collateral
could result in an LTV greater than 100%. The Company periodically reviews payment option ARM loans which are expected to reach their recast point. These loans are evaluated by assessing credit reports to identify increases in late payments and
incoming credit applications and any change in employment status, reviewing current credit scores versus the score reported at origination, and obtaining Automated Valuation Models.

For commercial loans and commercial loans secured by real estate, losses are recognized on a loan specific basis at the time a loss is both estimable and
probable. For all loans collateralized by residential real estate assets, losses are recognized at the time of repossession of the property and the amount of charge-off is the excess of the net investment in the loan over the fair value of the
property less costs to sell. For home equity lines of credit, losses are recorded when a loan becomes 270 days past due.

Prior to the
quarter ended December 31, 2007, the Companys policy was to fully reserve the entire balance of home equity lines when they reached 91 days delinquent, and recognize charge-offs as the losses were identified. Subsequent to
September 30, 2007, the policy was revised to require that loans that reach 270 days delinquent are charged-off. The change in policy resulted in the charge-off of $1.8 million in consumer loans in the quarter ended December 31, 2007, and
$1.0 million for the quarter ended March 31, 2008.



31



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Recoveries are reported at the time received, except for balances recoverable under mortgage insurance
policies. Recoveries under mortgage insurance policies are reported at the time a claim is submitted to the mortgage insurance company, at the lesser of the amount of the loss for the related loan or the amount recoverable under the mortgage
insurance policy, net of a valuation allowance for potential rejections of mortgage insurance claims. A receivable is recorded in the amount of the recovery. Prior to the fourth quarter of the year ended September 30, 2007, mortgage insurance
recoveries were not material and were not considered in the determination of the allowance for loan losses.

We evaluate the allowance on a
quarterly basis to maintain it at a level adequate to provide for inherent losses. Based on the estimate of inherent losses, provisions for loan losses of $98 million and $163 million were recorded for the three and six months ended March 31,
2008 respectively. The amount of the provisions recorded were based on the process described above, and considered the following trends and factors:



| |  |  | The United States economy, particularly in the housing and mortgage industries, continued to experience significant deterioration during the quarter with reported
fourth quarter 2007 GDP growth of only 0.6%, weak retail sales for the holiday season, rising foreclosures associated with nonpayment of mortgage loans, a declining trend for job growth, a stark increase in consumer prices, particularly energy
costs, and rising unemployment.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | A reversal in the multi-year trend of national home price appreciation has reduced collateral values. Various indexes have showed housing prices peaked in July 2006
and are down at least 8.6% since that time. This deterioration was particularly evident in various areas of Florida, California, Arizona, and Illinois which are areas where over 75% of the Companys loan collateral is located.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The level of the Companys residential loans which were classified as non-performing increased by 234% from $172.6 million at September 30, 2007 to $574.4
million at March 31, 2008. In addition, the Company experienced an increase in delinquent loans.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The level of total non-performing loans increased by 237% from 180.8 million at September 30, 2007 to $680.5 million at March 31, 2008.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------



| |  |  | An increase in the level of non-performing loans secured by commercial real estate precipitated by the difficulties in the housing markets and the general economic
deterioration.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The continued weakening and uncertainty in certain residential real estate markets including declines in prices which have been exacerbated by continuing builder
price reductions in our primary markets
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | As more borrowers near their limit of negative amortization permitted under the terms of their loans, the greater the increase in probability that their loan
payment will increase, causing a potential for increased non-performing assets.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The increase in the level of
non-performing assets, particularly residential loans, was a significant component of the allowance for loan losses and a major factor in determining the level of the allowance for loan losses at March 31, 2008 and the amount of provision for
loan losses recorded for the six months ended March 31, 2008. The Companys allowance for loan loss methodology strives to quantify the losses inherent in the loan portfolio at the balance sheet date. The Companys methodology
includes estimates of expected frequency of loss for non-performing loans using historical transfer rates from the non-performing category to the real estate owned category. The severity of these losses is likewise estimated using historical loss
rates which were incurred upon recording of the real estate at its fair value net of expected selling costs at foreclosure. These historical rates are adjusted based on current economic and housing market conditions which include home prices in the
area where the property is located, expected demand based on inventory levels in the area where the property is located, condition of the property, and the expected holding period of the property.

The Companys allowance methodology considers regional economic factors in arriving at the appropriate level of reserves for loan collateral located
in those regions. Specifically, the methodology used information culled from industry experts such as government agencies, mortgage insurers, and professional associations to determine the expected housing depreciation and foreclosure rates in the
various regions where our collateral is located. The identified areas for the March 31, 2008 allowance were Florida (specifically the Orlando, Sarasota, Fort Meyers, and Naples areas), California, Arizona, Illinois, New Jersey and Virginia. The
expected frequency and severity of loss for our loans in the identified areas are estimated using historical loss rates adjusted for the estimated inherent losses in those performing loans at the balance sheet date.

Mortgage Insurance

The Companys general
policy is to require mortgage insurance on one-to-four family residential loans originated with a loan to value ratio of greater than 80% at origination. The insurance covers a fixed percentage of the amount owed by a borrower at the completion of a
foreclosure, including principal, deferred interest which has been added to principal, unpaid interest, and certain costs incurred in connection with the foreclosure. The percentage of mortgage insurance coverage ranges from 12% to 35% of the total
amount owed by the borrower. As of March 31, 2008, loans with an aggregate principal balance of $1.9 billion were subject to mortgage insurance.



32



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In connection with its Community Reinvestment Act (CRA) lending activities, the Company
originates loans with a loan to value ratio of up to 95% under a program which does not require mortgage insurance. Borrowers under this program must meet specified requirements to qualify under this program. As of March 31, 2008, the Company
estimates that 897 loans, representing approximately 2.5% of the total number of loans outstanding, with an outstanding principal balance of $142.5 million were originated with loan to value ratios over 80% and did not have mortgage insurance.
Included in these loans were 774 loans with an outstanding principal amount of $126.5 million which were originated under the CRA program and the Company not require mortgage insurance. The remaining loans with original loan to value ratios over 80%
were primarily older loans.

Following the foreclosure and repossession of a property, the Company submits a claim to the mortgage insurer.
The mortgage insurer conducts a review to determine whether it is obligated to pay under the policy. Payment may be rejected if the mortgage insurer determines that there has been fraud, misrepresentation or any other factor which relieves the
mortgage insurer of its obligation under the policy. The Companys prior experience has been that payment decisions can be made in approximately 60 days, however, recent trends have indicated that the mortgage insurers are taking longer
periods, up to six months, to make payment decisions. Set forth below is a summary of claims activity from May 1, 2007 through March 31, 2008 (dollar amounts in thousands). Prior to May 1, 2007, the Company did not compile information
on mortgage claims because the volume and amount of claims was insignificant.



|               |  |               |  |        |       
|-------------- |  | ------------- |  | ------ | ------
|               |  | No. of Claims |  | Amount
|Claims filed   |  | 166           |  | $      | 12,506
|Claims pending |  | 89            |  |        | 6,583 
|Claims paid    |  | 68            |  |        | 5,231 
|Claims denied  |  | 9             |  |        | 605   

Claims pending as of March 31, 2008 included $1.5 million submitted in the quarter ended
December 31, 2007 and $5.1 million submitted in the quarter ended March 31, 2008.

The following illustrates the potential impact
of mortgage insurance on a loan for which a mortgage insurance policy was written. It is not representative of actual experience for an individual loan or a loan portfolio.



|                                      |  |   |         |    
|------------------------------------- |  | - | ------- | ---
|Original loan amount                  |  | $ | 225,000 |    
|Original collateral value amount      |  | $ | 250,000 |    
|Original loan to value                |  |   | 90      | %  
|Mortgage insurance coverage           |  |   | 25      | %  
|Deferred interest added to principal  |  | $ | 33,750  | (1)
|Amount owed at foreclosure            |  | $ | 268,750 | (2)
|Estimated mortgage insurance claim    |  | $ | 67,188  |    
|Net exposure after mortgage insurance |  | $ | 201,562 | (3)



| | (1) | For this example, a payment option loan is assumed, and it is further assumed that the loan incurs negative amortization resulting in the maximum 115% of the original loan balance.
Mortgage insurance would be applied similarly to the amount owed for a loan which does not incur negative amortization.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | For purposes of this example, amount owed is assumed to include $10,000 dollars of costs in excess of the outstanding principal balance.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------

| | (3) | Disposal of the acquired collateral is the primary source for recovery of the net exposure. An estimate of any amount which may not be recovered is considered in determining the
allowance for loan losses.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Mortgage insurance is obtained on an individual loan basis from insurance companies approved by
government sponsored entities. Management regularly reviews ratings and other financial information regarding the financial capability of the mortgage insurers. As of both September 30, 2007 and March 31 2008, 19%, or $1.9 billion, of our
residential loans were subject to mortgage insurance coverage. If any of the mortgage insurance companies were to become subject to adverse financial conditions resulting in an inability to pay claims, the Company could incur additional credit
losses due to the write-off of receivables recorded for claims submitted. Additionally, future credit losses for loans currently performing may be greater to the extent these loans defaulted and the recovery through foreclosure did not fully cover
the amount owed.

As of March 31, 2008, three insurance companies represented 81% of the total amount insured. The largest single
concentration, representing 47% of the total amount insured, was insured by a diversified insurance company rated AA+ by S&P; the second largest concentration, representing 20% of the total amount insured, was with an insurance company rated AA
by S&P; and the third largest concentration, representing 14% of the total amount insured, was also with an insurance company rated AA by S&P. The remaining 19% of the amount insured was placed with four other mortgage insurance companies
with S&P ratings from AA- to BBB.



33



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The following table sets forth the change in BankUniteds allowance for loan losses for the three
months and six months ended March 31, 2008 and 2007.



|                                                            |                |                                    |         |      |                                  |   |        |   |  |      |         |   |  |   |        |  
|----------------------------------------------------------- | -------------- | ---------------------------------- | ------- | ---- | -------------------------------- | - | ------ | - |  | ---- | ------- | - |  | - | ------ | -
|                                                            |                | For the ThreeMonths EndedMarch 31, |         |      | For the SixMonths EndedMarch 31, |  
|                                                            | 2008           |                                    |         | 2007 |                                  |   | 2008   |   |  | 2007 |        
|                                                            | (In thousands) |                                   
|Allowance for loan losses, balance (at beginning of period) |                | $                                  | 117,658 |      |                                  | $ | 39,192 |   |  | $    | 58,623  |   |  | $ | 36,378 |  
|Provisions for loan losses                                  |                |                                    | 98,000  |      |                                  |   | 4,000  |   |  |      | 163,000 |   |  |   | 8,000  |  
|Loans charged off:                                          |                |                                    |         |      |                                  |   |        |   |  |      |         |   |  |   |        |  
|One-to-four family residential                              |                |                                    | (18,180 | )    |                                  |   | (78    | ) |  |      | (24,062 | ) |  |   | (112   | )
|Construction and land                                       |                |                                    |        |      |                                  |   | (1,321 | ) |  |      | (127    | ) |  |   | (2,651 | )
|Commercial                                                  |                |                                    | (160    | )    |                                  |   | (131   | ) |  |      | (534    | ) |  |   | (162   | )
|Consumer                                                    |                |                                    | (1,032  | )    |                                  |   |        |   |  |      | (2,808  | ) |  |   |        |  
|                                                            |                |                                    |         |      |                                  |   |        |   |  |      |         |   |  |   |        |  
|Total loans charged off                                     |                |                                    | (19,372 | )    |                                  |   | (1,530 | ) |  |      | (27,531 | ) |  |   | (2,925 | )
|                                                            |                |                                    |         |      |                                  |   |        |   |  |      |         |   |  |   |        |  
|Recoveries:                                                 |                |                                    |         |      |                                  |   |        |   |  |      |         |   |  |   |        |  
|One-to-four family residential(1)                           |                |                                    | 6,023   |      |                                  |   | 1      |   |  |      | 8,209   |   |  |   | 35     |  
|Commercial                                                  |                |                                    | 6       |      |                                  |   | 89     |   |  |      | 9       |   |  |   | 260    |  
|Consumer                                                    |                |                                    |        |      |                                  |   | 75     |   |  |      | 5       |   |  |   | 79     |  
|                                                            |                |                                    |         |      |                                  |   |        |   |  |      |         |   |  |   |        |  
|Total recoveries                                            |                |                                    | 6,029   |      |                                  |   | 165    |   |  |      | 8,223   |   |  |   | 374    |  
|                                                            |                |                                    |         |      |                                  |   |        |   |  |      |         |   |  |   |        |  
|Allowance for loan losses, balance (at end of period)       |                | $                                  | 202,315 |      |                                  | $ | 41,827 |   |  | $    | 202,315 |   |  | $ | 41,827 |  
|                                                            |                |                                    |         |      |                                  |   |        |   |  |      |         |   |  |   |        |  



|(1) | Fiscal 2008 recoveries include $6.0 million for the three months and $8.2 million for the six months ended March 31, 2008 in expected payments from mortgage insurance companies
for claims.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The following table sets forth BankUniteds allocation of the allowance for loan losses by category as of
March 31, 2008 and September 30, 2007.



|                                                |                |               |         |                   |   |       
|----------------------------------------------- | -------------- | ------------- | ------- | ----------------- | - | ------
|                                                |                | March 31,2008 |         | September 30,2007
|                                                | (In thousands)
|Balance at the end of the period applicable to: |                |               |         |                   |   |       
|One-to-four family residential                  |                | $             | 125,811 |                   | $ | 26,787
|Home equity loans and lines of credit           |                |               | 7,256   |                   |   | 6,850 
|Multi-family                                    |                |               | 1,450   |                   |   | 960   
|Commercial real estate                          |                |               | 36,870  |                   |   | 8,092 
|Construction                                    |                |               | 2,026   |                   |   | 1,173 
|Land                                            |                |               | 3,465   |                   |   | 2,426 
|Commercial                                      |                |               | 4,689   |                   |   | 4,331 
|Consumer                                        |                |               | 7,516   |                   |   | 880   
|Unallocated (1)                                 |                |               | 13,232  |                   |   | 7,124 
|                                                |                |               |         |                   |   |       
|Total allowance for loan losses                 |                | $             | 202,315 |                   | $ | 58,623
|                                                |                |               |         |                   |   |       





|(1) | The unallocated component of the allowance for loan losses reflects managements evaluation of conditions that are not directly attributable to credit risk, inherent in
specific loan products (due to the imprecision that is inherent in credit loss estimation techniques). The conditions evaluated in connection with the unallocated allowance include national and local economic trends and conditions, industry
conditions, recent loan portfolio performance, loan growth and concentrations, changes in underwriting criteria, and the regulatory and public policy environment.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



34



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The following table indicates BankUniteds allowance as a percentage of the loan category balance
for the various categories of loans as of March 31, 2008 and September 30, 2007:



|                                      |  |                |  |                   
|------------------------------------- |  | -------------- |  | ------------------
|                                      |  | March 31, 2008 |  | September 30, 2007
|One-to-four family residential        |  | 1.19%          |  | .25%              
|Home equity loans and lines of credit |  | 8.16%          |  | 1.63%             
|Multi-family                          |  | 1.20%          |  | .80%              
|Commercial real estate                |  | 7.12%          |  | 1.63%             
|Construction                          |  | 1.20%          |  | .80%              
|Land                                  |  | 1.20%          |  | .80%              
|Commercial                            |  | 2.33%          |  | 2.30%             
|Consumer                              |  | 1.98%          |  | 5.42%             
|Unallocated (1)                       |  | 0.10%          |  | .06%              
|Total allowance for loan losses       |  | 1.64%          |  | .47%              



|(1) | Calculated as the percentage of the total loans held in portfolio.
|--- | ------------------------------------------------------------------

As of September 30, 2007 and March 31, 2008, one-to-four family residential loans represented approximately 85% and 86%, respectively, of the Companys total outstanding loans balance. At
September 30, 2007 and March 31, 2008, non-performing residential loans represented 96% and 94% of total non-performing loans, respectively. Historically, these loans have resulted in a lower percentage of loan losses when compared to
non-residential loans due to the significance of the underlying collateral. Since mid-2007, the Company has experienced significant increases in non-performing assets, the most significant component of which were represented by residential loans.
The level of allowance attributable to residential loans increased from .25% of these loans to 1.19% from September 30, 2007 to March 31, 2008. This increase is consistent with the increase in the amount of non-performing residential loans
from $172 million at September 30, 2007 to $367 million at December 31, 2007 and $574 million at March 31, 2008. The Companys methodology in estimating losses inherent in the loan portfolio has remained substantially unchanged but
has been updated for increases in historical loss factors and an improved understanding of the behavior of subsets of the portfolio resulting from actual experience. As a result of these factors, while the Companys allowance for loan losses
has increased substantially commensurate with the increase in non-performing residential loans, the ratio of the allowance to non-performing loans is lower due to the historically lower level of loss associated with residential loans when contrasted
with non-residential loans.

In addition to the increase in non-performing residential loans, the impact of lower volume of residential
home sales by developers resulted in approximately $22 million of commercial real estate loans becoming impaired as of March 31, 2008, compared to none as of September 30, 2007. Additionally, impaired consumer loans increased from $923,000
to $7.7 million over the same period. The amount of allowance allocated to impaired loans totaled $13.2 million at March 31, 2008.

There can be no assurance that additional provisions for loan losses will remain at the level recorded as of March 31, 2008. BankUnited anticipates that during fiscal 2008 provisions for loan losses may continue to be made at higher
levels than in prior years, in light of increasing non-performing assets, industry trends and real estate market conditions.



35



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Part II



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



|            |  |                                                                                                                                                       
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Exhibit Title                                                                                                                                         
|            | 
|31.1        |  | Certification of the Chief Executive Officer pursuant to Section 302, of the Sarbanes-Oxley Act of 2002.                                              
|            | 
|31.2        |  | Certification of the Chief Financial Officer pursuant to Section 302, of the Sarbanes-Oxley Act of 2002.                                              
|            | 
|32.1        |  | Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|            | 
|32.2        |  | Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.



36



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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 CORPORATIONBy:

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


Date: October 17, 2008



37



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Exhibit Index



|            |  |                                                                                                                                                       
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Exhibit Title                                                                                                                                         
|            | 
|31.1        |  | Certification of the Chief Executive Officer pursuant to Section 302, of the Sarbanes-Oxley Act of 2002.                                              
|            | 
|31.2        |  | Certification of the Chief Financial Officer pursuant to Section 302, of the Sarbanes-Oxley Act of 2002.                                              
|            | 
|32.1        |  | Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|            | 
|32.2        |  | Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.



38