BankUnited Announces 13% Increase in Second Quarter Net Income; Loans

BankUnited Announces 13% Increase in Second Quarter Net Income; Loans and Deposits Grow Sharply; Dividend and Branch Expansion Highlight Quarter

    Business Editors

    CORAL GABLES, Fla.--(BUSINESS WIRE)--April 18, 2005--BankUnited Financial Corporation (NASDAQ: BKUNA):

    Second Quarter 2005 Highlights:

--	Net income of $13.6 million, up 13% over the same quarter last year
--	Total deposits of $4.0 billion, up 18% from March 31st last year
--	Non-interest bearing deposits of $310 million, up 32% from March 31st last year
--	Non-performing assets as a percentage of total assets of 0.21%, down from 0.33% at March 31st last year
--	Total loan production of $1.1 billion, up 38% over the second quarter last year
--	Total assets of $9.3 billion, up 21% from March 31, 2004
--	Branch network increases to 53 with three new branch openings

    BankUnited Financial Corporation (NASDAQ: BKUNA), parent of BankUnited FSB, today reported record second quarter net income up 13% over the quarter ended March 31st, 2004.
    Net income for the quarter was $13.6 million, up 13% from $12.0 million for the same quarter last year. Basic and diluted earnings were $0.45 and $0.42 per share, respectively, for the quarter, up from $0.40 and $0.37 per share, respectively, for the same quarter last year.
    Net income for the six months ended March 31, 2005, was $28.1 million, up 19% from $23.6 million for the same period in the prior year. Basic and diluted earnings per share for the six months were $0.93 and $0.87, respectively, as compared to $0.79 and $0.72 for the same period in the prior year.
    BankUnited's Chairman and Chief Executive Officer, Alfred R. Camner, stated, "It was another strong quarter for BankUnited. Most of our key indicators show positive growth, including total deposits, loan production and non-interest bearing deposits. Additionally, we have stayed on track in our expansion by opening three new branches in our East Coast Florida market.
    "Mortgage production was so strong that we generated loans beyond our internal benchmarks. This allowed us to take advantage of demand for assets in the marketplace and sell the surplus. We intend to continue this strategy as opportunities arise in the future.
    "BankUnited and other financial intermediaries have been affected by higher interest rates and a flattening yield curve. This has created higher levels of prepayments in the mortgage area and has adversely impacted our margin. Nevertheless, we anticipate that strong mortgage loan production, the ongoing traction of our micro-market strategy, the impact of new branches and our robust corporate and commercial pipelines will assist us during the next several quarters and beyond.
    "BankUnited's board of directors declared a dividend to shareholders of record as of April 15, 2005. This will reward eligible shareholders for their ongoing support and create opportunities for institutional shareholders who wish to invest in BankUnited but are limited to investing in dividend-paying stocks."
    BankUnited's President and Chief Operating Officer, Ramiro Ortiz, added, "It was an outstanding quarter for growth in loans and deposits. We surpassed $4 billion in deposits and increased non-interest-bearing deposits by 32%. We believe this is a reflection of our micro-market strategy.
    "In addition, our corporate and commercial areas continue to perform at strong levels in both deposits and lending activity. In a highly competitive market, our team has repeatedly succeeded in making BankUnited our customers' bank of choice. We are ideally positioned to offer the best of both worlds - the personal service and attention provided by a neighborhood bank and the strength and diversity of products of a $9.3 billion institution."

    Loan Balances and Production

    Overall, loan production contributed to significant growth in BankUnited's loan balances during the quarter. BankUnited's total loans grew by $508 million, or 8%, during the quarter to $6.8 billion as of March 31, 2005. This growth included a $414 million increase in residential mortgage loan balances as well as a $63 million increase in commercial and commercial real estate loan balances.
    Total loan originations increased 38% over the same quarter last year.
    Residential mortgage loan originations, which include specialty consumer mortgage loans originated through branch offices, were $884 million for the quarter, up 59% over the second quarter of last year.
    Consumer loan production, which excludes specialty consumer mortgage loans originated through branch offices, was $64 million this quarter, up 53% over the same quarter of last year.

    Deposit Growth

    Total deposits increased 18% to $4.0 billion at March 31, 2005, up from $3.4 billion at March 31, 2004. Non-interest bearing deposits were $310 million at March 31, 2005, up 32% from March 31, 2004. Core deposits, which include checking, savings and money market accounts, increased 2% to $1.6 billion as of March 31, 2005, as compared to March 31, 2004. This quarter, BankUnited emphasized growth in time deposits including some lengthening of maturities in anticipation of a rising rate environment.

    Net Interest Margin

    The net interest margin decreased this quarter to 1.72%, down from 1.81% for the preceding quarter. Increases in short-term interest rates adversely affected BankUnited's margin primarily due to three factors. First, a significant portion of BankUnited's loan portfolio consists of adjustable rate mortgages, of which a substantial amount is indexed to the Monthly Treasury Average. This index lags the increase in short-term interest rates.
    Second, prepayments of BankUnited's mortgage loans increased considerably at the end of the quarter.
    Third, BankUnited's funding costs rose not only to correspond to increases in general market interest rates but also in response to competitive deposit pricing pressures.

    Non-Interest Income

    Total non-interest income reached $7.8 million for the quarter, up 53% over the same quarter last year. Non-interest income included gains from the sale of loans, investments and mortgage-backed securities of $2.6 million for the quarter ended March 31, 2005, as compared to $1.9 million for the same quarter last year. As a result of the strong loan production, BankUnited sold loans in the secondary market and generated additional non-interest income. These sales may reoccur should the high demand in the secondary market for these loans continue. Fee income, which includes loan fees, deposit fees and other fees (excluding loan servicing fees), was $2.9 million for the second quarter of fiscal 2005, up 15% compared to the same quarter last year.
    Insurance and investment income for the quarter was $1.3 million, up 6% over the same quarter last year and up 30% from the preceding quarter.
    BankUnited's portfolio of residential loans serviced for others was $1.3 billion at March 31, 2005. BankUnited earned $0.8 million in fees on loans serviced for others during the quarter, offset by a like amount of amortization. There was no impairment charge recorded during the period.

    Expenses and Efficiency Ratio

    Non-interest expense increased $4.4 million for the quarter, or 21%, from the same quarter in the prior fiscal year. The increase primarily reflects the company's rapid expansion. During the quarter, BankUnited increased its branch network to 53 locations by opening three new branches, and it expects to open seven to 11 new branches by December of 2005.
    The efficiency ratio was 54.96% for the quarter, an increase from 52.9% for the same quarter last year.

    Asset Quality

    Non-performing assets as a percentage of total assets increased to 0.21% from 0.19% for the previous quarter, and down from 0.33% at March 31, 2004. The net annualized charge-off ratio for the quarter remained the same at 0.05% compared to the preceding quarter. There can be no assurance that additional provisions for loan losses will not be required in future periods.
    The allowance for loan losses as a percentage of total loans was 0.36% as of March 31, 2005, compared to 0.48% as of March 31, 2004, and 0.39% as of December 31, 2004. While the current level is relatively low compared to the banking industry in general, management believes the current allowance to be prudent given the composition of its loan portfolio, which is more than 90% secured by real estate, primarily residential properties.

    Capital Ratios and Book Value

    BankUnited FSB continues to maintain its strong capital position in excess of regulatory requirements. Core and risk-based capital ratios were 7.6% and 15.6%, respectively, at March 31, 2005.
    Book value per common share was $16.45 as of March 31, 2005, up from $15.77 at March 31, 2004.

    Dividends

    BankUnited's board of directors declared a cash dividend of one-half cent ($0.005) per share to be paid on April 29, 2005, to stockholders of record as of April 15, 2005. BankUnited anticipates that it will continue to declare and pay such dividends on a quarterly basis subject to termination at any time at the sole discretion of the board.
    The amount of the dividend is nominal as BankUnited continues to focus on growth and expansion while retaining funds for the potential repurchase of its stock on the open market under its repurchase program announced October 24, 2002.

    About BankUnited

    BankUnited Financial Corp. (NASDAQ: BKUNA) is the holding company for BankUnited FSB, the largest banking institution headquartered in Florida as measured by assets. BankUnited had assets of $9.3 billion at March 31, 2005. Serving customers in Miami-Dade, Broward, Palm Beach, Martin and Collier counties through 53 branches, BankUnited offers a full spectrum of consumer and commercial banking products and services, including online products that can be accessed through www.bankunited.com. For additional information, call (877) 779-2265.
    A conference call to discuss the earnings for the quarter will be held on Monday, April 18, at 2 p.m. EDT, with Chairman and Chief Executive Officer Alfred R. Camner, President and Chief Operating Officer Ramiro Ortiz and Chief Financial Officer Bert Lopez.
    The toll-free dial-in number for the conference call is 800-967-7185. The call leader is Alfred R. Camner. The name of the call is BankUnited, and the access code for the call is 2245909. A replay of the call will be available from 4 p.m. EDT on April 18 through 11:59 p.m. EDT on April 24, by calling toll-free 888-203-1112 (domestic) or 719-457-0820 (international). The pass code for the replay is: 2245909.

    Forward-Looking Statements

    This press release may contain certain forward-looking statements, which are based on management's expectations regarding factors that may impact the Company's earnings and performance in future periods. Words and phrases such as: "will likely result," "expect," "will continue," "anticipate," "estimate," "project," "believe," "intend," "should," "may," "can," "could," "plan," "target" and similar expressions are intended to identify "forward-looking statements." Actual results or performance could differ from those implied or contemplated by such statements. Factors that could cause future results and performance to vary materially from current management expectations include, but are not limited to, general business and economic conditions; fiscal and monetary policies; war and terrorism; changes in interest rates; deposit flows; loan demand and real estate values; competition with other providers of financial products and services; the issuance or redemption of additional company equity or debt; volatility in the market price of our common stock; changes in accounting principles, policies or guidelines; changes in laws or regulation; reliance on other companies for products and services; and other economic, competitive, servicing capacity, governmental, regulatory and technological factors affecting the company's operations, pricing, products and delivery of services.

BankUnited Financial Corporation Quarter Ended March 31, 2005 Earnings Release ---------------------------------------------------------------------- For the For the Three Months Ended Six Months Ended March 31, Dec. 31, March 31, March 31, ---------------------------------------------------------------------- Operations Data: 2005 2004 2004 2005 2004 ---------------------- --------- -------- --------- --------- -------- (dollars and shares in thousands, except per share amounts)

Interest income: Interest and fees on loans $ 78,404 $70,103 $55,095 $148,507 $109,456 Interest on mortgage-backed securities 16,884 18,236 20,189 35,120 39,986 Interest and dividends on investments and other interest-earning assets 5,657 5,343 5,055 11,000 9,598 -------- ------- ------- -------- -------- Total interest income 100,945 93,682 80,339 194,627 159,040 Interest expense: Interest on deposits 21,901 19,096 17,902 40,997 36,172 Interest on borrowings 37,099 33,516 25,151 70,615 51,151 Interest on trust preferred securities and subordinated debentures 3,141 2,789 2,322 5,930 4,674 -------- ------- ------- -------- -------- Total interest expense 62,141 55,401 45,375 117,542 91,997 -------- ------- ------- -------- -------- Net interest income 38,804 38,281 34,964 77,085 67,043

Provision for loan losses 1,050 1,150 1,200 2,200 2,175 -------- ------- ------- -------- -------- Net interest income after provision for loan losses 37,754 37,131 33,764 74,885 64,868

Other income: Loan servicing fees, net of amortization 38 88 (317) 126 (1,090) Impairment of mortgage servicing rights - - (1,200) - (1,200) Loan fees 1,336 1,154 994 2,490 1,933 Deposit fees 1,010 1,106 1,044 2,116 2,163 Other fees 517 518 459 1,035 939 Gain on sales of loans, securities, and other assets (1) 2,565 2,003 1,861 4,568 3,018 Insurance and investment income 1,252 963 1,184 2,215 2,126 Other income 1,118 1,115 1,084 2,233 2,282 -------- ------- ------- -------- -------- Total other income 7,836 6,947 5,109 14,783 10,171

Other expense: Employee compensation 12,843 11,196 10,676 24,039 21,480 Occupancy and equipment 5,391 5,001 4,332 10,392 8,036 Professional fees 1,307 848 1,024 2,155 2,344 Telecommunications and data processing 1,527 1,619 1,409 3,146 2,793 Advertising and promotion expense 1,375 1,444 1,287 2,819 2,438 Insurance 381 382 370 763 727 Other operating expenses 2,811 2,232 2,104 5,043 2,497 -------- ------- ------- -------- -------- Total other expense 25,635 22,722 21,202 48,357 40,315 -------- ------- ------- -------- -------- Income before income taxes 19,955 21,356 17,671 41,311 34,724

Provision for income taxes 6,399 6,831 5,633 13,230 11,136 -------- ------- ------- -------- -------- Net income $ 13,556 $14,525 $12,038 $ 28,081 $ 23,588 ======== ======= ======= ======== ======== Earning Per Share Data: Net income $ 13,556 $14,525 $12,038 $ 28,081 $ 23,588 Preferred stock dividends 103 103 99 207 180 -------- ------- ------- -------- -------- Net income available to common stockholders $ 13,453 $14,422 $11,939 $ 27,874 $ 23,408 ======== ======= ======= ======== ======== Basic earnings per common share: $ 0.45 $ 0.48 $ 0.40 $ 0.93 $ 0.79 ======== ======= ======= ======== ======== Weighted average common shares 30,116 30,023 29,835 30,053 29,760 ======== ======= ======= ======== ======== Diluted earnings per common share: $ 0.42 $ 0.45 $ 0.37 $ 0.87 $ 0.72 ======== ======= ======= ======== ======== Weighted average diluted common shares 32,432 32,381 32,683 32,415 32,553 ======== ======= ======= ======== ========

(1) Consists of the following:

For the For the Three Months Ended Six Months Ended March 31, Dec. 31, March 31, March 31, ---------------------------- ------------------- 2005 2004 2004 2005 2004 --------- --------- -------- --------- --------- Gain (loss) on sales of investments and mortgage-backed securities $ 705 $ 1,481 $ 333 $ 2,186 $ (262) Gain on sales of loans and other assets $ 1,860 $ 522 $ 1,528 $ 2,382 $ 3,280

BankUnited Financial Corporation Quarter Ended March 31, 2005 Earnings Release (continued) ---------------------------------------------------------------------- As of As of As of March 31, Dec. 31, March 31, ---------------------------------------------------------------------- Selected Balance Sheet Data: 2005 2004 2004 ----------------------------------- ----------- ----------- ---------- (In thousands) Asset Data: Total assets $9,260,660 $8,914,672 $7,650,003 Cash and cash equivalents $ 64,178 $ 44,766 $ 45,077 Investment securities $ 304,840 $ 346,489 $ 339,506 Mortgage-backed securities $1,670,556 $1,826,121 $2,226,105 Loans: Residential loans $5,706,332 $5,282,999 $3,727,975 Commercial and commercial real estate loans 826,779 763,972 678,241 Consumer loans (1) 213,529 192,171 148,807 Unearned discounts, premiums and loan fees 91,145 81,056 44,883 Allowance for loan losses (24,777) (24,447) (22,665) ---------- ---------- ---------- Loans receivable, net (excluding loans held for sale) $6,813,008 $6,295,751 $4,577,241 ========== ========== ========== Loans held for sale $ 16,945 $ 25,874 $ 123,590 FHLB Stock $ 158,539 $ 152,609 $ 130,716 Liability Data: Total liabilities $8,756,878 $8,412,665 $7,171,927 Deposits: Non-interest bearing deposits $ 309,923 $ 262,028 $ 235,346 Interest bearing checking and money market deposits 388,322 417,649 376,191 Savings 947,531 1,006,511 1,005,806 ---------- ---------- ---------- Total core deposits 1,645,776 1,686,188 1,617,343 Certificates of deposit 2,398,126 2,040,595 1,808,901 ---------- ---------- ---------- Total deposits $4,043,902 $3,726,783 $3,426,244 ========== ========== ========== Borrowings (2) $4,311,839 $4,301,404 $3,352,886 Convertible debt $ 120,000 $ 120,000 $ 120,000 Trust preferred securities and subordinated debentures $ 195,482 $ 195,841 $ 165,544 Equity Data: Total stockholders' equity $ 503,782 $ 502,007 $ 478,076 Preferred equity $ 6,299 $ 6,299 $ 5,857 AVERAGE BALANCE SHEET DATA (Three months ended) Loans, net (3) $6,638,455 $6,025,555 $4,487,520 Investment securities $ 338,531 $ 338,365 $ 327,668 Mortgage-backed securities $1,763,429 $1,955,160 $2,111,979 Interest-earning assets (4) $8,898,079 $8,473,779 $7,047,261 Assets $9,170,970 $8,718,877 $7,297,054 Interest bearing deposits $3,566,115 $3,326,726 $3,112,017 Non-interest-bearing deposits $ 272,770 $ 247,454 $ 206,864 Other borrowings (2) $4,435,180 $4,263,078 $3,241,729 Convertible debt $ 120,000 $ 120,000 $ 43,516 Trust preferred securities and subordinated debentures $ 195,805 $ 175,702 $ 164,900 Interest-bearing liabilities $8,317,100 $7,885,507 $6,562,162 Liabilities $8,667,929 $8,223,505 $6,834,710 Stockholders' equity $ 503,041 $ 495,372 $ 462,343

(1) Includes home equity loans and lines of credit, excludes consumer mortgage products which are included in Residential Loans.

(2) Includes FHLB advances, repurchase agreements, and senior notes.

(3) Includes loans held for sale.

(4) Excludes non-accruing loans.

BankUnited Financial Corporation Quarter Ended March 31, 2005 Earnings Release (continued) --------------------------------------------------------------------- For the Three Months Ended March 31, Dec. 31, March 31, ---------------------------------------------------------------------- Selected Data: 2005 2004 2004 ------------------------------------------ -------- -------- ------- Quarterly Performance Data: Return on average tangible common equity 11.49% 12.52% 11.16% Return on average assets 0.59% 0.67% 0.66% Yield on interest-earning assets 4.54% 4.40% 4.55% Cost of interest-bearing liabilities 3.03% 2.79% 2.78% Net interest yield on earning assets (margin) 1.72% 1.81% 1.99% Net interest spread 1.51% 1.61% 1.77% Efficiency Ratio 54.96% 50.24% 52.91% For the Six Months Ended March 31, March 31, ------- ------- Year to Date Performance Data: 2005 2004 ------- ------- Return on average tangible common equity 12.00% 11.16% Return on average assets 0.63% 0.66% Yield on interest-earning assets 4.48% 4.58% Cost of interest-bearing liabilities 2.91% 2.83% Net interest yield on earning assets (margin) 1.77% 1.95% Net interest spread 1.57% 1.75% Efficiency Ratio 52.64% 52.21%

As of ------------------------------ March 31, Dec. 31, March 31, ------------------------------ 2005 2004 2004 -------- -------- ------- Equity Data: (dollars and shares in thousands, except per share amounts)

Book value per common share $ 16.45 $ 16.39 $ 15.77 Closing price of Class A Common Stock $ 26.86 $ 31.95 $ 29.70 Common shares outstanding 30,249 30,239 29,936 Average equity to average assets (3 mos.) 5.49% 5.68% 6.34%

Capital Ratios: Tangible capital ratio (1) 7.6% 7.3% 7.2% Tier 1 core capital ratio (1) 7.6% 7.3% 7.2% Total risk-based capital ratio (1) 15.6% 15.2% 15.5%

Non-Performing Assets: Non-accrual loans $18,132 $14,998 $21,645 Restructured loans 362 364 371 Loans 90 day past due and still accruing 41 39 52 -------- -------- ------- Total non-performing loans 18,535 15,401 22,068 Non-accrual tax certificates - - 212 Real estate owned 1,355 1,602 2,975 -------- -------- ------- Total non-performing assets $19,890 $17,003 $25,255 ======== ======== ======== Allowance for losses on tax certificates $ - $ - $ 208 Allowance for loan losses 24,777 24,447 22,665 -------- -------- ------- Total allowance $24,777 $24,447 $22,873 ======== ======== ========

Non-performing assets to total assets 0.21% 0.19% 0.33% Non-performing loans to total loans 0.27% 0.24% 0.47% Allowance for loan losses as a percentage of total loans 0.36% 0.39% 0.48% Allowance for loan losses as a percentage of non-performing loans 133.68% 158.74% 102.71% Net charge-offs for the three months ended $ 720 $ 782 $ 660 Net annualized year-to-date charge-offs as a percentage of average total loans 0.05% 0.05% 0.05%

(1) Capital ratios are for BankUnited FSB only.

--30--JC/na*

CONTACT: BankUnited Financial Corporation, Coral Gables Investor Relations: Lauren Camner, 305-231-6535 or Corporate Communications: Melissa Gracey, 305-817-8117 www.bankunited.com

KEYWORD: FLORIDA INDUSTRY KEYWORD: BANKING EARNINGS CONFERENCE CALLS SOURCE: BankUnited Financial Corporation

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