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BankUnited, Inc. Reports 2012 Results, Earnings Exceed $211 Million

Non-interest income for the quarter and year ended December 31, 2012 was impacted by lower accretion of discount on the FDIC indemnification asset of $0.8 million and $15.3 million, respectively, as compared to $10.7 million and $55.9 million, respectively, for the quarter and year ended December 31, 2011. As the expected cash flows from ACI loans have increased as discussed above, cash flows from the FDIC indemnification asset have decreased, resulting in lower accretion. We expect the rate of accretion on the FDIC indemnification asset to be negative beginning in the first quarter of 2013.

Income from resolution of covered assets, net was $11.4 million and $51.0 million, respectively, for the quarter and year ended December 31, 2012 compared to $11.7 million and $18.8 million, respectively, for the quarter and year ended December 31, 2011. This increase in income for the year ended December 31, 2012 resulted mainly from higher payoffs of ACI residential loans.

Loss on sale of covered loans, net was $29.3 million for each of the quarter and year ended December 31, 2012 compared to $70.4 million for each of the quarter and year ended December 31, 2011. The decrease in the amount of the loss was related to improved pricing and the effect of the sale of loans from the pool of ACI loans with a carrying value of zero. No loss was recorded related to the sale of loans from this pool. As discussed above, proceeds from the sale of loans in this pool were recorded in interest income. The carrying value of this pool was reduced to zero after the sale of covered loans in 2011.

Net gain (loss) on indemnification asset was $20.6 million and $(6.0) million, respectively, for the quarter and year ended December 31, 2012, as compared to $43.0 million and $79.8 million, respectively, for the quarter and year ended December 31, 2011. The primary factor impacting the decrease for the quarter ended December 31, 2012 as compared to the quarter ended December 31, 2011 was the decline in the loss on sale of covered loans. Other significant factors influencing the decline for the year ended December 31, 2012 as compared to the year ended December 31, 2011 included increased income from resolution of covered assets, net, reduced OREO impairment and more favorable gains (losses) on the sale of OREO as discussed further below.

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