UFM United Financial Mortgage Corp

United Financial Mortgage Corp. Reports First Quarter Results * Servicing Portfolio Reaches $1.5 Billion * Steve Khoshabe and Anthony Schweiger added to Board of Directors OAK BROOK, Ill., Sept. 9 /PRNewswire-FirstCall/ -- United Financial Mortgage Corp. (AMEX:UFM)(the "Company") today announced results for the first quarter ended July 31, 2004. First Quarter Results Revenues for the quarter ended July 31, 2004 decreased $6.9 million to $15.6 million from $22.4 million for the quarter ended July 31, 2003. Net income was $.9 million, or $.15 per diluted share (based on 6,148,940 fully diluted shares outstanding) for the most recent quarter, as compared with $1.8 million, or $.43 per diluted share (based on 4,123,196 fully diluted shares outstanding), for the corresponding period last year. Mortgage Banking Business As of July 31, 2004, the mortgage loans in the Company's mortgage loan- servicing portfolio had an aggregate unpaid principal balance of $1.5 billion, up from $939 million from the same date last year. Income from mortgage loan- servicing increased by $561 thousand to $783 thousand for the quarter ended July 31, 2004, a 253% increase from the same period last year. The weighted average coupon interest rate of the mortgage loans in the loan-servicing portfolio was approximately 5.4% as of July 31, 2004. The Company funded $471 million in mortgage loans during the quarter ended July 31, 2004, a $547 million decrease compared to the quarter ended July 31, 2003. Commenting on mortgage operations in the Company's first quarter, Steve Khoshabe, President and Chief Executive Officer of the Company stated, "Despite facing the continued challenges of today's mortgage environment, we were able to deliver solid earnings and grow our book value to $4.97 per share." Mr. Khoshabe added, "We continue to implement our growth strategy of increasing our servicing portfolio, growing our core origination platform, and diversifying our business. During the first quarter, we opened two new retail offices in offices in Chicago, Illinois and Wilmington, North Carolina and a wholesale operations center in Charlotte, North Carolina. In addition, we have also added six retail branch offices through our acquisition of Vision Mortgage Group, Inc. "With our balanced approach of continuing to selectively build our mortgage loan-servicing portfolio, expanding both organically and through acquisitions, controlling costs, and diversifying our business, we believe we are well-positioned for continued growth in fiscal 2005." Other News At the Company's annual meeting held on September 8, 2004, all proposals submitted to the shareholders of the Company were approved. Accordingly, the Board of Directors of the Company is now comprised of seven directors. The new directors are Messrs. Steve Khoshabe, the Company's President and Chief Executive Officer and Anthony Schweiger. Mr. Schweiger will serve as the Company's Audit Committee Chairmen and qualifies as an audit committee financial expert in accordance with applicable laws. Currently, Mr. Schweiger serves as the President and Chief Executive Officer of The Tomorrow Group, LLC, a governance and management consulting firm. Since 1992, he has been a director and the Governance Chair of Radian Group Inc., a NYSE traded global provider of credit enhancement products. He also serves on Radian's Audit and Executive Committees. Since 2001, Mr. Schweiger has served as a director of Paragon Technologies, Inc., an American Stock Exchange traded provider of automated solutions for material flow applications. He has also been an investor and director of Input Technologies, LLC, a supplier of human-to- machine interface products and services since February 1998. From 1983 until 1993, Mr. Schweiger served as Chief Executive Officer of Meridian Mortgage Corporation. In his capacity as a consultant, Mr. Schweiger advises various service and technology businesses on governance, operational and strategic issues. Mr. Schweiger is a graduate of the Wharton School of Finance & Commerce at the University of Pennsylvania. About United Financial Mortgage Corp. United Financial Mortgage Corp. is an independent originator and servicer of residential and commercial mortgage loans. The Company is headquartered in Oak Brook, Illinois and has 37 retail offices and 7 wholesale operations centers across 14 states. For additional information, please visit the Company's web site at http://www.ufmc.com/. This press release contains, and future oral and written statements may contain, forward-looking statements within the meaning of such term in the Private Securities Litigation Reform Act of 1995 with respect to the Company's business, financial condition, results of operations, plans, objectives and future performance. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of management and on information currently available to management, are generally identifiable by the use of words such as "believe," "expect," "anticipate," "plan," "intend," "estimate," "may," "will," "would," "could," "should" or other similar expressions. Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and the Company undertakes no obligation to update any statement in light of new information or future events. A number of factors, many of which are beyond the ability of the Company to control or predict, could cause actual results to differ materially from those in its forward-looking statements. These factors include, among others, the following: (i) changes in demand for mortgage loans due to fluctuations in the real estate market, interest rates or the market in which the Company sells its mortgage loans; (ii) the Company's access to funding sources and its ability to renew, replace or add to its existing credit facilities on terms comparable to the current terms; (iii) assumptions underlying the value of the Company's retained mortgage loan-servicing rights; (iv) the negative impact of economic slowdowns or recessions; (v) management's ability to manage the Company's growth and planned expansion; (vi) the effect of the competitive pressures from other lenders or suppliers of credit in the Company's market; (vii) changes in government regulations that affect the Company's business; (viii) the Company's ability to expand origination volume while reducing overhead; (ix) the impact of new state or federal legislation or court decisions restricting the activities of lenders or suppliers of credit in the Company's market; (x) other risk factors disclosed from time to time in the Company's filings with the Securities and Exchange Commission; and (xi) the inability of the Company to manage the risks associated with the foregoing as well as anticipated. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Additional information concerning the Company and its business, including additional factors that could materially affect the Company's financial results, is included in the Company's filings with the Securities and Exchange Commission. For Further Information Contact: Steve Khoshabe, President & Chief Executive Officer, United Financial Mortgage Corp., 815 Commerce Drive, Suite 100, Oak Brook, IL 60523, (630) 571-7222, Fax: (630) 571-2623, Dave Gentry, Aurelius Consulting Group, Inc., Maitland City Plaza, 225 S. Swoope Avenue, Suite 214, Maitland, FL 32751, (407) 644-4256, Fax: (407) 644-0758, -- FINANCIAL TABLES FOLLOW -- UNITED FINANCIAL MORTGAGE CORP. BALANCE SHEETS As of July 31, (Unaudited) 2004 2003 ASSETS Cash and due from financial institutions $0 $1,610,280 Interest-bearing deposits in financial institutions 11,132,042 6,931,693 Total cash and cash equivalents 11,132,042 8,541,973 Restricted cash 1,516,690 779,440 Certificates of deposit 437,182 428,857 Loans held for sale 160,247,491 215,967,931 Notes receivable-related parties 12,051 25,617 Mortgage servicing rights, net 18,272,844 9,514,331 Leasehold improvements and equipment, net 1,178,613 1,106,516 Goodwill 574,990 99,505 Prepaid expenses and other assets 2,555,875 1,118,806 Total assets $195,927,778 $237,582,976 LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Warehouse lines of credit $155,617,244 $ 212,742,927 Note payable -- 350,000 Accrued expenses and other liabilities 9,722,972 9,807,090 Total liabilities 165,340,216 222,900,017 Shareholders' equity Preferred stock, 5,000,000 authorized, no par value, Series A redeemable shares, 63 issued and outstanding at July 31, 2004 and 2003 (aggregate liquidation preference of $315,000) 315,000 315,000 Common stock, no par value, 20,000,000 shares authorized, 6,140,843 shares issued at July 31, 2004 and 4,100,929 at July 31, 2003 18,687,023 6,648,293 Retained earnings 11,907,129 8,041,256 30,909,152 15,004,549 Treasury stock, 176,700 shares at July 31, 2004 and 2003, at cost (321,590) (321,590) Total shareholders' equity 30,587,562 14,682,959 Total liabilities and shareholders' equity $195,927,778 $237,582,976 UNITED FINANCIAL MORTGAGE CORP. STATEMENTS OF INCOME For the three months ended July 31, (Unaudited) 2004 2003 Revenues Gain on sale of loans, net $12,286,143 $19,819,029 Loan servicing income, net 782,686 221,998 Interest income 2,441,478 2,242,451 Other income 50,172 152,678 Total revenues 15,560,479 22,436,156 Expenses Salaries and commissions 9,829,064 15,801,557 Selling and administrative 3,112,453 2,291,208 Interest expense 1,011,278 1,270,048 Depreciation 76,877 91,643 Total expenses 14,029,672 19,454,456 Income before income taxes 1,530,807 2,981,700 Income taxes 612,323 1,192,680 Net income 914,484 1,789,020 Preferred stock dividends 0 0 Net income for common stockholders $914,484 $1,789,020 Basic earnings per common share $.15 $.46 Diluted earnings per common share $.15 $.43 Weighted average shares outstanding 5,964,143 3,889,174 DATASOURCE: United Financial Mortgage Corp. CONTACT: Steve Khoshabe, President & Chief Executive Officer, United Financial Mortgage Corp., +1-630-571-7222, or fax, +1-630-571-2623, or ; or Dave Gentry, Aurelius Consulting Group, Inc., +1-407-644-4256, or fax, +1-407-644-0758, or , for United Mortgage Web site: http://www.ufmc.com/

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