UBMT United Financial

HIGHLIGHTS: Q4 Earnings per share up 13% in 2005 over Q4 2004; Loans up 18% and Assets up 12% in 2005; Net interest income up 9% in 2005 over 2004; Real estate origination tops $270 million in 2005. GREAT FALLS, Mont., March 2 /PRNewswire-FirstCall/ -- United Financial Corp. ("United") (NASDAQ:UBMT) today reported net income for the year ended December 31, 2005 of $4,140,000 or basic earnings per share of $1.35, compared to $3,918,000 or basic earnings per share of $1.29 for the same period in 2004. Fully diluted earnings per share were $1.32 and $1.25 for 2005 and 2004, respectively. Net income increased 10.7% for the quarter ended December 31, 2005, over the same quarter in 2004. For the quarter ended December 31, 2005, net income was $1,090,000 or basic and diluted earnings per share of $.36 and $.35, respectively, compared with $984,000 or basic and diluted earnings per share of $.32 and $.31, respectively, for the same quarter in 2004. All per share amounts have been restated for the 5 for 4 stock split effective in December 2005. United's assets at December 31, 2005 were $389 million compared to $347 million at December 31, 2004. Net loans increased to $312 million at December 31, 2005 from $265 million a year ago and deposits increased to $304 million at December 31, 2005 compared to $258 million a year ago. Net interest income rose to $14.1 million for the year ended December 31, 2005 compared to $13.0 million for the same period one year ago. United's shareholders' equity was $32.0 million at December 31, 2005, and book value per share was $10.41. The weighted average number of shares outstanding for 2005 was 3,060,717 compared to 3,043,240 for 2004. CEO Kevin Clark said, "2005 was another solid year for United. Our asset quality at year end is very good and our reserve for loan losses remains strong. Our net charge-offs for the year were a very manageable $187,000. We experienced another year of strong net interest income improvement and posted a 17% increase in real estate loan originations over 2004. We are pleased with the progress of our new Billings branch which exceeded our initial expectations. Additionally, plans are currently underway to offer full service banking in our Hamilton location." United's net interest margin was 4.16% in 2005 compared to 4.22% in 2004. United also originated over $270 million in real estate loans in 2005. Non-performing loans totaled $.1 million at December 31, 2005 compared to $.4 million in 2004. Forward-Looking Statements When used in this press release, the words or phrases 'will likely result in', 'are expected to', 'will continue', 'is anticipated', 'estimate', 'could', or 'project' or similar expressions are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected including general economic conditions, business conditions in the banking industry, the regulatory environment, new legislation, vendor quality and efficiency, employee retention factors, rapidly changing technology and evolving banking industry standards, competitive standards, competitive factors including increased competition among financial institutions and fluctuating interest rate environments. Readers are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Readers should also carefully review the risk factors described in documents the company files from time to time with the Securities and Exchange Commission. United Financial Corp. is a bank holding company based in Great Falls, Montana, and is the parent of Heritage Bank, with fifteen locations in Montana. United Financial Corp. Financial Highlights (Unaudited) (Dollars in thousands, except per share data) Three Months Twelve Months Ended Ended December 31, December 31, 2005 2004 2005 2004 Income statement amounts Net interest income $3,756 $3,350 $14,132 $13,012 Provision for losses on loans 80 - 230 70 Noninterest income Investment securities gains - 29 1 242 Gain on the sale of loans 854 690 3,163 2,804 Other 349 386 1,386 1,381 Noninterest expense 3,124 2,881 11,787 11,089 Earnings before income taxes 1,755 1,574 6,665 6,280 Income taxes 665 590 2,525 2,362 Net earnings 1,090 984 4,140 3,918 Per common share data Net earnings - basic $0.36 $0.32 $1.35 $1.29 - diluted 0.35 0.31 1.32 1.25 Cash dividends 0.22 0.22 0.90 1.66 Book value 10.41 10.06 Balances at end of period Loans receivable and held for sale, gross $319,650 $274,505 Allowance for losses on loans 3,751 3,708 Nonperforming assets Nonperforming loans 30 402 Foreclosed properties - 195 Available for sale investment securities 35,359 38,949 Total assets 389,293 347,140 Goodwill 1,422 1,422 Total deposits 303,691 258,334 Total stockholders' equity 31,978 30,628 Other supplemental information Net earnings Return on average assets 1.13% 1.18% Return on average common equity 13.35% 12.73% Allowance for loan losses to loans 1.17% 1.35% Common shares outstanding (end of period, in thousands) 3,071 3,046 Net interest margin 4.16% 4.22% Shareholders' equity to total assets 8.21% 8.82% Dividend payout ratio 66.37% 128.99% DATASOURCE: United Financial Corp. CONTACT: Kevin P. Clark, CEO of United Financial Corp., +1-406-727-6106

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