UBMT United Financial

United Financial Corp. Announces March 31, 2004 Earnings and Declares Quarterly and Special One-Time Dividend HIGHLIGHTS: Special one-time dividend of $1.00 per share; Total assets of $315 million; Q1 Net interest income up 7%; 2004 Q1 EPS of $.39 vs. 2003 Q1 EPS $.39; Billings, Montana branch opened GREAT FALLS, Mont., April 29 /PRNewswire-FirstCall/ -- United Financial Corp. ("United") today reported net income for the quarter ended March 31, 2004 of $974,189, or basic earnings per share of $.40 and $.39 per share on a fully diluted basis. This compares to March 31, 2003 earnings of $982,140, or basic earnings per share of $.40 and $.39 on a fully diluted basis. United's assets at March 31, 2004 were $315 million. Net loans were $236 million at March 31, 2004 compared to $211 million a year ago and deposits increased to $237 million at March 31, 2004 compared to $235 million a year ago. Net interest income rose to $3.0 million in the quarter ended March 31, 2004 compared to $2.8 million for the same quarter a year ago. United's shareholders' equity was $32.4 million at March 31, 2004, and book value per share was $13.32. All numbers reported are from continuing operations. Outstanding shares at March 31, 2004 were 2,429,773, compared to 2,439,225 at March 31, 2003. Chairman and CEO Kurt Weise said, "We are very pleased with this quarter considering the significant drop in mortgage origination fees. Our net interest margin was up 18 basis points over last year and our return on equity was over 12%. Asset quality remained very good. Our new office in Billings is being received very favorably and we are gaining market share." United's net interest margin was 4.07% in the first quarter of 2004 compared to 3.89% in the first quarter of 2003. Non-performing loans totaled $.7 million at both March 31, 2004 and March 31, 2003. United's past due and non-accrual loans totaled .35% of loans at March 31, 2004, compared to .75% for that of its peer bank holding companies at December 31, 2003 the most recent peer information available. United declared a regular quarterly dividend of $.27 per share, and a special one-time dividend of $1.00 per share to shareholders of record on May 17, 2004, payable June 1, 2004. The special one-time dividend was declared as a result of the increased earnings in 2003 and the current overall financial condition of the company. 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 the company's most recent Annual Report on Form 10-K for the period ending December 31, 2003 and other documents the company files from time to time with the Securities Exchange Commission. United Financial Corp. is a bank holding company based in Great Falls, Montana, and is the parent of Heritage Bank, a full service community bank with fifteen locations in Montana. United Financial Corp. Financial Highlights (Unaudited) (Dollars in thousands, except per share data) Three Months Ended March 31, 2004 2003 Income statement amounts Net interest income $3,040 2,793 Provision for losses on loans 52 262 Noninterest income Investment securities gains 194 17 Gain on the sale of loans 518 1,204 Other 357 268 Noninterest expense 2,494 2,585 Earnings from continuing operations before income taxes 1,563 1,435 Income taxes 589 540 Discontinued operations - 87 Net earnings 974 982 Per common share data Net earnings - continuing operations - basic 0.40 0.37 - diluted 0.39 0.36 Net earnings - discontinued operations - basic - 0.03 - diluted - 0.03 Cash dividends 0.270 0.180 Book value 13.32 12.65 Balances at end of period (from continuing operations) Loans, gross 239,804 214,447 Allowance for losses on loans 3,804 3,297 Nonperforming assets Nonperforming loans 726 682 Foreclosed properties 525 561 Available for sale investment securities 40,382 42,935 Total assets 314,782 313,856 Goodwill 1,422 1,422 Total deposits 236,689 234,897 Total stockholders' equity 32,370 30,856 Other supplemental information Net earnings Return on average assets 1.24% 1.27% Return on average common equity 12.02% 12.81% Allowance for loan losses to loans 1.59% 1.54% Common shares outstanding (end of period, in thousands) 2,430 2,439 Net interest margin 4.07% 3.89% Shareholders' equity to total assets (excluding subordinated debt) 10.28% 9.83% Dividend payout ratio 67.50% 45.00% DATASOURCE: United Financial Corp. CONTACT: Kurt R. Weise, Chairman & CEO of United Financial Corp., +1-763-512-5299

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