UFM United Financial Mortgage Corp

United Financial Mortgage Corp. Reports Record Revenues and Earnings for Fiscal 2004 OAK BROOK, Ill., June 24 /PRNewswire-FirstCall/ -- United Financial Mortgage Corp. (AMEX:UFM) (the "Company") today announced results for the fourth quarter and twelve months ended April 30, 2004. Fiscal Year Ended April 30, 2004 Highlights -- Revenue for the year was $70.2 million, compared to $51.3 million for the year ended April 30, 2003, an increase of 37%. -- Earnings per diluted share for the year was $.97 per share, compared to $1.16 per share for the year ended April 30, 2003. Earnings per share were impacted by the dilutive effect of our mid-year public stock offering. -- As of April 30, 2004, the Company had a book value per share of $4.83, compared to $3.21 as of April 30, 2003, an increase of 51%. The Company's cash position, including cash and cash equivalents, certificates of deposit and restricted cash, was $14.7 million or 50% of book value. -- The mortgage loans in the Company's mortgage loan-servicing portfolio had an aggregate unpaid principal balance of $1.4 billion, compared to $526 million as of April 30, 2003, an increase of 166%. -- Mortgage loan volume for the fiscal year ended April 30, 2004 was $2.7 billion, compared to $2.0 billion for the year ended April 30, 2003, an increase of 39%. -- As of April 30, 2004, the Company had 35 branch offices, up from 28 branch offices as of the same date last year. -- On May 6, 2003, the Company consummated the acquisition of Portland Mortgage Company. -- On December 15, 2003, a public offering of 2,039,214 shares of the Company's common stock was completed. Fourth Quarter Results Revenues for the quarter ended April 30, 2004 decreased $.2 million to $17.9 million from $18.1 million for the quarter ended April 30, 2003. Net income was $1.0 million, or $.17 per diluted share, for the most recent quarter, as compared with $1.8 million, or $.45 per diluted share, for the corresponding period last year. Twelve Month Results Revenues for the twelve months ended April 30, 2004 increased $18.9 million to $70.2 million from $51.3 million for the corresponding period last year. Twelve month net income rose to $4.8 million, or $.97 per diluted share, as compared to $4.7 million or $1.16 per diluted share for the same period last year. Mortgage Banking Business As of April 30, 2004, the mortgage loans in the Company's mortgage loan- servicing portfolio had an aggregate unpaid principal balance of $1.4 billion, up from $526 million as of the same date last year. Income from mortgage loan-servicing increased by $579 thousand to $718 thousand for the quarter ended April 30, 2004 and from $368 thousand to $2.4 million for the twelve months ended April 30, 2004, a 418% and 553% increase, respectively, from the same periods last year. The weighted average coupon rate of the underlying mortgage loans in the loan-servicing portfolio was approximately 5.4% as of April 30, 2004. The Company funded $699 million in mortgage loans in the fourth quarter ended April 30, 2004, a $9 million increase as compared to the fourth quarter ended April 30, 2003. For the twelve months ended April 30, 2004, the Company funded $2.7 billion in mortgage loans, compared to $2.0 billion during the same period last year, an increase of $.7 billion. Commenting on mortgage operations in the Company's fourth quarter, Steve Khoshabe, President and Chief Executive Officer of the Company, stated, "The short-lived bond market rally that started in March combined with our on-going branch expansion helped boost our loan production to its highest levels in three quarters. However, as both the Company and the industry have experienced a significant decrease in mortgage loan production as a result of the recent rise in interest rates, we continue to focus on building our mortgage loan-servicing portfolio as a strategy to manage the risks associated with the cyclical nature of the mortgage loan origination business. We believe that building our mortgage loan-servicing portfolio during a period of historically low interest rates will allow us to create a profitable long-term revenue stream. "Fiscal 2004 was a period of significant accomplishment for the Company. Our record mortgage loan volume fueled by a favorable interest rate environment and the consistent implementation of our growth strategy were important factors in our earnings and revenue growth. With our balanced approach of expanding both organically and through acquisitions, controlling costs, and continuing to selectively build our mortgage loan-servicing portfolio, we believe we are well-positioned, either in a flat or rising interest rate environment, for continued growth in fiscal 2005." Mr. Khoshabe added, "We continue to implement our growth strategy of diversifying our business and growing our core origination platform. During our fourth quarter, we opened two new offices in Schaumburg, Illinois and Peachtree City, Georgia. In an effort to meet the needs of homebuyers and borrowers in a rising interest rate environment, we continue to expand our menu of loan products to include additional ARM products, interest only programs, second mortgages and home equity lines of credit, and sub-prime loans. We believe that the continued expansion of our product offering combined with our substantial investment in technology will not only enhance our ability to recruit experienced mortgage professionals, but also provide the scalability necessary as the pace of consolidation within our industry continues to accelerate. "As we continue to manage the reality of today's mortgage market, our continued challenge will be to balance growth opportunities while evaluating and aligning infrastructure costs with volume levels." Other News Mr. Khoshabe concluded, "As we have always done, we continue to look at a number of options that are available to us to enhance shareholder value. We believe that industry-wide consolidation has already begun, and we are committed to evaluating all of our options to obtain the highest and best use of capital. As we continue to execute our strategy, we are hopeful that the performance of our stock will more accurately reflect the revenue and earnings growth of the Company." Conference Call Management will host a conference call today at 3:10 p.m. Central Time (4:10 p.m. Eastern Time) to discuss the fourth quarter and year-end operating results. The conference call will be accessible via a toll free number by dialing 800-299-9086 and providing the passcode 74042154. International callers should dial 617-786-2903 and provide the same passcode. A replay of the call will be available from 6:10 p.m. Central Time June 24, 2004 to 6:00 p.m. Central Time June 25, 2004 by dialing 888-286-8010 and providing the replay passcode 69151976. International callers should dial 617-801-6888 and use the same replay passcode. The conference call will also be webcast live via the Internet. To access the live webcast, log on to the Company's web site at http://www.ufmc.com/ and click through to the Investor Information page. 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 35 offices in 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 April 30, (Unaudited) 2004 2003 ASSETS Cash and due from financial institutions $10,967,950 $1,541,445 Interest-bearing deposits in financial institutions 1,932,526 6,371,979 Total cash and cash equivalents 12,900,476 7,913,424 Restricted cash 1,388,231 745,039 Certificates of deposit 434,184 431,884 Loans held for sale 223,634,641 154,734,980 Notes receivable-related parties 11,889 53,984 Mortgage servicing rights, net 16,438,437 4,735,490 Leasehold improvements and equipment, net 1,184,974 592,516 Goodwill 574,990 96,105 Prepaid expenses and other assets 2,052,676 851,370 Total assets $258,620,498 $170,950,359 LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Warehouse lines of credit $217,519,477 $151,473,234 Note payable -- 350,000 Accrued expenses and other liabilities 11,431,943 6,247,075 Total liabilities 228,951,420 158,070,309 Shareholders' equity Preferred stock, 5,000,000 authorized, no par value, Series A redeemable shares, 63 issued and outstanding at April 30, 2004 and (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 April 30, 2004 and 4,095,229 at April 30, 2003 18,687,023 6,634,403 Retained earnings 10,988,645 6,252,237 29,990,668 13,201,640 Treasury stock, 176,700 shares at April 30, 2004 and 2003, at cost (321,590) (321,590) Total shareholders' equity 29,669,078 12,880,050 Total liabilities and shareholders' equity $258,620,498 $ 170,950,359 UNITED FINANCIAL MORTGAGE CORP. STATEMENTS OF INCOME For the Years ended April 30, (Unaudited) 2004 2003 Revenues Gain on sale of loans, net $59,432,996 $45,316,255 Loan servicing income, net 2,407,024 368,336 Interest income 7,949,669 5,449,380 Other income 364,248 157,647 Total revenues 70,153,937 51,291,618 Expenses Salaries and commissions 46,770,020 34,736,981 Selling and administrative 11,126,345 5,866,086 Interest expense 4,006,039 2,686,621 Depreciation 290,994 171,545 Total expenses 62,193,398 43,461,233 Income before income taxes and cumulative effect of change in accounting principle 7,960,539 7,830,385 Income taxes 3,185,633 3,221,090 Income before cumulative effect of change in accounting principle 4,774,906 4,609,295 Cumulative effect of change in accounting principle, net of tax -- 86,821 Net income 4,774,906 4,696,116 Preferred stock dividends 38,500 38,500 Net income for common stockholders $4,736,406 $4,657,616 Basic earnings per common share before cumulative effect of change in accounting principle $1.01 $1.16 Per share cumulative effect of a change in accounting principle -- .02 Basic earnings per share $1.01 $1.18 Diluted earnings per common share before cumulative effect of change in accounting principle $.97 $1.14 Per share cumulative effect of a change in accounting principle -- .02 Diluted earnings per common share $.97 $1.16 http://www.ufmc.com/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 Financial Mortgage Corp. Web site: http://www.ufmc.com/

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