EXHIBIT 99.1
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, sk@ufmc.com
Dave Gentry, Aurelius Consulting Group, Inc. 200 St. Andrews Boulevard,
Suite 1808, Winter Park, FL 32792, (407) 644-4256, Fax: (407) 644-0758,
Aurelius@cfl.rr.com
FOR IMMEDIATE RELEASE:
United Financial Mortgage Corp. Reports First Quarter Results
* Announces Record Revenues, Strong Earnings
* Servicing Portfolio Reaches $1 Billion
Oak Brook, IL, September 16 2003 -- United Financial Mortgage Corp. (Amex:
UFM or the "Company") announced today record revenues for the quarter ended
July 31, 2003. Revenues for the first fiscal quarter ended July 31, 2003
increased 271% to $22,436,155, from $6,050,551 for the same period last
year. Net income for the period increased 328% to $1,789,019 or $0.43
per diluted share from $418,442, or $0.10 per diluted share for the
corresponding period last year.
The Company also reports that shortly after the first quarter ended, its
loan-servicing portfolio surpassed $1 billion. This represents an increase
of 90% over the level of the portfolio at April 30, 2003. The Company
derives a portion of its revenues from the servicing of mortgage loans for
others. Servicing rights arise in connection with mortgage loans originated
and then sold in the secondary market with mortgage servicing rights
retained. As of July 31, 2003, income from loan servicing increased by
309% to $221,998 for the quarter ended July 31, 2003, from $54,313 for
the same period last year.
The Company collects servicing fees ranging from 0.25% (i.e., 25 basis
points) per year to 0.75% (i.e., 75 basis points) per year of the declining
principal balances of the loans that it services. The total value of the
mortgage servicing rights asset as of July 31, 2003 was $9,514,331, up from
$4,735,590 at April 30, 2003, and the weighted average coupon rate of the
underlying loans in the portfolio was approximately 5.5% as of July 31,
2003.
Steve Khoshabe, President and Chief Executive Officer of the Company,
commented: "We have continued to grow revenues while maintaining very strong
earnings. We have also focused on building our conventional loan-servicing
portfolio over the last 12 months as a counter cyclical strategy against a
rising interest rate environment. We believe that building our servicing
portfolio during a period of historically low interest rates has allowed
us to create a profitable long-term revenue stream."
Mr. Khoshabe added, "Although the recent sharp rise in interest rates
has resulted in a decrease in the number of mortgage applications, it has
presented the company with an opportunity to increase market share. We
believe that we will have the opportunity to attract experienced mortgage
professionals as our competitors have difficulty reacting to the changes
in the market. This opportunity, combined with our strategy of controlling
costs, expanding both organically and through acquisitions, and continuing
to selectively build our servicing portfolio, should leave us well
positioned for future growth."
About United Financial Mortgage Corp.
United Financial Mortgage Corp. is a mortgage banker principally engaged
in originating retail and wholesale mortgages for single-family residences
of one to four units. The Company, which is authorized to engage in the
mortgage banking business in 36 states, is headquartered in Oak Brook,
Illinois and has offices in several other states. The Company's web site
(www.ufmc.com) allows consumers to get information on the many different
types of mortgage loans offered by the Company, calculate mortgage payments,
and apply online for a mortgage.
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. The forward-looking
statements are subject to various risks and uncertainties. Such risks
and uncertainties include, but are not limited to, 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 loan; the negative
impact of economic slowdowns or recessions; and other risks disclosed from
time to time in the Company's SEC reports and filings.
-- FINANCIAL TABLES FOLLOW --
UNITED FINANCIAL MORTGAGE CORP.
Balance Sheets
(Unaudited)
July 31, July 31,
2003 2002
----------- -----------
ASSETS
Cash and due from financial institutions $ 1,610,280 $ 646,540
Interest-bearing deposits in financial
institutions 6,121,658 5,205,005
----------- -----------
Total cash and cash equivalents 7,731,938 5,851,545
Restricted cash 779,440 -
Certificates of deposit 1,238,891 1,223,695
Loans held for sale 215,967,931 63,568,994
Notes receivable-related parties 25,617 66,093
Mortgage servicing rights, net 9,514,331 1,426,991
Leasehold improvements and equipment, net 1,106,515 304,770
Prepaid expenses and other assets 1,218,313 1,092,119
----------- -----------
Total assets $237,582,976 $ 73,534,207
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Warehouse lines of credit $212,742,927 $ 61,483,319
Note payable 350,000 369,836
Accrued expenses and other liabilities 9,807,090 2,965,047
----------- -----------
Total liabilities 222,900,017 64,818,202
Shareholders' equity
Preferred stock, 5,000,000 authorized, no par
value, Series A redeemable shares, 63 issued
and outstanding at July 31, 2003 and April
30, 2003 (aggregate liquidation preference
of $315,000) 315,000 315,000
Common stock, no par value, 20,000,000 shares
authorized, 4,100,929 shares issued at July
31, 2003 and 4,095,229 at April 30, 2003 6,648,293 6,633,903
Retained earnings 8,041,256 2,013,063
----------- -----------
15,004,549 8,961,966
Treasury stock, 176,700 shares at July 31,
2003 and at April 30, 2003, at cost (321,590) (245,961)
----------- -----------
Total shareholders' equity 14,682,959 8,716,005
----------- -----------
Total liabilities and shareholders' equity $237,582,976 $ 73,534,207
=========== ===========
UNITED FINANCIAL MORTGAGE CORP.
Statements of Income
(Unaudited)
Three Months Three Months
Ended Ended
July 31, July 31,
2003 2002
----------- -----------
Revenues
Gain on sale of loans, net $ 19,819,028 $ 5,073,435
Loan servicing income, net 221,998 54,313
Interest income 2,242,451 901,992
Other income 152,678 20,811
----------- -----------
Total revenues 22,436,155 6,050,551
Expenses
Salaries and commissions 15,801,557 3,769,302
Selling and administrative 2,291,208 1,250,440
Interest expense 1,270,048 442,819
Depreciation 91,643 35,288
----------- -----------
Total expenses 19,454,456 5,497,849
----------- -----------
Income before income taxes and cumulative
effect of change in accounting principle 2,981,699 552,702
Income taxes 1,192,680 221,081
----------- -----------
Income before cumulative effect of change
in accounting principle 1,789,019 331,621
Cumulative effect of change in accounting
principle, net of tax - 86,821
----------- -----------
Net income $ 1,789,019 $ 418,442
=========== ===========
Basic earnings per common share before
cumulative effect of change in
accounting principle $ .46 $ .08
Per share cumulative effect of a change
in accounting principle - .02
----------- -----------
Basic earnings per common share $ .46 $ .10
=========== ===========
Diluted earnings per common share before
cumulative effect of change in
accounting principle $ .43 $ .08
Per share cumulative effect of a change
in accounting principle - .02
----------- -----------
Diluted earnings per common share $ .43 $ .10
=========== ===========