EXHIBIT 99.2
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., Maitland City Plaza,
225 S. Swoope Avenue, Suite 214, Maitland, FL 32751,
(407) 644-4256, Fax: (407) 644-0758, dave@aurcg.com
FOR IMMEDIATE RELEASE:
United Financial Mortgage Corp. Reports Third Quarter Results
Oak Brook, IL, March 9, 2004 -- United Financial Mortgage Corp. (Amex: UFM
or the "Company") today announced results for its third quarter and nine
months ended January 31, 2004.
Third Quarter Results
Revenues for the quarter ended January 31, 2004 decreased $3.2 million to
$12.7 million from $15.9 million for the quarter ended January 31, 2003.
Net income was $638 thousand, or $.12 per diluted share, for the most recent
quarter, as compared with $1.5 million, or $.39 per diluted share, for the
corresponding period last year.
Nine Month Results
Revenues for the nine months ended January 31, 2004 increased $19.2 million
to $52.3 million from $33.0 million for the corresponding period last year.
Nine month net income rose to $3.7 million, or $.84 per diluted share, as
compared to $2.8 million or $.72 per diluted share for the same period last
year.
Mortgage Banking Business
As of January 31, 2004, the mortgage loans in the Company's loan-servicing
portfolio had an aggregate unpaid principal balance of $1.2 billion, up from
$303 million as of the same date last year. Income from mortgage loan
servicing increased by $865 thousand to $964 thousand for the quarter ended
January 31, 2004 and from $230 thousand to $1.7 million for the nine months
ended January 31, 2004, an 873% and 635% increase, respectively, from the
same periods last year. The weighted average coupon rate of the underlying
mortgage loans in the portfolio was approximately 5.4% as of January 31,
2004.
UFM funded $395 million in mortgage loans in the third quarter ended January
31, 2004, a $227 million decrease as compared to the second quarter ended
October 31, 2003. For the nine months ended January 31, 2004, UFM funded
$2.0 billion in mortgage loans, compared to $1.3 billion during the same
period last year, an increase of $.7 billion.
Commenting on mortgage operations in the third quarter, Steve Khoshabe,
President and Chief Executive Officer of the Company stated, "The rising
interest rate environment during our third quarter combined with the fact
that our third quarter has traditionally been our slowest period, resulted
in our mortgage origination volume decreasing significantly. However, as
of the start of our fourth quarter, we have seen our mortgage origination
pipeline begin to increase and, assuming a stable interest rate environment,
we anticipate this trend to continue well into our fourth quarter."
Mr. Khoshabe added, "Since the public offering in December, the Company
has been implementing and developing its growth strategy. We have been
focused on opening new branch offices, rolling out our new web-based loan
origination system to both our retail branch offices and our wholesale
mortgage brokers and expanding the mortgage products that we offer. I am
pleased to report that we have opened three new offices: Norfolk, Virginia;
Rochester, New York and an additional office in downtown Chicago. In
addition, we are preparing to launch our new origination system at the end
of this month. With this system, we have made a substantial investment to
help increase efficiency, speed and reliability. With this roll out, we
will have the scalability necessary to open new branch offices and expand
our current locations. More significant is the increase in our sub-prime
and ALT-A business. Whereas these two product categories accounted for 7%
of originations in the first six months of this fiscal year, they accounted
for 17% of originations during the third quarter. We believe that our
continued efforts to make these products more accessible will result in
this higher margin business comprising a greater percentage of our overall
originations.
As we look toward recruiting experienced mortgage professionals, our
continued challenge will be to balance growth opportunities with the reality
of today's mortgage market. As a result, we will continue to evaluate and
align infrastructure costs with volume levels on an on going basis."
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.
Additionally, at the end of our third quarter, our cash or cash equivalents
position was $14.2 million or 49% of our net capital. Although we believe
that the industry wide consolidation that has already begun will ultimately
benefit those companies with the opportunistic capital ready to deploy, we
will continue to evaluate all of our options to obtain the highest and best
use of capital."
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 third quarter operating results. The
conference call will be accessible via a toll free number by dialing 800-
901-5218 and providing the pass code 11393023. International callers should
dial 617-786-4511 and provide the same pass code. A replay of the call
will be available from 6:00 p.m. Central Time March 9, 2004 to 6:00 p.m.
Central Time March 10, 2004 by dialing 888-286-8010 and providing the replay
pass code 30751576. International callers should dial 617-801-6888 and use
the same replay pass code. The conference call will also be webcast live via
the Internet. To listen to the live webcast, log on to the Company's web
site at www.ufmc.com and click through to the Investor Information section.
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 36 offices in 14 states. For additional
information, please visit the Company's web site at 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. 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)
January 31, January 31,
2004 2003
----------- -----------
ASSETS
Cash and due from financial institutions $ 13,083,135 $ 3,215,799
Interest-bearing deposits in financial
institutions 1,148,292 4,557,363
----------- -----------
Total cash and cash equivalents 14,231,427 7,773,162
Restricted cash 1,497,049 1,107,432
Certificates of deposit 1,244,830 1,227,451
Loans held for sale 104,941,105 117,423,900
Notes receivable_related parties 14,111 44,687
Mortgage servicing rights, net 12,266,814 3,030,721
Leasehold improvements and equipment, net 1,131,768 354,702
Prepaid expenses and other assets 2,359,702 930,479
----------- -----------
Total assets $137,686,806 $131,892,534
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Warehouse lines of credit $100,197,065 $114,773,548
Note payable 350,000 350,000
Accrued expenses and other liabilities 8,417,553 5,690,031
----------- -----------
Total liabilities 108,964,618 120,813,579
Shareholders' equity
Preferred stock, 5,000,000 authorized, no par
value, Series A redeemable shares, 63 issued
and outstanding at January 31, 2004 and
April 30, 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
January 31, 2004 and 4,095,229 at April 30,
2003 18,726,613 6,634,403
Retained earnings 10,002,165 4,451,143
----------- -----------
29,043,778 11,400,546
Treasury stock, 176,700 shares at January 31,
2004 and at April 30, 2003, at cost (321,590) (321,591)
----------- -----------
Total shareholders' equity 28,722,188 11,078,955
----------- -----------
Total liabilities and shareholders' equity $137,686,806 $131,892,534
=========== ===========
UNITED FINANCIAL MORTGAGE CORP.
Statements of Income
(Unaudited)
Nine months Nine months Three Months Three Months
Ended Ended Ended Ended
January 31, January 31, January 31, January 31,
2004 2003 2004 2003
---------- ---------- ---------- ----------
Revenues
Gain on sale of loans $44,230,985 $28,892,817 $ 9,860,540 $14,138,564
Loan servicing income 1,689,567 229,877 964,104 99,041
Interest income 6,016,639 3,777,305 1,735,628 1,597,471
Other income 318,457 105,873 125,531 44,373
---------- ---------- ---------- ----------
Total revenues 52,255,648 33,005,872 12,685,803 15,879,449
Expenses
Salaries and commissions 34,700,216 22,126,333 8,206,430 10,904,653
Selling and administrative 7,926,284 4,229,625 2,514,802 1,578,327
Interest expense 3,133,030 1,921,889 852,046 786,192
Depreciation 240,927 111,857 49,150 38,288
---------- ---------- ---------- ----------
Total expenses 46,000,457 28,389,704 11,622,428 13,307,460
---------- ---------- ---------- ----------
Income before income taxes
and cumulative effect of
change in accounting
principle 6,255,191 4,616,168 1,063,375 2,571,989
Income taxes 2,505,263 1,846,467 425,349 1,028,796
---------- ---------- ---------- ----------
Income before cumulative
effect of change in
accounting principle 3,749,928 2,769,701 638,026 1,543,193
Cumulative effect of change
in accounting principle,
net of tax - 86,821 - -
---------- ---------- ---------- ----------
Net income $ 3,749,928 $ 2,856,522 $ 638,026 $ 1,543,193
========== ========== ========== ==========
Basic earnings per common
share before cumulative
effect of change in
accounting principle $ .88 $ .71 $ .13 $ .39
Per share cumulative effect
of a change in accounting
principle - .02 - -
---------- ---------- ---------- ----------
Basic earnings per
common share $ .88 $ .73 $ .13 $ .39
========== ========== ========== ==========
Diluted earnings per common
share before cumulative
effect of change in
accounting principle $ .84 $ .70 $ .12 $ .39
Per share cumulative effect
of a change in accounting
principle - .02 - -
---------- ---------- ---------- ----------
Diluted earnings per
common share $ .84 $ .72 $ .12 $ .39
========== ========== ========== ==========