EXHIBIT 99.1
FOR IMMEDIATE RELEASE:
United Financial Mortgage Corp. Reports Record Revenues and Earnings for
Fiscal 2004
Oak Brook, IL, Thursday, June 24, 2004 -- United Financial Mortgage Corp.
(Amex: UFM or 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 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 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 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, investorinfo@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
-- 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 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 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
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