EXHIBIT 99.1
FOR IMMEDIATE RELEASE:
United Financial Mortgage Corp. Reports First Quarter Results
* Servicing Portfolio Reaches $1.5 Billion
* Steve Khoshabe and Anthony Schweiger added to Board of Directors
Oak Brook, IL, Thursday, September 9, 2004 -- United Financial Mortgage
Corp. (Amex: UFM or the "Company") today announced results for the first
quarter ended July 31, 2004.
First Quarter Results
Revenues for the quarter ended July 31, 2004 decreased $6.9 million to $15.6
million from $22.4 million for the quarter ended July 31, 2003. Net income
was $.9 million, or $.15 per diluted share (based on 6,148,940 fully diluted
shares outstanding) for the most recent quarter, as compared with $1.8
million, or $.43 per diluted share (based on 4,123,196 fully diluted shares
outstanding), for the corresponding period last year.
Mortgage Banking Business
As of July 31, 2004, the mortgage loans in the Company's mortgage loan-
servicing portfolio had an aggregate unpaid principal balance of $1.5
billion, up from $939 million from the same date last year. Income from
mortgage loan-servicing increased by $561 thousand to $783 thousand for the
quarter ended July 31, 2004, a 253% increase from the same period last year.
The weighted average coupon interest rate of the mortgage loans in the loan-
servicing portfolio was approximately 5.4% as of July 31, 2004.
The Company funded $471 million in mortgage loans during the quarter ended
July 31, 2004, a $547 million decrease compared to the quarter ended July
31, 2003.
Commenting on mortgage operations in the Company's first quarter, Steve
Khoshabe, President and Chief Executive Officer of the Company stated,
"Despite facing the continued challenges of today's mortgage environment,
we were able to deliver solid earnings and grow our book value to $4.97
per share."
Mr. Khoshabe added, "We continue to implement our growth strategy of
increasing our servicing portfolio, growing our core origination platform,
and diversifying our business. During the first quarter, we opened two
new retail offices in offices in Chicago, Illinois and Wilmington, North
Carolina and a wholesale operations center in Charlotte, North Carolina.
In addition, we have also added six retail branch offices through our
acquisition of Vision Mortgage Group, Inc.
With our balanced approach of continuing to selectively build our
mortgage loan-servicing portfolio, expanding both organically and through
acquisitions, controlling costs, and diversifying our business, we believe
we are well positioned for continued growth in fiscal 2005."
Other News
At the Company's annual meeting held on September 8, 2004, all proposals
submitted to the shareholders of the Company were approved. Accordingly,
the Board of Directors of the Company is now comprised of seven directors.
The new directors are Messrs. Steve Khoshabe, the Company's President and
Chief Executive Officer and Anthony Schweiger. Mr. Schweiger will serve as
the Company's Audit Committee Chairmen and qualifies as an audit committee
financial expert in accordance with applicable laws. Currently, Mr.
Schweiger serves as the President and Chief Executive Officer of The
Tomorrow Group, LLC, a governance and management consulting firm. Since
1992, he has been a director and the Governance Chair of Radian Group Inc.,
a NYSE traded global provider of credit enhancement products. He also serves
on Radian's Audit and Executive Committees. Since 2001, Mr. Schweiger has
served as a director of Paragon Technologies, Inc., an American Stock
Exchange traded provider of automated solutions for material flow
applications. He has also been an investor and director of Input
Technologies, LLC, a supplier of human-to-machine interface products and
services since February 1998. From 1983 until 1993, Mr. Schweiger served
as Chief Executive Officer of Meridian Mortgage Corporation. In his capacity
as a consultant, Mr. Schweiger advises various service and technology
businesses on governance, operational and strategic issues. Mr. Schweiger
is a graduate of the Wharton School of Finance & Commerce at the University
of Pennsylvania.
Conference Call
Management will host a conference call today at 3:10 p.m. Central Time
(4:10 p.m. Eastern) to discuss the first quarter operating results. The
conference call will be accessible via a toll free number by dialing 800-
659-2037 and providing the passcode 64614461. International callers dial
617-614-2713 and provide the same passcode. A replay of the call will be
available from 6:10 p.m. Central Time September 9, 2004 to 6:00 p.m. Central
Time September 10, 2004 by dialing 888-286-8010 and providing the replay
passcode 65573051. International callers dial 617-801-6888 and use the
replay passcode. 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 go 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 37 retail offices and 7 wholesale operations
centers across 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 July 31,
(Unaudited)
2004 2003
----------- -----------
ASSETS
Cash and due from financial institutions $ 0 $ 1,610,280
Interest-bearing deposits in financial
institutions 11,132,042 6,931,693
----------- -----------
Total cash and cash equivalents 11,132,042 8,541,973
Restricted cash 1,516,690 779,440
Certificates of deposit 437,182 428,857
Loans held for sale 160,247,491 215,967,931
Notes receivable-related parties 12,051 25,617
Mortgage servicing rights, net 18,272,844 9,514,331
Leasehold improvements and equipment, net 1,178,613 1,106,516
Goodwill 574,990 99,505
Prepaid expenses and other assets 2,555,875 1,118,806
----------- -----------
Total assets $195,927,778 $237,582,976
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Warehouse lines of credit $155,617,244 $212,742,927
Note payable - 350,000
Accrued expenses and other liabilities 9,722,972 9,807,090
----------- -----------
Total liabilities 165,340,216 222,900,017
Shareholders' equity
Preferred stock, 5,000,000 authorized, no
parvalue, Series A redeemable shares, 63
issued and outstanding at July 31, 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 July
31, 2004 and 4,100,929 at July 31, 2003 18,687,023 6,648,293
Retained earnings 11,907,129 8,041,256
----------- -----------
30,909,152 15,004,549
Treasury stock, 176,700 shares at
July 31, 2004 and 2003, at cost (321,590) (321,590)
----------- -----------
Total shareholders' equity 30,587,562 14,682,959
----------- -----------
Total liabilities and shareholders' equity $195,927,778 $237,582,976
=========== ===========
UNITED FINANCIAL MORTGAGE CORP.
STATEMENTS OF INCOME
For the three months ended July 31,
(Unaudited)
2004 2003
----------- -----------
Revenues
Gain on sale of loans, net $ 12,286,143 $ 19,819,029
Loan servicing income, net 782,686 221,998
Interest income 2,441,478 2,242,451
Other income 50,172 152,678
----------- -----------
Total revenues 15,560,479 22,436,156
Expenses
Salaries and commissions 9,829,064 15,801,557
Selling and administrative 3,112,453 2,291,208
Interest expense 1,011,278 1,270,048
Depreciation 76,877 91,643
----------- -----------
Total expenses 14,029,672 19,454,456
Income before income taxes 1,530,807 2,981,700
Income taxes 612,323 1,192,680
----------- -----------
Net income 918,484 1,789,020
Preferred stock dividends 0 0
----------- -----------
Net income for common stockholders $ 918,484 $ 1,789,020
=========== ===========
Basic earnings per common share $ .15 $ .46
Diluted earnings per common share $ .15 $ .43
Weighted average shares outstanding 5,964,143 3,889,174