EXHIBIT 99.1
FOR IMMEDIATE RELEASE:
United Financial Mortgage Corp. Reports Second Quarter Results
* Book Value Increases to $5.18 per share
Oak Brook, IL, Thursday, December 9, 2004 -- United Financial Mortgage Corp.
(Amex: UFM or the "Company") today announced results for its second quarter
and six months ended October 31, 2004.
Second Quarter Results
Revenue for the quarter ended October 31, 2004 increased $1.2 million to
$18.3 million from $17.1 million for the quarter ended October 31, 2003.
Net income was $965 thousand, or $.16 per diluted share (based on 6,093,856
fully diluted shares outstanding) for the most recent quarter, as compared
with $1.3 million, or $.32 per diluted share (based on 4,104,634 fully
diluted shares outstanding) for the corresponding period last year.
Second Quarter Ended Second Quarter Ended
October 31, 2004 October 31, 2003
---------------- ----------------
Revenue $18,304,299 $17,133,691
Net Income $965,671 $1,322,883
Shares Outstanding 6,093,856 4,104,634
Fully Diluted EPS $.16 $.32
Six Month Results
Revenue for the six months ended October 31, 2004 decreased 14% to $33.9
million from $39.6 million for the corresponding period of 2003. Net Income
for the six-month period fell to $1.9 million, or $.31 per diluted share
(based on 6,103,832 fully diluted shares outstanding), as compared to $3.1
million, or $.76 per diluted share (based on 4,106,945 fully diluted shares
outstanding) for the same period last year.
Six Months Ended Six Months Ended
October 31, 2004 October 31, 2003
---------------- ----------------
Revenue $33,864,780 $39,569,845
Net Income $1,884,157 $3,111,902
Shares Outstanding 6,103,832 4,106,945
Fully Diluted EPS $.31 $.76
Mortgage Banking Business
As of October 31, 2004, the mortgage loans in the Company's mortgage loan-
servicing portfolio had an aggregate unpaid principal balance of $1.6
billion, up from $1.1 billion from the same date last year. Net income from
mortgage loan-servicing increased by $332 thousand to $835 thousand for the
quarter ended October 31, 2004, a 66% 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 October 31, 2004
and October 31, 2003.
The Company funded $687 million in mortgage loans during the quarter ended
October 31, 2004, a $65 million increase compared to the quarter ended
October 31, 2003.
Commenting on mortgage operations in the Company's second quarter, Steve
Khoshabe, President and Chief Executive Officer of the Company stated, "The
continued industry-wide reduction in refinance volume in the face of excess
capacity has led to intense pricing competition. As a result, our second
quarter was marked by significant price compression on our origination
business, which had a detrimental impact on our operating margins. Against
this backdrop and the continued challenges of today's mortgage origination
environment, we were able to deliver sound earnings and grow our book value
to $5.18 per share."
Mr. Khoshabe added, "We continue to implement our managed growth strategy of
increasing our servicing portfolio, growing our core origination platform,
and diversifying our business. During the second quarter, we opened two new
core retail offices in Baton Rouge, Louisiana and Richmond, Virginia, and a
wholesale operations center in Oklahoma City, Oklahoma. In addition, we
have also added two core retail branch offices in the state of Washington
and four in the state of Illinois through our acquisition of Vision Mortgage
Group, Inc.
With our balanced approach of continuing to selectively build our mortgage
loan-servicing portfolio, careful expansion of the origination platform,
controlling costs, and diversifying our business, we believe we are well
positioned for continued growth in the second half of fiscal 2005."
Other News
Mr. Khoshabe concluded, "We are encouraged by the results of our disciplined
strategy and strong capital base in a very competitive and demanding
marketplace. Concurrently, we continue to explore a number of options to
enhance shareholder value. We believe that our capital base and management
team position us well to execute our strategy to continue to build and
expand our business to generate increased profit and value for our
shareholders."
Conference Call
Management will host a conference call today at 3:30 p.m. Central Time
(4:30 p.m. Eastern) to discuss the second quarter operating results. The
conference call will be accessible via a toll free number by dialing 800-
706-7745 and providing the passcode 61821468. International callers should
dial 617-614-3472 and provide the same passcode. A replay of the call will
be available from 6:30 p.m. Central Time December 9, 2004 to 6:00 p.m.
Central Time December 10, 2004 by dialing 888-286-8010 and providing the
replay passcode 70856863. International callers should 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 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 39 retail offices and 8 wholesale operations
centers across 16 states. For additional information, please visit the
Company's web site at www.ufmc.com.
This press release contains 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, including, among others, changes in demand for
mortgage loans, the Company's access to funding sources and the terms upon
which it can obtain financing, assumptions underlying the value of the
Company's retained mortgage loan-servicing rights, the impact of economic
slowdowns or recessions, management's ability to manage the Company's growth
and planned expansion, difficulties in integrating or operating newly
acquired businesses, competition in the Company's market, changes in
government regulations, the Company's ability to expand origination volume
while reducing overhead, the impact of new legislation or court decisions
restricting the activities of lenders or suppliers of credit in the
Company's market, other risk factors disclosed from time to time in the
Company's filings with the Securities and Exchange Commission and 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:
Dave Gentry, Aurelius Consulting Group, Inc., Century Bank Building,
541 S. Orlando Avenue, Suite 206, Maitland, FL 32751,
(407) 644-4256, Fax: (407) 644-0758, dave@aurcg.com
-- FINANCIAL TABLES FOLLOW --
UNITED FINANCIAL MORTGAGE CORP.
BALANCE SHEETS
As of October 31,
(Unaudited)
2004 2003
----------- -----------
ASSETS
Cash and due from financial institutions $ - $ 741,194
Interest-bearing deposits in financial
institutions 8,227,266 3,259,681
----------- -----------
Total cash and cash equivalents 8,227,266 4,000,875
Restricted cash 1,832,779 1,536,605
Certificates of deposit 437,182 431,884
Loans held for sale 266,640,387 152,107,800
Mortgage servicing rights, net 20,088,215 11,506,754
Leasehold improvements and equipment, net 1,326,315 1,087,793
Goodwill 795,542 104,809
Prepaid expenses and other assets 3,362,220 1,586,969
----------- -----------
Total assets $302,709,906 $172,363,489
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Warehouse lines of credit $259,686,198 $146,979,389
Note payable - 350,000
Accrued expenses and other liabilities 11,467,505 9,027,013
----------- -----------
Total liabilities 271,153,703 156,356,402
Shareholders' equity
Preferred stock, 5,000,000 authorized, no
par value, 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, 6,149,444 shares issued at
October 31, 2004 and 3,921,545 at October
31, 2003 18,689,993 6,649,538
Retained earnings 12,872,801 9,364,139
----------- -----------
31,877,794 16,328,677
Treasury stock, 176,700 shares at
July 31, 2004 and 2003, at cost (321,590) (321,590)
----------- -----------
Total shareholders' equity 31,556,203 16,075,087
----------- -----------
Total liabilities and shareholders' equity $302,709,906 $172,363,489
=========== ===========
UNITED FINANCIAL MORTGAGE CORP.
STATEMENTS OF INCOME
(Unaudited)
Three months ended Six months ended
October 31, October 31,
-------------------------------------------------------
2004 2003 2004 2003
---------- ---------- ---------- ----------
Revenue
Gain on sale of loans, net $14,091,226 $14,551,417 $26,377,369 $34,370,445
Loan servicing income, net 835,344 503,465 1,618,030 725,463
Interest income 3,105,603 2,038,560 5,547,081 4,281,011
Other income 272,126 40,249 322,300 192,926
---------- ---------- ---------- ----------
Total revenues 18,304,299 17,133,691 33,864,780 39,569,845
Expenses
Salaries and commissions 11,357,273 10,692,229 21,186,341 26,493,786
Selling and administrative 3,701,295 3,120,273 6,813,743 5,411,482
Interest expense 1,558,442 1,010,937 2,569,720 2,280,984
Depreciation 77,838 100,134 154,715 191,777
---------- ---------- ---------- ----------
Total expenses 16,694,848 14,923,573 30,724,519 34,378,029
Income before income taxes 1,609,451 2,210,118 3,140,261 5,191,816
Income taxes 643,780 887,235 1,256,104 2,079,914
---------- ---------- ---------- ----------
Net income $ 965,671 $ 1,322,883 $ 1,884,157 $ 3,111,902
========== ========== ========== ==========
Basic earnings per
common share $ 0.16 $ 0.34 $ 0.32 $ 0.79
Diluted earnings per
common share $ 0.16 $ 0.32 $ 0.31 $ 0.76
Basic shares outstanding 5,965,152 3,924,500 5,964,647 3,921,545
Diluted shares outstanding 6,093,856 4,104,634 6,103,832 4,106,945