UFM United Financial Mortgage Corp

United Financial Mortgage Corp. Reports Second Quarter Results OAK BROOK, Ill., Dec. 16 /PRNewswire-FirstCall/ -- United Financial Mortgage Corp. (or the "Company") today announced results for its second quarter and six months ended October 31, 2003. Second Quarter Results Revenues for the quarter ended October 31, 2003 increased 55% to $17,133,691 from $11,075,873 for the quarter ended October 31, 2002. Net income rose 48% to $1,322,883, or $0.32 per diluted share, for the most recent quarter, as compared with $894,888, or $0.22 per diluted share, for the corresponding period last year. Six Month Results Revenues for the six months ended October 31, 2003 increased 131% to $39,569,845 from $17,126,424 for the corresponding period of 2002. Six-month net income rose to $3,111,902 or $0.76 per diluted share, as compared to $1,226,509, or $.31 per diluted share for the same period last year. Servicing Portfolio As of October 31, 2003, the mortgage loans in the Company's loan-servicing portfolio had an unpaid principal balance of $1.1 billion, up from $214 million as of the same date last year. Income from loan servicing increased by $426,942 to $503,465 for the quarter ended October 31, 2003, from $76,523 for the same period last year. The weighted average coupon rate of the underlying mortgage loans in the portfolio was approximately 5.4% as of October 31, 2003. Steve Khoshabe, President and Chief Executive Officer of the Company, commented: "As both the Company and the industry experience a significant decrease in loan production, especially when combined with the reduction in overall mortgage financings we typically see this time of year, we continue to focus on building our conventional loan-servicing portfolio as a strategy to manage the risks associated with the cyclical nature of our business. We believe that building our servicing portfolio during a period of historically low interest rates will allow us to create a profitable long-term revenue stream." Mr. Khoshabe added, "Although the 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 as a result of the industry-wide consolidation that has already begun, we will have the opportunity to attract experienced mortgage professionals. This opportunity, combined with our strategy of controlling costs, expanding both organically and through acquisitions, and continuing to selectively build our servicing portfolio, set against the backdrop of our recent public offering 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 (http://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 October 31, 2003 and 2002 (Unaudited) October 31, October 31, 2003 2002 ASSETS Cash and due from financial institutions $751,649 $1,758,534 Interest-bearing deposits in financial institutions 3,484,194 2,593,381 Total cash and cash equivalents 4,235,843 4,351,915 Restricted cash 490,118 1,103,096 Certificates of deposit 1,243,403 1,225,609 Loans held for sale 152,107,800 141,276,713 Notes receivable-related parties 21,147 66,093 Mortgage servicing rights, net 11,506,754 2,669,724 Leasehold improvements and equipment, net 1,087,792 295,762 Prepaid expenses and other assets 1,670,632 843,481 Total assets $172,363,489 $151,832,393 LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Warehouse lines of credit $146,979,389 $137,838,626 Note payable 350,000 350,000 Accrued expenses and other liabilities 9,027,013 4,058,159 Total liabilities 156,356,402 142,246,785 Shareholders' equity Preferred stock, 5,000,000 authorized, no par value, Series A redeemable shares, 63 issued and outstanding at October 31, 2003 and 2002 respectively (aggregate liquidation preference of $315,000) 315,000 315,000 Common stock, no par value, 20,000,000 shares authorized, 4,101,629 and 4,095,029 shares issued at October 31, 2003 and 2002, respectively 6,649,533 6,633,903 Retained earnings 9,364,139 2,907,952 16,328,677 9,856,855 Treasury stock, 176,700 and 158,900 shares at October 31, 2003 and 2002, respectively, at cost (321,590) (271,247) Total shareholders' equity 16,007,087 9,858,608 Total liabilities and shareholders' equity $172,363,489 $151,832,393 UNITED FINANCIAL MORTGAGE CORP. Statements of Income Six months and three months ended October 31, 2003 and 2002 (Unaudited) Six Months Six Months Three Months Three Months Ended Ended Ended Ended October 31, October 31, October 31, October 31, 2003 2002 2003 2002 Revenues Gain on sale of loans $34,370,445 $14,754,254 $14,551,417 $9,680,819 Loan servicing income 725,463 130,836 503,465 76,523 Interest income 4,281,011 2,179,835 2,038,560 1,277,842 Other income 192,926 61,499 40,249 40,689 Total revenues 39,569,845 17,126,424 17,133,691 11,075,873 Expenses Salaries and commissions 26,493,786 11,221,681 10,692,229 7,452,379 Selling and administrative 5,411,482 2,651,287 3,120,273 1,400,847 Interest expense 2,280,984 1,135,697 1,010,937 692,878 Depreciation 191,777 73,575 100,134 38,288 Total expenses 34,378,029 15,082,240 14,923,573 9,584,392 Income before income taxes and cumulative effect of change in accounting principle 5,191,816 2,044,184 2,210,118 1,491,481 Income taxes 2,079,914 817,675 887,235 596,593 Income before cumulative effect of change in accounting principle 3,111,902 1,226,509 1,322,883 894,888 Cumulative effect of change in accounting principle, net of tax -- 86,821 -- -- Net income $3,111,902 $1,313,330 $1,322,883 $894,888 Basic earnings per common share before cumulative effect of change in accounting principle $.79 $.31 $.34 $.23 Per share cumulative effect of a change in accounting principle -- .02 -- -- Basic earnings per common share $.79 $.33 $.34 $.23 Diluted earnings per common share before cumulative effect of change in accounting principle $.76 $.31 $.32 $.22 Per share cumulative effect of a change in accounting principle -- .02 -- -- Diluted earnings per common share $.76 $.33 $.32 $.22 DATASOURCE: United Financial Mortgage Corp. CONTACT: Steve Khoshabe, President & Chief Executive Officer, United Financial Mortgage, +1-630-571-7222, or fax, +1-630-571-2623, or ; or Dave Gentry, Aurelius Consulting Group, Inc., +1-407-644-4256, or fax, +1-407-644-0758, or , for United Financial Mortgage Corp. Web site: http://www.ufmc.com/

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