United Financial Mortgage Corp. Reports Third Quarter Results

United Financial Mortgage Corp. Reports Third Quarter Results 


OAK BROOK, Ill., March 9  /PRNewswire-FirstCall/ -- United Financial Mortgage
Corp.  (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
http://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 http://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.

                     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 onsale 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


DATASOURCE: United Financial Mortgage Corp.



CONTACT:  Steve Khoshabe, President & Chief Executive Officer of United

Financial Mortgage Corp., [phone], fax, [phone],

; or Dave Gentry of Aurelius Consulting Group, Inc.,

[phone], fax, [phone], , for United Financial

Mortgage Corp.



Web site:  http://www.ufmc.com/ 

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