United Financial Mortgage Corp

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					                                                                              EQUITY RESEARCH


Mortgage Finance
February 12, 2004                             Initiation                                                      Buy
Closing Price (2/11/04):
Target Price:
                                      $7.25
                                       9.00   United Financial Mortgage Corp.
52-Week Range:                   3.90-11.50   (UFM – AMEX – $7.25)
Market Cap (MM):                     $44.3
                                                We are initiating coverage of United Financial Mortgage Corp.
Diluted Shares O|S (MM):               6.1      (UFM), with a Buy rating and target price of $9.00. UFM is an
Float (MM):                            3.3      emerging provider of diversified mortgage banking services. The low
Avg. Vol. (000)                       62.4      interest rate environment over the past three years has lead to an
3Q'04E BV / Share:                   $4.80      abundance of home financing activity, fueling much of UFM’s growth
Dividend/Yield:                        NA
                                                and profitability.

Risk Profile:                         High      Contraction in the consumer refinance segment is likely to lead to
                                                consolidation in the mortgage-banking sector. Today, most
FYE April 30th,            EPS        P/E       mortgage companies require scale and diversification to effectively
       2002A                $0.26     27.9x     compete. If rates rise and competitors’ financial results are adversely
                                                impacted, we believe the Company is positioned to hire experienced
       2003A                 1.14      6.4
                                                sales professionals from failing or struggling companies. The
       2004E                 1.04      7.0
                                                Company could also pursue acquisitions to gain market share and
       2005E                 0.80      9.0      increase scale. Either way, we believe management is committed to
 LT Earnings Growth        10%                  diversifying the business to offset its dependency on mortgage
                                                originations.
                                                UFM is expanding and diversifying its service and product
                                                platforms to broaden its product offering and reduce risk. We
                                                believe UFM is taking the necessary steps to reduce its exposure and
                                                reliance on the mortgage refi business. In addition to increasing its
                                                mortgage servicing business, other areas of growth we believe could
                                                include expanding origination (particularly in the sub-prime market)
                                                and developing title insurance operations.
                                                UFM possesses a healthy balance sheet. We believe UFM finished
                                                3Q’04 with approximately $20 million in cash (excluding restricted
                                                cash). The Company appears to have adequate capital to fund current
                                                operations and pursue a variety of opportunities to further extend and
BigCharts.com                                   diversify its current mix of business, including potential acquisitions
                                                of selected businesses and/or operations.
                                                Target Price Analysis. In an environment of potentially rising
Andrew Scott     (212) 895-3575
                                                interest rates, we do not believe the market would provide UFM with
 Ascott@maximgrp.com                            a higher multiple, given its existing operations. Accordingly, our
                                                $9.00 target price is derived by applying a price/book multiple of 1.5x
                                                (similar to last year) our projected 2005 book value of $5.68 per share.




                                                  Maxim Group LLC
                                                405 Lexington Avenue
                                                 New York, NY 10174

                     SEE LAST PAGES FOR IMPORTANT DISCLOSURES
                                                       UNITED FINANCIAL MORTGAGE CORP. (UFM)


                                        CORPORATE PROFILE

United Financial Mortgage Corp.                                   Institutional Ownership:       1.6%
815 Commerce Drive                                                Khoshabe Family:                38%
Oak Brook, Illinois 60523                                         Shares Short (000s):             107
(630) 571-7222                                                    % of Public Float:             6.7%
www.ufmc.com

Senior Management:                                                Balance Sheet Summary ($MM):
Joseph Khoshabe, Chairman                                         (As of 10/31/03)
Steven Khoshabe, President/CEO                                    Equity:                       $16.0
Robert Hiatt, CFO                                                 Assets:                       172.4
                                                                  Cash:                           5.5
                                                                  Total Debt:                   147.3
Company Description: United Financial Mortgage                    ROE FY2004E:                   18%
Corp. (UFM) was organized in 1986 and is a mortgage
bank operating in 36 states. UFM originates, sells, and                     Quarterly EPS
services residential mortgages, with a primary focus on
                                                                          2003A     2004E       2005E
the wholesale and retail residential mortgage sectors.
                                                                  1Q      $0.08     $0.43A       $0.20
Recently, UFM has begun to diversify its business model
                                                                  2Q       0.22      0.32A        0.20
by increasing it mortgage loan servicing operations and
loan product offerings.        The Company recently               3Q       0.39      0.20         0.22
completed a secondary offering raising approximately              4Q       0.44      0.16         0.19
$12 million.                                                      FY      $1.14     $1.04        $0.80
                                                                  Fiscal Year Ends April 30th
Management: Joseph Khoshabe founded the company
in 1996 and served as CEO until assuming the Chairman
role in April 2003. Steven Khoshabe joined the                       Quarterly Revenue ($MM)
Company in 1994 and served as the CFO until becoming                   2003A 2004E        2005E
the CEO in April 2003.                                            1Q     $6.1    $22.4A    $12.7
                                                                  2Q     11.1     17.1A     12.7
Risks:                                                            3Q     15.9     13.2      11.3
                                                                  4Q     18.3     11.0      10.7
•   Rising interest rates could lead to decreasing
                                                                  FY    $51.3    $63.8     $47.3
    mortgage origination volume and adversely impact
                                                                  Fiscal Year Ends April 30th
    UFM’s financial results.
•   The Company’s ability to maintain adequate credit
    facilities (and its covenants) to make mortgage loans         Analysts Following the Co.:       0
    could become constrained.                                     (Excluding Maxim Group)
                                                                  Consensus Estimate:
•   The Company’s origination volume is geographically
                                                                       FY 2004:                   NA
    concentrated in four states.
                                                                       FY 2005:                   NA
•   The mortgage banking industry is highly regulated
    and could be impacted by new legislative changes.
                                                                  Investor Relations Contact:
                                                                  Steven Khoshabe, CEO
                                                                  (630) 571-7222




Maxim Group LLC                                                                                     2
                                             UNITED FINANCIAL MORTGAGE CORP. (UFM)


                       INVESTMENT SUMMARY AND CONCLUSION

                        United Financial Mortgage Corp. (UFM) is a rapidly emerging mortgage
Riding the tide of a    banking company benefiting from increased homeowner activity amid a
low interest rate       low interest rate environment. Over the past several years, activity in
environment             mortgage originations and the amount of mortgage debt growth have
                        been unprecedented in U.S. history. The Company, as well as other
                        sector related companies, has been the major beneficiaries of this low
                        interest rate environment.

                        Management is pursuing several avenues to accelerate growth and
                        capitalize on the high volume currently generated in the
                        marketplace. Overall, we believe management is focused on a
                        diversified business strategy that can leverage its existing infrastructure
                        and provide some new services. In our opinion, the recent capital raise
                        provides the Company with the funds to pursue synergistic strategic
                        acquisitions.

                        Existing operations could be leveraged to include additional services,
                        which would help increase cash flow from existing business.
                        Diversification should allow the Company to better manage the risks
                        associated with the cyclical nature of this industry. In our opinion,
                        diversification could be accomplished with the inclusion of a title
                        insurance subsidiary and expanding the existing product offerings. The
                        goal would be to open additional mortgage brokerage offices and
                        leverage same-store sales with additional products and services for cross-
                        selling opportunities. The increased flexibility should help sustain
                        continued growth and profitability, while also providing better stability
                        and visibility to future earnings.

                        New products and services should create expansion opportunities for
                        UFM in 2004. As the market is likely to consolidate, we believe
                        outsourcing could be a common theme going forward. Numerous
                        mortgage-banking participants have exited the industry over the past
                        several years due to its cyclical nature. Processing mortgages for smaller
                        companies also seem to be an appropriate inclusion into UFM’s strategy.

                        UFM’s ability to increase its mortgage loan servicing business
                        through increasing its servicing portfolio and mortgage servicing
                        rights (MSRs) strengthens an existing profit stream that is
                        countercyclical to the declining origination business. Management is
                        likely to selectively focus on continuing to increase the portfolio of
                        mortgage loans serviced. The income from servicing is generated from
                        the receipt of fees for servicing mortgage loans that the Company
                        originated in the secondary market. In an environment of rising interest
                        rates, UFM’s MSRs should appreciate in value and contribute to
                        profitability. Additionally, the retention of MSRs contributes to UFM’s
                        ability to sell additional products and services to customers, including
                        second mortgages, home equity lines, or home improvement loans.

                        Management has a relationship in place with a sub-servicer that performs
                        a private label arrangement with a leading loan servicer. For a per loan


Maxim Group LLC                                                                                  3
                                       UNITED FINANCIAL MORTGAGE CORP. (UFM)

                  fee, the sub-servicer collects the monthly principal and interest payments
                  and performs the escrow services on behalf of UFM. The Company is
                  provided with a retained mortgage servicing rights portfolio without
                  incurring a large capital investment in back office infrastructure. In our
                  opinion, we believe the Company could be more aggressive in increasing
                  its servicing operations in 2004.

                  The Company is making an effort to increase its commercial
                  mortgage lending operation. Currently, the Company’s commercial
                  operations are predominantly focused on small to medium sized
                  businesses that would have difficulty obtaining commercial mortgage
                  loans from traditional sources. UFM has an existing $2 million credit
                  line for the sole purpose of funding commercial mortgages. While no
                  announcements have been publicly made, we believe UFM can expand
                  and leverage its infrastructure for additional commercial mortgage
                  activities.

                  The nonconforming mortgage sector remains a more attractive and
                  profitable product. The nonconforming mortgage sector posted strong
                  growth and profitability in 2003, and we expect similar performance over
                  the next several years. The sub-prime origination market should
                  experience a more moderate decline than the prime market, and UFM is
                  already aggressively expanding its operations in this area. In fiscal 2003,
                  approximately 9% of UFM’s production volume consisted of non-
                  conforming loans (sub-prime and Alt-A), and we estimate that almost
                  20% of fiscal 2004’s volume will come from non-conforming loans.
                  UFM’s continued growth in this area should partially offset the declining
                  origination market for prime mortgages as well as provide additional
                  revenue streams to the Company.

                  We believe a downturn in originations, stemming from potential
                  rising interest rates, could accelerate market consolidation.
                  Mortgage banking is a commodity and scale business, which has thin
                  margins and zero pricing power. The problem with mortgages is that
                  they are low-yielding assets that are difficult to fund properly and
                  expensive to originate and manage. To lessen its dependence on
                  originations, we would look for UFM to add scale and diversification via
                  acquisitions. The rising interest rate environment could make acquisition
                  candidates more attractively priced. In our opinion, we believe natural
                  fits are title insurance, loan servicing, or a mortgage real estate
                  investment trust (REIT). We are witnessing more activity in public
                  markets regarding conversions of mortgage brokers into REITs, and in
                  our opinion, a transformation of UFM into a REIT would be a positive
                  development that if occurred, would prompt us to reevaluate our
                  investment perspectives and thesis on the Company.

                  The investments in infrastructure and experienced personnel should
                  lead to stable organic growth of operations in 2004. New personnel
                  are allowing the Company to penetrate new geographic markets without
                  incurring material expenditures or costs. The recruitment of experienced
                  loan originators with expertise in the mortgage lending industry and
                  long-standing relationships with consumers, builders, and real estate


Maxim Group LLC                                                                            4
                                           UNITED FINANCIAL MORTGAGE CORP. (UFM)

                      agents is a more cost-effective method of expansion. As a result, since
                      April 30, 1998, the Company has expanded from three to 28 offices.



                      Overall, we view 2004 as a transition year for UFM, as the primary
                      growth engine of the past few years cools amid potentially rising
                      interest rates and declining production volume. UFM’s ability to
                      expand its business model by altering its loan production mix and
                      increasing its servicing portfolio should contribute to greater financial
                      stability. Additionally, opportunistic acquisitions of selected sales teams,
                      portfolios, and even niche or smaller regional players could help
                      transition UFM to a more stable business model and position the
                      Company to operate successfully in a higher interest rate environment.

                      We believe the Company possess the necessary resources (personnel and
                      capital) to take the business to the next level and are initiating coverage
                      with a Buy rating.



                                    VALUATION



                      We are initiating coverage of UFM with a Buy investment rating due
UFM is fully valued   to an expected shift in its business model and its attractive valuation
at current levels     versus its peers. Historically, the industry does not trade with valuation
                      metrics of P/E or EV/Operating Income but on a price/book basis.
                      Currently, the mortgage-banking sector trades at approximately 2.1x-2.3
                      book value, while the Company is trading at roughly 1.4-1.5x book
                      value. We believe the discount reflects a combination of the company’s
                      smaller size vis-à-vis its peer group as well as lack of investor awareness.
                      As UFM broadens the business into less cyclical operations, we believe
                      that the discount to the peer group could narrow. However, in the near
                      term and facing an environment of potentially lower interest rates, we
                      believe a price/book multiple of 1.5x our 2005 projected book value per
                      share of $5.68 is appropriate at this time, which would yield a 12 month
                      target price of approximately $9.00 (See comparable companies table on
                      following page).




Maxim Group LLC                                                                                 5
                                                                                            UNITED FINANCIAL MORTGAGE CORP. (UFM)


Comparable Companies Analysis
(Amounts in 000s except per share data)

                                                       Recent     52 Week        Market       Book               CY EPS (a)                 P/E             P/E-to-Growth P/Bk
Company                                       Ticker    Close     Low   High     Value        Value      2003 2004 2005 LT Growth   2003    2004    2005     2004    2005
United Financial Mortgage Corp.               UFM      $7.25    $3.90 $11.50      $44,328     $29,323   $1.33 $0.78 $0.74     10%    5.4x    9.3x    9.7x    0.93x 0.97x   1.5x
Accredited Home Lenders Holding Co.           LEND     36.16     6.99 43.24       761,023     177,283    4.90  5.11   4.50   15%     7.4     7.1     8.0     0.47    0.54   4.3
American Residential Investment Trust, Inc.   INV       8.39     3.35 12.21        71,494      88,827     NA    NA     NA      NA    NA      NA      NA        NA     NA    0.8
Countrywide Financial Corp.                   CFC      89.37    37.86 89.10    12,760,964   7,512,493   12.44 10.15 10.41    13%     7.2     8.8     8.6     0.68    0.66   1.7
Delta Financial Corp.                         DFC       9.88     1.58 11.50       183,206      89,072     NA    NA     NA      NA    NA      NA      NA        NA     NA    2.1
Doral Financial                               DRL      33.31    19.13 34.94     2,454,582   1,508,292    3.51  4.18   5.12   23%     9.5     8.0     6.5     0.35    0.29   1.6
E-LOAN, Inc.                                  EELN      2.95     2.04   7.20      198,069      80,433    0.34  0.21    NA      NA    8.7    14.0     NA        NA     NA    2.5
Impac Mortgage Holdings                       IMH      20.44    11.05 21.28     1,086,243     430,134    2.35  2.44   2.60     6%    8.7     8.4     7.9     1.32    1.24   2.5
IndyMac Bancorp. Inc.                         NDE      32.58    17.65 33.15     1,856,767     925,666    3.02  3.07   3.22   14%    10.8    10.6    10.1     0.76    0.72   2.0
New Century Financial Corp.                   NCEN     49.30    17.18 51.80     1,827,058     476,277    6.44  7.26   8.35   15%     7.7     6.8     5.9     0.45    0.39   3.8
Pelican Financial, Inc.                       PFI       8.14     2.53   8.23       36,764      39,977     NA    NA     NA     NA     NA      NA      NA        NA     NA    0.9
Saxon Capital, Inc.                           SAXN     28.77    10.76 30.10       872,090     324,599    2.13  2.63    NA     NA    13.5    10.9     NA        NA     NA    2.7

                                              Low                                                                             6%   7.2x      6.8x    5.9x   0.35x   0.29x   0.8x
                                              Average                                                                        14% 9.17        9.3     7.8    0.67    0.64    2.3
                                              Median                                                                         15% 8.69        8.6     7.9    0.58    0.60    2.1
                                              High                                                                           23% 13.51      14.0    10.1    1.32    1.24    4.3

Source: Companies' reports, consensus, and Maxim Group LLC estimates. Closing prices are as of February 11, 2004.
Note: Low, average, median, and high calculations exclude UFM.
NA = Not Available, NM = Not Meaningful.
(a) EPS estimates are calendarized to a December year end.




                                                                                       RISKS

                                                                 In our opinion, UFM is faced with a business model that might not be
              A potentially higher                               ideally suited for the current economic environment. Management will
              interest rate                                      need to initiate new corporate development ventures or alter operations
              environment in 2004                                to protect against potential declining financial results. UFM’s continued
              and beyond could                                   success could depend on its ability to diversify its revenue sources,
              impact financial                                   increase its loan servicing business, streamline its back-office operations,
              results
                                                                 and aggressively increase its share of a shrinking origination market. As
                                                                 a result, we remain slightly cautious in the near-term but believe UFM’s
                                                                 management team could be successful in diversifying business going
                                                                 forward. Other material risks include:

                                                                 Fluctuating interest rates could be beneficial to Company results,
                                                                 but rising interest rates may adversely impact financial results.
                                                                 Higher interest rates could make it more difficult for homeowners to
                                                                 borrow or qualify for residential property leading to a decline in volume.
                                                                 Until the Company can further diversify its business model, bottom line
                                                                 results are closely correlated to interest rate movements. Potentially
                                                                 higher interest rates could also lead to a decline in home values, which
                                                                 could further impact volume and put the Company at greater risk.

                                                                 Decline in industry-wide mortgage origination volume could
                                                                 pressure profitability. As interest rates begin to rise and the refi boom
                                                                 cools, production volume of mortgages could decline, resulting in
                                                                 increased competition among originators for a shrinking pool of
                                                                 mortgages. Profitability could be impacted, as net interest margins
                                                                 compress from increasing competition.


             Maxim Group LLC                                                                                                                                    6
                                        UNITED FINANCIAL MORTGAGE CORP. (UFM)

                  The Company requires substantial cash to support operating
                  activities and its growth plans. The Company primarily relies on
                  funding its activities through borrowings under credit facilities, and to a
                  lesser extent, its internally generated cash flow. The loan origination
                  business requires continued access to adequate credit facilities and lack
                  of access to these facilities could impair growth and financial results.
                  Also, the credit facilities contain extensive restrictions that require the
                  Company to satisfy certain financial tests. A failure to meet the
                  covenants could trigger action against the Company to assume the
                  collateral of which the loans were pledged against. Failure to maintain
                  compliance with these covenants could impact the Company’s ability to
                  continue as an on-going concern.

                  Over 90% of the Company’s origination volume was generated from
                  customers in four states. Should any of these states, which include
                  California (50%), Illinois (21%), Oregon (13%), and Utah (8%), suffer
                  adverse economic, political, or natural disaster woes, the Company’s
                  results could become materially impacted. Also, a decline in property
                  values or foreclosures and its losses on the mortgage loans the Company
                  originates could increase substantially.

                  The mortgage banking industry is highly regulated. The industry is
                  subject to the rules and regulations of a variety of agencies including
                  Fannie Mae, Freddie Mac, the Federal Housing Administration,
                  Department of Housing and Urban Development, Department of
                  Veteran’s Affairs, and other federal, state, and local entities. In addition,
                  predatory lending, which mostly concerns subprime mortgages, is an
                  evolving issue currently being addressed by regulators. New legislation
                  and/or failures to meet the rules set forth could impact the Company’s
                  ability to act as an operating company.



                          OPERATING OVERVIEW

                  UFM’s business model currently focuses on two areas: residential
                  mortgage origination activities, and mortgage loan servicing by retaining
                  the servicing rights on selected mortgage loans that are originated. On a
                  limited level, UFM also has a mortgage brokering operation. UFM is
                  currently authorized to conduct business in 36 states.

                  The Company’s mortgage banking business is primarily focused on the
                  origination of residential mortgage loans that are principally prime credit
                  quality, first-lien mortgage loans secured by single family residences and
                  one-to-four family residential properties. These loans consist of
                  conventional mortgage loans, FHA-insured mortgage loans, and VA-
                  guaranteed mortgage loans. The majority of UFM’s conventional loan
                  originations are conforming mortgages, which meet the requirements for
                  purchasing by Fannie Mae or Freddie Mac. UFM makes conventional
                  non-conforming mortgage loans with original balances up to $3 million.
                  During the fiscal year ended April 30, 2003, UFM originated
                  approximately $2 billion in loans for resale. Currently, approximately


Maxim Group LLC                                                                              7
                                       UNITED FINANCIAL MORTGAGE CORP. (UFM)

                  50-60% of UFM’s loans are conventional prime, less than 20% are
                  government, and the remainder is Alt-A and sub-prime.

                  UFM focuses its operations on increasing its loan production capabilities,
                  promoting a strong sales oriented culture through its mortgage loan
                  origination channels, broadening its line of loan products, expanding its
                  loan servicing operations, and leveraging technologies to reduce cost and
                  maximize efficiency and productivity.



                  Mortgage loan production is currently the primary revenue
Mortgage Loan     generator. UFM originates mortgage loans through its Wholesale
Origination       Origination Division, Retail Origination Division, and more recently,
Operations        through relationships with Internet mortgage referral sites.

                  The Wholesale Origination Division involves funding of mortgage loans
                  submitted by non-affiliated mortgage brokers. The Company realizes
                  revenues from the sale of these mortgage loans in the secondary market
                  to buyers for a price greater than the amount paid to the mortgage broker.
                  This includes fee income relating to mortgage servicing rights from the
                  Company’s service portfolio. The wholesale origination business is
                  generally less profitable on a per loan basis than retail origination, but
                  expansion is not as capital intensive, since operations require establishing
                  office space and additional overhead expenses. The Wholesale Division
                  acquires mortgage loans from a network of over 200 active relationships
                  including mortgage brokers and other financial intermediaries, such as
                  banks. UFM’s Wholesale Origination Division currently includes five
                  branch offices in three states (Oak Brook, Illinois; Midvale, Utah; and
                  Fair Oaks, Chatsworth, and Irvine, California). For FY2003, the
                  wholesale operations accounted for 85.5% of total loan production
                  volume.

                  The Company selectively singles outs the mortgage brokers it seeks to
                  deal with. The Company reviews items such as reputation, book of
                  business, mortgage lending experience, references, and financial
                  statements. The brokers work directly with the borrower to submit a
                  fully processed loan application for underwriting determination. The
                  Company then applies its underwriting standard to each loan applicant
                  for underwriting determination.

                  The Retail Origination Division involves the direct solicitation of
                  realtors, builders, prospective borrowers and others for the origination of
                  mortgage loans. The principal revenue contributor is the premium
                  received from the purchaser of the mortgage loan and any points or fees
                  paid by the borrower over the cost to fund the mortgage loan. Typically,
                  the Company shares the premium and/or points and fees on a negotiated
                  basis with loan officers and others who procure the mortgage loan and
                  assist in the loan origination process. Historically, the Retail Origination
                  Division accounts for 13%-17% of mortgage loan origination volume.
                  UFM’s retail operations currently include 28 branch offices in 12 states,



Maxim Group LLC                                                                             8
                                            UNITED FINANCIAL MORTGAGE CORP. (UFM)

                        with approximately 94% of 1Q’04 production concentrated in four states:
                        California (52%), Illinois (21%), Oregon (13%), and Utah (6%).

                        Recently, the Company entered into a relationship with LendingTree,
                        Inc., in an effort to generate more customers at a lower cost. The
                        Internet arrangement allows the Company to access potential new
                        customers while incurring limited overhead and marketing outlays.
                        Internet mortgage origination accounts for roughly 1-2% annually.
                        However, we project this number to grow, possibly double, by the end of
                        fiscal 2004.



Mortgage Loan           Mortgage Loan Servicing is a growing component of UFM’s business
Servicing Operations    and can partially offset declining volume of refi originations. UFM
                        also generates revenues from the servicing of mortgage loans for others.
                        As of 2Q’04, the Company’s MSRs were valued at $11.5 million,
                        servicing a portfolio with a principal balance of approximately $1.1
                        billion. Retaining MSRs from the sale of mortgage loans into the
                        secondary market can offset declines from the origination business
                        during periods of rising interest rates by increasing cash flow and
                        providing a more consistent revenue stream. The geographic distribution
                        of UFM’s servicing portfolio mirrors the geography of the origination
                        business, with California, Illinois, Oregon, and Utah representing the
                        four states that accounted for approximately 94.5% of the total number of
                        loans serviced and 95.4% of the servicing portfolio.



                        The Company has increased its productivity through its investments
Leveraging              in information technology. Over the past several years, the Company
technology to improve   has significantly invested in an IT infrastructure to reduce costs and
productivity.           handle increased volume. The Company uses an interfaced combination
                        of Calyx’s Point, Del Mar Database’s Data Trac, and various other
                        closing document solutions to support loan processing. Additionally, in
                        June 2003, UFM implemented Open Close, a web-based loan transaction
                        platform, to eliminate or reduce third-party transaction issues, network
                        brokers, and loan officers. The venture should also offer online
                        origination, automated loan approval, and provide real-time pipeline
                        reports.    In our opinion, this software should result in greater
                        productivity through enabling greater loan production and services from
                        the existing sales force and potential cost savings from having a leaner
                        staff. Lastly, the Company’s own website, www.ufmc.com, is a valuable
                        lead source for new and existing mortgage customers.




Maxim Group LLC                                                                                9
                                                       UNITED FINANCIAL MORTGAGE CORP. (UFM)


                          INDUSTRY OVERVIEW AND TRENDS

                        Residential mortgage industry trends. The residential mortgage market
                        is the largest consumer finance market in the U.S. with an estimated $3.8
                        trillion of mortgage loan originations in 2003, as estimated by the
                        Mortgage Bankers Association (MBA). As depicted in the graph below,
                        during the last three years, the residential mortgage sector has
                        experienced its greatest boom in history, as originations increased at a
                        CAGR of almost 55%, from $1.0 trillion in 2001 to an estimated $3.8
                        trillion in 2003, resulting from refinancings driven by the low interest
                        rate environment. Refinancings accounted for 57% of mortgage
                        originations in 2001 and grew at a CAGR of 134% to an estimated $2.5
                        trillion in 2003 (comprising 66% of mortgage originations). With
                        mortgage interest rates rising at the end of 2003 coupled with a majority
                        of consumers having exhausted their refinancing activities, refis are
                        expected to significantly decline during the next several years at a
                        projected rate of almost 50% annually. MBA and Fannie Mae estimate
                        that 2004 mortgage volume will decline by almost 50% from 2003
                        levels. MBA’s current forecasts are for 2004 refis to drop almost 73%
                        from 2003 to $678 billion. However, the purchase market has
                        historically been extremely stable, and this purchase volume is expected
                        to remain relatively steady, growing slightly at a CAGR of 3.4% for the
                        next several years and supported by stable trends in the housing sector.
                        Overall, total mortgage origination volume is projected to decline
                        annually by over 22% for the next several years. Although 2004
                        origination volume will plummet to levels of slightly more than 50% of
                        2003 volume, 2004 should still be the 4th best year historically.



                                     Mortgage Origination Volume 1990A - 2006E
                                                                     ($ Billions)
                     4,000


                     3,500


                     3,000


                     2,500


                     2,000


                     1,500


                     1,000


                       500


                         0
                                                                                                       E

                                                                                                       E

                                                                                                       E

                                                                                                       E
                            90

                                   91

                                   92

                                           93

                                                  94

                                                         95

                                                                96

                                                                       97

                                                                       98

                                                                              99

                                                                                      00

                                                                                             01

                                                                                                     02

                                                                                                    03

                                                                                                    04

                                                                                                    05

                                                                                                    06
                          19

                                 19

                                 19

                                         19

                                                19

                                                       19

                                                              19

                                                                     19

                                                                     19

                                                                            19

                                                                                    20

                                                                                           20

                                                                                                   20

                                                                                                  20

                                                                                                  20

                                                                                                  20

                                                                                                  20




                  Source: Mortgage Bankers Association.                                           Purchase   Refi


Maxim Group LLC                                                                                                     10
                                                             UNITED FINANCIAL MORTGAGE CORP. (UFM)

                          Housing market trends. From 2000 until 2003, housing starts for single-
                          and multi- family homes is estimated to have increased 5.7% annually,
                          from 1.6 billion to almost 1.9 billion units. (See chart below.) Total new
                          home sales, which include existing and new homes, is estimated to have
                          increased 6.2% annually from 6 billion to 7.2 billion units. Although
                          housing starts and home sales are estimated to have peaked during
                          2H:03, forecasts from the Mortgage Bankers Association predict only a
                          modest decline for the next several years. Housing starts and home sales
                          are forecasted to decline 4% and 3% annually, respectively, indicating
                          stabilization in the residential housing market. Although the price of
                          homes has increased significantly during the last several years, MBA
                          forecasts that home-price appreciation will slow but remain in an uptrend
                          through 2006.

                                                                                                  1
                                      Housing Starts and Home Sales , 1990A - 2006E
                                                                        (in thousands)
                       8,000


                       7,000


                       6,000


                       5,000


                       4,000


                       3,000


                       2,000


                       1,000


                            0
                                                                                                        E

                                                                                                        E

                                                                                                        E

                                                                                                        E
                               90

                               91

                                            92

                                            93

                                            94

                                            95

                                                                     96

                                                                     97

                                                                     98

                                                                     99

                                                                     00

                                                                                                      01

                                                                                                      02

                                                                                                     03

                                                                                                     04

                                                                                                     05

                                                                                                     06
                             19

                             19

                                          19

                                          19

                                          19

                                          19

                                                                   19

                                                                   19

                                                                   19

                                                                   19

                                                                   20

                                                                                                    20

                                                                                                    20
                                                                                                   20

                                                                                                   20

                                                                                                   20

                                                                                                   20



                                                                                                  Housing Starts              Home Sales
                  1Ho using starts include single and multi-family ho uses. Ho me sales include existing and new single family ho mes.
                  So urce: M o rtgage B ankers A sso ciatio n, U.S. Census B ureau, and Natio nal A sso ciatio n o f Realto rs.




                          Overview of the mortgage banking sector. The mortgage banking
                          business generally includes the origination or purchase of residential
                          mortgage loans (which are then sold into the secondary mortgage
                          market), and the servicing of those mortgage loans. Two government-
                          sponsored organizations, Fannie Mae and Freddie Mac, are typically the
                          purchasers of the conforming loans that are originated. The mortgage
                          banking industry is a commodity business, driven by scale due to thin
                          margins, and is heavily influenced by economic cyclicality and
                          seasonality. Primary drivers include the state of the economy, level of
                          interest rates, and consumer and housing trends. The origination
                          business is generally subject to seasonal trends, which tends to reflect


Maxim Group LLC                                                                                                                            11
                                        UNITED FINANCIAL MORTGAGE CORP. (UFM)

                  patterns in the sale and resale of homes, while the servicing business is
                  not subject to these trends. While originations of purchase loans has
                  historically been fairly stable, the declining, low interest rate
                  environment over the past several years has driven tremendous growth in
                  refi originations, with many mortgage companies (especially those with
                  large origination businesses) enjoying exceptional growth and increased
                  profitability. In general, mortgage servicing businesses tend to decline in
                  low interest rate environments and are not as profitable, since
                  amortization costs of MSRs increase and the value of MSRs are impaired
                  due to prepayment risks. With strong origination volume, companies as
                  a result will retain less servicing rights, and instead sell a greater portion
                  of their loan production for cash. As borrowing costs begin to increase,
                  especially over the next several years, declining refi activity will cause
                  net interest margin compressions, as competition intensifies due to a
                  shrinking pool of refi originations and oversupply of mortgage
                  companies. The loan servicing business should also benefit from rising
                  interest rates, contributing cash flows and earnings that are more stable
                  due to decreasing prepayment risk and increasing MSR valuation.

                  Industry participants. The mortgage banking industry is highly
                  competitive and remains largely fragmented among mortgage banks,
                  state and national banks, savings and loans associations, savings banks,
                  credit unions and insurance companies, mortgage bankers, and mortgage
                  brokers. Historically, mortgage banks have made up 20-30% of the loan
                  origination volume. Although no single lender controls significant
                  market share, the top ten mortgage originators have 65-70% of the
                  market share and the top ten mortgage servicing companies comprise
                  approximately 50% of the total market (according to Inside Mortgage
                  Finance, as of 9/30/03). The top five mortgage servicers are estimated to
                  have 37% of the market, with the remainder of the industry being
                  comprised of over 1,000 firms.

                  Consolidation trend. Historically, the mortgage finance industry has
                  experienced consolidations, as many of the larger players have pursued
                  acquisition strategies to achieve their current scale and geographic
                  presence. As interest rates continue to rise and the refi volume declines,
                  an oversupply of industry participants could accelerate the pace of
                  consolidations. Companies with operations that are predominantly
                  production focused will need to seek strategic alternatives, including
                  acquisitions, mergers, or expansion of product offerings, or may be
                  forced to exit the industry. Larger companies could target niche
                  acquisitions and small to midsized players that have worsening
                  valuations due to the difficult business environment. Acquisition
                  opportunities could include portfolios, business lines, key personnel, or
                  entire companies.




Maxim Group LLC                                                                              12
                                       UNITED FINANCIAL MORTGAGE CORP. (UFM)


                  FINANCIAL HIGHLIGHTS &       OUTLOOK

                  UFM derives revenues and income predominantly through both the
                  mortgage loan origination and servicing businesses. Revenue is
                  generated from origination fees and interest income earned on the
                  mortgage loans that are originated, and income earned from servicing
                  mortgage loans. Expenses mostly consist of commissions paid to loan
                  originators on closed mortgage loans, salaries and benefits to employees
                  other than loan originators, general selling and administrative expenses,
                  and interest expense from outstanding balances under the credit facilities.



                  FINANCIAL REVIEW

                  Fiscal 2001 – 1H:04A
                  (Note: Fiscal year ends April)

                  Revenues. UFM experienced strong annual revenue growth of 85%
                  from 2001-2003, primarily driven by strong origination business. During
                  this period, gain on sale of loans increased almost 93% annually and
                  contributed to 88% of total revenues in fiscal 2003. Loan servicing
                  activities, which increased 116% annually, did not contribute
                  significantly and was only 0.7% of revenues in 2003. For 1H:04, total
                  revenues decreased almost 24% from 1Q to 2Q, primarily due to a 27%
                  drop in revenue from gain on sale of loans. Loan servicing income
                  increased 127% from 1Q’04 to 2Q’04, and accounted for almost 3% of
                  total revenues in 2Q’04.

                  Loan production. Production volume increased 125% annually from
                  2001-2003, predominantly driven by strong refi growth. Refis grew
                  annually at 212% (vs. purchases growing at 22%) and comprised over
                  83% of loans originated in 2003. However, during 1H:04, total
                  production volume decreased 39% from 1Q to 2Q, due to a 46%
                  decrease in refi origination volume. Purchase volume was relatively flat
                  from 1Q to 2Q, and loan servicing volume dropped to only 76% of total
                  production.

                  Loan servicing. From 2001-2003, the value of UFM’s MSRs increased
                  183% annually and the Company’s loan servicing portfolio increased
                  from $33.9 million in 2001 to $526 million, representing an annual
                  increase of 294%. During 1H:04, MSRs increased 21% to $11.5 million
                  in 2Q from $9.5 million in 1Q, and UFM’s servicing book increased to
                  $1.1 billion in 2Q from $940 million in 1Q.

                  Expenses. As a percent of revenues, total expenses decreased from 93%
                  in 2001 to 84.7% in 2003, but increased annually at 77% in absolute
                  dollars. Expenses increased predominantly from higher salary and
                  commissions costs associated with increased volume of business and
                  growth of the operations, as the number of full-time employees doubled
                  and the number of retail branch offices increased from 10 to 21.
                  Sequentially, total expenses decreased in 2Q’04 versus 1Q’04, as


Maxim Group LLC                                                                           13
                                       UNITED FINANCIAL MORTGAGE CORP. (UFM)

                  production volume also decreased. As of 1Q’04, UFM had 28 retail
                  offices, 5 wholesale offices, and 391 full-time employees.

                  Profitability. From 2001-2003, net income to common increased
                  annually at 129% and diluted EPS increased 131% annually from $0.21
                  to $1.14 (excluding non-recurring and extraordinary items). For 1H:04,
                  profitability declined from 1Q to 2Q, with diluted EPS declining to $0.32
                  from $0.43.

                  Financial condition and liquidity. As of 2Q’04, UFM’s total debt was
                  $147 million, with total cash of $5.5 million (excluding restricted cash).
                  UFM’s leverage ratio of debt to equity was 9.2x. UFM’s book value at
                  2Q’04 was $16 million, or $3.90 per diluted share. On an annual basis,
                  UFM has delivered positive cash flows annually from 2001-2003.



                  OUTLOOK

                  Fiscal 2004E – 2006E
                  (Note: Fiscal year ends April)

                  Outlook. A majority UFM’s growth and profitability in 2001-2003 was
                  derived from strong origination volume of consumer refinancings. After
                  1H:04, we assume refi volume will drop significantly, having a negative
                  impact on UFM’s revenues and bottom line. Currently, our projections
                  for 2004 do not include any significant acquisitions of any companies,
                  and our forecasts for 2005 and 2006 primarily assume organic growth
                  with potential acquisitions of selected, small operations or business units.
                  While we believe UFM may pursue strategies to potentially offset the
                  declining refi operations by altering its business model, we are not
                  incorporating these significant initiatives until there is greater certainty
                  and clarity with respect to these changes.

                  Revenues. For FY2004, we estimate total revenues of $63.8 million, an
                  increase of 24% versus FY2003, due to strong origination volume in
                  1H:04 from continued homeowner activity. We project gains on sale of
                  loans to increase 20% to $54.5 million from $45 million in 2003, but
                  loan servicing income should grow 482% to $2.1 million from $368
                  million in 2003. As the Company prepares for an environment of higher
                  and rising interest rates, we would look for management to shift and
                  diversify its revenue mix to include more mortgage purchase volume
                  encompassing non-conforming loan products, and increased loan
                  servicing activities. From 2004 to 2006, we project total revenues to
                  decline 12% annually, primarily due to gain on sale of loans decreasing
                  19% annually. We forecast that UFM’s loan servicing income should
                  increase over 76% annually, partially offsetting the declining revenues
                  from originations. As a percent of total revenues, our projections
                  estimate loan-servicing income to increase from less than 1% in fiscal
                  2003 to almost 14% by 2006.




Maxim Group LLC                                                                            14
                                       UNITED FINANCIAL MORTGAGE CORP. (UFM)

                  Loan production. We estimate total production volume to increase 29-
                  30% in 2004 to $2.5 billion from $2.0 billion in 2003, primarily driven
                  by refis in 1H:04. We estimate that refi volume will continue to decline
                  in 3Q and 4Q, resulting in a net increase of 16% for 2004. For purchase
                  volume, we project almost 99% growth to $648 million from $326
                  million in 2003, due to sustained forecasts of a stable housing market and
                  UFM aggressively expanding its product mix to include sub-prime and
                  also Alt-A loans. From 2004 to 2006, we project purchase volume to
                  increase at 30% annually, while refi volume declines 38% annually. We
                  anticipate total origination volume to decrease 15-16% annually during
                  this period. Overall, we estimate that refi volume as a percent of total
                  production volume could drop from an estimated 75% in 2004 to under
                  40% by 2006.

                  Loan servicing. For 2004, we estimate that UFM can increase the size
                  of its servicing portfolio to $1.4 billion from $526 million in 2003, with
                  almost $15 million in capitalized value of MSRs, versus $4.7 million at
                  the end of 2003. As UFM continues to aggressively build its book of
                  servicing portfolio, we project the size of the portfolio increasing 42-
                  43% annually from 2004 to 2006.

                  Expenses. We are forecasting total expenses to increase 26% from 2003
                  to 2004. As a percent of revenues, we expect 2H:04 expenses to
                  decrease slightly but will be approximately 86% for the full year, versus
                  84.7% in 2003. For 2004 to 2006, we project expenses as a percent of
                  revenues to decline slightly as UFM reduces some costs to account for
                  the declining refi origination business, including potential closures of
                  unprofitable retail branch offices and reductions of extraneous
                  headcount. Although we expect the company to increase efforts to
                  expand its product offering and aggressively cross-sell loan products, we
                  believe the net effect will be a decrease in total operating expenses.

                  Profitability. For 2004, we estimate net income to common to increase
                  almost 17% but diluted EPS to decrease to $1.04 from $1.14 (due to
                  share dilution from the secondary equity offering completed in
                  December 2003). We estimate diluted EPS of $0.20 in 3Q’04 and $0.16
                  in 4Q’04. From 2004-2006, we anticipate annual declines in net income
                  and EPS of 6-7% and approximately 16%, respectively, resulting from
                  decreases in the origination business.

                  Financial condition and liquidity. We estimate that UFM will have
                  total debt of approximately $51 million with total cash of $19 million by
                  the end of fiscal 2004. During 3Q’04, UFM completed a secondary
                  equity offering with proceeds of $12 million, net of fees and expenses,
                  and we estimate that UFM ended that quarter with approximately $20
                  million in cash. We project book value at the end of 2005 to be over $35
                  million, or $5.68 per diluted share. Including the equity offering, we
                  estimate net positive cash flows of $10 million for 2004, but negative
                  cash flows for 2005 and 2006. However, we estimate that UFM is well
                  capitalized and has enough cash to meet expenses and expenditures
                  through 2006, baring any large acquisitions (which we have not included
                  in our model).


Maxim Group LLC                                                                          15
                                                                                                                                                                     UNITED FINANCIAL MORTGAGE CORP. (UFM)

         United Financial Mortgage Corp. - Quarterly Income Statement & Operational Data (2004E-2005E)
                                                                                          (In thousands, except per share data)
                                                                                                                                   2004E                                                                                     2005E
            FY Ends April 30th                          1Q July 03          2Q Oct 03          3QE Jan 04      4QE Apr 04                    1Q July 04          2Q Oct 04          3Q Jan 05          4Q Apr 05
            Revenues:
            Gain on sale of loans, net                     $19,819.0           $14,551.4         $11,048.9         $9,102.3     $54,521.6       $10,584.5           $10,335.5           $8,781.4           $7,879.3       $37,580.7
             --% of total revenues                               88.3%              84.9%              83.4%           82.9%         85.5%            83.6%              81.5%              78.0%              73.8%           79.5%
            Loan servicing income, net                          222.0              503.5              619.6           799.9       2,144.9         1,217.4             1,315.2            1,435.4            1,601.5         5,569.6
             --% of total revenues                                   1.0%               2.9%            4.7%            7.3%          3.4%                9.6%           10.4%              12.7%              15.0%           11.8%
            Interest income                                   2,242.5            2,038.6            1,528.8         1,040.6       6,850.4           810.5               979.3            1,007.0            1,159.4         3,956.2
             --% of total revenues                               10.0%              11.9%              11.5%            9.5%         10.7%                6.4%               7.7%               8.9%           10.9%            8.4%
            Other income                                        152.7               40.2               46.4            38.4        277.7              44.3               44.4               39.4               37.4          165.5
               --% of total revenues                                 0.7%               0.2%            0.4%            0.4%          0.4%                0.4%               0.4%               0.4%               0.4%         0.4%
              Total revenues                                 22,436.2           17,133.7           13,243.6        10,981.2      63,794.7        12,656.8            12,674.3           11,263.2           10,677.6        47,271.9
            Expenses:
            Salaries and commissions                         15,801.6           10,692.2            8,343.5         7,028.0      41,865.3         7,783.9             7,731.3            6,757.9            6,406.6        28,679.7
             --% of revenues                                     70.4%              62.4%              63.0%           64.0%         65.6%            61.5%              61.0%              60.0%              60.0%           60.7%
            Selling and administrative                        2,291.2            3,120.3            1,986.5         1,647.2       9,045.2         2,404.8             2,344.7            1,689.5            1,494.9         7,933.9
             --% of revenues                                     10.2%              18.2%              15.0%           15.0%         14.2%            19.0%              18.5%              15.0%              14.0%           16.8%
            Interest expense                                  1,270.0            1,010.9              770.5           467.5       3,519.0           344.0               438.5              464.0              594.3         1,840.7
             --% of revenues                                         5.7%               5.9%            5.8%            4.3%          5.5%                2.7%               3.5%               4.1%               5.6%         3.9%
            Depreciation & amortization                          91.6              100.1               95.5            95.9        383.2              96.2               96.5               96.7               97.0          386.4
             --% of revenues                                         0.4%               0.6%            0.7%            0.9%          0.6%                0.8%               0.8%               0.9%               0.9%         0.8%
              Total expenses                                 19,454.5           14,923.6           11,196.0         9,238.5      54,812.6        10,628.8            10,611.0            9,008.1            8,592.7        38,840.6
               --% of revenues                                   86.7%              87.1%              84.5%           84.1%         85.9%            84.0%              83.7%              80.0%              80.5%           82.2%
            Income before taxes                               2,981.7            2,210.1            2,047.6         1,742.7       8,982.1         2,027.9             2,063.3            2,255.1            2,084.9         8,431.2
            Income taxes                                      1,192.7              887.2              822.0           699.6       3,601.5           814.1               828.3              905.3              837.0         3,384.7
             Implied tax rate                                    40.0%              40.1%              40.1%           40.1%         40.1%            40.1%              40.1%              40.1%              40.1%           40.1%
            Net income                                        1,789.0            1,322.9            1,225.6         1,043.1       5,380.6         1,213.8             1,235.0            1,349.8            1,247.9         5,046.6
             Preferred stock dividends                            -                  -                  -             38.50         38.50             -                   -                  -                38.50           38.50
            Net income to common (a)                         $1,789.0           $1,322.9           $1,225.6        $1,004.6      $5,342.1        $1,213.8            $1,235.0           $1,349.8           $1,209.4        $5,008.1
               --Net income margin                                   8.0%               7.7%            9.3%            9.1%          8.4%                9.6%               9.7%           12.0%              11.3%           10.6%
            Diluted shares                                      4,123.2            4,104.6           6,114.1          6,144.7      5,121.7          6,175.4             6,206.3            6,237.3            6,268.5        6,221.9
            Diluted EPS (a)                                     $0.43              $0.32              $0.20           $0.16        $1.04            $0.20               $0.20              $0.22              $0.19          $0.80

            Net income to common - GAAP                      $1,789.0           $1,322.9           $1,225.6        $1,004.6      $5,342.1        $1,213.8            $1,235.0           $1,349.8           $1,209.4        $5,008.1
            Diluted EPS - GAAP                                  $0.43              $0.32              $0.20           $0.16         $1.04           $0.20               $0.20              $0.22              $0.19           $0.80


            % Change (Year-over-Year)
            Gain on sale of loans, net                         290.6%              50.3%            -21.9%          -44.6%         20.3%           -46.6%              -29.0%             -20.5%             -13.4%         -31.1%
            Loan servicing income, net                         308.7%             557.9%            525.6%          477.7%        482.3%           448.4%              161.2%             131.7%             100.2%         159.7%
            Interest income                                    148.6%              59.5%             -4.3%          -37.8%         25.7%           -63.9%              -52.0%             -34.1%              11.4%         -42.2%
            Other income                                       633.6%              -1.1%              4.5%          -25.8%         76.2%           -71.0%               10.2%             -15.0%              -2.8%         -40.4%
              Total revenues                                   270.8%              54.7%            -16.6%          -39.9%         24.4%           -43.6%              -26.0%             -15.0%              -2.8%         -25.9%
            Salaries and commissions                           319.2%              43.5%             -23.5%          -44.3%        20.5%            -50.7%             -27.7%             -19.0%               -8.8%         -31.5%
            Selling and administrative                          83.2%             122.7%              25.9%            0.7%        54.2%              5.0%             -24.9%             -15.0%               -9.2%         -12.3%
             Total expenses                                    253.9%              55.7%             -15.9%          -38.7%        26.1%            -45.4%             -28.9%             -19.5%               -7.0%         -29.1%
            Net income to common (a)                           439.5%              47.8%             -20.6%          -44.2%        16.9%            -32.2%              -6.6%              10.1%              20.4%           -6.3%
            Diluted EPS (a)                                    420.8%              43.8%             -48.0%          -63.0%        -8.4%            -54.7%             -38.3%               8.0%              18.0%          -22.8%


            Summary Operational Data
            Mortgage Loan Activity:
             UFM Purchase money mortgages                   $148,500           $148,111           $165,885        $185,791      $648,286        $297,265            $282,402           $225,921           $192,033        $997,622
               % of total loans originated                       15%                24%                33%             46%            25%            55%                 55%                51%                48%              53%
             UFM Refinancings                                869,813            474,205            331,943         222,402      1,898,363        240,194             232,988            221,339            205,845          900,367
               % of total loans originated                       85%                76%                67%             54%            75%            45%                 45%                49%                52%              47%
            Total loans originated for resale              1,018,313            622,316            497,828         408,193      2,546,649        537,459             515,390            447,260            397,878        1,897,988
            Proceeds: Sales of loans held for sale           994,058            698,169            563,494         464,217      2,719,939         539,809            527,109            447,853            401,843        1,916,614
            Net gains on sales of loans held for sale         19,819             14,551             11,049           9,102         54,522          10,584             10,335              8,781              7,879           37,581

            Mortgage Servicing Data:
            Loan servicing fees                                  222                 503               620             800          2,145           1,217               1,315              1,435              1,602           5,570
            Loan servicing portfolio                         939,358           1,100,000         1,274,240       1,437,517      1,437,517       1,652,501           1,858,657          2,037,561          2,196,712       2,196,712
            Capitalized value of MSRs                          9,514              11,507            13,246          14,858         14,858          17,160              19,260             20,971             22,414          22,414

            Source: Company reports and Maxim Group LLC
            (a) Excludes changes in accounting principles, extraordinary, non-recurring, and infrequent items.


Maxim Group LLC                                                                                                                                                                                                                        16
                                                                     UNITED FINANCIAL MORTGAGE CORP. (UFM)

                                      United Financial Mortgage Corp.
                          Annual Income Statement & Operational Data (2001A-2006E)
                                                (In thousands, except per share data)
                                                       2001         2002            2003          2004E          2005E         2006E
 FY Ends April 30th
 Revenues:
 Gain on sale of loans, net                      $12,229.8     $18,720.1      $45,316.3       $54,521.6       $37,580.7     $35,479.4
  --% of total revenues                                81.9%        82.8%           88.4%             85.5%        79.5%         72.1%
 Loan servicing income, net                            78.7        202.1           368.3        2,144.9         5,569.6       6,682.2
  --% of total revenues                                 0.5%         0.9%            0.7%             3.4%         11.8%         13.6%
 Interest income                                    2,564.0      3,685.0         5,449.4        6,850.4         3,956.2       6,905.1
  --% of total revenues                                17.2%        16.3%           10.6%             10.7%         8.4%         14.0%
 Other income                                          69.2          -             157.6          277.7          165.5         172.3
    --% of total revenues                               0.5%         0.0%            0.3%             0.4%          0.4%          0.4%
   Total revenues                                 14,941.7      22,607.3       51,291.6        63,794.7        47,271.9      49,238.9
 Expenses:
 Salaries and commissions                           8,288.6     13,002.6       34,737.0        41,865.3        28,679.7      29,873.1
  --% of revenues                                      55.5%        57.5%           67.7%             65.6%        60.7%         60.7%
 Selling and administrative                         2,971.5      4,804.3         5,866.1        9,045.2         7,933.9       7,878.2
  --% of revenues                                      19.9%        21.3%           11.4%             14.2%        16.8%         16.0%
 Interest expense                                   2,510.0      2,362.7         2,686.6        3,519.0         1,840.7       3,210.5
  --% of revenues                                      16.8%        10.5%            5.2%             5.5%          3.9%          6.5%
 Depreciation & amortization                         131.0         135.0           171.5          383.2          386.4         415.7
  --% of revenues                                       0.9%         0.6%            0.3%             0.6%          0.8%          0.8%
   Total expenses                                 13,901.1      20,304.6       43,461.2        54,812.6        38,840.6      41,377.5
    --% of revenues                                    93.0%        89.8%           84.7%             85.9%        82.2%         84.0%
 Income before taxes                                1,040.6      2,302.7         7,830.4        8,982.1         8,431.2       7,861.4
 Income taxes                                         172.3      1,207.4         3,221.1        3,601.5         3,384.7       3,152.1
  Implied tax rate                                     16.6%        52.4%           41.1%             40.1%        40.1%         40.1%
 Net income                                          868.3       1,095.3        4,609.3         5,380.6         5,046.6       4,709.3
  Preferred stock dividends                            -           38.50          38.50           38.50           38.50         38.50
 Net income to common (a)                           $868.3      $1,056.8       $4,570.8        $5,342.1        $5,008.1      $4,670.8
    --Net income margin                                 5.8%         4.7%            8.9%             8.4%         10.6%          9.5%
 Diluted shares                                      4,068.8       4,002.6        4,012.6         5,121.7        6,221.9       6,346.3
 Diluted EPS (a)                                     $0.21         $0.26           $1.14          $1.04          $0.80         $0.74

 Net income to common - GAAP                        $868.3      $1,056.8       $4,657.6        $5,342.1        $5,008.1      $4,670.8
 Diluted EPS - GAAP                                  $0.21         $0.26          $1.16           $1.04           $0.80         $0.74


 % Change (Year-over-Year)
 Gain on sale of loans, net                                        53.1%         142.1%           20.3%         -31.1%         -5.6%
 Loan servicing income, net                                       156.8%          82.2%          482.3%         159.7%         20.0%
 Interest income                                                   43.7%          47.9%           25.7%         -42.2%         74.5%
 Other income                                                         NM             NM           76.2%         -40.4%          4.2%
   Total revenues                                                  51.3%         126.9%           24.4%         -25.9%          4.2%
 Salaries and commissions                                          56.9%         167.2%           20.5%          -31.5%          4.2%
 Selling and administrative                                        61.7%          22.1%           54.2%          -12.3%         -0.7%
  Total expenses                                                   46.1%         114.0%           26.1%          -29.1%          6.5%
 Net income to common (a)                                          21.7%         332.5%           16.9%           -6.3%         -6.7%
 Diluted EPS (a)                                                   23.7%         331.4%           -8.4%          -22.8%         -8.6%


 Summary Operational Data
 Mortgage Loan Activity:
  UFM Purchase money mortgages                    $220,400     $306,400       $326,400        $648,286        $997,622     $1,097,384
    % of total loans originated                        57%          36%             17%             25%             53%           60%
  UFM Refinancings                                 167,804      551,300       1,637,401       1,898,363         900,367       720,293
    % of total loans originated                        43%          64%             83%             75%             47%           40%
 Total loans originated for resale                 388,204      857,700       1,963,801       2,546,649       1,897,988     1,817,677
 Proceeds from sales of loans held for sale        375,162      876,539       1,900,627       2,719,939       1,916,614     1,809,447
 Net gains on sales of loans held for sale          12,230       18,720          45,316          54,522          37,581        35,479

 Mortgage Servicing Data:
 Loan servicing fees                                    79          202             368           2,145           5,570         6,682
 Loan servicing portfolio                           33,902      107,176         526,166       1,437,517       2,196,712     2,923,783
 Capitalized value of MSRs                             592        1,340           4,735          14,858          22,414        28,315

 Source: Company reports and Maxim Group LLC
 (a) Excludes changes in accounting principles, extraordinary, non-recurring, and infrequent items.

Maxim Group LLC                                                                                                                          17
                                                                                                      UNITED FINANCIAL MORTGAGE CORP. (UFM)

                                                                  United Financial Mortgage Corp.
                                                               Statements of Cash Flow (2001A-2006E)
                                                                                         (In thousands)
                                                       2001        2002          2003                                                                          2004E        2005E          2006E
FY Ends April 30th                                                                       1Q July 03       2Q Oct 03      3QE Jan 04       4QE Apr 04
Cash flows from operating activities
Net income                                           $868.3    $1,095.3      $4,696.1      $1,789.0    $1,322.9               $1,225.6        $1,043.1      $5,380.6      $5,046.6      $4,709.3
Depreciation & amortization                           131.0       135.0         171.5          91.6       100.1                   95.5            95.9         383.2         386.4         415.7
Amortization of mortgage servicing rights              68.6        84.1         716.0         883.2       565.6                  618.8           597.2       2,664.8       2,692.2       3,551.1
Impairment of mortgage servicing rights                 -         169.0       1,060.1           -           -                      -               -             -             -             -
Reversal of valuation allowance of MSRs                 -           -             -        (1,060.1)        -                      -               -        (1,060.1)          -             -
Change in accounting principles                         -           -           (86.8)          -           -                      -               -             -             -             -
Gain on sale of loans                              (8,745.0) (18,720.1)     (45,316.3)    (19,819.0) (14,551.4)              (11,048.9)       (9,102.3)    (54,521.6)    (37,580.7)    (35,479.4)
Origination of mortgage loans held for sale      (388,204.4) (857,700.4) (1,963,800.8) (1,018,312.8) (622,315.9)            (497,827.8)     (408,192.7) (2,546,649.3) (1,897,988.3) (1,817,677.1)
Proceeds--sale of mortgage loans held for         375,162.4   876,539.3   1,900,627.5     994,058.1   698,169.5              561,136.6       462,007.8   2,715,372.0   1,906,365.1   1,799,995.5
sale
Change in prepaid expenses & other assets            (132.1)     (203.5)        454.2           (167.5)        (452.3)          452.2            208.1           40.6         27.9      (3,110.5)

Change in prepaid expenses & other                   696.7      1,719.6       3,245.5          2,798.5         (780.1)        (2,140.3)        (1,396.1)     (1,518.0)      (151.8)        222.2
liabilities
  Cash flow from operations                       (20,154.4)    3,118.3     (98,233.0)       (39,739.0)      62,058.3        52,511.7         45,261.0     120,092.0     (21,202.5)    (47,373.2)


Cash flows from investing activities
Net change in certificates of deposit              1,283.9         11.3          (5.6)           (11.4)          (4.5)             -                -           (16.0)         -             -
Purchase of leasehold improv. & equip.                20.9       (120.0)       (466.0)          (276.4)         (81.4)          (100.0)          (100.0)       (557.8)      (400.0)       (500.0)
Changes in notes receivable - related parties,        54.1         (9.1)         26.7             32.8            4.5              -                -            37.2          -             -
net
Restricted Cash                                        -            -          (745.0)           (34.4)         289.3              -                -           254.9          -             -
Acquisitions and other                                 -            -             -              153.9            -                -                -           153.9          -             -
Cash flow from investing activities                1,358.9       (117.9)     (1,190.0)          (135.6)         207.9           (100.0)          (100.0)       (127.8)      (400.0)       (500.0)


Cash flows from financing activities
Purchase of treasury stock, net                      (31.2)       (189.3)       (75.6)             -              -                -                -             -            -             -
Issuance of stock & exercise of warrants              97.5           -            0.5             13.9            1.2         12,090.0              -        12,105.1          -             -
Changes in warehouse lines of credit, net         21,870.2        (842.8)   101,263.7         39,679.3      (65,763.5)       (49,489.0)       (46,922.0)   (122,495.3)    18,954.7      43,709.0
Repayment of note payable                             (8.1)        (22.7)       (19.8)             -              -                -                -             -            -             -
Preferred stock dividend                              38.5           -          (38.5)             -              -                -              (38.5)        (38.5)       (38.5)        (38.5)
Cash flow from financing activities               21,967.0      (1,054.9)   101,130.2         39,693.2      (65,762.3)       (37,399.0)       (46,960.5)   (110,428.7)    18,916.2      43,670.5

Increase in cash and cash equivalents               $3,171       $1,946       $1,707             ($181)       ($3,496)        $15,013          ($1,800)       $9,536       ($2,686)      ($4,203)

Cash--beginning of period (a)                     $1,089.2     $4,260.6      $6,206.2         $7,913.4       $7,731.9        $4,235.8        $19,248.5      $7,913.4     $17,449.0     $14,762.7
Cash--end of period (a)                            4,260.6      6,206.2       7,913.4          7,731.9        4,235.8        19,248.5         17,449.0      17,449.0      14,762.7      10,559.9


Source: Company reports and Maxim Group LLC
(a) Excludes restricted cash




                Maxim Group LLC                                                                                                                                                18
                                                                                          UNITED FINANCIAL MORTGAGE CORP. (UFM)

                                                            United Financial Mortgage Corp.
                                                             Balance Sheet (2001A-2006E)
                                                                              (In thousands)
                                                  2001        2002         2003                                                                  2004E        2005E        2006E
FY Ends April 30th                                                                1Q July 03      2Q Oct 03     3QE Jan 04     4QE Apr 04
ASSETS
Total cash and cash equivalents               $4,260.6    $6,206.2     $7,913.4        $7,731.9      $4,235.8      $19,248.5      $17,449.0   $17,449.0    $14,762.7    $10,559.9
Restricted cash                                  -             -          745.0          779.4      490.1              490.1          490.1       490.1        490.1        490.1
Certificates of deposit                      1,233.1       1,221.8      1,227.5        1,238.9    1,243.4            1,243.4        1,243.4     1,243.4      1,243.4      1,243.4
Loans held for sale                         52,719.2      51,417.2    154,735.0      215,967.9  152,107.8           97,490.3       50,568.3    50,568.3     69,523.0    113,232.0
Notes receivable - related parties              71.5          80.6         54.0           25.6       21.1               21.1           21.1        21.1         21.1         21.1
Mortgage servicing rights, net                 591.6       1,339.7      4,735.5        9,514.3   11,506.8           13,245.5       14,857.5    14,857.5     22,414.5     28,315.3
Leasehold improvements & equipment, net        313.1         298.1        592.5        1,106.5    1,087.8            1,092.3        1,096.4     1,096.4      1,110.0      1,194.3
Prepaid expenses and other assets            1,198.2       1,401.6        947.5        1,218.3    1,670.6            1,218.4        1,010.3     1,010.3        982.3      4,092.9
Total assets                               $60,387.3     $61,965.3   $170,950.4     $237,583.0 $172,363.5         $134,049.7      $86,736.2   $86,736.2   $110,547.2   $159,149.1




LIABILITIES & SHAREHOLDERS' EQUITY
Warehouse lines of credit                  $51,052.4     $50,209.6   $151,473.2     $212,742.9 $146,979.4          $97,490.3      $50,568.3   $50,568.3    $69,523.0   $113,232.0
Note payable                                   392.5         369.8        350.0          350.0      350.0              350.0          350.0       350.0        350.0        350.0
Accrued expenses and other liabilities       1,512.2       3,088.4      6,247.1        9,807.1    9,027.0            6,886.7        5,490.6     5,490.6      5,338.8      5,561.0
  Total liabilities                         52,957.2      53,667.8    158,070.3      222,900.0  156,356.4          104,727.0       56,408.9    56,408.9     75,211.8    119,143.0

Total shareholders' equity                     7,430.1     8,297.6     12,880.1        14,683.0      16,007.1       29,322.7       30,327.3    30,327.3     35,335.4     40,006.1
Total liabilities & shareholders' equity   $60,387.3     $61,965.3   $170,950.4     $237,583.0 $172,363.5         $134,049.7      $86,736.2   $86,736.2   $110,547.2   $159,149.1


Source: Company reports and Maxim Group LLC




               Maxim Group LLC                                                                                                                                19
                                                                           UNITED FINANCIAL MORTGAGE CORP. (UFM)

                                             DISCLOSURES & DISCLAIMERS

Maxim Group LLC Stock Rating System                                                                                   (As of 2/11/04)
                                                                                                           % of Coverage          % of Ratings
                                                                      Risk to Fundamentals/                  Universe             that are Inv.
               Expected Performance*                                  or Valuation                          with Rating          Banking Clients
Strong Buy     Expected to significantly outperform market;            Minimal                                    14%                   0%
Buy            Expected to moderately outperform market                Moderate                                   61%                   0%
Hold           Expected to perform in line with market                 Moderate to Substantial                    21%                   0%
Sell           Expected to underperform market                         High                                        4%                   0%
* Relative to S&P 500 for larger capitalization stocks. Russell 2000 for medium and small caps.


                                          All prices in this report are as of market close 02/11/04

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Furthermore, no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in
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Maxim Group LLC                                                                                                                                   20
                              UNITED FINANCIAL MORTGAGE CORP. (UFM)




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Maxim Group LLC                                                  21
                              UNITED FINANCIAL MORTGAGE CORP. (UFM)




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Maxim Group LLC                                                  22
                              UNITED FINANCIAL MORTGAGE CORP. (UFM)




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Maxim Group LLC                                                  23
EQUITY RESEARCH DEPARTMENT                                  CAPITAL MARKETS
Specialty Retail/Consumer                                   Christopher Fiore,          212-895-3743
  Kathleen Heaney, Director of Research      212-895-3670     Head of Capital Markets
Apparel/Footwear/Specialty Retail
  Susan Sansbury                             212-895-3764   INSTITUTIONAL SALES         800-724-0761
Healthcare & Special Situations                              Brant Bodden               212-895-3654
  Andrew Scott                               212-895-3575    Carlo Corvaja              212-895-3741
Medical Devices & Healthcare Services                        Virginia Dadey             212-895-3749
  Anthony Vendetti                           212-895-3802    Paul Ferretti              212-895-3740
                                                             Christopher Fiore          212-895-3743
                                                             Thomas Higgins             212-895-3583
Equity Research Associates                                   Klaus Korzilius            212-895-3673
  John Horng                                 212-895-3757    Takashi Mori               212-895-3747
  Olga Urgiles                               212-895-3587    Joe Vianna                 212-895-3742
                                                             Amanda Nozaki              212-895-3570

Barry Ritholtz, Market Strategist            212-895-3614


FIXED INCOME TRADING                                        SALES TRADING
 Adam Ferencz                                212-895-3640    Anthony Marciano           212-895-3680
 Deborah Frank                               212-895-3646    Danny Bellezze             212-895-3680
 Michael Messinger                           212-894-3704    John Conlin                212-895-3680
 Yoshishige Omoti                            212-895-3785    Edmond Farber              212-895-3680
 Michelle Agosta                             212-895-3631    Steve Farber               212-895-3680
                                                             Dan Kroski                 212-895-3680
INSTITUTIONAL OPTIONS TRADING                                Gina Nelson                212-895-3680
 Leonard Greenbaum, Co-Head                  212-895-3791    Robert Sayegh              212-895-3680
 Tim Moi, Co-Head                            212-895-3795    William Zachoff            212-895-3680




RETAIL SALES                                                SYNDICATE
John Garrity, Director Sales & Marketing     516-396-3302    Joe Jaigobind              212-895-6313
Franco Zappone, Sales Manager                212-895-3540    Paul LaRosa                516-396-3350




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