UBMT United Financial

HIGHLIGHTS: Total assets of $418 million; Q3 Net interest income up 5% in 2006 over Q3 2005; Assets up 10% in Q3 2006 over Q3 2005. GREAT FALLS, Mont., Oct. 26 /PRNewswire-FirstCall/ -- United Financial Corp. ("United") (NASDAQ:UBMT) today reported net income for the quarter ended September 30, 2006 of $1,155,000 or basic earnings per share of $.38, compared to $1,177,000 or basic earnings per share of $.38 for the same period in 2005. Fully diluted earnings per share were $.37 for both 2006 and 2005. Net income for the nine-month period ended September 30, 2006 was $3,220,000, or basic and diluted earnings per share of $1.05 and $1.02, respectively, compared to $3,050,000, or basic earnings per share of $.99 and $.97 on a fully diluted basis for the same period a year ago. All per share amounts in this press release have been restated for the 5 for 4 stock split effective in December 2005. United's assets at September 30, 2006 were $418 million compared to $381 million at September 30, 2005, an increase of 9.7%. Net loans increased to $333 million at September 30, 2006 from $300 million a year ago, a 10.8% increase, and deposits increased to $311 million at September 30, 2006 compared to $303 million a year ago, a 2.7% increase. Net interest income rose to $3.7 million for the quarter ended September 30, 2006 compared to $3.5 million for the same period one year ago. United's shareholders' equity was $33.2 million at September 30, 2006, and book value per share was $10.79. The weighted average number of shares outstanding for the third quarter of 2006 was 3,074,882 compared to 3,063,814 for the same period in 2005. CEO Kevin Clark said, "These results represent another solid quarter for United. Although margins are experiencing some compression, overall net interest income is up 5% over the third quarter of 2005. Net income per share is up 6% for the nine months ended September 30, 2006 as compared to the same period in 2005." United's net interest margin was 3.84% for the third quarter of 2006 compared to 4.03% for the third quarter of 2005. United had $6,000 of non- performing loans at September 30, 2006 compared to $5,000 at September 30, 2005. United declared a regular quarterly cash dividend of $.23 per share, to shareholders of record on November 17, 2006, payable December 1, 2006. Forward-Looking Statements When used in this press release or other statements, the words or phrases 'will likely result in', 'are expected to', 'will continue', 'is anticipated', 'estimate', 'could', or 'project' or similar expressions are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected including general economic conditions, business conditions in the banking industry, general economic conditions in the state of Montana, the regulatory environment, new legislation, vendor quality and efficiency, employee retention factors, rapidly changing technology and evolving banking industry standards, competitive standards, competitive factors including increased competition among financial institutions and fluctuating interest rate environments. Readers are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Readers should also carefully review the risk factors described in the company's most recent Annual Report on Form 10-K for the period ending December 31, 2005. United Financial Corp. is a bank holding company based in Great Falls, Montana, and is the parent of Heritage Bank, with fifteen locations in Montana. United Financial Corp. Financial Highlights (Unaudited) (Dollars in thousands, except per share data) Three Months Ended Nine Months Ended Sept 30, Sept 30, 2006 2005 2006 2005 Income statement amounts Net interest income $3,683 $3,509 $10,836 $10,083 Provision for losses on loans - 100 175 150 Noninterest income Gain on the sale of loans 1,005 1,107 2,583 2,602 Other 347 407 1,002 1,038 Noninterest expense 3,154 3,026 9,037 8,663 Income before income taxes 1,881 1,896 5,209 4,910 Income taxes 726 719 1,989 1,860 Net income 1,155 1,177 3,220 3,050 Per common share data Net income - basic $0.38 $0.38 $1.05 $0.99 - diluted 0.37 0.37 1.02 0.97 Cash dividends 0.23 0.23 0.69 0.67 Book value 10.79 10.33 Balances at end of period Loans receivable and held for sale, gross $344,373 $314,271 Allowance for losses on loans 3,896 3,682 Nonperforming assets Nonperforming loans 6 5 Foreclosed properties - - Investment securities available- for-sale 39,641 32,407 Total assets 418,071 380,937 Goodwill 1,422 1,422 Total deposits 311,116 302,831 Total stockholders' equity 33,183 31,659 Other supplemental information Net income Return on average assets 1.06% 1.12% Return on average common equity 13.36% 13.21% Allowance for loan losses to loans 1.13% 1.17% Common shares outstanding (end of period, in thousands) 3,076 3,065 Net interest margin 3.85% 4.03% Shareholders' equity to total assets 7.94% 8.31% Dividend payout ratio 65.71% 67.68% DATASOURCE: United Financial Corp. CONTACT: Kevin P. Clark, CEO, of United Financial Corp., +1-406-727-6106

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