UBMT United Financial

United Financial Corp. Announces June 30, 2004 Earnings and Declares Quarterly Dividend HIGHLIGHTS: Total assets of $334 million; 2004 Q2 Net interest income up 7.6% over 2003 Q2; 2004 Q2 EPS of $.39 vs. 2003 Q2 EPS $.47. GREAT FALLS, Mont., July 28 /PRNewswire-FirstCall/ -- United Financial Corp. ("United") (NASDAQ:UBMT) today reported net income for the quarter ended June 30, 2004 of $945,769, or basic earnings per share of $.39 and $.38 per share on a fully diluted basis. This compares to June 30, 2003 earnings of $1,143,784, or basic earnings per share of $.47 and $.46 on a fully diluted basis. Net income for the six-month period ended June 30, 2004 was $1,919,959, or basic and diluted earnings per share of $.79 and $.76, respectively, compared to $2,125,924, or basic earnings per share of $.87 and $.85 on a fully diluted basis in the same period a year ago. United's assets at June 30, 2004 were $334 million. Net loans were $252 million at June 30, 2004 compared to $219 million a year ago. Net interest income rose to $3.2 million in the quarter ended June 30, 2004 compared to $3.0 million for the same quarter a year ago. United's shareholders' equity was $29.6 million at June 30, 2004, and book value per share was $12.16. Outstanding shares at June 30, 2004 were 2,433,965, compared to 2,441,669 at June 30, 2003. Chairman and CEO, Kurt Weise, said, "Considering the significant drop in mortgage refinance activity and the approximate $.06 per share cost year-to-date of our new office in Billings, we are pleased with this six month period. Our net interest margin was up 13 basis points over last year and our return on equity was over 12%. Asset quality remained very good and net loans were up 15% over a year ago." United's net interest margin was 4.16% for the first six months of 2004 compared to 4.03% for the first six months of 2003. Non-performing loans totaled $.4 million at June 30, 2004 and $.9 million at June 30, 2003. United's past due and non-accrual loans totaled .30% of loans at June 30, 2004, compared to .78% for that of its peer bank holding companies at March 31, 2004 the most recent peer information available. United declared a regular quarterly dividend of $.27 per share to shareholders of record on August 18, 2004, payable September 1, 2004. This represents a yield of 4.5% annualized on a stock price of $24.00 per share. Forward-Looking Statements When used in this press release, 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, 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, 2003 and other documents the company files from time to time with the Securities and Exchange Commission. United Financial Corp. is a bank holding company based in Great Falls, Montana, and is the parent of Heritage Bank, a full service community bank with fifteen locations in Montana. United Financial Corp. Financial Highlights (Unaudited) (Dollars in thousands, except per share data) Three Months Ended Six Months Ended June 30, June 30, 2004 2003 2004 2003 Income statement amounts Net interest income $3,239 $3,012 $6,279 5,805 Provision for losses on loans 18 313 70 575 Noninterest income Investment securities gains - - 213 18 Gain on the sale of loans 621 1,552 1,139 2,756 Other 462 337 799 605 Noninterest expense 2,865 2,882 5,281 5,468 Earnings from continuing operations before income taxes 1,516 1,706 3,079 3,141 Income taxes 570 643 1,159 1,183 Discontinued operations - 81 - 168 Net earnings 946 1,144 1,920 2,126 Per common share data Net earnings - continuing operations - basic $0.39 0.44 0.79 0.80 - diluted 0.38 0.43 0.76 0.79 Net earnings - discontinued operations - basic - 0.03 - 0.07 - diluted - 0.03 - 0.06 Cash dividends 1.27 0.48 1.54 0.36 Book value 12.16 12.97 Balances at end of period (from continuing operations) Loans, gross 255,825 222,211 Allowance for losses on loans 3,733 3,581 Nonperforming assets Nonperforming loans 370 857 Foreclosed properties 592 562 Investment securities available- for-sale 42,637 41,368 Total assets 334,063 383,766 Goodwill 1,422 3,429 Total deposits 240,806 242,782 Total stockholders' equity 29,601 31,671 Other supplemental information Net earnings Return on average assets 1.20% 1.37% Return on average common equity 12.12% 13.78% Allowance for loan losses to loans 1.46% 1.61% Common shares outstanding (end of period, in thousands) 2,434 2,442 Net interest margin 4.16% 4.03% Shareholders' equity to total assets (excluding subordinated debt) 8.86% 8.25% Dividend payout ratio 194.94% 41.38% DATASOURCE: United Financial Corp. CONTACT: Kurt R. Weise, Chairman & CEO of United Financial Corp., +1-763-512-5299

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