EFH Empire Financial Holding

Operating Results Generate EPS of $0.01 LONGWOOD, Fla., Aug. 16 /PRNewswire-FirstCall/ -- Empire Financial Holding Company (AMEX:EFH), a financial brokerage services firm serving retail and institutional clients, today announced financial results for the second quarter and six months ended June 30, 2005. Second quarter results included positive net income of $57,092 or $0.01 per basic and diluted share compared to a net loss of $(905,140) or $(0.28) per basic and diluted share for the same period in 2004. In addition, the second quarter 2005 financial results included a $2,713,651 increase in shareholders' equity. Empire Financial's President and CEO Donald A. Wojnowski Jr. commented, "We are pleased with our continued profitability along with the significant improvements to our balance sheet that were completed during the second quarter. The change of control transaction with EFH Partners, LLC that closed on May 20, 2005 resulted in significant balance sheet and cash flow improvements and returned Empire to a positive shareholders' equity, while providing the resources necessary to fund our ongoing growth objectives. From an operational standpoint, our second quarter results, which include a regulatory provision of $275,000, indicate that our business plan is on track. In addition, the recent announcement regarding the opening of our New York Institutional and Corporate Finance office is in-line with our operating strategy of diversifying Empire Financial's revenue streams and financial objectives of generating improvements in gross margins and achieving profitability for the balance of the year." Financial Results Total revenues for the three months ended June 30, 2005 were $5,137,958, a decrease of $432,737, or 8%, compared to our revenues of $5,570,695 for the same period in 2004. Total operating expenses for the three months ended June 30, 2005 were $5,068,979 compared to total operating expenses of $6,469,085 for the same period in 2004. The decrease in expenses was primarily due to lower commissions and clearing costs and general and administrative expenses compared to the same period last year. For the three months ended June, 2005, the Company reported net income of $57,092, or $0.01 per basic and diluted share, compared to a net loss of $(905,140), or $(0.28) per basic and diluted share, for the same period in 2004. Total revenues for the six months ended June 30, 2005 were $11,074,718, an increase of $79,347, or 1%, compared to our revenues of $10,995,371 for the same period in 2004. Total operating expenses for the six months ended June 30, 2005 were $10,768,155 compared to total operating expenses of $11,854,594 for the same period in 2004. The decrease in expenses was primarily due to lower commissions and clearing costs and general and administrative expenses compared to the same period last year. For the six months ended June, 2005, Empire Financial reported net income of $287,926, or $.0.07 per basic and $0.06 diluted share, compared to a net loss of $(872,723), or $(0.27) per basic and diluted share, for the same period in 2004. Financial Condition At June 30, 2005, the Company had total assets of $6,246,240, the majority of which consisted of cash and cash equivalents, trading account securities purchased not yet sold and receivables from brokers, dealers and clearing organizations arising from customer-related securities transactions. Stockholders' equity was $1,404,714 at June 30, 2005, representing an improvement of $2,713,651 from a stockholders' deficit of $(1,308,937) at March 31, 2005, primarily due to the net proceeds from the issuance of additional shares of the Company's common stock and preferred stock. About Empire Financial Holding Company Empire Financial Holding Company, through its wholly owned subsidiary, Empire Financial Group, Inc., provides full-service retail brokerage services through its network of independently owned and operated offices and discount retail securities brokerage via both the telephone and the Internet. Through its market-making and trading division, the Company offers securities order execution services for unaffiliated broker dealers and makes markets in domestic and international securities. Empire Financial also provides turn-key fee based investment advisory and registered investment advisor custodial services through its wholly owned subsidiary, Empire Investment Advisors, Inc. Forward-Looking Statement Disclaimer This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties or other factors which may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Factors that might cause such a difference include, without limitation, fluctuations in the volume of transactional services provided by the Company, competition with respect to financial services commission rates, the effect of general economic and market conditions, factors affecting the securities brokerage industry as well as other risks and uncertainties detailed from time to time in the Company's Securities and Exchange Commission filings. At the Company: Donald A. Wojnowski Jr. President (407) 774-1300 At Financial Relations Board: Lasse Glassen General Information (310) 854-8313 EMPIRE FINANCIAL HOLDING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENT OF FINANCIAL CONDITION (Unaudited) June 30, 2005 ASSETS Cash and equivalents $1,704,819 Trading account securities purchased not yet sold, at fair value 2,325,799 Receivables from brokers and dealers and clearing organizations 1,371,590 Deposits at clearing organizations 608,728 Furniture and equipment, net of accumulated depreciation 151,110 Prepaid expenses and other assets 84,194 Total assets $6,246,240 LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Notes payable $914,880 Notes payable - 10%, 12/06 convertible debt 472,089 Accounts payable, accrued expenses and other liabilities 1,074,146 Trading account securities, sold not yet bought, at fair value 1,157,350 Payable to brokers, dealers and clearing organizations 1,223,061 Total liabilities 4,841,526 Shareholders' Equity: Convertible preferred stock, series B, C & D, $.01 par value, share authorized, 16,062 issued and outstanding 161 Common stock, $.01 par value, 100,000,000 shares authorized; 6,370,170 shares issued and outstanding 63,700 Additional paid-in capital 9,110,485 Deferred compensation (41,849) Accumulated deficit (7,727,783) Total shareholders' equity 1,404,714 Total liabilities and shareholders' equity $6,246,240 EMPIRE FINANCIAL HOLDING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENT OF INCOME (Unaudited) Three Months Ended June 30, 2004 June 30, 2005 (Restated) Revenues: Commissions and fees $3,931,694 $4,336,120 Order execution trading revenues, net 1,054,214 1,159,528 Interest 37,812 43,857 Other 114,238 31,190 5,137,958 5,570,695 Expenses: Employee compensation and benefits 1,082,488 1,006,089 Commissions and clearing costs 2,747,511 4,051,419 Interest 53,390 28,191 Communications and data processing 129,647 14,431 Regulatory Provision 275,000 -- General and administrative 780,943 1,368,955 5,068,979 6,469,085 Net income (loss) 68,979 (898,390) Accrued preferred stock dividend (11,887) (6,750) Net income (loss) applicable to common shareholders $57,092 $(905,140) Basis and diluted income (loss) per share applicable to common shareholders: Earnings (loss) per share-basic and diluted $0.01 $(0.28) Weighted average shares outstanding: Basic 4,335,233 3,194,450 Diluted 5,506,593 3,194,450 EMPIRE FINANCIAL HOLDING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENT OF INCOME (Unaudited) Six Months Ended June 30, 2004 June 30, 2005 (Restated) Revenues: Commissions and fees $8,017,084 $8,751,188 Order execution trading revenues, net 2,738,901 2,088,669 Interest 87,122 83,060 Other 231,611 72,454 11,074,718 10,995,371 Expenses: Employee compensation and benefits 2,386,832 1,814,938 Commissions and clearing costs 6,593,625 7,826,251 Interest 82,550 56,040 Communications and data processing 185,156 47,278 Regulatory Provision 275,000 General and administrative 1,244,992 2,110,087 10,768,155 11,854,594 Net income (loss) 306,563 (859,223) Accrued preferred stock dividend (18,637) (13,500) Net income (loss) applicable to common shareholders $287,926 $(872,723) Basis and diluted income (loss) per share applicable to common shareholders: Basic income (loss) per share $0.07 $(0.27) Diluted income (loss) per share $0.06 $(0.27) Weighted average shares outstanding: Basic 3,959,769 3,194,450 Diluted 4,539,281 3,194,450 DATASOURCE: Empire Financial Holding Company CONTACT: Donald A. Wojnowski Jr., President of Empire Financial Holding Company, +1-407-774-1300, ; or Lasse Glassen, General Information, Financial Relations Board, +1-310-854-8313, , for Empire Financial Holding Company

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