EXHIBIT 99.1
[AMERICAN HOME MORTGAGE LOGO]
FOR IMMEDIATE RELEASE
- ---------------------
American Home Mortgage Reports First Quarter 2004 Results
- Announces diluted earnings per share of $0.70 -
- Increases dividends policy to $0.61 per share per quarter or $2.44 per year -
- Raises 2004 earnings guidance to $3.25 to $3.40 per fully diluted share -
Melville, NY (April 28, 2004) -- American Home Mortgage Investment Corp. (NYSE:
AHH) today announced results for the first quarter ended March 31, 2004.
o Net earnings for the first quarter of 2004 were $21.2 million,
compared to $16.3 million for the first quarter of 2003, an increase
of 30.1%.
o Earnings per diluted share for the first quarter of 2004 was $0.70
per share, compared to $0.96 per share for the first quarter of
2003, a decrease of 27.1%.
o Book value per share rose to $18.59 at March 31, 2004, compared to
$10.73 at March 31, 2003.
o Dividends per share for the first quarter was $0.55 compared to
$0.10 for the first quarter of 2003.
Michael Strauss, Chairman and Chief Executive Officer, commented, "We are
pleased with the results from our first quarter. During the quarter, we worked
to build our portfolio of mortgage-backed securities and added $1.0 billion of
self-originated securities and $2.1 billion of purchased securities to our
holdings. On March 31, 2004, total mortgage backed securities held, including
ARM loans pending securitization, was $4.3 billion compared to $1.9 billion on
December 31, 2003. Holdings on April 26, 2004, were $5.7 billion. During the
quarter, the company also added to the capital deployed in its mortgage
securities holdings business through an equity offering of $359.3 million."
FIRST QUARTER HIGHLIGHTS
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During the quarter, the company continued to focus on its strategy of reducing
interest rate risk by attempting to match the duration of its assets to their
associated liabilities and hedges. The company's duration gap was less than one
month on both March 31 and April 26, and the value of the company's
mortgage-backed securities portfolio was not significantly impacted by falling
rates during the first quarter of 2004, or the subsequent recent increase in
interest rates. The company continues to hold primarily high credit quality
assets. Of its mortgage-backed securities holdings, 89.1% were either rated AAA
by Standard & Poor's or were obligations of Fannie Mae or Freddie Mac, while
9.1% were rated AA. During the quarter, the company's mortgage-backed securities
holdings average portfolio yield was 3.1%, while its average cost of funds and
hedges was 2.1%. The result was a net margin of 1.2%. The average cost of the
mortgage-backed securities held was 101.6 percent of their principal amount,
while the value of the mortgage-backed securities held was 102.5 percent of
their principal amount. The average amount of mortgage-backed securities held
during the quarter was $2.0 billion, while net interest income from those
holdings was $5.7 million.
The company's loan origination segment produced $4.4 billion of new loans during
the first quarter. This represents an increase of 2.3% compared to the first
quarter of 2003 and compares favorably to the trend in total U.S. originations
which declined 21.0% in the first quarter of 2004 compared to the first quarter
of 2003. Loan production in the first quarter of 2004 also compared favorably to
the fourth quarter of 2003 when the company originated $4.1 billion of loans.
During the first quarter of 2004, the company sold $3.4 billion of primarily
fixed rate loans to third parties and securitized and held $0.9 billion of
adjustable rate loans as long-term investments.
The company's servicing business experienced a loss during the first quarter of
2004 due to a decline in interest rates causing rapid amortization and
impairment of the company's servicing assets. Amortization and impairment was
$19.9 million pretax and created a tax benefit of $8.2 million, resulting in an
after-tax expense of $11.7 million. Given the current level of interest rates,
the company expects amortization to slow and expects to recover its impairment
reserve net of taxes in the second quarter of 2004.
During the first quarter of 2004, the company's book value increased primarily
as a result of its completed equity offering, and also as a result of income
exceeding dividends. Book value at the end of the quarter was $741 million or
$18.59 per share.
OPERATING STATISTICS
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At and for the Quarter Ended March 31,
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Mortgage-Backed Securities Holdings*: 2004 2003
- ----------------------------------------------- ------------- -------------
Average Mortgage-Backed Securities Held $ 2.0 billion ---
Mortgage-Backed Securities Held - End of Period $ 4.0 billion ---
Average Portfolio Yield 3.1% ---
Average Cost of Funds and Hedges 2.1% ---
Net Interest Margin 1.2% ---
Average Cost of Mortgage-Backed Securities 101.6% ---
Period End Duration Gap (in years) 0.04 ---
*Excludes loans held pending securitization.
At and for the Quarter Ended March 31,
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Loan Origination: 2004 2003
- ----------------------------------------------- ------------- -------------
Loan Originations $ 4.4 billion $ 4.3 billion
Refinance 57% 73%
ARM 35% 15%
Loans Securitized and Held $ 0.9 billion ---
Loans Sold to Third Parties $ 3.4 billion $ 4.0 billion
Applications Accepted $ 9.1 billion $ 7.1 billion
Application Pipeline $ 7.3 billion $ 5.3 billion
Number of Branches 276 206
At and for the Quarter Ended March 31,
---------------------------------------
Loan Servicing: 2004 2003
- ----------------------------------------------- ------------- -------------
Loan Servicing Portfolio - Total with Warehouse $ 10.3 billion $ 8.9 billion
Loan Servicing Portfolio - Loans Sold or Securitized $9.0 billion $ 7.9 billion
Weighted Average Note Rate 5.58% 6.67%
Weighted Average Service Fee 0.363% 0.349%
Average Age (in months) 26 36
OUTLOOK
- -------
The company projects that its mortgage-backed securities holdings, including ARM
loans pending securitization, will increase to an average of $5.7 billion in the
second quarter of 2004 and $6.6 billion for the third and fourth quarters of
2004. The company expects to continue to attempt to match the duration of its
securities and their associated liabilities and hedges, and consequently
anticipates that the results from its securities holdings will not be
significantly affected by changing interest rates. The company expects its net
margin will incrementally increase approximately 40 basis points by 2004
year-end as the portion of its holdings which are self-originated grows.
The company expects that the recent rise and expected continued increases in
interest rates will significantly reduce its loan originations during the later
half of 2004 compared to anticipated originations for the second quarter.
Originations are projected to be approximately $6 billion during the second
quarter, $5 billion during the third quarter and $4 billion during the fourth
quarter. In addition, the company expects that second quarter origination
results will be diminished by its adoption of Staff Accounting Bulletin No. 105,
which replaces the industry's interpretation of FASB No. 133 in regards to
accounting for the value of mortgage application pipelines and the resulting
effect on the value of mortgage loans held for sale.
The company expects that the recent rise in interest rates will significantly
improve its results from servicing. Rising interest rates are expected to slow
amortization throughout the year. In addition, second quarter servicing results
are projected to benefit from a recovery of the impairment reserve associated
with the company's servicing assets. Servicing fee income is expected to
increase throughout 2004 as the company securitizes its ARM loan production and
holds the associated servicing contracts.
Based on its projections for the combined results from the company's mortgage
holdings, mortgage origination and mortgage servicing segments, the company is
raising its earnings guidance for the full year 2004 to $3.25 to $3.40 per
share.
DIVIDEND
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The company sets its dividend policy based on its forecasts of earnings and cash
flow. The dividend policy may be changed at any time by the company's Board of
Directors and does not constitute an actual decision by the company to pay
dividends, which only occurs when dividends are actually declared. Based on the
company's forecasts, the company is increasing its dividend policy to a
quarterly rate of $0.61 or an annualized rate of $2.44 per fully diluted share.
OTHER COMPANY NEWS
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During the first quarter of 2004 the company formed American Home Mortgage
Securities LLC ("AHMS") to create collateralized mortgage obligations, many of
which will be held as long-term assets of the Company. During the quarter, AHMS
securitized $615 million of loans in a transaction underwritten by Bear Stearns
and Lehman Brothers.
On April 27, 2004, the company's Board of Directors appointed Irving J. Thau as
a Director of the company and increased the number of Board members from six to
seven. The Board also appointed Mr. Thau Chairman of the Company's Audit
Committee. Mr. Thau is a retired certified public accountant and previously was
the head of Ernst & Young's Century City, California, office where he supervised
approximately 150 professionals, including 22 partners. Later, Mr. Thau was head
of Ernst & Young's Western Region Advisory Group, which encompassed the western
states, and which advised Ernst and Young clients on the accounting for mergers
and acquisitions, business valuations, and reorganizations. Mr. Thau is a
graduate of City College of New York and has completed Stanford University's
Executive Program. Mr. Thau also serves as Chairman of the audit committee of
American Vanguard Corporation.
C. Cathleen Raffaeli, who previously served as Chairman of the Audit Committee,
will continue to serve the company's stockholders as an Audit Committee member
and Director of the company.
In addition, effective June 1, 2004, the company's ticker symbol on the New York
Stock Exchange will change from AHH to AHM.
The Board of Directors has scheduled the company's annual stockholder meeting
date for June 16, 2004 at 10:00 a.m., Eastern Time, at the company's executive
offices located at 520 Broadhollow Road, Melville, New York. All stockholders of
record on April 23, 2004 are invited to attend.
CONFERENCE CALL TODAY
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American Home will hold an investor conference call to discuss earnings at 10:30
a.m., Eastern Time, today, April 28, 2004. Interested parties may listen to the
call by visiting the American Home corporate website, www.americanhm.com,
Shareholder Information section, to listen to the conference call webcast live.
A replay of the call will be available after 1:00 p.m., Eastern Time, April 28,
2004, through midnight Eastern Time on May 12, 2004. Please contact John Lovallo
at Ogilvy Public Relations Worldwide at 212-880-5216 or
john.lovallo@ogilvypr.com with any questions.
ABOUT AMERICAN HOME MORTGAGE
American Home Mortgage Investment Corp. (NYSE: AHH) is a mortgage real estate
investment trust focused on earning net interest income from mortgage backed
securities, and through its taxable subsidiaries, on originating and servicing
mortgage loans for institutional investors. Mortgages are originated through a
network of 276 loan production offices as well as through mortgage brokers and
are serviced at the Company's Columbia, Maryland servicing center. For
additional information, please visit the Company's website at
www.americanhm.com.
###
Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995: This news release contains statements about future events and
expectations, which are "forward-looking statements." Any statement in this
release that is not a statement of historical fact, including, but not limited
to earnings guidance and forecasts, projections of financial results, and
expected future financial position, dividends and dividend plans and business
strategy, is a forward-looking statement. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors, which may
cause American Home's actual results to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. Specific factors that might cause such a difference
include, but are not limited to: the potential fluctuations in American Home's
operating results; American Home's potential need for additional capital, the
direction of interest rates and their subsequent effect on American Home's
business; federal and state regulation of mortgage banking; competition;
American Home's ability to attract and retain skilled personnel; and those risks
and uncertainties discussed in filings made by American Home with the Securities
and Exchange Commission. Such forward-looking statements are inherently
uncertain, and stockholders must recognize that actual results may differ from
expectations. American Home does not assume any responsibility and expressly
disclaims any responsibility, to issue updates to the forward-looking statements
discussed in this press release, whether as a result of new information, future
events or otherwise.
AMERICAN HOME MORTGAGE CONTACT:
John D. Lovallo
Senior Vice President
Ogilvy Public Relations Worldwide
212-880-5216
john.lovallo@ogilvypr.com
-Financial Tables Follow on Next Two Pages-
AMERICAN HOME MORTGAGE INVESTMENT CORP.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share data)
(unaudited)
Three Months Ended
March 31,
----------------------------
2004 2003
------------ ------------
Net interest income:
Interest income $ 34,050 $ 20,978
Interest expense (21,278) (10,209)
------------ ------------
Net interest income 12,772 10,769
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Non-interest income:
Gain on sales of mortgage loans and mortgage-backed securities 80,133 88,211
Loan servicing fees 10,318 11,128
Amortization (7,346) (12,769)
Impairment reserve provision (12,584) (5,713)
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Net loan servicing fees (loss) (9,612) (7,354)
------------ ------------
Other non-interest income 978 2,928
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Total non-interest income 71,499 83,785
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Non-interest expense
Salaries, commissions and benefits, net 39,782 44,647
Occupancy and equipment 8,094 5,623
Data processing and communications 3,213 3,079
Office supplies and expenses 3,118 3,023
Marketing and promotion 2,212 2,799
Travel and entertainment 2,577 1,987
Professional fees 2,428 1,841
Other 5,438 3,665
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Total non-interest expenses 66,862 66,664
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Net income before income taxes 17,409 27,890
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Income taxes (3,814) 11,577
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Net income $ 21,223 $ 16,313
============ ============
Per share data:
Basic $ 0.71 $ 0.97
============ ============
Diluted $ 0.70 $ 0.96
============ ============
Weighted average number of shares - basic 30,030,248 16,750,960
Weighted average number of shares - diluted 30,507,818 17,015,681
AMERICAN HOME MORTGAGE INVESTMENT CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands except share data)
(Unaudited)
March 31, December 31,
2004 2003
============ ============
Assets
Cash and cash equivalents $ 97,557 $ 53,148
Mortgage-backed securities 4,003,079 1,763,628
Mortgage loans, net 1,371,048 1,223,827
Mortgage servicing rights, net 113,519 117,784
Goodwill 83,752 83,445
Other assets 158,024 160,558
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Total assets $ 5,826,979 $ 3,402,390
============ ============
Liabilities
Warehouse lines of credit $ 1,251,845 $ 1,121,760
Reverse repurchase agreements 3,394,941 1,344,327
Payable for securities purchased 134,647 259,701
Notes payable 106,423 99,655
Other liabilities 197,942 178,977
------------ ------------
Total liabilities 5,085,798 3,004,420
------------ ------------
Stockholders' equity 741,181 397,970
------------ ------------
Total liabilities and stockholders' equity $ 5,826,979 $ 3,402,390
============ ============
Number of shares outstanding - Basic 39,875,524 25,270,100