EXHIBIT 99.1
[AHM LOGO]
Lehman Brothers Financial
Services Conference
September 13, 2004
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American Home Mortgage Investment Corp.
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Corporate Profile
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o American Home Mortgage Investment (NYSE: AHM)
o Hybrid Mortgage REIT
o Self-Originates and Holds Mortgage Securities
o Focuses on High Credit Quality Assets
o Offers Strong Dividend with Opportunity for Rapid Growth
o Operates 20th Largest Prime Mortgage Originator in the United States
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Business Model
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o Focus on Building our Portfolio's
- Value
- Yield
o Value and Yield Building is Accomplished by Originating Loans, Creating
Structured Securities and Investing in Higher Yielding Securities
o Mortgage Origination Business Enables Portfolio to Grow In Value and Yield
o Risk-Averse Portfolio Management Strategy
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Growing Portfolio Value and Yield through
Structured Securitizations
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o Securitization Process Converts Value Created by the Mortgage Origination
Business into increased Portfolio Value and Higher Yield
o Securitization Structure Designed to Create High Yielding Securities which
are Retained while Lower Yielding Securities are Sold
o Increases Portfolio Value and Yield with Limited Capital Commitment
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Expected Yields on Existing Portfolio v.
Self-Originated and Retained Securities
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o Expected Yield from Portfolio in place on June 30, 2004 Assuming No Change
in Interest Rates
18.4%
o Expected Yield on Retained Securities Created in Q3, 2004 Assuming No
Change in Interest Rates
26.6%
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American Home Aims to be a Strong
Dividend and High Growth Investment
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o Dividend Generated by Portfolio
o Origination Business Increases the Value and Yield of the Portfolio Over
Time
o Goal is to Accelerate Growth in Portfolio Value and Yield by Growing the
Mortgage Origination Business
o Greater Portfolio Value and Yield Should Lead to Higher Dividends
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Both Investment and Origination Businesses
are Benefited by our Tax Status
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o Net Interest Income from the Portfolio is Untaxed Provided it is Paid Out
as Dividends
o Much of the Value Created by the Mortgage Origination Business is Untaxed
- Value is realized as an addition to portfolio value, and not through
an asset sale.
o Tax Structure Provides a Significant Advantage Over Taxable Mortgage Asset
Holders and Taxable Mortgage Originators
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Portfolio Strategy
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o Yield and Yield Growth Driven by Self-Origination Capability
o Consequently a Defensive Portfolio Management Strategy is Possible
o Key Components of Defensive Strategy
- Duration Neutral
- High Credit Quality
- Low Exposure to Extension and Prepayment due to short resetting ARM
Assets
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Portfolio Strategy
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o Return Not Benefited by the Slope of the Yield Curve
o Agnostic About Direction of Interest Rates
- Return Not Dependent on Finding Value or Other Portfolio Management
Strategies
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Projected Yield and Yield Variance
(Portfolio Income Before Expenses)
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ROEs for Instantaneous Interest Rate Changes
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-100 bp -50 bp 0 bp +50 bp +100 bp Flattener Steepner
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Portfolio as of 6/30/2004 13.5% 17.6% 18.4% 17.7% 14.3% 15.5% 22.0%
Projected Q3 Securitization ($825 Million*) 20.3% 25.6% 26.6% 25.7% 21.4% 22.9% 31.0%
* $2.1 billion securitization, $1.275 billion sold for cash, $825 million
retained for portfolio Flattener and Steepner represent 2-10 yr. 50 bp interest
rate shocks. Assumes 12:1 leverage.
Based on company projections and are to be used as a representative model only.
Actual results may vary
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Portfolio Characteristics
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Portfolio Size Loan Types Credit Quality
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[GRAPHIC PIE CHART] [GRAPHIC PIE CHART] [GRAPHIC PIE CHART]
Self Originated 54% 5/1 ARMs 56% AAA and Agency 97%
Market Bought 46% 3/1 ARMs 22% Other 2%
Short Reset (less
than 1 year) 22%
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Portfolio Statistics
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Leverage Statistic 10.9 Times Equity Average Life 3.78 Years
Net Duration Statistic -0.1 Years Average Mark 100.26 of par
Convexity -.53 Price/Yield Spread Duration 3.17 years
As of 06/30/04
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Risk Mitigation Strategies
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o Ongoing hedging to Maintain Duration Neutral Position
o Key Rate Management
o Concentration on Short Reset ARMs
- Reduced Extension / Prepayment Exposure
- Reduced Spread Volatility
o BlackRock Tools and Consultation
o Concentration on High Credit Quality Assets
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Mortgage Origination Business
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o Origination Business Drives Growth in the Value and Yield of the Mortgage
Portfolio
o Company Aims to Aggressively Grow the Origination Business to Speed
Portfolio Value and Yield Growth
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Mortgage Origination Business - Overview
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Top Mortgage Originators in 2004
(For 3 months - Dollars in Billions)
2004
o Trend in origination volume: Rank Lender Volume
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- 2000 $ 3.0 Billion 1 Countrywide Financial Corp., CA $ 99.66
2 Wells Fargo Home Mortgage, CA $ 96.08
- 2001 $ 7.8 Billion 3 Washington Mutual, WA $ 76.36
4 Chase Home Finance, NJ $ 56.87
- 2002 $ 12.2 Billion 5 CitiMortgage, Inc., MO / Principal Residential Mortgage, IA $ 40.13
6 Bank of America, NC $ 28.46
- 2003 $ 21.7 Billion 7 GMAC Residential Holdings, PA $ 24.44
8 ABN Amro Mortgage, MI $ 19.43
- Q104 $ 4.4 Billion 9 National City Mortgage, OH $ 18.73
10 Cendant Mortgage (2), NJ $ 17.63
- Q204 $ 6.6 Billion 11 Homecomings, MN $ 13.73
12 HSBC Mortgage Corp. USA, NY $ 12.63
13 Golden West Financial Corp./World, CA $ 12.40
14 Aurora Loan Services, Inc., CO $ 11.26
o Average national market share: 15 GreenPoint Mortgage Funding, CA $ 11.17
16 First Horizon Home Loans, TX $ 10.38
- 2000 0.29 % 17 IndyMac Bancorp, Inc., CA $ 9.42
18 Flagstar Bank, FSB, MI $ 9.00
- 2001 0.38 % 19 SunTrust Mortgage, Inc., VA $ 8.81
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- 2002 0.47 % 20 American Home Mtg. Investment, NY $ 6.62
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- 2003 0.60 % 21 RBC Mortgage, IL $ 5.90
22 Impac Funding Corporation, CA $ 5.50
- Q104 0.75 % 23 Branch Banking & Trust Co., NC $ 5.46
24 U.S. Bank Home Mortgage, MN $ 5.22
- Q204 0.83 % 25 Wachovia/First Union Mtg., NC $ 5.05
26 Ohio Savings Bank, F.S.B. (E), OH $ 4.50
27 First Magnus Financial Corp., AZ $ 4.09
28 Netbank, SC $ 3.90
29 CTX Mortgage, TX $ 3.50
30 E*Trade, VA $ 3.39
Source: Inside Mortgage Finance, Copyright 2004 Source: National Mortgage News, Copyright 2004
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Benefits of Scale
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o Lower Per Loan Production Costs
o Better Terms of Business with Counterparties
- Fannie Mae / Freddie Mac
- Liquidity Providers
- Service Providers
o Enhanced Ability to Improve Production Platform
- Technology
- Marketing Innovations
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Origination Business Growth Drivers
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o Inexpensive Acquisitions
- Origination Franchise being Built at Less than Replacement Cost
- Recent Acquisition from Washington Mutual
o Rapid Organic Growth
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Nationwide Branch Network
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> American Home Mortgage originates mortgages through approximately 303
branches in 38 states
> Approximately 3900 Employees
[GRAPHIC MAP OF UNITED STATES OF AMERICA]
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Production Characteristics
(Second Quarter 2004)
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Credit Quality Retail vs. Wholesale
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[GRAPHIC PIE CHART] [GRAPHIC PIE CHART]
Agency Eligible 63% Wholesale 54%
High Credit Quality Jumbo Loans 21% Retail 46%
Alt A 10%
Home Equity & Second Mortgages 3%
Non-Prime 3%
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Largest States Fixed vs. ARMs
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[GRAPHIC PIE CHART] [GRAPHIC PIE CHART]
All Other 42% Fixed 51%
CA 24% ARMs 49%
IL 18%
MD 6%
AZ 5%
VA 5%
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Strong Access to Liquidity
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Commercial Paper Program
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o $2.0 Billion Lehman Sponsored Asset-Backed CP Guaranteed by Bank of
America, Caylon and ABN Amro
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Warehouse and Loan Gestation
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UBS $1.2 billion
Bank of America Syndication 600 million
RBS Greenwich Capital 500 million
CDC IXIS 450 million
Morgan Stanley 350 million
Caylon 200 million
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Securities Repurchase Facilities
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Bank of America Bear Stearns Citigroup
Credit Suisse Deutsche Bank Goldman Sachs
Lehman Brothers Merrill Lynch UBS
Morgan Stanley Nomura Greenwich Capital
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Outstanding Financial Results
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American Home Mortgage's Results For Four Full Years
Since Initial Public Offering
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AHM Loan Originations Revenues
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[GRAPHIC BAR CHART] [GRAPHIC BAR CHART]
92% CAGR 95% CAGR
Billions Millions
2000 $3.0 2000 $58.3
2001 $7.8 2001 $126.1
2002 $12.2 2002 $232.8
2003 $21.7 2003 $432.1
Net Income Earnings Per Share
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[GRAPHIC BAR CHART] [GRAPHIC BAR CHART]
139% CAGR 70% CAGR
Millions Dollars
2000 $5.4 2000 $.83
2001 $25.5 2001 $2.14
2002 $39.5 2002 $2.65
2003 $73.8 2003 $4.07
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Condensed Income Forecast
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2nd Half 2004
Dollars in Millions
Net Interest Income 64.8
Reduction in Trading Portfolio Value (14.9)
Portfolio Expenses (4.4)
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Portfolio Income 45.4
Gain on Sale of Loans and Securitizations 156.8
Loan Origination Expenses (124.0)
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Loan Origination Income 32.8
Servicing and Other Income (Expenses) (2.6)
Preferred Dividends (2.5)
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Net Income Available For Common 73.1
Average Diluted Common Shares 40.3
EPS 1.81
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Condensed Cash Flow Forecast
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2nd Half 2004
Dollars in Millions
Net Interest Income (Excludes premium amortization) 75.2
Sales of Loans and Newly Created Securities 121.7
Servicing and Other Income * 21.9
Increase in MBS Value ** 25.4
Increase in Servicing Value *** 17.8
Additional Borrowings Given Constant Leverage 35.9
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Total Cash Generated 254.7
Loan Origination and Servicing Expenses 179.5
Preferred Dividends 2.5
Common Dividends at Current Pay Rate 48.6
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Total Cash Usage 230.6
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Excess Cash Available to Reduce Leverage,
Grow Portfolio or Increase Common Dividend 24.1
* Excludes servicing amortization and impairment
** Net of principal paydowns and convexity losses
*** Net of portfolio runoff and market value declines
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2nd Half Guidance
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Six Months Ended Full Year
December 31 2004
Earnings Per Diluted Share 1.81 3.40
Common Dividends Per Share 1.22 2.32
December 31, 2004
Book Value Per Share 18.41
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