EXHIBIT 99.1 [AMERICAN HOME MORTGAGE LOGO] FOR IMMEDIATE RELEASE American Home Mortgage Reports Fourth Quarter and Full Year 2004 Results Announces fourth quarter fully diluted earnings per share of $1.14 Board of Directors increases dividend policy to $0.71 per share per quarter or $2.84 per share annualized Common stockholder book value increases $0.53 per share to $18.95 Melville, NY (January 27, 2005) - American Home Mortgage Investment Corp. (NYSE: AHM) announced today results for the fourth quarter and full year ended December 31, 2004. FINANCIAL HIGHLIGHTS Comparison of the Three Months Ended December 31, 2004 and 2003 o Revenue for the fourth quarter of 2004 was $152.0 million, compared to $86.2 million for the fourth quarter of 2003, an increase of 76.3%. o Net earnings for the fourth quarter were $48.6 million, compared to $11.9 million for the fourth quarter of 2003, an increase of 308.2%. o Earnings per diluted share for the fourth quarter were $1.14 per share, compared to $0.59 per share for the fourth quarter of 2003, an increase of 93.2%. o Dividends per common share for the fourth quarter were $0.66, compared to $0.55 for the fourth quarter of 2003. o Book value per common share was $18.95 as of December 31, 2004, compared to $15.75 as of December 31, 2003. Comparison of the Three Months Ended December 31, 2004 and September 30, 2004 o Revenue for the fourth quarter of 2004 was $152.0 million, compared to $111.3 million for the third quarter of 2004, an increase of 36.6%. o Net earnings for the fourth quarter were $48.6 million, compared to $42.9 million for the third quarter of 2004, an increase of 13.2%. o Earnings per diluted share for the fourth quarter were $1.14 per share, compared to $1.02 per share for the third quarter of 2004, an increase of 11.8%. o Dividends per common share for the fourth quarter were $0.66, compared to $0.61 for the third quarter of 2004. o Book value per common share was $18.95 as of December 31, 2004, compared to $18.42 as of September 30, 2004. Comparison of the Full Year 2004 and Full Year 2003 o Revenue for the year ended December 31, 2004 was $436.6 million, compared to $432.1 million for the full year 2003, an increase of 1.0%. o Net earnings for the year ended December 31, 2004 were $146.3 million, compared to $73.8 million for the year ended December 31, 2003, an increase of 98.2%. o Earnings per diluted share for the full year 2004 were $3.74 per share, compared to $4.07 per share for the full year 2003, a decrease of 8.1%. o Dividends per common share for the year ended December 31, 2004 were $2.43, compared to $0.91 for the year ended December 31, 2003. Michael Strauss, Chairman and Chief Executive Officer, commented, "During the fourth quarter, our Company achieved considerable success in executing its business plan. Net interest income, origination activity and servicing revenue all grew ahead of plan. Net interest income benefited from a continued shift from holding market-purchased securities to holding self-originated securities structured to enhance net interest margin. It also benefited from higher balances of loans held for sale and securitization, and from the greater use of commercial paper and other relatively low cost borrowing vehicles made possible by the Company's increased scale. Our origination activity benefited from increased market share, which reached a new high. Origination revenue also benefited from a favorable product mix and resulting improved gross margins. The Company continued to expand its retail and wholesale sales forces, with the quarter-end combined size of our sales force rising to a total of 1,867 loan officers and account executives, also a new high for the Company. At quarter-end, the number of loans being serviced by the Company exceeded 100,000 for the first time, an important milestone in our Company's ongoing effort to grow its servicing platform and permanent customer base. In the fourth quarter, the interest rate environment remained supportive to our Company's efforts. Rates, in general, remained relatively low. Also of particular importance to our Company, the spread between yields on mortgage-backed securities and fixed-rate securities did not increase, but instead tightened slightly. It is the Company's assumption that the interest rate environment will not continue to be as supportive during 2005. Based on our fourth quarter results and our projected earnings for 2005, I am very pleased to announce that the Board of Directors has again raised the Company's dividend policy with respect to its common stock to $0.71 per quarter, or $2.84 annualized. This is the eighth time the Company has raised its dividend policy since its initial dividend in April 2001." Fourth Quarter Results During the fourth quarter, the Company's mortgage-backed securities (MBS) portfolio averaged $7.3 billion, earned a net interest margin of 1.57%, and earned net interest income of $28.0 million. Also, during the fourth quarter, the Company's inventory of loans pending sale or securitization averaged $2.7 billion, earned a net interest margin of 2.97% and earned net interest income of $20.2 million. Finally, during the quarter the Company had interest expense on servicing financing and other obligations of $1.4 million. At December 31, 2004, the composition of the Company's MBS portfolio by type of loan was 71.4% 5/1 adjustable-rate mortgages (ARMs), 17.1% short reset ARMs, and 11.5% 3/1 ARMs. The composition of the MBS portfolio by credit quality based on Standard & Poor's ratings was 94.5% Agency and AAA, 2.1% AA and A, and 3.4% BBB or unrated. On December 31, 2004, the MBS portfolio's duration, net of liabilities and hedges, was estimated to be 0.07 years, its projected average life was 2.17 years, and its average cost was 100.5% of par. During the quarter, the Company securitized $3.5 billion of newly originated loans through collateralized debt obligation and agency pass-through transactions. The collateralized debt obligation was structured to enhance the yield of securities retained by the Company. Of the securities created, $1.5 billion were retained in the Company's portfolio while $2.0 billion were sold for a cash gain of $40.6 million, net of discontinued hedges. The $1.5 billion of retained securities had a projected yield of 4.61%, an estimated duration of 1.75 years, an expected average life of 2.83 years, were valued at an average price of 102.3% of par, and created an unrealized gain of $32.8 million. Changes to prepayment speeds and other factors may prevent the projected yield, estimated duration or expected average life from being realized. The Company expects that it will continue to create higher yielding securities from its originations using collateralized debt issuances, and that it will hold a portion of these securities in substitution for lower yielding, primarily market-purchased securities. During the quarter, $891 million of securities were sold, largely to make room for the higher-yielding, retained securities. The sold securities resulted in a gain, net of discontinued hedges on the associated liabilities, of $3.0 million. During the quarter, the Company experienced a mark-to-market unrealized loss, net of associated hedges, of $5.6 million on its portfolio of trading securities. The net impact of these portfolio changes was a reduction in earnings of $2.6 million, or $0.06 per common share. During the fourth quarter, loan production was $6.7 billion. Of the $6.7 billion, 54% of loans were to homebuyers while 46% were for refinancing. During the quarter, the Company estimates its national market share reached 0.95% based on Fannie Mae's forecast of national market size, compared to 0.83% in the third quarter of 2004 and 0.62% during the fourth quarter of 2003. During the quarter, the Company sold $2.9 billion of non-securitized, primarily fixed-rate loans to third parties for a gain of $36.0 million. At December 31, 2004, the Company employed approximately 1,867 loan officers and account executives, including call center representatives, but excluding sales assistants, compared to approximately 1,738 on September 30, 2004. The number of loans serviced on December 31, 2004, including warehouse loans, reached 104,841 loans with a principal balance of $16.8 billion compared to 87,714 loans with a principal balance of $13.6 billion on September 30, 2004. During the quarter, servicing revenues were $10.6 million, direct servicing expenses were $2.4 million and amortization and impairment was $14.8 million. During the quarter, servicing experienced a loss of $2.3 million, net of an associated tax benefit, due to impairment and amortization. The carrying value, net of impairment reserves, of the servicing portfolio on December 31 was $189.2 million, or 1.22% of the unpaid principal balance, or 3.6 times the weighted average servicing fee, compared to $160.4 million, or 1.28% of the unpaid principal balance, or 3.6 times the weighted average servicing fee at September 30. The market value of the servicing portfolio was $189.9 million on December 31 and $163.0 million on September 30. On December 31, the impairment reserve had increased to $15.9 million, the weighted average servicing fee was 0.345%, the weighted average age of the portfolio was 1.3 years, and the weighted average coupon was 5.45%. The Company's total revenues for the quarter were $152.0 million. Of these revenues, $46.8 million was from net interest income, $76.6 million was from gains on sales to third parties of loans and securities backed by self-originated loans, and from net mortgage origination fees. $32.8 million of revenue was from unrealized gains on newly created mortgage securities that were retained, $11.7 million was from mortgage servicing fees and ancillary revenues, and $1.5 million was from other sources. Revenues were increased by the $3.0 million gain from sales of MBS portfolio securities and discontinuation of hedges on the associated liabilities and were reduced by $5.6 million of unrealized loss on mortgage-backed securities held in trading and their associated hedges and $14.8 million for servicing amortization and impairment. During the quarter, the Company's expenses were $102.6 million, and the Company's pre-tax profit was $49.4 million. Net income for the quarter was $48.6 million, preferred dividends were $2.3 million and net income available to common stockholders was $46.3 million, resulting in earnings per fully diluted common share of $1.14. Book value attributable to common stockholders on December 31, 2004 was $763.6 million, or $18.95 per common share. Dividend Policy Increase and Dividend Tax Treatment The Company's Board of Directors sets dividend policy based primarily on the Company's projected GAAP earnings and cash flow. Cash flow is primarily generated from net interest income, from the sale to third parties of loans and newly originated securities, from applying leverage to retained newly originated securities and to increases in the value of mortgage servicing rights and securities held, and from loan servicing and loan origination fees. Cash flow is used to pay operating expenses, fund increases in working capital, make capital expenditures, post securities and derivatives margins and pay preferred and common dividends. Based on the Company's projections for GAAP earnings and cash-flow, the Company's Board of Directors has changed the Company's dividend policy to increase the quarterly dividend on its common stock to $0.71, or $2.84 annualized. It is expected that the first dividend of $0.71 per common share will be payable in April 2005. The Company's dividend policy does not constitute an obligation to pay dividends, which only occurs when its Board of Directors declares a dividend. The dividend policy is subject to ongoing review by the Board of Directors based on, among other things, the Company's business prospects, financial condition, GAAP earnings projections and cash flow projections, and the Board may, when it deems doing so is advisable, lower or eliminate the dividend without prior notice. The Company announced in its earnings release of October 28, 2004, that a portion of the dividend it paid out in 2004 would be classified as a capital distribution, as opposed to ordinary income, for income tax purposes. The Company now projects that it is unlikely that any portion of its 2004 dividend will be a capital distribution, and that all of its dividend will be classified as ordinary income. In part, this is a result of net interest income being higher than originally projected. The Company estimates that of its 2004 dividend, $0.25 per common share and $0.08 per share of 9.75% Series A Cumulative Redeemable Preferred Stock will be excess inclusion income for taxpayers subject to the Unrelated Business Income Tax ("UBIT"). The Company believes most of its shareholders are not subject to UBIT and consequently will not be affected by a portion of its dividend being classified as excess inclusion income under federal tax rules, however: o Tax-exempt stockholders (other than certain government-related entities) will typically be subject to UBIT and will need to pay tax on the portion of their dividend classified as excess inclusion income; o Stockholders typically may not offset the portion of their dividends classified as excess inclusion income with net operating losses. Stockholders will receive tax form 1099 showing their total 2004 dividend receipts and the portion that is excess inclusion income. The Company recommends that stockholders discuss the proper tax treatment of their excess inclusion income with their tax advisor. Earnings Outlook The Company reaffirms its 2005 earnings guidance set forth in its third quarter earnings release of $3.80 to $3.90 per fully diluted common share. The Company could fail to achieve its earnings guidance, and may experience losses due to a broad range of reasons, including, but not limited to, market forces reducing net interest income or net asset values or both, credit delinquencies reducing income and/or net asset values, loan production or production margins being less than anticipated, expenses being higher than expected, or any combination thereof. Other Fourth Quarter Highlights During the quarter, the Company issued 3,450,000 shares of 9.25% Series B Cumulative Redeemable Preferred Stock, which included the exercise in full of the underwriters' option to purchase 450,000 shares to cover over-allotments. The proceeds to the Company, including the underwriters' over-allotment option, was $86.3 million before underwriting discounts, commissions and other offering expenses. The Series B Preferred Stock has no stated maturity date and is non-callable for five years. It trades on the New York Stock Exchange under the symbol "AHM PrB". The Company filed a universal shelf registration statement on Form S-3 with the Securities and Exchange Commission (SEC). The registration statement, which was declared effective by the SEC on January 6, 2005, registers an aggregate of $761,875,000 of equity and/or debt securities, which includes $11,875,000 of equity and/or debt securities that remained available for issuance under the Company's prior shelf registration statement, for possible issuance and sale from time to time. Additionally, the Company continued to grow its senior management team through the appointments of Michelle L. Rothman, Gail Thakarar and Mary M. Feder. Ms. Rothman will assume the position of Chief Credit Officer, a newly created position consolidating the Company's risk management, quality assurance and credit analytics groups. Ms. Rothman previously was Director of Credit Policy for CitiMortgage. Ms. Thakarar will fill the position of Director of Human Resources, a position which had been vacant. Ms. Thakarar previously was Corporate Vice President, Human Resources, at the MONY Group, and had been the officer in charge of human resources at Countrywide Financial Corporation. Ms. Feder will assume the newly created position of Investor Relations Director. Previously, Ms. Feder held a similar position at The Roslyn Savings Bank. Conference Call Today American Home will hold an investor conference call today, January 27, 2005, at 10:30 a.m., Eastern Time, to discuss earnings. Interested parties may listen to the live conference call by visiting the American Home corporate website, www.americanhm.com, and clicking on the "Investor Info" section. A replay of the online broadcast will be available on the site through February 10, 2005. American Home Mortgage Investment Corp. has established an Investors Choice Dividend Reinvestment & Direct Stock Purchase and Sale Plan for its shareholders. The plan offers affordable alternatives for buying and selling common stock of American Home Mortgage Investment Corp. Participants in the plan may also reinvest cash dividends and make periodic supplemental cash payments to purchase additional shares of the Company's common stock. If you have additional questions or would like to enroll in the plan, please contact the plan administrator, American Stock Transfer & Trust Company, at 1-888-777-0319 (toll free) or visit their website at www.amstock.com. American Home Mortgage Investment Corp. is a mortgage REIT focused on earning net interest income from self-originated mortgage-backed securities, and through its taxable subsidiaries, from originating and servicing mortgage loans for institutional investors. Mortgages are originated through a network of 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. 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 or 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 Mortgage Investment Corp.'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: American Home Mortgage Investment Corp.'s limited operating history with respect to its portfolio strategy; the potential fluctuations in American Home Mortgage Investment Corp.'s operating results; American Home Mortgage Investment Corp.'s potential need for additional capital; the direction of interest rates and their subsequent effect on the business of American Home Mortgage Investment Corp. and its subsidiaries; risks associated with the use of leverage; changes in federal and state tax laws affecting real estate investment trusts; federal and state regulation of mortgage banking; and those risks and uncertainties discussed in filings made by American Home Mortgage Investment Corp. 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 Mortgage Investment Corp. does not assume any responsibility, and expressly disclaims any responsibility, to issue updates to any forward-looking statements discussed in this news release, whether as a result of new information, future events or otherwise. CONTACT: Mary M. Feder Vice President, Investor Relations American Home Mortgage Investment Corp. (631) 622-6469 mary.feder@americanhm.com ### Financial Tables to Follow on Next Pages AMERICAN HOME MORTGAGE INVESTMENT CORP. AND SUBSIDIARIES OPERATING STATISTICS Three Months Ended ---------------------------------------------------------------------- December 31, September 30, June 30, March 31, 2004 2004 2004 2004 ---------------- ---------------- ---------------- ---------------- Mortgage-Backed Securities Holdings Segment:* - ---------------------------------------------------- Average mortgage-backed securities held $7.3 billion $7.2 billion $4.8 billion $2.0 billion Average portfolio yield 3.9% 3.7% 3.4% 3.1% Average cost of funds and hedges 2.5% 2.5% 2.7% 2.1% Net interest margin 1.6% 1.4% 0.9% 1.2% Mortgage-backed securities held - end of period $7.6 billion $7.3 billion $7.3 billion $4.0 billion Average cost of mortgage-backed securities 100.5% 100.7% 100.8% 101.6% Period end duration gap (in years) 0.07 (0.002) (0.04) 0.04 * - Excludes loans held pending securitization Loan Origination Segment: - ---------------------------------------------------- Loan originations $6.7 billion $5.3 billion $6.6 billion $4.4 billion Refinance 46% 36% 52% 57% ARM 55% 56% 49% 35% Loans securitized and held $1.5 billion $1.4 billion $1.5 billion $0.9 billion Loans securitized and sold $2.0 billion $1.3 billion $0.6 billion $0.1 billion Loans sold to third parties $2.9 billion $2.9 billion $4.5 billion $3.4 billion Applications accepted $9.9 billion $8.7 billion $8.8 billion $9.1 billion Application pipeline $6.2 billion $6.5 billion $6.5 billion $7.3 billion December 31, September 30, June 30, March 31, 2004 2004 2004 2004 ---------------- ---------------- ---------------- ---------------- Loan Servicing Segment: - ---------------------------------------------------- Loan servicing portfolio - total with warehouse $16.8 billion $13.6 billion $11.6 billion $10.3 billion Loan servicing portfolio - loans sold or securitized $15.5 billion $12.5 billion $10.2 billion $9.0 billion Weighted average note rate 5.45% 5.41% 5.39% 5.58% Weighted average service fee 0.345% 0.354% 0.358% 0.363% Average age (in months) 16 18 20 26 AMERICAN HOME MORTGAGE INVESTMENT CORP. AND SUBSIDIARIES OPERATING STATISTICS Three Months Ended Year Ended December 31, December 31, ------------------------------- ------------------------------- 2004 2003 2004 2003 -------------- -------------- -------------- --------------- Mortgage-Backed Securities Holdings Segment:* - -------------------------------------------------------- Average mortgage-backed securities held $7.3 billion $0.3 billion $5.3 billion $0.1 billion Average portfolio yield 3.9% 3.6% 3.6% 3.6% Average cost of funds and hedges 2.5% 3.4% 2.5% 3.4% Net interest margin 1.6% 1.2% 1.3% 1.2% Mortgage-backed securities held - end of period $7.6 billion $1.8 billion Average cost of mortgage-backed securities 100.5% 101.5% Period end duration gap (in years) 0.07 (0.04) * - Excludes loans held pending securitization Loan Origination Segment: - -------------------------------------------------------- Loan originations $6.7 billion $4.1 billion $23.1 billion $21.7 billion Refinance 46% 53% 48% 67% ARM 55% 28% 49% 19% Loans securitized and held $1.5 billion $0.5 billion $3.3 billion $0.5 billion Loans securitized and sold $2.0 billion -- $6.0 billion -- Loans sold to third parties $2.9 billion $4.0 billion $13.7 billion $20.8 billion Applications accepted $9.9 billion $5.8 billion $36.5 billion $30.3 billion Application pipeline $6.2 billion $4.0 billion December 31, ------------------------------- 2004 2003 -------------- -------------- Loan Servicing Segment: - -------------------------------------------------------- Loan servicing portfolio - total with warehouse $16.8 billion $9.4 billion Loan servicing portfolio - loans sold or securitized $15.5 billion $8.3 billion Weighted average note rate 5.45% 5.72% Weighted average service fee 0.345% 0.347% Average age (in months) 16 27 AMERICAN HOME MORTGAGE INVESTMENT CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (In thousands, except per share amounts) Three Months Ended ---------------------------------------------------------- December 31, September 30, June 30, March 31, 2004 2004 2004 2004 -------------- -------------- ------------- -------------- Net interest income: Interest income $ 113,785 $ 94,298 $ 69,999 $ 34,050 Interest expense (67,002) (61,405) (49,913) (21,278) -------------- -------------- ------------- -------------- Total net interest income 46,783 32,893 20,086 12,772 -------------- -------------- ------------- -------------- Non-interest income: Gain on sales of mortgage loans 36,004 28,373 17,141 52,581 Gain on sales of mortgage-backed securities and derivatives 43,547 22,341 6,481 8,488 Unrealized gain on mortgage-backed securities and derivatives 27,224 27,069 36,063 18,909 Loan servicing fees 11,701 9,822 8,730 10,318 Amortization (9,750) (7,755) (7,764) (7,346) Impairment reserve (provision) recovery (5,013) (4,807) 7,252 (12,584) -------------- -------------- ------------- -------------- Net loan servicing (loss) fees (3,062) (2,740) 8,218 (9,612) -------------- -------------- ------------- -------------- Other non-interest income 1,480 3,349 1,226 978 -------------- -------------- ------------- -------------- Total non-interest income 105,193 78,392 69,129 71,344 -------------- -------------- ------------- -------------- Non-interest expenses: Salaries, commissions and benefits, net 60,588 46,482 42,696 39,627 Occupancy and equipment 11,556 9,984 8,008 8,094 Data processing and communications 5,869 3,745 3,338 3,213 Office supplies and expenses 4,385 3,012 3,215 3,118 Marketing and promotion 3,391 2,610 2,196 2,212 Travel and entertainment 5,106 3,620 2,887 2,577 Professional fees 5,378 2,524 1,829 2,428 Other 6,333 6,363 4,082 5,438 -------------- -------------- ------------- -------------- Total non-interest expenses 102,606 78,340 68,251 66,707 -------------- -------------- ------------- -------------- Net income before income tax expense (benefit) 49,370 32,945 20,964 17,409 Income tax expense (benefit) 755 (9,998) (12,518) (3,814) -------------- -------------- ------------- -------------- Net income 48,615 42,943 33,482 21,223 -------------- -------------- ------------- -------------- Dividends on preferred stock 2,340 1,648 - - -------------- -------------- ------------- -------------- Net income available to common shareholders $ 46,275 $ 41,295 $ 33,482 $ 21,223 ============== ============== ============= ============== Per share data: Basic $ 1.15 $ 1.03 $ 0.84 $ 0.71 Diluted $ 1.14 $ 1.02 $ 0.83 $ 0.70 Weighted average number of shares - basic 40,216 40,145 40,000 30,030 Weighted average number of shares - diluted 40,737 40,605 40,445 30,508 AMERICAN HOME MORTGAGE INVESTMENT CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (In thousands, except per share amounts) Three Months Ended Year Ended December 31, December 31, ------------------------- ------------------------- 2004 2003 2004 2003 ------------ ----------- ------------ ----------- Net interest income: Interest income $ 113,785 $ 29,900 $ 312,132 $ 106,017 Interest expense (67,002) (18,196) (199,598) (56,986) ------------ ----------- ------------ ----------- Total net interest income 46,783 11,704 112,534 49,031 ------------ ----------- ------------ ----------- Non-interest income: Gain on sales of mortgage loans 36,004 53,535 134,099 376,605 Gain on sales of mortgage-backed securities and derivatives 43,547 2,359 80,857 2,359 Unrealized gain on mortgage-backed securities and derivatives 27,224 3,272 109,265 3,272 Loan servicing fees 11,701 9,870 40,571 39,125 Amortization (9,750) (6,866) (32,615) (51,824) Impairment reserve (provision) recovery (5,013) 10,694 (15,152) 6,334 ------------ ----------- ------------ ----------- Net loan servicing (loss) fees (3,062) 13,698 (7,196) (6,365) ------------ ----------- ------------ ----------- Other non-interest income 1,480 1,637 7,033 7,229 ------------ ----------- ------------ ----------- Total non-interest income 105,193 74,501 324,058 383,100 ------------ ----------- ------------ ----------- Non-interest expenses: Salaries, commissions and benefits, net 60,588 43,388 189,393 204,939 Occupancy and equipment 11,556 7,373 37,642 27,015 Data processing and communications 5,869 3,692 16,165 13,201 Office supplies and expenses 4,385 2,885 13,730 13,312 Marketing and promotion 3,391 3,403 10,409 12,239 Travel and entertainment 5,106 1,964 14,190 9,964 Professional fees 5,378 1,715 12,159 7,547 Other 6,333 4,656 22,216 21,897 ------------ ----------- ------------ ----------- Total non-interest expenses 102,606 69,076 315,904 310,114 ------------ ----------- ------------ ----------- Net income before income tax expense (benefit) 49,370 17,129 120,688 122,017 Income tax expense (benefit) 755 5,219 (25,575) 48,223 ------------ ----------- ------------ ----------- Net income 48,615 11,910 146,263 73,794 ------------ ----------- ------------ ----------- Dividends on preferred stock 2,340 - 3,988 - ------------ ----------- ------------ ----------- Net income available to common shareholders $ 46,275 $ 11,910 $ 142,275 $ 73,794 ============ =========== ============ =========== Per share data: Basic $ 1.15 $ 0.60 $ 3.78 $ 4.16 Diluted $ 1.14 $ 0.59 $ 3.74 $ 4.07 Weighted average number of shares - basic 40,216 19,876 37,612 17,727 Weighted average number of shares - diluted 40,737 20,356 38,087 18,113 AMERICAN HOME MORTGAGE INVESTMENT CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) (Dollars in thousands, except per share amounts) December 31, September 30, December 31, 2004 2004 2003 --------------------- --------------------- --------------------- Assets: Cash and due from banks $ 192,821 $ 118,441 $ 53,148 Money market investments - 68,039 - --------------------- --------------------- --------------------- Cash and cash equivalents 192,821 186,480 53,148 --------------------- --------------------- --------------------- Accounts receivable and servicing advances 105,338 101,105 84,311 Mortgage-backed securities 7,601,793 7,331,888 1,763,628 Mortgage loans held for sale, net 1,316,609 1,131,661 1,216,353 Derivative assets 23,344 11,630 30,611 Mortgage servicing rights, net 189,229 160,435 117,784 Premises and equipment, net 51,576 47,955 41,738 Goodwill 90,877 89,196 83,445 Other assets 20,759 16,645 13,672 --------------------- --------------------- --------------------- Total assets $ 9,592,346 $ 9,076,995 $ 3,404,690 ===================== ===================== ===================== Liabilities and Stockholders' Equity: Liabilities: Warehouse lines of credit $ 735,783 $ 547,584 $ 1,121,760 Drafts payable 26,200 45,526 25,625 Commercial paper 529,790 462,712 - Reverse repurchase agreements 7,071,168 6,899,024 1,344,327 Payable for securities purchased - - 259,701 Derivative liabilities 1,860 18,237 12,694 Accrued expenses and other liabilities 165,626 154,339 76,156 Notes payable 135,761 128,448 99,655 Income taxes payable 28,545 30,133 66,802 --------------------- --------------------- --------------------- Total liabilities 8,694,733 8,286,003 3,006,720 --------------------- --------------------- --------------------- Stockholders' Equity: Preferred stock 134,040 50,857 - Common stock 403 402 252 Additional paid-in capital 631,530 629,807 281,432 Retained earnings 170,979 151,297 121,029 Accumulated other comprehensive loss (39,339) (41,371) (4,743) --------------------- --------------------- --------------------- Total stockholders' equity 897,613 790,992 397,970 --------------------- --------------------- --------------------- Total liabilities and stockholders' equity $ 9,592,346 $ 9,076,995 $ 3,404,690 ===================== ===================== ===================== Number of shares outstanding - preferred 5,600,000 2,150,000 - Number of shares outstanding - common 40,288,077 40,184,333 25,270,100 AMERICAN HOME MORTGAGE INVESTMENT CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) (In thousands) Three Months Ended Year Ended ------------------------------------------------------------ ------------ December 31, September 30, June 30, March 31, December 31, 2004 2004 2004 2004 2004 ------------ ------------ ------------ ------------ ------------ Preferred stock Balance at beginning of period $ 50,857 $ -- $ -- $ -- $ -- Issuance of preferred stock - offering 83,183 50,857 -- -- 134,040 ------------ ------------ ------------ ------------ ------------ Balance at end of period $ 134,040 $ 50,857 $ -- $ -- $ 134,040 ------------ ------------ ------------ ------------ ------------ Common stock Balance at beginning of period $ 402 $ 401 $ 399 $ 252 $ 252 Issuance of common stock - earnouts -- -- 2 -- 2 Issuance of common stock - Omnibus Stock Plan 1 1 -- 3 5 Issuance of common stock - offering -- -- -- 144 144 ------------ ------------ ------------ ------------ ------------ Balance at end of period $ 403 $ 402 $ 401 $ 399 $ 403 ------------ ------------ ------------ ------------ ------------ Additional paid-in capital Balance at beginning of period $ 629,807 $ 629,203 $ 623,953 $ 281,432 $ 281,432 Issuance of common stock - earnouts 734 151 4,583 109 5,577 Issuance of common stock - Omnibus Stock Plan 823 374 331 978 2,506 Issuance of common stock - offering -- -- -- 339,647 339,647 Tax benefit from stock options exercised -- -- -- 1,599 1,599 Restricted shares amortization 166 79 336 188 769 ------------ ------------ ------------ ------------ ------------ Balance at end of period $ 631,530 $ 629,807 $ 629,203 $ 623,953 $ 631,530 ------------ ------------ ------------ ------------ ------------ Retained earnings Balance at beginning of period $ 151,297 $ 134,515 $ 125,504 $ 121,029 $ 121,029 Net income 48,615 42,943 33,482 21,223 146,263 Dividends declared (28,933) (26,161) (24,471) (16,748) (96,313) ------------ ------------ ------------ ------------ ------------ Balance at end of period $ 170,979 $ 151,297 $ 134,515 $ 125,504 $ 170,979 ------------ ------------ ------------ ------------ ------------ Other comprehensive loss Balance at beginning of period $ (41,371) $ (50,553) $ (8,675) $ (4,743) $ (4,743) Unrealized (loss) gain on mortgage-backed securities (12,491) 52,945 (61,386) 10,221 (10,711) Gain (loss) on cash flow hedges, net of amortization 14,523 (43,763) 19,508 (14,153) (23,885) ------------ ------------ ------------ ------------ ------------ Balance at end of period $ (39,339) $ (41,371) $ (50,553) $ (8,675) $ (39,339) ------------ ------------ ------------ ------------ ------------ Total stockholders' equity $ 897,613 $ 790,992 $ 713,566 $ 741,181 $ 897,613 ============ ============ ============ ============ ============ AMERICAN HOME MORTGAGE INVESTMENT CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) Three Months Ended Year Ended ------------------------------------------------------ -------------- December 31, September 30, June 30, March 31, December 31, 2004 2004 2004 2004 2004 ------------------------------------------------------ -------------- Cash flows from operating activities: Net income $ 48,615 $ 42,943 $ 33,482 $ 21,223 $ 146,263 Adjustments to reconcile net income to net cash (used in) provided by operating activities: Depreciation and amortization 2,288 2,151 1,988 1,977 8,404 Amortization and impairment of mortgage servicing rights 14,763 12,562 512 19,930 47,767 Amortization of mortgage-backed securities premiums, net 6,560 9,477 7,330 2,952 26,319 Amortization of cash flow hedges 543 (7,019) 1,871 - (4,605) (Gain) loss on sales of mortgage-backed securities and derivatives (2,967) 4,610 4,246 (7,263) (1,374) Unrealized (gain) loss on securities held in trading (20,631) (46,322) 2,423 (18,909) (83,439) Unrealized (gain) loss on free standing derivatives (14,482) 14,856 (41,451) - (41,077) Additions to mortgage servicing rights on securitized loans (40,645) (27,203) (22,514) (9,863) (100,225) Additions to mortgage servicing rights on sold loans (2,912) (3,976) (6,297) (5,802) (18,987) (Increase) decrease in capitalized interest rate lock commitments (395) 7,358 21,613 (9,990) 18,586 (Increase) decrease in deferred origination costs (1,488) (808) 5,026 (884) 1,846 Decrease (increase) in SFAS 133 basis adjustments 1,276 (1,009) 10,658 5,524 16,449 Other 83 2,610 853 (2,089) 1,457 (Increase) decrease in operating assets: Accounts receivable and servicing advances (4,233) (616) (20,063) 3,885 (21,027) Other assets (4,114) (2,857) (1,575) 1,703 (6,843) Increase (decrease) in operating liabilities: Accrued expenses and other liabilities 8,518 32,761 41,252 (8,092) 74,439 Income taxes payable (1,588) (10,995) (12,561) (13,113) (38,257) Forward delivery contracts 766 (9,004) 9,249 (5,809) (4,798) ------------------------------------------------------ -------------- Net cash from operating activities excluding loans held for sale (10,043) 19,519 36,042 (24,620) 20,898 ------------------------------------------------------ -------------- Origination of mortgage loans held for sale (3,143,181) (2,688,820) (4,458,196) (3,240,687) (13,530,884) Proceeds from sales of mortgage loans 2,974,379 2,806,070 4,643,542 3,292,010 13,716,001 ------------------------------------------------------ -------------- Net cash (used in) provided by operating activities (178,845) 136,769 221,388 26,703 206,015 ------------------------------------------------------ -------------- Cash flows from investing activities: Purchases of premises and equipment, net (5,909) (5,565) (5,295) (1,473) (18,242) Origination of mortgage loans held for securitization (3,600,897) (2,603,371) (2,161,446) (1,172,487) (9,538,201) Proceeds from securitizations of mortgage loans 3,584,963 2,779,409 1,892,031 978,128 9,234,531 Purchases and additions to mortgage-backed securities (3,654,544) (3,260,340) (4,637,358) (3,064,485) (14,616,727) Proceeds from sales of mortgage-backed securities and derivatives 2,889,109 2,947,068 943,413 794,749 7,574,339 Principal repayments on mortgage-backed securities 499,022 397,727 292,487 63,719 1,252,955 Other - - 109 (353) (244) ------------------------------------------------------ -------------- Net cash (used in) provided by investing activities (288,256) 254,928 (3,676,059) (2,402,202) (6,111,589) ------------------------------------------------------ -------------- Cash flows from financing activities: Increase (decrease) in warehouse lines of credit 188,199 (124,872) (579,389) 130,085 (385,977) Increase in reverse repurchase agreements 172,144 485,518 3,018,565 2,050,614 5,726,841 (Decrease) increase in payable for securities purchased - (423,909) 289,262 (125,054) (259,701) Increase (decrease) in commercial paper 67,078 (584,324) 1,047,036 - 529,790 (Decrease) increase in drafts payable (19,326) (40,774) 21,990 38,685 575 Proceeds from issuance of preferred stock 83,425 52,057 - - 135,482 Proceeds from issuance of common stock 776 426 329 341,882 343,413 Dividends paid (26,167) (24,468) (7,575) (23,072) (81,282) Increase in notes payable 7,313 21,211 814 6,768 36,106 ------------------------------------------------------ -------------- Net cash provided by (used in) financing activities 473,442 (639,135) 3,791,032 2,419,908 6,045,247 ------------------------------------------------------ -------------- Net increase (decrease) in cash and cash equivalents 6,341 (247,438) 336,361 44,409 139,673 Cash and cash equivalents, beginning of period 186,480 433,918 97,557 53,148 53,148 ------------------------------------------------------ -------------- Cash and cash equivalents, end of period $ 192,821 $ 186,480 $ 433,918 $ 97,557 $ 192,821 ====================================================== ============== AMERICAN HOME MORTGAGE INVESTMENT CORP. AND SUBSIDIARIES FAIR VALUE OF FINANCIAL INSTRUMENTS (In thousands) December 31, 2004 ---------------------------------------------------------------- Fair Value in Excess of Carrying Value Fair Value Carrying Value -------------------- -------------------- -------------------- Assets: Cash and cash equivalents $ 192,821 $ 192,821 $ - Accounts receivable and servicing advances 105,338 105,338 - Mortgage-backed securities 7,601,793 7,601,793 - Mortgage loans held for sale, net 1,316,609 1,357,084 40,475 Mortgage servicing rights, net 189,229 189,928 699 Derivative assets* 23,344 29,379 6,035 -------------------- $ 47,209 -------------------- Carrying Value in Excess of Fair Value -------------------- Liabilities: Warehouse lines of credit $ 735,783 $ 735,783 $ - Commercial paper 529,790 529,790 - Notes payable 135,761 135,761 - Drafts payable 26,200 26,200 - Reverse repurchase agreements 7,071,168 7,065,072 6,096 Derivative liabilities 1,860 1,860 - -------------------- $ 6,096 -------------------- $ 53,305 ==================== * Derivative assets includes interest rate lock commitments ("IRLCs") to fund mortgage loans. The carrying value excludes the value of the mortgage servicing rights ("MSRs") attached to the IRLCs in accordance with SEC Staff Accounting Bulletin No. 105. The fair value includes the value of MSRs.