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.