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American Home Mortgage Announces Third Quarter ResultsQuarterly earnings are $1.09 per diluted share
MELVILLE, N.Y., Oct. 26 /PRNewswire-FirstCall/ -- American Home Mortgage Investment Corp. announced today results for the quarter ended September 30, 2005. FINANCIAL HIGHLIGHTS
Comparison of the Three Months Ended September 30, 2005 and 2004
- Revenue for the third quarter of 2005 was $204.8 million compared to
revenue of $111.3 million for the third quarter of 2004, an increase of
84.1%.
- Net earnings for the third quarter of 2005 were $53.2 million compared
to net earnings of $42.9 million for the third quarter of 2004, an
increase of 23.9%.
- Earnings per diluted share for the third quarter of 2005 were $1.09
compared to earnings per diluted share of $1.02 for the third quarter of
2004, an increase of 6.9%.
- Dividends per common share for the third quarter of 2005 were $0.86,
compared to $0.61 for the third quarter of 2004, an increase of 41.0%.
- Book value per common share was $22.81 at September 30, 2005, compared
to $18.42 per share at September 30, 2004, an increase of 23.8%.
Comparison of the Three Months Ended September 30, 2005 and June 30, 2005
- Revenue for the third quarter of 2005 was $204.8 million compared to
revenue of $203.3 million for the second quarter of 2005, an increase of
0.7%.
- Net earnings for the third quarter of 2005 were $53.2 million compared
to net earnings of $65.5 million for the second quarter of 2005, a
decrease of 18.8%.
- Earnings per diluted share for the third quarter of 2005 were $1.09
compared to earnings per diluted share of $1.52 for the second quarter
of 2005, a decrease of 28.3%.
- Dividends per common share for the third quarter of 2005 were $0.86,
compared to $0.76 for the second quarter of 2005, an increase of 13.2%.
- Book value per common share was $22.81 at September 30, 2005, compared
to book value per common share of $20.21 at June 30, 2005, an increase
of 12.9%.
Comparison of the Nine Months Ended September 30, 2005 and 2004
- Adjusted revenue for the nine months ended September 30, 2005 was $572.1
million compared to revenue of $284.6 million for the nine months ended
September 30, 2004, an increase of 101.0%. GAAP revenue for the nine
months ended September 30, 2005 totaled $643.5 million.
- Adjusted net earnings for the nine months ended September 30, 2005 were
$172.7 million compared to net earnings of $97.6 million for the nine
months ended September 30, 2004, an increase of 76.9%. GAAP net
earnings for the nine months ended September 30, 2005 totaled $244.1
million.
- Adjusted earnings per diluted share for the nine months ended September
30, 2005 were $3.83 compared to earnings per diluted share of $2.58 for
the nine months ended September 30, 2004, an increase of 48.4%. GAAP
earnings per diluted share for the nine months ended September 30, 2005
were $5.51.
- Dividends per common share for the nine months ended September 30, 2005
were $2.33, compared to $1.77 for the nine months ended September 30,
2004, an increase of 31.6%.
Michael Strauss, American Home's Chief Executive Officer, commented, "I am pleased by our company's overall results for the third quarter. During the quarter, our diluted earnings per share were $1.09, slightly higher than expected. Earnings were driven by record high loan production of $13.7 billion due to a record market share of 1.81% of national originations based on Freddie Mac estimates. As a result, our company's revenues from loan sales and warehouse interest income reached all time highs. Also, during the quarter, our company successfully embarked on the strategic shifts described during our second quarter earnings release. Specifically, we retained only a selected portion of the ARM loans we originated, while selling the balance of our ARM loan production. The $1.3 billion of ARM loans we kept during the quarter, we believe, offer relatively high returns and less exposure to changes in prepayment speeds. The ARM loans we kept were accounted for as loans held for investment, and are carried at their cost basis rather than their market value. As a result, we expect ongoing enhanced net interest income from these loans. In the future, we expect that all of the loans we retain will be accounted for as loans held for investment, and will be carried at their cost basis. Our company's third quarter results would have been much stronger if not for a $34 million write-down, net of associated hedges, of the value of residual assets we hold from our prior period securitizations. This write-down, which was charged to current period income, primarily reflects changes in prepayment speed assumptions used by residual asset buyers. We have written these assets down in previous quarters and our earnings model allows for limited write-downs of these assets, but the third quarter write-down was disproportionately large. Our most recent data shows prepayment speeds on our prior period securitizations slowing. If this trend continues, I would expect that any future write-downs of these assets would be much more limited. I believe our positive financial results, even given the impact of the write-down, demonstrates the resiliency of our business model. Our third quarter net interest income reached $46.9 million, a slight increase over the second quarter of 2005. Mortgage loan net interest income increased by $4.4 million to $26.9 million, however, portfolio net interest income decreased by $3.3 million to $21.6 million. Portfolio net interest income was reduced by sharp movements in interest rates. I believe net interest income will materially increase in the coming quarters as a result of our company holding self-originated loans for investment, carried at their cost. I also believe net interest income will increase because a growing portion of our assets will be financed through the permanent issuance of mortgage- backed securities, which will largely reduce the impact of sharp movements in interest rates on our net interest income. Finally, our net interest income should be enhanced as we invest and reap the benefit of the proceeds from our recent common stock offering. As I consider our company's outlook for the fourth quarter and 2006, I caution investors against taking our company's third quarter results and adding back the write-down of our residual assets. I believe our company's net interest income and servicing results are likely to improve in coming quarters, but I also expect our loan production will decline in response to rising interest rates and our tax expense will increase due to greater profitability in our taxable REIT subsidiaries. Based on our prospects taken as a whole, our company is reaffirming our 2005 adjusted earnings guidance of $4.60 to $4.80 per share and our 2006 earnings guidance of $4.85 to $5.15 per share. Based on our results and prospects, I am very pleased to announce that our Board of Directors has increased our company's dividend policy by $0.05 per quarter, to $0.91 per quarter or $3.64 on an annualized basis. This is the eleventh increase in our quarterly dividend since we began paying dividends in April 2001. The increased dividend rate is expected to be effective for dividends paid in January 2006." THIRD QUARTER RESULTS During the third quarter, American Home's mortgage-backed securities ("MBS") portfolio averaged $7.1 billion, and earned a net interest margin of 1.24%, resulting in net interest income of $21.6 million. By comparison, during the second quarter of 2005, the MBS portfolio averaged $6.8 billion and earned a net interest margin of 1.48%, resulting in net interest income of $24.9 million. Net interest income is projected to increase in coming quarters due to a growing portion of the portfolio's make-up being self- originated whole loans financed by MBS, due to an anticipated normalization of interest rate volatility, and as a result of fully investing the proceeds from the Company's recent stock offering. During the third quarter, American Home purchased a number of securities for its investment portfolio which settled at or near the end of September and has since purchased additional securities as it seeks to fully deploy the capital raised from its third quarter common stock offering. During the third quarter, American Home's inventory of loans averaged $5.7 billion, earned a net interest margin of 2.06% and earned net interest income of $26.9 million. This compares with an average balance of $3.9 billion, a net interest margin of 2.37% and net interest income of $22.5 million in the second quarter of 2005. During the third quarter, the Company had interest expense on servicing financing and other obligations of $1.7 million compared to $2.4 million during the second quarter of 2005. At September 30, 2005, the composition of the Company's portfolio by type of loan, including loans held for investment and securitized loans was 78.6% 5/1 adjustable-rate mortgages ("ARMs"), 15.8% short reset ARMs, and 5.6% 3/1 ARMs. The composition of the MBS portfolio by credit quality based on Standard & Poor's ratings was 92.7% Agency and AAA, 4.6% AA, A, and BBB and 2.7% unrated. On September 30, 2005, the MBS portfolio's duration, net of liabilities and hedges, was estimated to be 0.17 years and its projected average life was 2.46 years. During the third quarter, the Company's loan production was $13.7 billion. Of the $13.7 billion, 54% of loans were to homebuyers while 46% were for refinancing. During the quarter, the Company estimates its national market share reached 1.81% based on Freddie Mac's recent forecast of national market size, compared to 1.47% in the second quarter of 2005 and 0.77% during the third quarter of 2004. At September 30, 2005, the Company employed approximately 2,377 loan officers and account executives, including call center representatives, but excluding sales assistants, compared to approximately 2,334 on June 30, 2005. During the quarter, the Company embarked on its strategy of holding loans in its investment portfolio, which are carried at cost, less any associated loan loss allowance. The amount of loans placed into the investment portfolio during the quarter was $1.3 billion. At September 30, 2005, the $1.3 billion of loans added to the investment portfolio were carried at an average cost of 101.10% of par, or $14.3 million above their par value. These loans had a fair value of 103.15% of par, or $40.8 million above their par value. During the quarter, the Company sold $9.9 billion of non-securitized loans to third parties for a net gain of $123.7 million including net mortgage origination fees. Also during the quarter, the Company completed what it anticipates will be its last securitizations structured to be accounted for as sales under FAS 140. These securitizations totaled $2.5 billion. Of the securities created, $1.3 billion were sold for a gain of $20.0 million, while $1.2 billion were retained and carried at their market value, resulting in an unrealized gain of $22.6 million. In addition, during the quarter, the Company's origination segment had interest rate swap hedge gains of $10.3 million. During the quarter, the Company recognized realized and unrealized losses, net of hedges, on the value of its securities portfolio of $44.6 million, of which $37.8 million was charged to current period income, and $6.8 million resulted in other comprehensive loss. During the quarter, revenue associated with the Company's servicing assets was $17.6 million, including $21.1 million of servicing fee revenue, $15.1 million of amortization expense, and $11.6 million of impairment reserve recovery. At the end of the quarter, the principal amount of the loans being serviced including loans held for sale and loans held for investment was $27.5 billion compared to $24.7 billion at the end of the second quarter. The Company's total revenues for the quarter were $204.8 million. Of these revenues, $46.9 million was from net interest income, $176.5 million was from gains on newly originated mortgage loans including origination fees and net of hedges, $21.1 million was from mortgage servicing fees, and $1.6 million was from other sources. Revenues were decreased by $37.8 million of realized and unrealized losses on MBS, net of hedges, and by $3.5 million of servicing amortization, net of recovery. During the quarter, the Company's expenses were $149.1 million, and the Company's pre-tax income was $55.7 million. During the quarter, the Company's taxable subsidiary had pre-tax income of $5.8 million resulting in tax expense of $2.5 million. Consequently, net income for the quarter was $53.2 million while preferred dividends were $3.3 million and net income available to common stockholders was $49.9 million, resulting in earnings per diluted share of $1.09. Book value attributable to common stockholders on September 30, 2005 was $1.1 billion, or $22.81 per common share, compared to $819.1 million, or $20.21 per common share, on June 30, 2005. DIVIDEND POLICY INCREASE Based on the Company's projections for 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 $0.91 per share, or $3.64 per share on an annualized basis. It is expected that the first dividend of $0.91 per common share will be payable in January 2006. 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, 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. EARNINGS GUIDANCE American Home is reaffirming its 2005 adjusted earnings guidance of $4.60 to $4.80 per diluted share and its 2006 earnings guidance of $4.85 to $5.15. It is expected that 2006 earnings will be affected by seasonality in the Company's production segment with earnings being higher in the second and third quarters compared to the first and fourth quarters. OTHER THIRD QUARTER HIGHLIGHTS During the quarter, the Company issued 9 million shares of common stock at a price of $35.50 per share. The offering, which closed on August 15, resulted in proceeds to the Company of $319.5 million before underwriting discounts and other expenses. During the quarter, the Company privately placed $50 million of trust preferred stock at a yield of LIBOR +300. The trust preferred is callable by the Company after 5 years, and matures after 30 years. ADJUSTED FINANCIAL MEASURES Throughout this news release the terms adjusted revenues, adjusted net earnings, adjusted earnings per diluted share, adjusted net interest income, adjusted net interest margin, 2005 adjusted earnings guidance and other similar terms are used to identify financial measures that are not prepared in accordance with Generally Accepted Accounting Principles ("GAAP"). The Company has been, and expects to continue to be managed on the basis of the adjusted financial measures. The adjusted financial measures should be read in conjunction with the Company's GAAP results. A reconciliation of the adjusted financial measures to financial measures prepared in accordance with GAAP is included on pages A-1 through A-5 of this release. CONFERENCE CALL TODAY American Home will hold an investor conference call today, October 26, 2005, at 10:30 a.m., Eastern Time, to discuss earnings. Interested parties may listen to the live conference call by visiting the investor relations section of American Home's corporate website, http://www.americanhm.com/. A replay of the online broadcast will be available on the site through November 9, 2005. DIVIDEND REINVESTMENT & DIRECT STOCK PURCHASE AND SALE PLAN 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 http://www.amstock.com/. ABOUT AMERICAN HOME American Home Mortgage Investment Corp. is a mortgage real estate investment trust ("REIT") focused on earning net interest income from self- originated MBS, 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 correspondents and are serviced at the Company's Irving, Texas servicing center. For additional information, please visit the Company's website at http://www.americanhm.com/. FORWARD-LOOKING STATEMENTS This news release contains "forward-looking statements" that are based upon expectations, estimates, forecasts, projections and assumptions. Any statement in this news release that is not a statement of historical fact, including, but not limited to, earnings guidance and forecasts, projections of financial results and loan origination volume, expected future financial position, dividend plans or business strategy, and any other statements of plans, expectations, objectives, estimates and beliefs, is a forward looking statement. Words such as "look forward," "will," "anticipate," "may," "expect," "plan," "believe," "intend," "opportunity," "potential," and similar words, or the negatives of those words, are intended to identify forward- looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that are difficult to predict, and are not guarantees of future performance. As a result, actual future events may differ materially from any future results, performance or achievements expressed in or implied by this news release. Specific factors that might cause such a difference include, but are not limited to: American Home's limited operating history with respect to its portfolio strategy; the potential fluctuations in American Home's operating results; American Home's potential need for additional capital; the direction of interest rates and their subsequent effect on the business of American Home and its subsidiaries; risks associated with the use of leverage; changes in federal and state tax laws affecting REITs; federal and state regulation of mortgage banking; and those risks and uncertainties discussed in filings made by American Home with the Securities and Exchange Commission. Such forward-looking statements are inherently uncertain, and stockholders must recognize that actual results may differ from expectations. American Home does not assume any responsibility, and expressly disclaims any responsibility, to issue updates to any forward- looking statements discussed in this news release, whether as a result of new information, future events or otherwise. Financial Table Presentation The following financial tables include GAAP, adjusted and reconciling information for the reasons and purposes described under the heading ADJUSTED FINANCIAL MEASURES herein. AMERICAN HOME MORTGAGE INVESTMENT CORP. AND SUBSIDIARIES
OPERATING STATISTICS
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2005 2004 2005 2004
(1)
As Adjusted
Mortgage-Backed Securities
Holdings Segment:*
Average mortgage-backed
securities held ($ billions) 7.1 7.2 7.1 4.7
Interest income ($ millions) 84.5 66.7 239.8 123.1
Average portfolio yield 4.76% 3.72% 4.50% 3.53%
Interest expense ($ millions) 62.9 42.1 161.8 82.0
Average cost of funds and
hedges 3.84% 2.47% 3.29% 2.51%
Net interest income
($ millions) 21.6 24.6 78.0 41.1
Net interest margin 1.24% 1.39% 1.46% 1.18%
Mortgage-backed securities held
- end of period ($ billions) 9.2 7.3 9.2 7.3
Period end duration gap
(in years) 0.17 (0.002) 0.17 (0.002)
* - Excludes loans held pending securitization
Loan Origination Segment:
Loan originations
($ billions) 13.7 5.3 31.7 16.3
Refinance 46% 36% 45% 47%
ARM 48% 56% 50% 47%
Average mortgage loans, net
($ billions) 5.7 2.4 4.1 2.0
Net interest income
($ millions) 26.9 9.7 68.3 28.6
Net interest margin 2.06% 1.60% 2.26% 1.89%
Loans securitized and held
($ billions) 1.2 1.4 2.9 3.8
Loans securitized and sold
($ billions) 1.3 1.3 10.3 2.0
Loans sold to third parties
($ billions) 9.9 2.9 17.5 10.8
Additions to loans held
for investment ($ billions) 1.3 --- 1.4 ---
Gain on sales of loans and
current period
securitizations
net of hedge gains
($ millions) 176.5 81.2 472.0 198.5
Excess of fair value over
carrying value of loans
added to investment
portfolio ($ millions) 26.5 --- 27.8 ---
Total ($ millions) 203.0 81.2 499.8 198.5
Gain on sales of loans and
current period
securitizations
net of hedge gains
(% of principal) 1.42% 1.45% 1.60% 1.20%
Excess of fair value over
carrying value of loans
added to investment portfolio
(% of principal) 2.02% --- 1.92% ---
Total (% of principal) 1.48% 1.45% 1.61% 1.20%
Applications accepted
($ billions) 19.7 8.7 50.0 26.6
Application pipeline
($ billions) 11.6 6.5 11.6 6.5
Sept. 30, Sept. 30,
Loan Servicing Segment: 2005 2004
Loan servicing portfolio -
total with warehouse
($ billions) 27.5 13.6
Loan servicing portfolio -
loans sold or securitized
($ billions) 24.2 12.5
Weighted average note rate 5.73% 5.41%
Weighted average service
fee 0.331% 0.354%
Average age (in months) 13 18
Note:
(1) Adjusted as if the Company's fourth quarter 2004 securitization had
qualified for SFAS 140 sale accounting treatment in the fourth quarter of
2004.
Please refer to the detailed reconciliation of the Company's GAAP and as
adjusted results on pages A-1 through A-5.
AMERICAN HOME MORTGAGE INVESTMENT CORP. AND SUBSIDIARIES
OPERATING STATISTICS
Three Months Ended
Sept. 30, June 30, March 31, Dec. 31, Sept. 30,
2005 2005 2005 2004 2004
(1) (1)
As Adjusted As Adjusted
Mortgage-Backed Securities
Holdings Segment:*
Average
mortgage-backed
securities held
($ billions) 7.1 6.8 7.4 7.3 7.2
Interest income
($ millions) 84.5 77.1 78.2 70.6 66.7
Average portfolio
yield 4.76% 4.53% 4.23% 3.89% 3.72%
Interest expense
($ millions) 62.9 52.2 46.7 42.6 42.1
Average cost of
funds and hedges 3.84% 3.29% 2.71% 2.48% 2.47%
Net interest income
($ millions) 21.6 24.9 31.5 28.0 24.6
Net interest
margin 1.24% 1.48% 1.70% 1.57% 1.39%
Mortgage-backed
securities held
- end of period
($ billions) 9.2 6.9 7.2 7.6 7.3
Period end duration
gap (in years) 0.17 0.08 0.09 0.07 (0.002)
* - Excludes loans held pending securitization
Loan Origination Segment:
Loan originations
($ billions) 13.7 10.8 7.2 6.7 5.3
Refinance 46% 41% 48% 46% 36%
ARM 48% 50% 53% 55% 56%
Average mortgage
loans, net
($ billions) 5.7 3.9 2.8 2.7 2.4
Net interest income
($ millions) 26.9 22.5 18.9 20.2 9.7
Net interest
margin 2.06% 2.37% 2.70% 2.97% 1.60%
Loans securitized and
held ($ billions) 1.2 0.4 1.5 1.4 1.5
Loans securitized and
sold ($ billions) 1.3 5.4 2.0 1.3 0.6
Loans sold to third
parties ($ billions) 9.9 4.5 2.9 2.9 4.5
Additions to loans held
for investment
($ billions) 1.3 0.1 --- --- ---
Gain on sales of loans
and current period
securitizations
net of hedge gains
($ millions) 176.5 182.6 112.9 109.4 81.2
Excess of fair value
over carrying value
of loans added to
investment portfolio
($ millions) 26.5 1.3 --- --- ---
Total ($ millions) 203.0 183.9 112.9 109.4 81.2
Gain on sales of loans
and current period
securitizations
net of hedge gains
(% of principal) 1.42% 1.78% 1.64% 1.69% 1.45%
Excess of fair value
over carrying value
of loans added to
investment portfolio
(% of principal) 2.02% 0.95% --- --- ---
Total (% of principal) 1.48% 1.77% 1.64% 1.69% 1.45%
Applications accepted
($ billions) 19.7 17.3 13.0 9.9 8.7
Application pipeline
($ billions) 11.6 10.7 8.4 6.2 6.5
Sept. 30, June 30, March 31, Dec. 31, Sept. 30,
2005 2005 2005 2004 2004
Loan Servicing Segment:
Loan servicing
portfolio - total
with warehouse
($ billions) 27.5 24.7 19.9 16.8 13.6
Loan servicing
portfolio - loans
sold or securitized
($ billions) 24.2 22.6 18.2 15.5 12.5
Weighted average
note rate 5.73% 5.62% 5.21% 5.45% 5.41%
Weighted average
service fee 0.331% 0.336% 0.344% 0.345% 0.354%
Average age
(in months) 13 13 14 16 18
Note:
(1)- Adjusted as if the Company's fourth quarter 2004 securitization had
qualified for SFAS 140 sale accounting treatment in the fourth quarter of
2004.
Please refer to the detailed reconciliation of the Company's GAAP and as
adjusted results on pages A-1 through A-5.
AMERICAN HOME MORTGAGE INVESTMENT CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands, except per share amounts)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2005 2004 2005 2004
(1)
As
Adjusted
Net interest income:
Interest income $180,038 $94,298 $435,325 $198,347
Interest expense (133,169) (61,405) (294,830) (132,596)
Net interest
income 46,869 32,893 140,495 65,751
Non-interest income:
Gain on sales of
mortgage loans 123,658 28,373 236,288 98,095
Gain on sales of
current period
securitized
mortgage loans 19,960 30,460 168,998 40,119
Gain (loss) on sales
of mortgage-backed
securities and
derivatives 6,116 (8,120) 11,468 (2,810)
Unrealized (loss)
gain on mortgage-
backed securities
and derivatives (10,965) 27,069 (1,021) 82,041
Loan servicing fees 21,099 9,822 52,232 28,870
Amortization (15,055) (7,755) (38,558) (22,865)
Impairment reserve
recovery (provision) 11,577 (4,807) (3,354) (10,139)
Net loan servicing
fees (loss) 17,621 (2,740) 10,320 (4,134)
Other non-interest
income 1,585 3,350 5,594 5,554
Non-interest income 157,975 78,392 431,647 218,865
Non-interest expenses:
Salaries, commissions
and benefits, net 101,378 46,482 264,712 128,805
Occupancy and
equipment 15,328 9,984 42,396 26,086
Data processing and
communications 6,479 3,745 18,386 10,296
Office supplies and
expenses 5,024 3,012 15,110 9,345
Marketing and
promotion 5,104 2,610 14,360 7,018
Travel and
entertainment 4,670 3,620 14,025 9,084
Professional fees 3,744 2,524 10,646 6,781
Other 7,360 6,363 21,072 15,883
Non-interest
expenses 149,087 78,340 400,707 213,298
Net income before
income tax expense
(benefit) 55,757 32,945 171,435 71,318
Income tax expense
(benefit) 2,549 (9,998) (1,302) (26,330)
Net income $53,208 $ 42,943 $172,737 $97,648
Dividends on preferred
stock 3,304 1,648 9,913 1,648
Net income available to
common shareholders $ 49,904 $ 41,295 $162,824 $ 96,000
Per share data:
Basic $1.10 $1.03 $3.88 $2.61
Diluted $1.09 $1.02 $3.83 $2.58
Weighted average
number of shares
- basic 45,174 40,145 41,973 36,737
Weighted average
number of shares
- diluted 45,669 40,605 42,471 37,198
Note:
(1) Adjusted as if the Company's fourth quarter 2004 securitization had
qualified for SFAS 140 sale accounting treatment in the fourth
quarter of 2004.
Please refer to the detailed reconciliation of the Company's GAAP and as
adjusted results on pages A-1 through A-5.
AMERICAN HOME MORTGAGE INVESTMENT CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands, except per share amounts)
Three Months Ended
Sept. 30, June 30, March 31, Dec. 31, Sept. 30,
2005 2005 2005 2004 2004
(1) (1)
As As
Adjusted Adjusted
Net interest income:
Interest income $180,038 $135,318 $119,969 $113,785 $94,298
Interest expense (133,169) (90,336) (71,325) (67,002) (61,405)
Net interest income 46,869 44,982 48,644 46,783 32,893
Non-interest income:
Gain on sales of
mortgage loans 123,658 77,377 35,253 36,004 28,373
Gain on sales of current
period securitized
mortgage loans 19,960 104,377 44,661 40,674 30,460
Gain (loss) on sales of
mortgage-backed
securities and
derivatives 6,116 620 4,732 2,873 (8,120)
Unrealized (loss) gain
on mortgage-backed
securities and
derivatives (10,965) (10,292) 20,236 27,224 27,069
Loan servicing fees 21,099 16,970 14,163 11,701 9,822
Amortization (15,055) (12,832) (10,671) (9,750) (7,755)
Impairment reserve
recovery (provision) 11,577 (20,398) 5,467 (5,013) (4,807)
Net loan servicing
fees (loss) 17,621 (16,260) 8,959 (3,062) (2,740)
Other non-interest income 1,585 2,543 1,466 1,480 3,350
Non-interest income 157,975 158,365 115,307 105,193 78,392
Non-interest expenses:
Salaries, commissions
and benefits, net 101,378 94,859 68,475 60,588 46,482
Occupancy and equipment 15,328 14,397 12,671 11,556 9,984
Data processing and
communications 6,479 5,957 5,950 5,869 3,745
Office supplies and
expenses 5,024 5,657 4,429 4,385 3,012
Marketing and promotion 5,104 5,126 4,130 3,391 2,610
Travel and entertainment 4,670 5,427 3,928 5,106 3,620
Professional fees 3,744 3,432 3,470 5,378 2,524
Other 7,360 6,843 6,869 6,333 6,363
Non-interest
expenses 149,087 141,698 109,922 102,606 78,340
Net income before income
tax expense (benefit) 55,757 61,649 54,029 49,370 32,945
Income tax expense
(benefit) 2,549 (3,851) - 755 (9,998)
Net income $53,208 $65,500 $54,029 $48,615 $42,943
Dividends on preferred
stock 3,304 3,304 3,305 2,340 1,648
Net income available to
common shareholders $49,904 $62,196 $50,724 $46,275 $41,295
Per share data:
Basic $1.10 $1.54 $1.26 $1.15 $1.03
Diluted $1.09 $1.52 $1.24 $1.14 $1.02
Weighted average
number of shares -
basic 45,174 40,384 40,308 40,216 40,145
Weighted average
number of shares -
diluted 45,669 40,886 40,811 40,737 40,605
Note:
(1) - Adjusted as if the Company's fourth quarter 2004 securitization had
qualified for SFAS 140 sale accounting treatment in the fourth quarter
of 2004.
Please refer to the detailed reconciliation of the Company's GAAP and as
adjusted results on pages A-1 through A-5.
AMERICAN HOME MORTGAGE INVESTMENT CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands)
September 30, June 30, March 31,
2005 2005 2005
Assets:
Cash and cash equivalents $624,424 $197,375 $162,762
Accounts receivable and servicing
advances 335,736 116,835 103,295
Mortgage-backed securities 9,208,172 6,917,986 7,181,170
Mortgage loans held for sale, net 1,901,293 1,965,074 1,627,891
Mortgage loans held for investment,
net 1,445,429 134,597 -
Derivative assets 67,185 35,756 73,383
Mortgage servicing rights, net 300,659 261,839 228,412
Premises and equipment, net 64,174 61,441 55,986
Goodwill 99,268 98,826 92,745
Other assets 31,697 21,185 49,332
Total assets $14,078,037 $9,810,914 $9,574,976
Liabilities and Stockholders' Equity:
Liabilities:
Warehouse lines of credit $2,165,154 $665,697 $658,686
Drafts payable 18,763 26,538 28,391
Commercial paper 1,334,296 1,291,684 858,382
Reverse repurchase agreements 8,041,579 6,337,630 6,720,167
Payable for securities purchased 554,717 - -
Derivative liabilities - 6,195 1,945
Trust preferred securities 96,964 48,414 -
Accrued expenses and other
liabilities 239,382 177,761 176,859
Notes payable 305,766 256,060 159,339
Income taxes payable 56,310 47,753 54,250
Total liabilities 12,812,931 8,857,732 8,658,019
Stockholders' Equity:
Preferred stock 134,040 134,040 134,040
Common stock 496 405 403
Additional paid-in capital 946,105 638,595 632,828
Retained earnings 235,556 224,442 193,064
Accumulated other comprehensive loss (51,091) (44,300) (43,378)
Total stockholders' equity 1,265,106 953,182 916,957
Total liabilities and
stockholders' equity $14,078,037 $9,810,914 $9,574,976
Number of shares outstanding -
preferred 5,600,000 5,600,000 5,600,000
Number of shares outstanding - common 49,590,821 40,538,479 40,335,255
Note:
(1) - Adjusted as if the Company's fourth quarter 2004 securitization had
qualified for SFAS 140 sale accounting treatment in the
fourth quarter of 2004.
Please refer to the detailed reconciliation of the Company's GAAP and as
adjusted results on pages A-1 through A-5.
AMERICAN HOME MORTGAGE INVESTMENT CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands)
December 31, September 30,
2004 2004
(1)
Assets: As Adjusted
Cash and cash equivalents $192,821 $186,480
Accounts receivable and servicing
advances 105,338 101,105
Mortgage-backed securities 7,601,793 7,331,888
Mortgage loans held for sale, net 1,316,609 1,131,661
Mortgage loans held for investment,
net - -
Derivative assets 23,344 11,630
Mortgage servicing rights, net 189,229 160,435
Premises and equipment, net 51,576 47,955
Goodwill 90,877 89,196
Other assets 46,556 16,645
Total assets $9,618,143 $9,076,995
Liabilities and Stockholders' Equity:
Liabilities:
Warehouse lines of credit $735,783 $547,584
Drafts payable 26,200 45,526
Commercial paper 529,790 462,712
Reverse repurchase agreements 7,071,168 6,899,024
Payable for securities purchased - -
Derivative liabilities 1,860 18,237
Trust preferred securities - -
Accrued expenses and other
liabilities 165,626 154,339
Notes payable 135,761 128,448
Income taxes payable 54,342 30,133
Total liabilities 8,720,530 8,286,003
Stockholders' Equity:
Preferred stock 134,040 50,857
Common stock 403 402
Additional paid-in capital 631,530 629,807
Retained earnings 170,979 151,297
Accumulated other comprehensive
loss (39,339) (41,371)
Total stockholders' equity 897,613 790,992
Total liabilities and
stockholders' equity $9,618,143 $9,076,995
Number of shares outstanding -
preferred 5,600,000 2,150,000
Number of shares outstanding - common 40,288,077 40,184,333
Note:
(1) - Adjusted as if the Company's fourth quarter 2004 securitization had
qualified for SFAS 140 sale accounting treatment in the
fourth quarter of 2004.
Please refer to the detailed reconciliation of the Company's GAAP and as
adjusted results on pages A-1 through A-5.
AMERICAN HOME MORTGAGE INVESTMENT CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited)
(In thousands)
Three Months Ended
Sept. 30, June 30, Mar. 31,
2005 2005 2005
Preferred stock
Balance at beginning of period $134,040 $134,040 $134,040
Issuance of preferred stock -
offering - - -
Balance at end of period $134,040 $134,040 $134,040
Common stock
Balance at beginning of period $405 $403 $403
Issuance of common stock - earnouts - 2 -
Issuance of common stock - Omnibus
Stock Plan 1 - -
Issuance of common stock - offering 90 - -
Balance at end of period $496 $405 $403
Additional paid-in capital
Balance at beginning of period $638,595 $632,828 $631,530
Issuance of common stock - earnouts 139 5,005 846
Issuance of common stock - Omnibus
Stock Plan 488 588 311
Issuance of common stock - offering 304,033 - -
Tax benefit for stock options
exercised 2,638 - -
Restricted shares amortization 212 174 141
Balance at end of period $946,105 $638,595 $632,828
Retained earnings
Balance at beginning of period $224,442 $193,064 $99,628
Net income 53,208 65,500 125,380
Dividends declared (42,094) (34,122) (31,944)
Balance at end of period $235,556 $224,442 $193,064
Other comprehensive loss
Balance at beginning of period $(44,300) $(43,378) $(39,339)
Unrealized (loss) gain on mortgage-
backed securities (15,918) 6,901 (24,435)
Gain (loss) on cash flow hedges, net
of amortization 9,127 (7,823) 20,396
Balance at end of period $(51,091) $(44,300) $(43,378)
Total stockholders' equity $1,265,106 $953,182 $916,957
Adjustment (1) - - -
Adjusted total stockholders'
equity (1) $1,265,106 $953,182 $916,957
Note:
(1) - Adjusted as if the Company's fourth quarter 2004 securitization had
qualified for SFAS 140 sale accounting treatment in the fourth quarter of
2004.
Please refer to the detailed reconciliation of the Company's GAAP and as
adjusted results on pages A-1 through A-5.
AMERICAN HOME MORTGAGE INVESTMENT CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited)
(In thousands)
Nine
Months
Three Months Ended Ended
Dec. 31, Sept. 30, Sept. 30,
2004 2004 2005
Preferred stock
Balance at beginning of period $50,857 $- $134,040
Issuance of preferred stock -
offering 83,183 50,857 -
Balance at end of period $134,040 $50,857 $134,040
Common stock
Balance at beginning of period $402 $401 $403
Issuance of common stock - earnouts - - 2
Issuance of common stock - Omnibus
Stock Plan 1 1 1
Issuance of common stock - offering - - 90
Balance at end of period $403 $402 $496
Additional paid-in capital
Balance at beginning of period $629,807 $629,203 $631,530
Issuance of common stock - earnouts 734 151 5,990
Issuance of common stock - Omnibus
Stock Plan 823 374 1,387
Issuance of common stock - offering - - 304,033
Tax benefit for stock options
exercised - - 2,638
Restricted shares amortization 166 79 527
Balance at end of period $631,530 $629,807 $946,105
Retained earnings
Balance at beginning of period $151,297 $134,515 $99,628
Net income (22,736) 42,943 244,088
Dividends declared (28,933) (26,161) (108,160)
Balance at end of period $99,628 $151,297 $235,556
Other comprehensive loss
Balance at beginning of period $(41,371) $(50,553) $(39,339)
Unrealized (loss) gain on mortgage-
backed securities (12,491) 52,945 (33,452)
Gain (loss) on cash flow hedges, net
of amortization 14,523 (43,763) 21,700
Balance at end of period $(39,339) $(41,371) $(51,091)
Total stockholders' equity $826,262 $790,992 $1,265,106
Adjustment (1) 71,351 - -
Adjusted total stockholders' equity
(1) $897,613 $790,992 $1,265,106
Note:
(1) - Adjusted as if the Company's fourth quarter 2004 securitization had
qualified for SFAS 140 sale accounting treatment in the fourth quarter
of 2004.
Please refer to the detailed reconciliation of the Company's GAAP and as
adjusted results on pages A-1 through A-5.
AMERICAN HOME MORTGAGE INVESTMENT CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
Three Months Ended
Sept. 30, June 30, Mar. 31,
2005 2005 2005
Cash flows from operating
activities:
Net income $53,208 $65,500 $125,380
Adjustments to reconcile net income
to net cash (used in) provided
by operating activities:
Depreciation and amortization 3,098 2,739 2,439
Amortization and impairment of
mortgage servicing rights 3,478 33,230 5,082
Accretion and amortization of
mortgage-backed securities, net (2,571) (1,169) 4,593
Amortization of deferred cash flow
hedge gain (loss) 1,689 1,738 17,052
Loss on sales of mortgage-backed
securities and derivatives 2,819 447 3,336
Unrealized loss (gain) on mortgage-
backed securities 74,595 (4,533) 51,003
Unrealized (gain) loss on free
standing derivatives (31,137) 25,903 (40,312)
(Decrease) increase in forward
delivery contracts (12,820) 13,930 (9,595)
Capitalized mortgage servicing
rights on securitized loans (27,536) (62,629) (79,711)
Capitalized mortgage servicing
rights on sold loans (14,762) (4,027) (2,347)
Decrease (increase) in interest rate
lock commitments 14,501 (6,264) 210
(Increase) decrease in mortgage loan
basis adjustments (12,649) (10,584) 30,954
Other 1,469 (2,155) 1,177
(Increase) decrease in operating
assets:
Accounts receivable (218,519) (14,401) 12,952
Servicing advances (382) 861 731
Income taxes receivable - 25,797 -
Other assets (10,512) 2,350 7,714
Increase (decrease) in operating
liabilities:
Accrued expenses and other
liabilities 53,657 (1,269) 21,432
Income taxes payable 8,557 (6,497) (92)
Origination of mortgage loans held
for sale (12,394,139) (10,647,029) (7,255,400)
Principal received from sales of
mortgage loans held for sale 9,448,293 4,457,519 3,080,795
Proceeds from securitizations of
mortgage loans held for sale 2,993,315 5,855,914 7,336,612
Additions to mortgage-backed
securities and derivatives (1,191,209) (466,522) (2,840,259)
Principal proceeds from sales of
self-originated mortgage-backed
securities - 1,104,227 -
Cash received from residual assets
in securitizations 35,431 23,539 16,556
Principal repayments of mortgage-
backed securities 274,035 172,172 108,403
Net cash (used in) provided by
operating activities (948,091) 558,787 598,705
Cash flows from investing
activities:
Purchases of premises and equipment (5,831) (8,194) (6,849)
Origination of mortgage loans held
for investment (1,301,364) (133,757) -
Proceeds from repayments of mortgage
loans held for investment 5,108 - -
Purchases of mortgage-backed
securities (2,417,565) (933,929) -
Principal proceeds from sales of
purchased mortgage-backed
securities 518,517 20,962 1,133,989
Principal repayments of purchased
mortgage-backed securities 414,667 361,049 368,671
Net cash (used in) provided by
investing activities (2,786,468) (693,869) 1,495,811
Cash flows from financing
activities:
Increase (decrease) in warehouse
lines of credit, net 1,499,457 7,011 (77,097)
Increase (decrease) in reverse
repurchase agreements, net 1,703,949 (382,537) (351,001)
(Decrease) increase in
collateralized debt obligations - - (2,022,218)
Increase (decrease) in payable for
securities purchased 554,717 - -
Increase (decrease) in commercial
paper, net 42,612 433,302 328,592
(Decrease) increase in drafts
payable, net (7,775) (1,853) 2,191
Increase in trust preferred
securities 48,550 48,414 -
Increase in notes payable, net 49,706 96,721 23,578
Proceeds from issuance of preferred
stock - - -
Proceeds from issuance of common
stock 304,522 587 311
Dividends paid (34,130) (31,950) (28,931)
Net cash provided by (used in)
financing activities 4,161,608 169,695 (2,124,575)
Net increase (decrease) in cash and
cash equivalents 427,049 34,613 (30,059)
Cash and cash equivalents, beginning
of period 197,375 162,762 192,821
Cash and cash equivalents, end of
period $624,424 $197,375 $162,762
AMERICAN HOME MORTGAGE INVESTMENT CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
Three Months Ended
Dec. 31, Sept. 30,
2004 2004
Cash flows from operating activities:
Net income $(22,736) $42,943
Adjustments to reconcile net income
to net cash (used in) provided by
operating activities:
Depreciation and amortization 2,288 2,151
Amortization and impairment of
mortgage servicing rights 12,034 12,562
Accretion and amortization of
mortgage-backed securities, net 7,700 9,455
Amortization of deferred cash flow
hedge gain (loss) 515 (7,019)
Loss on sales of mortgage-backed
securities and derivatives 390 6,998
Unrealized loss (gain) on mortgage-
backed securities 15,850 (33,525)
Unrealized (gain) loss on free
standing derivatives (14,482) 14,856
(Decrease) increase in forward
delivery contracts 766 (9,004)
Capitalized mortgage servicing rights
on securitized loans (123) (27,203)
Capitalized mortgage servicing rights
on sold loans (2,912) (3,976)
Decrease (increase) in interest rate
lock commitments (395) 7,358
(Increase) decrease in mortgage loan
basis adjustments (27,113) (1,817)
Other (3,720) 2,611
(Increase) decrease in operating
assets:
Accounts receivable (10,569) (124)
Servicing advances (5,304) (492)
Income taxes receivable - -
Other assets (40,401) (2,857)
Increase (decrease) in operating
liabilities:
Accrued expenses and other
liabilities (4,695) 32,761
Income taxes payable 24,209 (10,995)
Origination of mortgage loans held
for sale (6,744,078) (5,292,191)
Principal received from sales of
mortgage loans held for sale 2,974,379 2,806,070
Proceeds from securitizations of
mortgage loans held for sale 75,209 2,765,737
Additions to mortgage-backed
securities and derivatives (15,112) (1,435,334)
Principal proceeds from sales of
self-originated mortgage-backed
securities 852,283 1,023,037
Cash received from residual assets in
securitizations 14,709 7,186
Principal repayments of mortgage-
backed securities 132,510 93,120
Net cash (used in) provided by
operating activities (2,778,798) 2,308
Cash flows from investing activities:
Purchases of premises and equipment (5,909) (5,565)
Origination of mortgage loans held
for investment - -
Proceeds from repayments of mortgage
loans held for investment - -
Purchases of mortgage-backed
securities (107,009) (535,056)
Principal proceeds from sales of
purchased mortgage-backed securities 50,710 633,036
Principal repayments of purchased
mortgage-backed securities 351,687 296,974
Net cash (used in) provided by
investing activities 289,479 389,389
Cash flows from financing activities:
Increase (decrease) in warehouse
lines of credit, net 188,199 (124,872)
Increase (decrease) in reverse
repurchase agreements, net 172,144 485,518
(Decrease) increase in collateralized
debt obligations 2,022,218 -
Increase (decrease) in payable for
securities purchased - (423,909)
Increase (decrease) in commercial
paper, net 67,078 (584,324)
(Decrease) increase in drafts
payable, net (19,326) (40,774)
Increase in trust preferred
securities - -
Increase in notes payable, net 7,313 21,211
Proceeds from issuance of preferred
stock 83,425 52,057
Proceeds from issuance of common
stock 776 426
Dividends paid (26,167) (24,468)
Net cash provided by (used in)
financing activities 2,495,660 (639,135)
Net increase (decrease) in cash and
cash equivalents 6,341 (247,438)
Cash and cash equivalents, beginning
of period 186,480 433,918
Cash and cash equivalents, end of
period $192,821 $186,480
AMERICAN HOME MORTGAGE INVESTMENT CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
Nine Months
Ended
September 30,
2005
Cash flows from operating activities:
Net income $244,088
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 8,276
Amortization and impairment of
mortgage servicing rights 41,790
Accretion and amortization of
mortgage-backed securities, net 853
Amortization of deferred cash flow hedge gain 20,479
Loss on sales of mortgage-backed
securities and derivatives 6,602
Unrealized loss on mortgage-backed securities 121,065
Unrealized gain on free standing derivatives (45,546)
Decrease in forward delivery contracts (8,485)
Capitalized mortgage servicing rights
on securitized loans (169,876)
Capitalized mortgage servicing rights
on sold loans (21,136)
Decrease in interest rate lock commitments 8,447
Decrease in mortgage loans basis adjustments 7,721
Other 491
(Increase) decrease in operating assets:
Accounts receivable (219,968)
Servicing advances 1,210
Income taxes receivable 25,797
Other assets (448)
Increase (decrease) in operating liabilities:
Accrued expenses and other liabilities 73,820
Income taxes payable 1,968
Origination of mortgage loans held for sale (30,296,568)
Principal received from sales of
mortgage loans held for sale 16,986,607
Proceeds from securitizations of
mortgage loans held for sale 16,185,841
Additions to mortgage-backed
securities and derivatives (4,497,990)
Principal proceeds from sales of
self-originated mortgage-backed
securities 1,104,227
Cash received from residual assets in
securitizations 75,526
Principal repayments of mortgage-
backed securities 554,610
Net cash provided by operating activities 209,401
Cash flows from investing activities:
Purchases of premises and equipment (20,874)
Origination of mortgage loans held for investment (1,435,121)
Proceeds from repayments of mortgage
loans held for investment 5,108
Purchases of mortgage-backed securities (3,351,494)
Principal proceeds from sales of
purchased mortgage-backed securities 1,673,468
Principal repayments of purchased
mortgage-backed securities 1,144,387
Net cash used in investing activities (1,984,526)
Cash flows from financing activities:
Increase in warehouse lines of credit, net 1,429,371
Increase in reverse repurchase agreements, net 970,411
Decrease in collateralized debt obligations (2,022,218)
Increase in payable for securities purchased 554,717
Increase in commercial paper, net 804,506
Decrease in drafts payable, net (7,437)
Increase in trust preferred securities 96,964
Increase in notes payable, net 170,005
Proceeds from issuance of common stock 305,420
Dividends paid (95,011)
Net cash provided by financing activities 2,206,728
Net increase in cash and cash equivalents 431,603
Cash and cash equivalents, beginning of period 192,821
Cash and cash equivalents, end of period $624,424
AMERICAN HOME MORTGAGE INVESTMENT CORP. AND SUBSIDIARIES
FAIR VALUE OF FINANCIAL INSTRUMENTS (Unaudited)
(In thousands)
September 30, 2005
Fair Value
in Excess
of
Carrying Carrying
Value Fair Value Value
Assets:
Cash and cash equivalents $624,424 $624,424 $-
Accounts receivable and servicing
advances 335,736 335,736 -
Mortgage-backed securities 9,208,172 9,208,172 -
Mortgage loans held for sale, net 1,901,293 1,909,533 8,240
Mortgage loans held for investment,
net 1,445,429 1,473,965 28,536
Mortgage servicing rights, net 300,659 300,772 113
Derivative assets* 67,185 75,556 8,371
$45,260
Carrying
Value in
Excess of
Fair Value
Liabilities:
Warehouse lines of credit $2,165,154 $2,165,154 $-
Drafts payable 18,763 18,763 -
Commercial paper 1,334,296 1,334,296 -
Reverse repurchase agreements 8,041,579 8,041,313 266
Trust preferred securities 96,964 96,964 -
Notes payable 305,766 305,766 -
$266
Fair Value
in Excess of
Carrying
Value
$45,526
* Derivative assets includes interest rate lock commitments ("IRLCs") to
fund mortgage loans.
The carrying value excludes the value of the mortgage servicing rights
("MSRs") attached to the IRLCs in accordance with SEC Staff Accounting
Bulletin No. 105. The fair value includes the value of MSRs.
AMERICAN HOME MORTGAGE INVESTMENT CORP. AND SUBSIDIARIES
OPERATING STATISTICS
Three Months Ended
March 31, 2005 December 31, 2004
(1) (1)
As As
GAAP Adjustments Adjusted GAAP Adjustments Adjusted
Mortgage-Backed
Securities Holdings
Segment:*
Average
mortgage-backed
securities held
($ billions) 5.9 1.5 7.4 7.1 0.2 7.3
Interest income
($ millions) 58.3 19.9 78.2 68.4 2.2 70.6
Average portfolio
yield 3.98% 4.23% 3.86% 3.89%
Interest expense
($ millions) 39.0 7.7 46.7 42.4 0.2 42.6
Average cost of funds
and hedges 2.79% 2.71% 2.52% 2.48%
Net interest income
($ millions) 19.3 12.2 31.5 26.0 2.0 28.0
Net interest margin 1.33% 1.70% 1.49% 1.57%
Mortgage-backed securities
held - end of period
($ billions 7.2 7.2 6.0 1.6 7.6
Period end duration gap
(in years) 0.09 0.09 0.07 0.07
* - Excludes loans held
pending securitization
Loan Origination Segment:
Loan originations
($ billions) 7.2 7.2 6.7 6.7
Refinance 48% 48% 46% 46%
ARM 53% 53% 55% 55%
Average mortgage loans,
net ($ billions) 6.2 -3.4 2.8 3.1 -0.4 2.7
Net interest income
($ millions) 41.3 -22.4 18.9 22.6 -2.4 20.2
Net interest margin 2.64% 2.70% 2.93% 2.97%
Loans securitized and
held ($ billions) 2.8 -1.5 1.3 --- 1.5 1.5
Loans securitized and
sold ($ billions) 4.5 -2.0 2.5 --- 2.0 2.0
Loans sold to third
parties($ billions) 3.1 3.1 2.9 2.9
Gain on sales of loans and
current period
securitizations
net of hedge
gains($ millions) 156.4 -43.5 112.9 36.0 73.4 109.4
Excess of fair value over
carrying value of
loans added to
investment portfolio
($ millions) --- --- --- --- --- ---
Total
($ millions) 156.4 -43.5 112.9 36.0 73.4 109.4
Gain on sales of loans and
current period
securitizations
net of hedge
gains
(% of principal) 2.26% 1.64% 0.56% 1.69%
Excess of fair value over
carrying value of loans
added to investment
portfolio
(% of principal) --- --- --- ---
Total
(% of principal) 2.26% 1.64% 0.56% 1.69%
Applications accepted
($ billions) 13.0 13.0 9.9 9.9
Application pipeline
($ billions) 8.4 8.4 6.2 6.2
March 31, 2005 December 31, 2004
Loan Servicing
Segment:
Loan servicing
portfolio - total
with warehouse
($ billions) 19.9 19.9 16.8 16.8
Loan servicing
portfolio - loans
sold or securitized
($ billions) 18.2 18.2 12.0 3.5 15.5
Weighted average
note rate 5.21% 5.21% 5.48% 5.45%
Weighted average
service fee 0.344% 0.344% 0.348% 0.345%
Average age
(in months) 14 14 20 16
Note:
(1) - Adjustments reflect the net effect on the period presented to
reconcile the Company's operating statistics, results of operations
and financial condition prepared in accordance with GAAP to the
amounts adjusted as if the Company's fourth quarter 2004
securitization had qualified for SFAS 140 sale accounting
treatment in the fourth quarter of 2004.
AMERICAN HOME MORTGAGE INVESTMENT CORP. AND SUBSIDIARIES
OPERATING STATISTICS
Nine Months Ended
September 30, 2005
(1)
As
GAAP Adjustments Adjusted
Mortgage-Backed Securities Holdings
Segment:*
Average mortgage-backed securities
held ($ billions) 6.6 0.5 7.1
Interest income ($ millions) 219.9 19.9 239.8
Average portfolio yield 4.45% 4.50%
Interest expense ($ millions) 154.1 7.7 161.8
Average cost of funds and hedges 3.34% 3.29%
Net interest income ($ millions) 65.8 12.2 78.0
Net interest margin 1.33% 1.46%
Mortgage-backed securities held - end
of period ($ billions) 9.2 9.2
Period end duration gap (in years) 0.17 0.17
* - Excludes loans held pending
securitization
Loan Origination Segment:
Loan originations ($ billions) 31.7 31.7
Refinance 45% 45%
ARM 50% 50%
Average mortgage loans, net
($ billions) 5.3 -1.2 4.1
Net interest income ($ millions) 90.7 -22.4 68.3
Net interest margin 2.34% 2.26%
Loans securitized and held
($ billions) 4.4 -1.5 2.9
Loans securitized and sold
($ billions) 12.3 -2.0 10.3
Loans sold to third parties
($ billions) 17.5 17.5
Additions to loans held for
investment ($ billions) 1.4 1.4
Gain on sales of loans and current
period securitizations
net of hedge gains ($ millions) 515.5 -43.5 472.0
Excess of fair value over carrying
value of loans added
to investment portfolio
($ millions) 27.8 27.8
Total ($ millions) 543.3 499.8
Gain on sales of loans and current
period securitizations
net of hedge gains
(% of principal) 1.74% 1.60%
Excess of fair value over carrying
value of loans added
to investment portfolio
(% of principal) 1.92% 1.92%
Total (% of principal) 1.75% 1.61%
Applications accepted ($ billions) 50.0 50.0
Application pipeline ($ billions) 11.6 11.6
September 30, 2005
Loan Servicing Segment:
Loan servicing portfolio - total with
warehouse ($ billions) 27.5 27.5
Loan servicing portfolio - loans sold
or securitized ($ billions) 24.2 24.2
Weighted average note rate 5.73% 5.73%
Weighted average service fee 0.331% 0.331%
Average age (in months) 13 13
Note:
(1)- Adjustments reflect the net effect on the period presented to
reconcile the Company's operating statistics, results of operations
and financial condition prepared in accordance with GAAP to the
amounts adjusted as if the Company's fourth quarter 2004
securitization had qualified for SFAS 140 sale accounting treatment
in the fourth quarter of 2004.
AMERICAN HOME MORTGAGE INVESTMENT CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands, except per share amounts)
Three Months Ended
March 31, 2005
(1)
GAAP Adjustments As Adjusted
Net interest income:
Interest income $146,894 $(26,925) $119,969
Interest expense (88,091) 16,766 (71,325)
Net interest income 58,803 (10,159) 48,644
Non-interest income:
Gain on sales of mortgage loans 35,253 - 35,253
Gain on sales of current period
securitized mortgage loans 69,919 (25,258) 44,661
Gain on sales of mortgage-backed
securities and derivatives 6,132 (1,400) 4,732
Unrealized gain (loss) on mortgage-
backed securities and derivatives 57,499 (37,263) 20,236
Loan servicing fees 11,312 2,851 14,163
Amortization (8,501) (2,170) (10,671)
Impairment reserve recovery
(provision) 3,419 2,048 5,467
Net loan servicing fees (loss) 6,230 2,729 8,959
Other non-interest income 1,466 - 1,466
Non-interest income 176,499 (61,192) 115,307
Non-interest expenses:
Salaries, commissions and benefits,
net 68,475 - 68,475
Occupancy and equipment 12,671 - 12,671
Data processing and communications 5,950 - 5,950
Office supplies and expenses 4,429 - 4,429
Marketing and promotion 4,130 - 4,130
Travel and entertainment 3,928 - 3,928
Professional fees 3,470 - 3,470
Other 6,869 - 6,869
Non-interest expenses 109,922 - 109,922
Net income before income tax expense 125,380 (71,351) 54,029
Income tax expense - - -
Net income $125,380 $(71,351) $54,029
Dividends on preferred stock 3,305 - 3,305
Net income available to common
shareholders $122,075 $(71,351) $50,724
Per share data:
Basic $3.03 $(1.77) $1.26
Diluted $2.99 $(1.75) $1.24
Weighted average number of shares
- basic 40,308 40,308 40,308
Weighted average number of shares
- diluted 40,811 40,811 40,811
Note:
(1) - Adjustments reflect the net effect on the period presented to
reconcile the Company's operating statistics, results of operations and
financial condition prepared in accordance with GAAP to the amounts
adjusted as if the Company's fourth quarter 2004 securitization had
qualified for SFAS 140 sale accounting treatment in the fourth quarter
of 2004.
AMERICAN HOME MORTGAGE INVESTMENT CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands, except per share amounts)
December 31, 2004
(1)
GAAP Adjustments As Adjusted
Net interest income:
Interest income $115,957 $(2,172) $113,785
Interest expense (68,777) 1,775 (67,002)
Net interest income 47,180 (397) 46,783
Non-interest income:
Gain on sales of mortgage loans 36,004 - 36,004
Gain on sales of current period
securitized mortgage loans - 40,674 40,674
Gain on sales of mortgage-backed
securities and derivatives 2,873 - 2,873
Unrealized gain (loss) on mortgage-
backed securities and derivatives (6,579) 33,803 27,224
Loan servicing fees 11,701 - 11,701
Amortization (9,750) - (9,750)
Impairment reserve recovery
(provision) (2,284) (2,729) (5,013)
Net loan servicing fees (loss) (333) (2,729) (3,062)
Other non-interest income 1,480 - 1,480
Non-interest income 33,445 71,748 105,193
Non-interest expenses:
Salaries, commissions and benefits,
net 60,588 - 60,588
Occupancy and equipment 11,556 - 11,556
Data processing and communications 5,869 - 5,869
Office supplies and expenses 4,385 - 4,385
Marketing and promotion 3,391 - 3,391
Travel and entertainment 5,106 - 5,106
Professional fees 5,378 - 5,378
Other 6,333 - 6,333
Non-interest expenses 102,606 - 102,606
Net income before income tax expense (21,981) 71,351 49,370
Income tax expense 755 - 755
Net income $(22,736) $71,351 $48,615
Dividends on preferred stock 2,340 - 2,340
Net income available to common
shareholders $(25,076) $71,351 $46,275
Per share data:
Basic $(0.62) $1.77 $1.15
Diluted $(0.62) $1.75 $1.14
Weighted average number of shares
- basic 40,216 40,216 40,216
Weighted average number of shares
- diluted 40,737 40,737 40,737
Note:
(1) - Adjustments reflect the net effect on the period presented to
reconcile the Company's operating statistics, results of operations and
financial condition prepared in accordance with GAAP to the amounts
adjusted as if the Company's fourth quarter 2004 securitization had
qualified for SFAS 140 sale accounting treatment in the fourth quarter
of 2004.
AMERICAN HOME MORTGAGE INVESTMENT CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands, except per share amounts)
Nine Months Ended
September 30, 2005
(1)
GAAP Adjustments As Adjusted
Net interest income:
Interest income $462,250 $(26,925) $435,325
Interest expense (311,596) 16,766 (294,830)
Net interest income 150,654 (10,159) 140,495
Non-interest income:
Gain on sales of mortgage loans 236,288 - 236,288
Gain on sales of current period
securitized mortgage loans 194,256 (25,258) 168,998
Gain on sales of mortgage-backed
securities and derivatives 12,868 (1,400) 11,468
Unrealized gain (loss) on mortgage-
backed securities and derivatives 36,242 (37,263) (1,021)
Loan servicing fees 49,381 2,851 52,232
Amortization (36,388) (2,170) (38,558)
Impairment reserve provision (5,402) 2,048 (3,354)
Net loan servicing fees 7,591 2,729 10,320
Other non-interest income 5,594 - 5,594
Non-interest income 492,839 (61,192) 431,647
Non-interest expenses:
Salaries, commissions and benefits,
net 264,712 - 264,712
Occupancy and equipment 42,396 - 42,396
Data processing and communications 18,386 - 18,386
Office supplies and expenses 15,110 - 15,110
Marketing and promotion 14,360 - 14,360
Travel and entertainment 14,025 - 14,025
Professional fees 10,646 - 10,646
Other 21,072 - 21,072
Non-interest expenses 400,707 - 400,707
Net income before income tax benefit 242,786 (71,351) 171,435
Income tax benefit (1,302) - (1,302)
Net income $244,088 $(71,351) $172,737
Dividends on preferred stock 9,913 - 9,913
Net income available to common
shareholders $234,175 $(71,351) $162,824
Per share data:
Basic $5.58 $(1.70) $3.88
Diluted $5.51 $(1.68) $3.83
Weighted average number of shares
- basic 41,973 41,973 41,973
Weighted average number of shares
- diluted 42,471 42,471 42,471
Note:
(1) - Adjustments reflect the net effect on the period presented to
reconcile the Company's operating statistics, results of
operations and financial condition prepared in accordance with GAAP to
the amounts adjusted as if the Company's fourth
quarter 2004 securitization had qualified for SFAS 140 sale accounting
treatment in the fourth quarter of 2004.
AMERICAN HOME MORTGAGE INVESTMENT CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands)
December 31, 2004
(1)
Assets: GAAP Adjustments As Adjusted
Cash and cash equivalents $192,821 $- $192,821
Accounts receivable and servicing
advances 116,978 (11,640) 105,338
Mortgage-backed securities 6,016,866 1,584,927 7,601,793
Mortgage loans held for sale, net 4,853,394 (3,536,785) 1,316,609
Derivative assets 24,803 (1,459) 23,344
Mortgage servicing rights, net 151,436 37,793 189,229
Premises and equipment, net 51,576 - 51,576
Goodwill 90,877 - 90,877
Other assets 57,046 (10,490) 46,556
Total assets $11,555,797 $(1,937,654) $9,618,143
Liabilities and Stockholders'
Equity:
Liabilities:
Warehouse lines of credit $735,783 $- $735,783
Drafts payable 26,200 - 26,200
Commercial paper 529,790 - 529,790
Reverse repurchase agreements 7,071,168 - 7,071,168
Collateralized debt obligations 2,022,218 (2,022,218) -
Derivative liabilities 1,860 - 1,860
Accrued expenses and other
liabilities 152,413 13,213 165,626
Notes payable 135,761 - 135,761
Income taxes payable 54,342 - 54,342
Total liabilities 10,729,535 (2,009,005) 8,720,530
Stockholders' Equity:
Preferred stock 134,040 - 134,040
Common stock 403 - 403
Additional paid-in capital 631,530 - 631,530
Retained earnings 99,628 71,351 170,979
Accumulated other comprehensive
loss (39,339) - (39,339)
Total stockholders' equity 826,262 71,351 897,613
Total liabilities and
stockholders' equity $11,555,797 $(1,937,654) $9,618,143
Number of shares outstanding -
preferred 5,600,000 5,600,000 5,600,000
Number of shares outstanding -
common 40,288,077 40,288,077 40,288,077
Note:
(1) - Adjustments reflect the net effect on the period presented to
reconcile the Company's operating statistics, results of
operations and financial condition prepared in accordance with GAAP to the
amounts adjusted as if the Company's fourth
quarter 2004 securitization had qualified for SFAS 140 sale accounting
treatment in the fourth quarter of 2004.
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