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American Home Mortgage announces Q4 and full year results

National Mortgage Professional
May 22, 2007

American Home Mortgage announces Q4 and full year resultsMortgagePress.comloan origination business continued to produce strong results, acquisition of Flower Bank FSB American Home Mortgage Investment Corporation has announced its results for the fourth quarter of 2006, as well as its year-end totals. Revenue for the fourth quarter of 2006 was $257.7 million, compared to revenue of $150.5 million for the fourth quarter of 2005, an increase of 71.3 percent. Net earnings for the fourth quarter of 2006 were $64.7 million, compared to net earnings of $16.7 million for the fourth quarter of 2005, an increase of 287.5 percent. Revenue for 2006 was $1.03 billion, compared to adjusted revenue of $722.6 million for 2005 - an increase of 42 percent. Generally Accepted Accounting Principles (GAAP) revenue for 2005 was $793.9 million. Net earnings for 2006 were $263.5 million, compared to adjusted net earnings of $189.4 million for 2005 - an increase of 39.1 percent. GAAP net earnings for 2005 were $260.8 million. Michael Strauss, American Home's chief executive officer, commented, "The fourth quarter was highly successful for our company, with earnings of $1.21 per diluted share. During the quarter, we added $1 billion of recently originated loans to our portfolio, which are carried at cost. Loan origination volume was a record $15.5 billion, due to our company achieving a record market share of 2.48 percent of national originations. Net interest income was stable while our servicing portfolio produced record revenues. During the quarter, our company did, however, experience its highest delinquency related charges to date, which reduced our quarterly earnings." During the fourth quarter of 2006, the company's loan origination business continued to produce strong results. Loan originations reached a record $15.5 billion compared to $15.3 billion in the third quarter of 2006. During the fourth quarter, the company sold $14.3 billion of loans to third parties for a gross gain on sale, excluding reserving for delinquencies of $217.4 million equal to a gross gain on sale margin of 1.52 percent. By comparison, during the third quarter of 2006, the company sold $14.3 billion of loans to third parties for a gross gain on sale of $213.4 million equal to a gain on sale margin of 1.49 percent. The company's gain on sale net of additions to its reserves for delinquent loans held for sale was $202.9 million in the fourth quarter compared to $210.6 million in the third quarter of 2006. During the fourth quarter of 2006, the company completed its acquisition of Flower Bank FSB and consequently became a thrift holding company. As a result of its acquisition of Flower, a small portion of the company's liabilities are now deposits. The company expects to grow Flower slowly at first, but over the long term, Flower should become a significant contributor to the company's earnings. In connection with its acquisition of Flower, the company has hired Lou Dunham to serve as Flower's president. Dunham has more than 32 years of banking experience, most recently as president of Ameribank, a Florida-based federal thrift. Previously, Dunham was the senior executive vice president and chief risk officer at Republic Security Bank. The company also elected Tom Wren to serve as an independent director of Flower. Wren was recently the treasurer of MBNA, where he served for 10 years, and previously was a senior bank regulator in the Office of the Controller of the Currency where he served for 18 years. For more information, visit www.americanhm.com.
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