Event Brief of Q1 2006 American Home Mortgage Investment Corp. Earnings Conference Call - Final.

Original Source: FD (FAIR DISCLOSURE) WIRE

PARTICIPANTS

. Mary Feder, American Home Mortgage Investment Corp., VP IR . Michael Strauss, American Home Mortgage Investment Corp., CEO . Steve Hozie, American Home Mortgage Investment Corp., EVP and CFO . Paul Hamilos, A.G. Edwards, Analyst . Mark DeVries, Lehman Brothers, Analyst . Steve Delaney, Flagstone Securities, Analyst . Scott Coren, Bear Stearns, Analyst . Don Fandetti, Citigroup, Analyst . Paul Miller, Friedman Billings Ramsey, Analyst . Bose George, KBW, Analyst . Sanjay Sakhrani, Calyon Securities, Analyst . David Foster, Boddy Brown, Analyst . Darius Drawn, Citadel Investment Group, Analyst

OVERVIEW

AHM reported 1Q06 diluted EPS of $1.02 per share. The Co.'s Board of Directors has voted to increase the dividend policy to $0.96 per common share or $3.84 on an annualized basis. The new dividend rate is expected to become effective for July 2006. For full-year 2006, EPS is expected to be in the range of $4.85-5.15.

FINANCIAL DATA

A. Key Data From Call 1. 1Q06 diluted EPS = $1.02. 2. Full-year 2006 EPS guidance = $4.85-5.15.

PRESENTATION SUMMARY

S1. 1Q06 Overview (M.S.) 1. Highlights: 1. During 1Q06, the gain on sale margin recovered while loan originations remained strong.

1. The gain on sale margin was 1.27%, resulting in revenue from

loans sold to third parties of $171.9m. 2. In 4Q05, the gain on sale margin was 0.96%, resulting in revenue from loans sold to third parties of $105.4m. 2. Net interest income excluding the carry on its freestanding swap hedges was $46.6m vs. $50.4m in 4Q05. 1. Inclusive of the carry from AHM's freestanding swap hedges, net interest income in 1Q06 was $50.5m vs. $51.3m in 4Q05.

2. Net interest from the Co.'s growing portfolio of loans held

for investment was strongly higher, while net interest from the mortgage-backed securities and warehouse loans was marginally lower.

3. The loan production business continued to excel during 1Q06.

1. Especially noteworthy was the growth in AHM's national market share, which reached a record 2.55%, far exceeding the 2.02% reached in 4Q05. 2. Altogether, originations were $13.2b, down slightly from $13.6b in 4Q05, but well ahead of forecast. 4. The Co. continued to build its investment portfolio through additions of self-originated loans carried at their cost. 1. Specifically during 1Q06, AHM added $970m of such self-originated loans to its portfolio. 2. Placing self-originated loans carried at their costs into the Co.'s portfolio reduces current period income as gains on these loans are forgone, but enhances portfolio interest income in future quarters.

3. AHM's central portfolio strategy is to, over time, substitute self-originated loans carried at costs for its mortgage-backed securities and other portfolio assets. 4. Through this strategy, the Co. projects that its portfolio net interest income will steadily grow.

5. AHM acquired Waterfield Financial in 1Q06. 1. This acquisition adhered to the Co.'s growth-by-acquisition criteria of acquiring well-established businesses at reasonable costs that can be improved by AHM's broad product line, technology, and other capabilities.

2. Waterfield has now been integrated on to AHM's platform and

processes and has started to make a contribution towards the Co.'s loan production efforts. 6. Based on 1Q06 results and ongoing prospects, AHM's Board of Directors has voted to increase the dividend policy to $0.96 per common share or $3.84 on an annualized basis.

1. This is the 12th increase to the dividend policy since AHM

first declared dividend in April 2001. 2. The new dividend rate is expected to become effective for the July 2006 dividend.

S2. Financials (S.H.) 1. Details: 1. 1Q06 diluted EPS was $1.02 per share. 2. AHM's investment portfolio consists of mortgage-backed

securities and loans held of investment. 1. The Co. further separates its loans held of investment between those that are permanently financed through the issuance of collateralized debt obligations and those that are being pooled for securitization and consequently are funded with short-term debt. 2. For segment reporting purposes, AHM reported net interest income associated with the loans held for investment that are permanently securitized with CDOs in its mortgage

holding segment along with its [MBS] securities. 3. However, AHM reported a net interest income associated with its loans held for investment awaiting securitization in its loan origination segment.

3. In 1Q06, the MBS portfolio earned $24.6m in net interest

income including positive hedge carry of $3.9m on an avg.

balance of $9.9b for an annualized ROA of 0.99%. 1. In 4Q05, the MBS portfolio earned $27.3m in net interest income, including positive hedge carry of $1m on an avg. balance of $9.5b for an annualized ROA of 1.14%. 4. In 1Q06, loans held for investment that were permanently

financed with CDO debt earned $5.7m in net interest income on

an avg. balance of $1.2b for an annualized ROA of 1.98%.

1. In 4Q05, loans held for investment that were permanently financed with CDO debt earned $3.5m in net interest income on an avg. balance of $1b for an annualized ROA of 1.48%. 5. In 1Q06, AHM's loans held for investment pending securitization earned $9.4m in net interest income on an avg. balance of $2.6b for an annualized ROA of 1.43%. 1. In 4Q05, loans held for investment pending securitization

earned $2.1m in net interest income on an avg. balance of $1.5b for an annualized ROA of 0.58%. 2. This improvement in the QoverQ net interest from loans held for investment pending securitization was largely related to reductions in the contract period prior to the first interest rate adjustment on retained ARM loans. 3. Near the end of 1Q06, the large majority of loans held for investment pending securitizations were in fact securitized. 6. In 1Q06, the warehouse loans held for sale earned $18.6m of net interest income on an avg. balance of $7b for an annualized ROA of 1.07%.

1. In 4Q05, the warehouse loans held for sale earned $24.3m of

net interest income on an avg. balance …