American Home Mortgage Announces Third Quarter Results

Earnings are $1.36 per diluted share





MELVILLE, N.Y., Oct. 26  /PRNewswire-FirstCall/ -- American Home Mortgage Investment Corp. (NYSE:AHM) announced today results for the quarter ended September 30, 2006.

  FINANCIAL HIGHLIGHTS

  Comparison of the Three Months Ended September 30, 2006 and 2005

  -- Revenue for the third quarter of 2006 was $258.9 million, compared to
     revenue of $204.8 million for the third quarter of 2005, an increase of
     26.4%.
  -- Net earnings for the third quarter of 2006 were $72.0 million, compared
     to net earnings of $53.2 million for the third quarter of 2005, an
     increase of 35.4%.
  -- Earnings per diluted share for the third quarter of 2006 were $1.36,
     compared to earnings per diluted share of $1.09 for the third quarter
     of 2005, an increase of 24.8%.
  -- Dividends per common share for the third quarter of 2006 were $1.01,
     compared to $0.86 for the third quarter of 2005, an increase of 17.4%.
  -- Book value per common share was $22.52 at September 30, 2006, compared
     to book value per common share of $22.81 at September 30, 2005, a
     decrease of 1.3%.

  Comparison of the Three Months Ended September 30, 2006 and June 30, 2006

  -- Revenue for the third quarter of 2006 was $258.9 million, compared to
     revenue of $276.8 million for the second quarter of 2006, a decrease of
     6.4%.
  -- Net earnings for the third quarter of 2006 were $72.0 million, compared
     to net earnings of $72.4 million for the second quarter of 2006, a
     decrease of 0.5%.
  -- Earnings per diluted share for the third quarter of 2006 were $1.36,
     compared to earnings per diluted share of $1.37 for the second quarter
     of 2006, a decrease of 0.7%.
  -- Dividends per common share for the third quarter of 2006 were $1.01,
     compared to $0.96 for the second quarter of 2006, an increase of 5.2%.
  -- Book value per common share was $22.52 at September 30, 2006, compared
     to book value per common share of $22.35 at June 30, 2006, an increase
     of 0.8%.

  Comparison of the Nine Months Ended September 30, 2006 and 2005

  -- Revenue for the nine months ended September 30, 2006 was $768.8
     million, compared to adjusted revenue of $572.1 million for the nine
     months ended September 30, 2005, an increase of 34.4%.  GAAP revenue
     for the nine months ended September 30, 2005 was $643.5 million.
  -- Net earnings for the nine months ended September 30, 2006 were $198.8
     million compared to adjusted net earnings of $172.7 million for the
     nine months ended September 30, 2005, an increase of 15.1%.  GAAP net
     earnings for the nine months ended September 30, 2005 were $244.1
     million.
  -- Earnings per diluted share for the nine months ended September 30, 2006
     were $3.75 compared to adjusted earnings per diluted share of $3.83 for
     the nine months ended September 30, 2005, a decrease of 2.1%.  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, 2006
     were $2.88, compared to $2.33 for the nine months ended September 30,
     2005, an increase of 23.6%.



Michael Strauss, American Home's Chief Executive Officer, commented, "I am pleased by our company's results during the third quarter.  In particular, earnings per share were strong at $1.36, while dividends and book value per share continued to advance from second quarter levels.  Our company's third quarter results were accomplished during a period that was particularly difficult for our industry; a period that included the adverse impacts of an inverted yield curve, falling national housing prices, reduced national loan originations, and servicing write-downs due to lower interest rates.  These difficult conditions are reflected in American Home's third quarter results which include a significant mortgage servicing asset write-down, a lower although still constructive gain-on-sale margin, high credit expense for reserving necessitated by sharply higher delinquencies and loan repurchases, and finally, lower warehouse net interest due to a narrower spread between new loan yields and funding yields.  These factors were offset in our company's third quarter results however, by record portfolio net interest income, record loan production and record servicing and ancillary fee income, as well as by lower expenses in our loan production business.  In addition, our company did not experience a loss in its mortgage-backed securities portfolio as had been the case in several of the previous quarters, but instead had a net portfolio gain of $3.4 million.  I believe our company's strong results in this challenging environment illustrate the underlying earnings power of our businesses.

"During the quarter, our company added $906.8 million of newly originated loans to its portfolio of loans held for investment.  These loans are carried at their cost, have an unrecognized fair value in excess of cost of $15.5 million, and are projected to yield 7.01% over their estimated life.  As investors know, one of our company's core strategies is to grow ongoing portfolio net interest income by increasing our holdings of self-originated loans benefited by a low cost basis.

"Based on our third quarter results and our outlook for the fourth quarter, our company is reaffirming its 2006 earnings guidance of $4.85 to $5.15 per share, and its guidance for annual loan originations of $55 billion to $60 billion.

"As was previously announced, earlier this month our company completed its purchase of Flower Bank, a federal savings bank located in Chicago, Illinois. This purchase represents an important milestone in our company's development. Although Flower Bank will grow slowly, eventually our strategic plan is to be able to provide additional consumer financial services to our customers and the general public.  Through this strategy we expect to increase the return from our customer base and our customer acquisition expenditures as well as to diversify the sources of earnings from our operating subsidiaries.

"I am very pleased to announce that based on our company's earnings and prospects, our Board of Directors has again increased our company's quarterly dividend policy on its common stock by $0.05 per share.  The new per share common stock dividend policy is $1.06 per quarter, or $4.24 on an annualized basis.  The new dividend policy is expected to take effect with our January dividend payment, although our company is not obligated to pay dividends until such dividends are declared by our Board of Directors, and our Board of Directors may change our company's dividend policy at any time without prior notice."

THIRD QUARTER RESULTS

During the third quarter, net interest income from portfolio loans and mortgage-backed securities including carry from free-standing swaps increased moderately to reach a record $35.9 million compared to $33.9 million during this year's second quarter.  The increase was attributable to a $500 million increase in average portfolio assets as well as a slight increase in the portfolio's net interest margin including swap carry to 1.11% compared to 1.09 % in the second quarter.  Contributing to the improvement in net interest margin was an increase in the portfolio's proportion of self-originated loans held for investment.  During the third quarter, loans and mortgage-backed securities in portfolio averaged $13.0 billion, and earned net interest income of $28.4 million equal to a net interest margin of 0.88%.  In addition, during the quarter, the Company earned $7.5 million of positive carry on interest rate swaps which economically hedge the trading portion of the Company's portfolio.  Under accounting rules, these swaps are classified as free- standing derivatives and consequently are not included in GAAP net interest income, but are instead included in unrealized gains and losses on mortgage- backed securities and derivatives.  For the third quarter, the combined net interest income and positive swap carry was $35.9 million, or 1.11% of average portfolio assets.  By comparison, during the second quarter of 2006, the Company's mortgage loans and mortgage-backed securities portfolio averaged $12.5 billion and earned net interest income of $28.1 million equal to a net interest margin of 0.90%.  During the second quarter, the Company had $5.8 million of positive carry from interest rate swaps which economically hedge the trading portion of the Company's portfolio.  Consequently, in the second quarter the combined net interest income and positive swap carry was $33.9 million, or 1.09% of average portfolio assets.

During the third quarter, the Company's overall net interest income fell to $43.0 million compared to $50.2 million in the second quarter.  Lower overall net interest income resulted from lower net interest earnings from the Company's inventory of warehoused loans, which more than offset increased net interest earnings from the investment portfolio.  During the third quarter, the Company's inventory of warehoused loans averaged $8.1 billion, earned a net interest margin of 1.24% and earned net interest income of $25.1 million. This compares with average warehoused loans of $8.8 billion, a net interest margin of 1.44% and net interest income of $31.6 million in the second quarter of 2006.  Lower net interest margin from warehoused loans was a result of ongoing narrowing of the spread between the yield on fixed-rate and hybrid adjustable-rate mortgage ("ARM") loans compared to the yield on the Company's funding sources including commercial paper and warehouse credit facilities. Net interest income from warehoused loans is expected to continue at low levels so long as the yield on short term interest rates exceeds the yield on longer term rates.  During the third quarter, the Company had interest expense on trust preferred borrowings, servicing financing and other obligations of $10.5 million compared to $9.5 million during the second quarter of 2006.

During the third quarter, the Company continued to experience higher costs for credit provisions and allowances due to sharply higher portfolio delinquencies as well as increased repurchases of delinquent, previously sold loans.  Non-performing loans held for investment increased to $66.9 million at the end of the third quarter compared to $33.5 million at the end of the second quarter.  Allowances and reserves associated with these loans were $12.5 million at quarter-end compared to $6.9 million at the end of the second quarter, while the Company's provision expense was $5.4 million in the third quarter compared to $4.0 million during the second quarter.  During the third quarter, the Company's loss severity as a percent of loan principal on completed foreclosures, net of mortgage insurance recoveries, was 15.7%.  The Company purchases mortgage insurance to partially mitigate its credit exposure and 46.3% of the Company's securitized loans held for investment are benefited by mortgage insurance.  Delinquencies and related expenses are expected to continue to rise in future quarters primarily due to a weakened national housing market as well as seasoning of the Company's portfolio.

Throughout the third quarter, the Company continued to pursue a strategy of matching the duration of its portfolio assets with the duration, net of hedges, of the liabilities used to fund those assets.  At September 30, 2006, the composition of the Company's loans held for investment and loans underlying its mortgage-backed securities was 49.1% 5/1 ARM loans, 24.9% short reset ARMs, 14.0% fixed rate loans, 6.5% HELOC and closed-end seconds, 2.5% 3/1 ARMs, and 3.0% other ARM types.   On September 30, 2006, the mortgage- backed securities portfolio's duration, net of liabilities and hedges, was estimated to be (0.12) years and its projected average life was 2.57 years. The composition of the mortgage-backed securities portfolio by credit quality based on Standard & Poor's ratings was 93.5% Agency and AAA, 4.0% AA, A, and BBB and 2.5% BB and unrated.

During the third quarter, the Company's loan origination business continued to produce strong results.  Loan production reached a record $15.3 billion compared to $14.9 billion in this year's second quarter.  During the third quarter, the Company sold $14.3 billion of loans to third parties for a gain on sale of $210.6 million equal to a gain on sale margin of 1.47%.  By comparison, during this year's second quarter, the Company sold $13.9 billion of loans to third parties for a gain on sale of $224.6 million equal to a gain on sale margin of 1.62%.  During the third quarter, the Company's loan production expenses were $152.6 million, or 1.06% of loans sold, or 1.00% of loans originated, compared to $160.2 million, or 1.16% of loans sold, or 1.07% of loans originated in the second quarter.  The Company estimates that its national market share, based on Freddie Mac's recent, revised estimate of national market size, was 2.23% in the third quarter compared to 2.04% in this year's second quarter and 1.45% during the third quarter of 2005.  At the end of the third quarter, the Company employed approximately 2,640 loan officers and account executives, including call center representatives, but excluding sales assistants, compared to approximately 2,612 on June 30, 2006.

In the third quarter, the Company's financial results were affected by several significant changes in the carrying value of its assets and derivatives.  During the quarter, the change in the value of the Company's servicing assets due to changes in valuation assumptions declined by $16.8 million, net of hedges, due primarily to lower interest rates.  Additionally, during the quarter, the Company had gains excluding positive carry from swaps of $3.4 million in its portfolio of mortgage-backed securities and related hedges.  Finally, during the quarter, the Company had other comprehensive loss of $9.6 million.  Of this other comprehensive loss, the Company's portfolio of investment securities and related hedges gained $1.7 million.  The remaining $11.3 million of other comprehensive loss resulted from a loss in value in the swaps and other derivatives used to hedge the Company's loans held for investment.  When interest rates decline, as they did in the third quarter, these derivatives lose value, and the loss is recognized in other comprehensive income.  The loans held for investment, however, gained fair value during the quarter in response to lower interest rates.  The amount of gain in the fair value of the loans held for investment in the third quarter was $21.5 million.  Under GAAP, this gain in the fair value of the loans is not recognized in other comprehensive income.  The gain is, however, included as a portion of the increase in the positive difference between the fair value of the Company's loans compared to those loans' carrying values, which is shown as a supplemental schedule to the Company's financial tables accompanying this earnings release.

During the third quarter, the Company's servicing income and ancillary fees reached a record $43.4 million gross, and $14.6 million net of $28.8 million of realization of servicing cash flow expense.  "Realization of servicing cash flows" expense is a classification resulting from the Company's adoption of FAS 156, and is roughly though not fully equivalent in concept to the classification "amortization of servicing rights" that appeared in the Company's financial results for periods prior to its adoption of FAS 156.  By comparison, during the second quarter, servicing income and ancillary fees were $30.4 million gross, and $4.1 million net of $26.3 million of realization of servicing cash flows.  As noted above, however, during the quarter the Company experienced a net write-down of its mortgage servicing assets of $16.8 million including $23.9 million of gross write-down partially offset by $7.1 million of servicing hedge gains.  This compares with a net write-up of $7.5 million during this year's second quarter including $7.5 million of gross write-up and no hedge gains or losses.  Prior to the third quarter, the Company did not hedge its servicing assets.  As was previously announced, the Company began hedging its servicing assets in July 2006, and continued to build its hedge through the balance of the third quarter, completing the establishment of the hedge earlier this month.  During the third quarter, the servicing hedge only partially offset the gross write-down of the servicing assets primarily because the hedge was not fully in place throughout the quarter.  The hedge is expected to more closely offset changes in the value of the Company's mortgage servicing assets in future quarters.  At the end of the third quarter, the principal amount of the loans underlying the Company's servicing assets was $35.9 billion.  By comparison, the amount of loans underlying the Company's servicing assets at the end of this year's second quarter was $32.6 billion.  The principal amount of the servicing portfolio, including warehouse loans, was $43.0 billion at the end of the third quarter and $39.1 billion at the end of this year's second quarter.

The Company's total revenues in the third quarter were $258.9 million.  Of these revenues, $43.0 million was from net interest income, $210.6 million was from sales of newly originated mortgage loans including origination fees and net of hedges, $43.4 million was from mortgage servicing fees, $7.5 million was from interest carry on free-standing swaps, $3.4 million was realized and unrealized gains on mortgage-backed securities held, net of hedges, and $2.0 million was from other sources.  Revenues were decreased by $28.8 million due to realization of servicing cash flows, $16.8 million from decline in the value of servicing due to changes in assumptions, net of hedges, and $5.4 million of provision for loan losses. During the quarter, the Company's expenses were $171.3 million, and the Company's pre-tax income was $87.6 million.  Also during the quarter, the Company's tax expense was $15.6 million.  Consequently, net income for the quarter was $72.0 million while preferred dividends were $3.3 million and net income available to common stockholders was $68.7 million, resulting in earnings per diluted share of $1.36.  Book value attributable to common stockholders at September 30, 2006 was $1.13 billion, or $22.52 per common share, compared to $1.12 billion, or $22.35 per common share, at June 30, 2006.

EARNINGS GUIDANCE

With this earnings announcement, American Home is reaffirming its 2006 earnings guidance of $4.85 to $5.15 per diluted share.  The Company's earnings guidance is based on uncertain assumptions about factors that will affect the Company's fourth quarter, 2006 results including: that net interest margins will remain near constant, that gain- on-sale margins will decline slightly, that originations will decline slightly, that expenses as a percentage of loan production will remain constant, that credit loss related expenses will continue to increase and that the Company will not experience significant write-downs or write-ups in the value of its assets due to changing interest rates or credit spreads which are not offset by the Company's hedges.  Results differing from the Company's assumptions for these factors as well as many other factors may cause the Company's actual results to differ from its earnings guidance.  With this earnings release, the Company is also reaffirming its guidance for 2006 loan production of $55 billion to $60 billion.

DIVIDEND POLICY

Based on the Company's projections for earnings and cash flow, its Board of Directors has raised the Company's common stock dividend policy to $1.06 per share per quarter, or $4.24 per share on an annualized basis.  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.  The new dividend policy of $1.06 per share per quarter is expected to commence beginning in January 2007.

OTHER COMPANY HIGHLIGHTS

On October 19, 2006, the Company acquired Flower Bank, fsb, of Chicago, Illinois.  In connection with its acquisition of Flower, the Company recognized goodwill of approximately $17.0 million.  In addition, the Company recapitalized Flower through a cash investment in Flower's equity of $50 million.  The Company's business plan for Flower includes the Company depositing approximately $350 million of mortgage servicing escrow accounts at Flower.  It also includes Flower offering deposit accounts and consumer credit products including real estate loans and credit cards.  Flower is expected to invest in the loans it originates as well as in high-grade securities, and, in particular, securities issued by Fannie Mae and Freddie Mac.

On August 22, 2006, the Company completed an acquisition of certain loan origination assets of Pacific Crest Savings Bank.  The annual loan originations of the acquired Pacific Crest branches are projected to be $200 million to $250 million.  The Company acquired three loan origination branches from Pacific Crest, two of which are in the Seattle metropolitan area.  In connection with the acquisition, American Home paid approximate net book value for Pacific Crest's nominal fixed assets and hired approximately 23 loan officers into its retail channel.

On August 18, 2006, the Company privately issued $30 million of trust preferred securities.  The yield on the securities was LIBOR plus 2.40%.  The securities are callable in five years at the option of the Company at a price of par, and mature in thirty years.  One of the Company's strategies is to increase its unsecured borrowings and reduce its reliance on borrowing facilities that require pledged collateral.  Implementation of this strategy to date has primarily been though the issuance of trust preferred securities.

On August 10, 2006, the Company increased the facility size of the Company's Bank of America syndicated committed revolving credit facility from $1.0 billion to $1.25 billion and extended the maturity date for an additional one-year term.  Additionally, on September 13, 2006, the Company entered into a $350 million mortgage warehouse facility with Credit Suisse First Boston and on September 22, 2006, the Company entered into a $2.0 billion mortgage warehouse facility with subsidiaries of Deutsche Bank.

On October 23, 2006, Fitch Ratings upgraded its rating of the Company's servicing operations to 'RPS3+'.  The previous rating had been 'RPS3'.

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 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 tables A-1 and A-2 of this release.

CONFERENCE CALL TODAY

American Home will hold an investor conference call today, October 26, 2006, 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, 2006.

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 loans and mortgage-backed securities, and, through its taxable subsidiaries, from originating and selling mortgage loans and servicing mortgage loans for institutional investors.  Mortgages are originated through a network of loan production offices and mortgage brokers as well as purchased from correspondent lenders, 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,
                                         2006     2005     2006     2005
                                                                     (1)
                                                                      As
                                                                   Adjusted
  Mortgage Holdings Segment:
  Investment Portfolio Performance (2):
  Average loans and mortgage-backed
   securities in portfolio ($ billions)    13.0      7.1     12.2      7.1
  Interest income ($ millions)            195.6     84.5    531.8    239.8
  Average portfolio yield                 6.03%    4.76%    5.82%    4.50%

  Interest expense ($ millions)           167.2     62.9    448.9    161.8
  Average cost of funds and hedges        5.37%    3.84%    5.18%    3.29%

  Net interest income ($ millions)         28.4     21.6     82.9     78.0
  Net interest margin                     0.88%    1.24%    0.91%    1.46%

  Interest carry on free standing
   derivatives ($ millions)                 7.5     -0.6     17.2     -8.3
  Net interest income including
   interest carry on free standing
   derivatives ($ millions)                35.9     21.0    100.1     69.7
  Net interest margin including
   interest carry on free standing
   derivatives                            1.11%    1.21%    1.10%    1.31%

  Reconciliation of Changes in Mortgage
   Holdings (3):
  Net change in mortgage-backed
   securities ($ billions)                 -0.3      1.2     -1.6     -1.1
  Additions to loans in portfolio
   ($ billions)                             0.9      1.3      3.1      1.4
  Principal repayments and other
   dispositions of loans in portfolio
   ($ billions)                             0.4      0.0      0.8      0.0
  Net additions to loans in portfolio
   ($ billions)                             0.5      1.3      2.3      1.4
  Loans and mortgage-backed securities
   held - end of period ($ billions)       14.8     10.7     14.8     10.7
  Mortgage-backed securities period end
   duration gap (in years)                -0.12     0.17    -0.12     0.17

  Loan Origination Segment:
  Loan originations ($ billions) (4)       15.3     13.7     43.4     31.7
     Refinance                              54%      46%      52%      45%
     ARM                                    53%      48%      53%      50%

  Average mortgage loans, net ($
   billions) (3)                            8.1      5.7      8.8      4.1
  Net interest income excluding trust
   preferred and other interest expense
   ($ millions)                            25.1     28.5     84.7     70.4
  Net interest margin excluding trust
   preferred and other interest expense   1.24%    2.12%    1.28%    2.32%
  Trust preferred and other interest
   expense ($ millions)                     6.6      2.0     17.0      3.2
  Net interest income ($ millions)         18.5     26.5     67.7     67.2
  Loans securitized and held ($
   billions)                                0.0      1.2      0.0      2.9
  Loans securitized and sold ($
   billions)                                0.0      1.3      0.0     10.3
  Loans sold to third parties ($
   billions)                               14.3      9.9     41.7     17.5

  Gain on sales of loans, net of hedge
   gains ($ millions) (5)                 210.6    176.5    607.1    472.0
  Excess of fair value over carrying
   value of loans added
   to investment portfolio
   ($ millions)                            15.6     26.5     48.4     27.8
             Total ($ millions)           226.2    203.0    655.5    499.8

  Gain on sales of loans, net of hedge
   gains (% of principal) (5)             1.47%    1.42%    1.46%    1.60%
  Excess of fair value over carrying
   value of loans added to investment
   portfolio (% of principal)             1.71%    2.02%    1.54%    1.92%
             Total (% of principal)       1.48%    1.48%    1.46%    1.61%
  Applications accepted ($ billions)       23.4     19.7     66.3     50.0
  Application pipeline ($ billions)        12.3     11.6     12.3     11.6


                                         Sept. 30, Sept. 30,
                                           2006       2005
  Loan Servicing Segment:
  Loan servicing portfolio - total with
   warehouse ($ billions)                  43.0     27.5
  Loan servicing portfolio - loans sold
   or securitized ($ billions)             35.9     24.2
  Interest expense ($ millions)             3.9      1.3
  Weighted average note rate               6.77%    5.73%
  Weighted average service fee            0.339%   0.331%
  Average age (in months)                    15       13

  Notes:
  (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 tables A-1 and A-2.
  (2) Excludes loans held for investment pending securitization.
  (3) Includes loans held for investment pending securitization.
  (4) Loan  originations of $13.2 billion in the first quarter of 2006
      exclude $559 million of loans purchased in the Waterfield acquisition.
  (5) Prior to the fourth quarter of 2005, includes gain on current period
      securitizations, net of hedge gains.



           AMERICAN HOME MORTGAGE INVESTMENT CORP. AND SUBSIDIARIES
                             OPERATING STATISTICS

                                                 Three Months Ended
                                          Sept.  June   March  Dec.   Sept.
                                           30,    30,    31,    31,    30,
                                          2006   2006   2006   2005   2005
  Mortgage Holdings Segment:
  Investment Portfolio Performance (1):
  Average loans and mortgage-backed
   securities in portfolio ($ billions)    13.0   12.5   11.1   10.5    7.1
  Interest income ($ millions)            195.6  181.3  154.9  138.0   84.5
  Average portfolio yield                 6.03%  5.82%  5.60%  5.27%  4.76%

  Interest expense ($ millions)           167.2  153.2  128.5  108.2   62.9
  Average cost of funds and hedges        5.37%  5.19%  4.96%  4.36%  3.84%

  Net interest income ($ millions)         28.4   28.1   26.4   29.8   21.6
  Net interest margin                     0.88%  0.90%  0.95%  1.17%  1.24%

  Interest carry on free standing
   derivatives ($ millions)                 7.5    5.8    3.9    1.0   -0.6
  Net interest income including interest
   carry on free standing derivatives
   ($ millions)                            35.9   33.9   30.3   30.8   21.0
  Net interest margin including interest
   carry on free standing derivatives     1.11%  1.09%  1.09%  1.21%  1.21%

  Reconciliation of Changes in Mortgage
   Holdings (2):
  Net change in mortgage-backed
   securities ($ billions)                 -0.3   -0.3   -1.0    1.4    1.2
  Additions to loans in portfolio
   ($ billions)                             0.9    1.2    1.0    2.1    1.3
  Principal repayments and other
   dispositions of loans in portfolio
   ($ billions)                             0.4    0.2    0.2    0.0    0.0
  Net additions to loans in portfolio
   ($ billions)                             0.5    1.0    0.8    2.1    1.3
  Loans and mortgage-backed securities
   held - end of period ($ billions)       14.8   14.6   13.9   14.1   10.7
  Mortgage-backed securities period end
   duration gap (in years)                -0.12   0.10   0.15  -0.03   0.17

  Loan Origination Segment:
  Loan originations ($ billions) (3)       15.3   14.9   13.2   13.6   13.7
     Refinance                              54%    51%    51%    51%    46%
     ARM                                    53%    55%    51%    50%    48%

  Average mortgage loans, net
   ($ billions) (2)                         8.1    8.8    9.6    8.6    5.7
  Net interest income excluding trust
   preferred and other interest expense
   ($ millions)                            25.1   31.6   28.0   26.4   28.5
  Net interest margin excluding trust
   preferred and other interest expense   1.24%  1.44%  1.17%  1.28%  2.12%
  Trust preferred and other interest
   expense ($ millions)                     6.6    5.7    4.7    3.3    2.0
  Net interest income ($ millions)         18.5   25.9   23.3   23.1   26.5
  Loans securitized and held ($ billions)   0.0    0.0    0.0    0.0    1.2
  Loans securitized and sold ($ billions)   0.0    0.0    0.0    0.0    1.3
  Loans sold to third parties ($ billions) 14.3   13.9   13.5   11.0    9.9

  Gain on sales of loans, net of hedge
   gains ($ millions) (4)                 210.6  224.6  171.9  105.4  176.5
  Excess of fair value over carrying
   value of loans added to investment
   portfolio ($ millions)                  15.6   18.8   14.0   30.2   26.5
             Total ($ millions)           226.2  243.4  185.9  135.6  203.0

  Gain on sales of loans, net of hedge
   gains (% of principal) (4)             1.47%  1.62%  1.27%  0.96%  1.42%
  Excess of fair value over carrying
   value of loans added to investment
   portfolio (% of principal)             1.71%  1.49%  1.44%  1.43%  2.02%
             Total (% of principal)       1.48%  1.61%  1.28%  1.03%  1.48%
  Applications accepted ($ billions)       23.4   22.1   20.8   17.8   19.7
  Application pipeline ($ billions)        12.3   12.1   11.8    9.2   11.6


                                     Sept.   June    March   Dec.    Sept.
                                      30,     30,     31,     31,     30,
                                     2006    2006    2006    2005    2005
  Loan Servicing Segment:
  Loan servicing portfolio - total
   with warehouse ($ billions)       43.0    39.1    34.8    30.7    27.5
  Loan servicing portfolio - loans
   sold or securitized ($ billions)  35.9    32.6    29.0    25.0    24.2
  Interest expense ($ millions)       3.9     3.8     3.1     2.6     1.3
  Weighted average note rate        6.77%   6.38%   6.09%   5.79%   5.73%
  Weighted average service fee     0.339%  0.336%  0.329%  0.330%  0.331%
  Average age (in months)              15      14      14      15      13

  Notes:
  (1) Excludes loans held for investment pending securitization.
  (2) Includes loans held for investment pending securitization.
  (3) Loan  originations of $13.2 billion in the first quarter of 2006
      exclude $559 million of loans purchased in the Waterfield acquisition.
  (4) Prior to the fourth quarter of 2005, includes gain on current period
      securitizations, net of hedge gains.



           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,
                                       2006      2005      2006      2005
                                                                     (1)
                                                                      As
                                                                   Adjusted
  Net interest income:
    Interest income                  $332,875  $180,038  $963,684  $435,325
    Interest expense                 (289,878) (133,169) (823,905) (294,830)
         Net interest income           42,997    46,869   139,779   140,495

    Provision for loan losses          (5,365)      -     (10,655)      -

         Net interest income after
          provision for loan losses    37,632    46,869   129,124   140,495

  Non-interest income:
    Gain on sales of mortgage loans   210,621   123,658   607,122   236,288
    Gain on sales of current period
     securitized mortgage loans           -      19,960       -     168,998
    Gain on sales of mortgage-backed
     securities and derivatives         9,849     6,116     8,952    11,468
    Unrealized gain (loss) on
     mortgage-backed securities and
     derivatives                        1,050   (10,965)    2,635    (1,021)

    Loan servicing fees                43,379    21,099    98,129    52,232
    Amortization and impairment of
     mortgage servicing rights            -      (3,478)      -     (41,912)
    Change in fair value of mortgage
     servicing rights:
      Due to realization of cash
       flows                          (28,839)      -     (73,880)      -
      Due to changes in valuation
       assumptions, net of hedge
       gain (loss)                    (16,799)      -      (9,209)      -
         Net loan servicing (loss)
          fees                         (2,259)   17,621    15,040    10,320

    Other non-interest income           2,018     1,585     5,912     5,594
         Non-interest income          221,279   157,975   639,661   431,647

  Non-interest expenses:
    Salaries, commissions and
     benefits, net                    105,676   101,378   308,100   264,712
    Occupancy and equipment            19,228    15,328    56,961    42,396
    Data processing and
     communications                     5,700     6,479    19,559    18,386
    Office supplies and expenses        5,346     5,024    14,823    15,110
    Marketing and promotion             4,868     5,104    17,051    14,360
    Travel and entertainment            7,798     4,670    22,344    14,025
    Professional fees                   6,076     3,744    16,420    10,646
    Other                              16,588     7,360    49,662    21,072
         Non-interest expenses        171,280   149,087   504,920   400,707

  Net income before income tax
   expense (benefit)                   87,631    55,757   263,865   171,435

  Income tax expense (benefit)         15,611     2,549    65,035    (1,302)

  Net income                          $72,020   $53,208  $198,830  $172,737

  Dividends on preferred stock          3,305     3,304     9,914     9,913

  Net income available to common
   shareholders                       $68,715   $49,904  $188,916  $162,824

    Per share data:
      Basic                             $1.37     $1.10     $3.78     $3.88
      Diluted                           $1.36     $1.09     $3.75     $3.83

      Weighted average number of
       shares - basic                  50,148    45,174    49,975    41,973
      Weighted average number of
       shares - diluted                50,553    45,669    50,363    42,471

  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 tables A-1 and A-2.



           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,
                              2006      2006      2006      2005      2005
  Net interest income:
   Interest income         $332,875  $330,196  $300,613  $265,435  $180,038
   Interest expense        (289,878) (279,992) (254,035) (215,057) (133,169)
        Net interest
         income              42,997    50,204    46,578    50,378    46,869

   Provision for loan
    losses                   (5,365)   (3,979)   (1,311)   (2,142)      -

        Net interest
         income after
         provision for
         loan losses         37,632    46,225    45,267    48,236    46,869

  Non-interest income:
   Gain on sales of
    mortgage loans          210,621   224,594   171,907    98,777   123,658
   Gain on sales of
    current period
    securitized mortgage
    loans                       -         -         -         -      19,960
   Gain (loss) on sales of
    mortgage-backed
    securities and
    derivatives               9,849       (47)     (850)   38,068     6,116
   Unrealized gain (loss)
    on mortgage-backed
    securities and
    derivatives               1,050    (7,730)    9,315   (44,778)  (10,965)

   Loan servicing fees       43,379    30,417    24,333    26,715    21,099
   Amortization and
    impairment of mortgage
    servicing rights            -         -         -     (18,745)   (3,478)
   Change in fair value of
    mortgage servicing
    rights:
     Due to realization of
      cash flows            (28,839)  (26,306)  (18,735)      -         -
     Due to changes in
      valuation assumptions,
      net of hedge gain
      (loss)                (16,799)    7,476       114       -         -
        Net loan servicing
         (loss) fees         (2,259)   11,587     5,712     7,970    17,621

   Other non-interest
    income                    2,018     2,125     1,769     2,181     1,585
        Non-interest
         income             221,279   230,529   187,853   102,218   157,975

  Non-interest expenses:
   Salaries, commissions
    and benefits, net       105,676   103,157    99,267    95,237   101,378
   Occupancy and equipment   19,228    19,763    17,970    16,459    15,328
   Data processing and
    communications            5,700     6,733     7,126     6,402     6,479
   Office supplies and
    expenses                  5,346     5,145     4,332     4,612     5,024
   Marketing and promotion    4,868     6,383     5,800     5,951     5,104
   Travel and entertainment   7,798     7,793     6,753     6,982     4,670
   Professional fees          6,076     5,013     5,331     3,586     3,744
   Other                     16,588    17,192    15,882    10,946     7,360
        Non-interest
         expenses           171,280   171,179   162,461   150,175   149,087

  Net income before income
   tax expense (benefit)     87,631   105,575    70,659       279    55,757

  Income tax expense
   (benefit)                 15,611    33,224    16,200   (16,419)    2,549

  Net income                $72,020   $72,351   $54,459   $16,698   $53,208

  Dividends on preferred
   stock                      3,305     3,304     3,305     3,304     3,304

  Net income available to
   common shareholders      $68,715   $69,047   $51,154   $13,394   $49,904

   Per share data:
     Basic                    $1.37     $1.38     $1.03     $0.27     $1.10
     Diluted                  $1.36     $1.37     $1.02     $0.27     $1.09

     Weighted average
      number of shares -
      basic                  50,148    50,056    49,715    49,605    45,174
     Weighted average
      number of shares -
      diluted                50,553    50,487    50,070    49,998    45,669


          AMERICAN HOME MORTGAGE INVESTMENT CORP. AND SUBSIDIARIES
                   CONSOLIDATED BALANCE SHEETS (Unaudited)
                           (Dollars in thousands)

                                       September 30,  June 30,     March 31,
                                           2006         2006         2006
  Assets:
    Cash and cash equivalents            $298,079     $304,268     $572,591
    Accounts receivable and servicing
     advances                             350,965      342,244      327,586
    Mortgage-backed securities          8,957,373    9,299,224    9,580,963
    Mortgage loans held for sale, net   1,365,595    1,243,702    1,589,613
    Mortgage loans held for
     investment, net                    5,797,801    5,337,138    4,315,384
    Derivative assets                      26,323      139,397      102,267
    Mortgage servicing rights, net        460,913      434,173      371,974
    Premises and equipment, net            82,288       80,296       75,594
    Goodwill                              111,890      110,759      110,330
    Other assets                           53,100       34,398       30,708
        Total assets                  $17,504,327  $17,325,599  $17,077,010

  Liabilities and Stockholders' Equity:
  Liabilities:
    Warehouse lines of credit          $1,890,034   $1,476,958   $1,754,581
    Drafts payable                          8,749       12,349       16,377
    Commercial paper                    1,283,858      888,476    1,073,630
    Reverse repurchase agreements       7,232,503    8,939,786    8,899,050
    Collateralized debt obligations     3,484,873    3,724,878    2,905,199
    Payable for securities purchased    1,221,105          -        215,114
    Derivative liabilities                 40,170        3,280        7,512
    Trust preferred securities            282,340      252,780      204,018
    Accrued expenses and other
     liabilities                          383,585      355,009      385,392
    Notes payable                         317,161      337,700      330,714
    Income taxes payable                   95,808       80,529       51,016
      Total liabilities                16,240,186   16,071,745   15,842,603

  Stockholders' Equity:

    Preferred stock                       134,040      134,040      134,040
    Common stock                              502          501          500
    Additional paid-in capital            962,903      960,995      958,175
    Retained earnings                     245,473      227,450      206,512
    Accumulated other comprehensive
     loss                                 (78,777)     (69,132)     (64,820)
      Total stockholders' equity        1,264,141    1,253,854    1,234,407

        Total liabilities and
         stockholders' equity         $17,504,327  $17,325,599  $17,077,010

  Number of shares outstanding -
   preferred                            5,600,000    5,600,000    5,600,000
  Number of shares outstanding -
   common                              50,182,257   50,107,214   50,004,965


                                              December 31,     September 30,
                                                 2005              2005
  Assets:
    Cash and cash equivalents                   $575,650          $624,424
    Accounts receivable and servicing
     advances                                    329,132           335,736
    Mortgage-backed securities                10,602,104         9,208,172
    Mortgage loans held for sale, net          2,208,749         1,901,293
    Mortgage loans held for investment,
     net                                       3,479,721         1,445,429
    Derivative assets                             44,594            67,185
    Mortgage servicing rights, net               319,671           300,659
    Premises and equipment, net                   68,782            64,174
    Goodwill                                      99,527            99,268
    Other assets                                  26,815            31,697
        Total assets                         $17,754,745       $14,078,037

  Liabilities and Stockholders' Equity:
  Liabilities:
    Warehouse lines of credit                 $3,474,191        $2,165,154
    Drafts payable                                20,754            18,763
    Commercial paper                           1,079,179         1,334,296
    Reverse repurchase agreements              9,806,144         8,041,579
    Collateralized debt obligations            1,057,906               -
    Payable for securities purchased             261,539           554,717
    Derivative liabilities                        16,773               -
    Trust preferred securities                   203,688            96,964
    Accrued expenses and other liabilities       277,476           239,382
    Notes payable                                319,309           305,766
    Income taxes payable                          30,770            56,310
      Total liabilities                       16,547,729        12,812,931

  Stockholders' Equity:

    Preferred stock                              134,040           134,040
    Common stock                                     496               496
    Additional paid-in capital                   947,512           946,105
    Retained earnings                            203,778           235,556
    Accumulated other comprehensive loss         (78,810)          (51,091)
      Total stockholders' equity               1,207,016         1,265,106

        Total liabilities and
         stockholders' equity                $17,754,745       $14,078,037

  Number of shares outstanding - preferred     5,600,000         5,600,000
  Number of shares outstanding - common       49,639,646        49,590,821



        AMERICAN HOME MORTGAGE INVESTMENT CORP. AND SUBSIDIARIES
       CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited)
                             (In thousands)

                                                Three Months Ended
                                          Sept. 30,    June 30,     Mar. 31,
                                             2006        2006        2006

  Preferred stock
  Balance at end of period                 $134,040    $134,040    $134,040

  Common stock
  Balance at beginning of period               $501        $500        $496
  Issuance of common stock - earnouts             -           -           3
  Issuance of common stock - Omnibus
   Stock Plan                                     1           1           1
  Issuance of common stock - offering             -           -           -
  Balance at end of period                     $502        $501        $500

  Additional paid-in capital
  Balance at beginning of period           $960,995    $958,175    $947,512
  Issuance of common stock - earnouts           296           -       9,555
  Issuance of common stock - Omnibus
   Stock Plan                                 1,067       1,126         651
  Issuance of common stock - offering             -           -           -
  Stock-based employee compensation
   expense                                       37         373         410
  Tax benefit for stock options
   exercised                                    332       1,198           -
  Restricted shares amortization                176         123          47
  Balance at end of period                 $962,903    $960,995    $958,175

  Retained earnings
  Balance at beginning of period           $227,450    $206,512    $203,778
  Cumulative-effect adjustment as of
   beginning of period (1)                        -           -      (2,917)
  Net income                                 72,020      72,351      54,459
  Dividends declared                        (53,997)    (51,413)    (48,808)
  Balance at end of period                 $245,473    $227,450    $206,512

  Other comprehensive loss
  Balance at beginning of period           $(69,132)   $(64,820)   $(78,810)
  Unrealized gain (loss) on mortgage-
   backed securities                         75,429     (44,510)    (35,765)
  (Loss) gain on cash flow hedges, net
   of amortization                          (85,074)     40,198      49,755
  Balance at end of period                 $(78,777)   $(69,132)   $(64,820)

  Total stockholders' equity             $1,264,141  $1,253,854  $1,234,407


                                                                     Nine
                                                                     Months
                                             Three Months Ended      Ended
                                            Dec. 31,   Sept. 30,   Sept. 30,
                                              2005        2005        2006

  Preferred stock
  Balance at end of period                 $134,040    $134,040    $134,040

  Common stock
  Balance at beginning of period               $496        $405        $496
  Issuance of common stock - earnouts             -           -           3
  Issuance of common stock - Omnibus
   Stock Plan                                     -           1           3
  Issuance of common stock - offering             -          90           -
  Balance at end of period                     $496        $496        $502

  Additional paid-in capital
  Balance at beginning of period           $946,105    $638,595    $947,512
  Issuance of common stock - earnouts             -         139       9,851
  Issuance of common stock - Omnibus
   Stock Plan                                   857         488       2,844
  Issuance of common stock - offering             -     304,033           -
  Stock-based employee compensation
   expense                                        -           -         820
  Tax benefit for stock options
   exercised                                    434       2,638       1,530
  Restricted shares amortization                116         212         346
  Balance at end of period                 $947,512    $946,105    $962,903

  Retained earnings
  Balance at beginning of period           $235,556    $224,442    $203,778
  Cumulative-effect adjustment as of
   beginning of period (1)                        -           -      (2,917)
  Net income                                 16,698      53,208     198,830
  Dividends declared                        (48,476)    (42,094)   (154,218)
  Balance at end of period                 $203,778    $235,556    $245,473

  Other comprehensive loss
  Balance at beginning of period           $(51,091)   $(44,300)   $(78,810)
  Unrealized gain (loss) on mortgage-
   backed securities                         (7,730)    (15,918)     (4,846)
  (Loss) gain on cash flow hedges, net
   of amortization                          (19,989)      9,127       4,879
  Balance at end of period                 $(78,810)   $(51,091)   $(78,777)

  Total stockholders' equity             $1,207,016  $1,265,106  $1,264,141

  Note:
  (1) Effective January 1, 2006, the Company adopted SFAS 156 and
      elected the fair value option to subsequently measure its MSRs.



         AMERICAN HOME MORTGAGE INVESTMENT CORP. AND SUBSIDIARIES
            CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
                              (In thousands)

                                                 Three Months Ended
                                          Sept. 30,    June 30,     Mar. 31,
                                            2006         2006         2006
  Cash flows from operating activities:
  Net income                              $72,020      $72,351      $54,459
  Adjustments to reconcile net income
   to net cash (used in) provided by
   operating activities:
  Depreciation and amortization             4,275        5,014        3,953
  Provision for loan losses                 5,365        3,979        1,311
  Change in fair value of mortgage
   servicing rights                        52,753       18,830       18,621
  Amortization and impairment of
   mortgage servicing rights                    -            -            -
  Accretion and amortization of
   mortgage-backed securities, net          4,696        2,006        2,331
  Deferred cash flow hedge gain
   (loss), net of amortization              5,509       10,509        3,909
  (Gain) loss on sales of mortgage-
   backed securities and derivatives       (4,735)           -            -
  Unrealized (gain) loss on mortgage-
   backed securities                       (1,588)      14,591        3,090
  Unrealized loss (gain) on free
   standing derivatives                    20,629       (1,038)      (4,765)
  Increase (decrease) in forward
   delivery contracts                      42,315       (6,036)     (24,041)
  Capitalized mortgage servicing
   rights on securitized loans                  -            -            -
  Capitalized mortgage servicing
   rights on sold loans                   (79,493)     (81,029)     (69,768)
  (Increase) decrease in interest
   rate lock commitments                   (5,069)      (4,447)       7,131
  (Increase) decrease in mortgage
   loan basis adjustments                 (10,125)      (2,156)       4,731
  Excess tax benefits from share-
   based payment arrangements                (332)      (1,198)           -
  Other                                      (569)        (633)        (198)
  (Increase) decrease in operating
   assets:
     Accounts receivable                    2,740      (13,506)       6,829
     Servicing advances                   (11,461)      (1,152)      (3,281)
     Other assets                         (18,648)      (3,582)      (1,451)
  Increase (decrease) in operating
   liabilities:
     Accrued expenses and other
      liabilities                          25,988      (32,977)      93,876
     Income taxes payable                  15,611       30,711       16,173

  Origination of mortgage loans held
   for sale                           (14,664,704) (14,371,439) (12,203,014)
  Principal received from sales of
   mortgage loans held for sale        14,241,440   14,013,921   13,372,574
  Proceeds from securitizations of
   mortgage loans held for sale                 -            -            -
  Additions to mortgage-backed
   securities and derivatives                   -            -            -
  Principal proceeds from sales of
   self-originated mortgage-backed
   securities                                   -       99,086    1,809,796
  Cash received from residual assets
   in securitizations                      16,785       20,947       27,353
  Principal repayments of mortgage-
   backed securities                       35,677       60,485       93,845
     Net cash (used in) provided by
      operating activities               (250,921)    (166,763)   3,213,464

  Cash flows from investing activities:
  Purchases of premises and equipment      (6,267)      (9,716)     (10,765)
  Origination of mortgage loans held
   for investment                        (599,384)    (560,003)    (970,335)
  Proceeds from repayments and
   dispositions of mortgage loans
   held for investment                    446,199      240,403      137,545
  Purchases of mortgage-backed
   securities                          (1,666,650)    (461,125)  (1,389,336)
  Principal proceeds from sales of
   purchased mortgage-backed
   securities                           1,503,760            -            -
  Principal repayments of purchased
   mortgage-backed securities             529,441      501,239      438,297
  Net increase in investment in
   Federal Home Loan Bank stock, at
   cost                                       (54)        (108)           -
  Acquisition of business                       -            -     (550,077)
     Net cash provided by (used in)
      investing activities                207,045     (289,310)  (2,344,671)

  Cash flows from financing
   activities:
  Increase (decrease) in warehouse
   lines of credit, net                   413,076     (277,623)  (1,719,610)
  (Decrease) increase in reverse
   repurchase agreements, net          (1,707,283)      40,736     (907,094)
  (Decrease) increase in
   collateralized debt obligations       (240,005)     819,679    1,847,293
  Increase (decrease) in payable for
   securities purchased                 1,221,105     (215,114)     (46,425)
  Increase (decrease) in commercial
   paper, net                             395,382     (185,154)      (5,549)
  (Decrease) increase in drafts
   payable, net                            (3,600)      (4,028)      (4,377)
  Increase in trust preferred
   securities                              29,560       48,762          330
  (Decrease) increase in notes
   payable, net                           (20,539)       6,986       11,405
  Proceeds from issuance of common
   stock                                    1,068        1,127          652
  Excess tax benefits from share-
   based payment arrangements                 332        1,198            -
  Dividends paid                          (51,409)     (48,819)     (48,477)
     Net cash provided by (used in)
      financing activities                 37,687      187,750     (871,852)

  Net (decrease) increase in cash and
   cash equivalents                        (6,189)    (268,323)      (3,059)
  Cash and cash equivalents,
   beginning of period                    304,268      572,591      575,650
  Cash and cash equivalents, end of
   period                                $298,079     $304,268     $572,591

  Supplemental disclosure of non-cash
   investing activities:
  Net transfer of loans held for sale
   to loans held for investment          $307,431     $699,519           $-


                                                    Three Months Ended
                                                 Dec. 31,         Sept. 30,
                                                   2005              2005
  Cash flows from operating activities:
  Net income                                     $16,698           $53,208
  Adjustments to reconcile net income
   to net cash
    (used in) provided by operating
     activities:
  Depreciation and amortization                    3,454             3,098
  Provision for loan losses                        2,142                 -
  Change in fair value of mortgage
   servicing rights                                    -                 -
  Amortization and impairment of
   mortgage servicing rights                      18,745             3,478
  Accretion and amortization of
   mortgage-backed securities, net                 1,509            (2,571)
  Deferred cash flow hedge gain (loss),
   net of amortization                              (346)            1,689
  (Gain) loss on sales of mortgage-
   backed securities and derivatives                 876             2,819
  Unrealized (gain) loss on mortgage-
   backed securities                              40,968            74,595
  Unrealized loss (gain) on free
   standing derivatives                            6,149           (31,137)
  Increase (decrease) in forward
   delivery contracts                             24,124           (13,547)
  Capitalized mortgage servicing rights
   on securitized loans                                -           (27,536)
  Capitalized mortgage servicing rights
   on sold loans                                 (37,757)          (14,762)
  (Increase) decrease in interest rate
   lock commitments                              (10,508)           14,501
  (Increase) decrease in mortgage loan
   basis adjustments                             (32,201)          (12,649)
  Excess tax benefits from share-based
   payment arrangements                              -                 -
  Other                                             (645)            2,196
  (Increase) decrease in operating assets:
      Accounts receivable                         18,156          (218,519)
      Servicing advances                         (11,552)             (382)
      Other assets                                 4,882           (10,512)
  Increase (decrease) in operating liabilities:
      Accrued expenses and other liabilities      31,696            53,657
      Income taxes payable                       (25,106)            8,557

  Origination of mortgage loans held
   for sale                                  (11,482,292)      (12,394,139)
  Principal received from sales of
   mortgage loans held for sale               11,179,015         9,448,293
  Proceeds from securitizations of
   mortgage loans held for sale                      -           2,993,315
  Additions to mortgage-backed
   securities and derivatives                   (152,666)       (1,191,209)
  Principal proceeds from sales of
   self-originated mortgage-backed
   securities                                  1,333,188               -
  Cash received from residual assets in
   securitizations                                26,958            35,431
  Principal repayments of mortgage-
   backed securities                             212,927           274,035
      Net cash (used in) provided by
       operating activities                    1,168,414          (948,091)

  Cash flows from investing activities:
  Purchases of premises and equipment             (8,062)           (5,831)
  Origination of mortgage loans held
   for investment                             (2,084,025)       (1,301,364)
  Proceeds from repayments and
   dispositions of mortgage loans held
   for investment                                 75,613             5,108
  Purchases of mortgage-backed securities     (3,298,636)       (2,417,565)
  Principal proceeds from sales of
   purchased mortgage-backed securities           24,592           518,517
  Principal repayments of purchased
   mortgage-backed securities                    409,080           414,667
  Net increase in investment in Federal
   Home Loan Bank stock, at cost                       -                 -
  Acquisition of business                              -                 -
      Net cash provided by (used in)
       investing activities                   (4,881,438)       (2,786,468)

  Cash flows from financing activities:
  Increase (decrease) in warehouse
   lines of credit, net                        1,309,037         1,499,457
  (Decrease) increase in reverse
   repurchase agreements, net                  1,764,565         1,703,949
  (Decrease) increase in collateralized
   debt obligations                            1,057,906                 -
  Increase (decrease) in payable for
   securities purchased                         (293,178)          554,717
  Increase (decrease) in commercial
   paper, net                                   (255,117)           42,612
  (Decrease) increase in drafts
   payable, net                                    1,991            (7,775)
  Increase in trust preferred securities         106,724            48,550
  (Decrease) increase in notes payable, net       13,543            49,706
  Proceeds from issuance of common stock             857           304,522
  Excess tax benefits from share-based
   payment arrangements                                -                 -
  Dividends paid                                 (42,078)          (34,130)
      Net cash provided by (used in)
       financing activities                    3,664,250         4,161,608

  Net (decrease) increase in cash and
   cash equivalents                              (48,774)          427,049
  Cash and cash equivalents, beginning
   of period                                     624,424           197,375
  Cash and cash equivalents, end of
   period                                       $575,650          $624,424

  Supplemental disclosure of non-cash
   investing activities:
  Net transfer of loans held for sale
   to loans held for investment                       $-                $-



           AMERICAN HOME MORTGAGE INVESTMENT CORP. AND SUBSIDIARIES
              CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
                                (In thousands)

                                                           Nine Months Ended
                                                               September 30,
                                                                    2006
  Cash flows from operating activities:
  Net income                                                       $198,830
  Adjustments to reconcile net income to net cash
    provided by operating activities:
  Depreciation and amortization                                      13,242
  Provision for loan losses                                          10,655
  Change in fair value of mortgage servicing rights                  90,204
  Accretion and amortization of
   mortgage-backed securities, net                                    9,033
  Deferred cash flow hedge gain, net of amortization                 19,927
  Gain on sales of mortgage-backed
   securities and derivatives                                        (4,735)
  Unrealized loss on mortgage-backed securities                      16,093
  Unrealized loss on free standing derivatives                       14,826
  Increase in forward delivery contracts                             12,238
  Capitalized mortgage servicing rights on sold loans              (230,290)
  Increase in interest rate lock commitments                         (2,385)
  Increase in mortgage loan basis adjustments                        (7,550)
  Excess tax benefits from share-based payment arrangements          (1,530)
  Other                                                              (1,400)
  Increase in operating assets:
       Accounts receivable                                           (3,937)
       Servicing advances                                           (15,894)
       Other assets                                                 (23,681)
  Increase in operating liabilities:
       Accrued expenses and other liabilities                        86,887
       Income taxes payable                                          62,495

  Origination of mortgage loans held for sale                   (41,239,157)
  Principal received from sales of
   mortgage loans held for sale                                  41,627,935
  Principal proceeds from sales of
   self-originated mortgage-backed securities                     1,908,882
  Cash received from residual assets in securitizations              65,085
  Principal repayments of mortgage-backed securities                190,007
       Net cash provided by operating activities                  2,795,780

  Cash flows from investing activities:
  Purchases of premises and equipment                               (26,748)
  Origination of mortgage loans held for investment              (2,129,722)
  Proceeds from repayments and
   dispositions of mortgage loans held for investment               824,147
  Purchases of mortgage-backed securities                        (3,517,111)
  Principal proceeds from sales of
   purchased mortgage-backed securities                           1,503,760
  Principal repayments of purchased
   mortgage-backed securities                                     1,468,977
  Net increase in investment in Federal
   Home Loan Bank stock, at cost                                       (162)
  Acquisition of business                                          (550,077)
       Net cash used in investing activities                     (2,426,936)

  Cash flows from financing activities:
  Decrease in warehouse lines of credit, net                     (1,584,157)
  Decrease in reverse repurchase agreements, net                 (2,573,641)
  Increase in collateralized debt obligations                     2,426,967
  Increase in payable for securities purchased                      959,566
  Increase in commercial paper, net                                 204,679
  Decrease in drafts payable, net                                   (12,005)
  Increase in trust preferred securities                             78,652
  Decrease in notes payable, net                                     (2,148)
  Proceeds from issuance of common stock                              2,847
  Excess tax benefits from share-based
   payment arrangements                                               1,530
  Dividends paid                                                   (148,705)
       Net cash used in financing activities                       (646,415)

  Net decrease in cash and cash equivalents                        (277,571)
  Cash and cash equivalents, beginning of period                    575,650
  Cash and cash equivalents, end of period                         $298,079

  Supplemental disclosure of non-cash investing activities:
  Net transfer of loans held for sale
   to loans held for investment                                  $1,006,950



          AMERICAN HOME MORTGAGE INVESTMENT CORP. AND SUBSIDIARIES
              FAIR VALUE OF FINANCIAL INSTRUMENTS (Unaudited)
                               (In thousands)

                                               September 30, 2006
                                                                 Fair Value
                                                                  in Excess
                                         Carrying               of Carrying
                                          Value     Fair Value     Value
  Assets:
    Cash and cash equivalents             $298,079    $298,079       $-
    Accounts receivable and servicing
     advances                              350,965     350,965        -
    Mortgage-backed securities           8,957,373   8,957,373        -
    Mortgage loans held for sale, net    1,365,595   1,397,843     32,248
    Mortgage loans held for investment,
     net                                 5,797,801   5,912,358    114,557
    Mortgage servicing rights, net         460,913     460,913        -
    Derivative assets (1)                   26,323      96,686     70,363
                                                                 $217,168


                                                                  Carrying
                                                                  Value in
                                                                 Excess of
                                                                   (Lower
                                                                 Than) Fair
                                                                    Value
  Liabilities:
    Warehouse lines of credit            $1,890,034   $1,890,034       $-
    Drafts payable                            8,749        8,749        -
    Commercial paper                      1,283,858    1,283,858        -
    Reverse repurchase agreements         7,232,503    7,232,534        (31)
    Collateralized debt obligations       3,484,873    3,486,483     (1,610)
    Derivative liabilities                   40,170       40,170        -
    Trust preferred securities              282,340      282,340        -
    Notes payable                           317,161      317,161        -
                                                                    $(1,641)

                                                                 Fair Value
                                                                  in Excess
                                                                 of Carrying
                                                                    Value
                                                                   $215,527

  Note:
  (1) 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.


                                Table A-1

          AMERICAN HOME MORTGAGE INVESTMENT CORP. AND SUBSIDIARIES
                            OPERATING STATISTICS

                                                Nine Months Ended
                                                September 30, 2005
                                                       (1)
                                            GAAP   Adjustments  As Adjusted
  Mortgage Holdings Segment:
  Investment Portfolio Performance (2):
  Average loans and mortgage-backed
   securities in portfolio ($ 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%

  Interest carry on free standing
   derivatives ($ millions)                   -8.3                    -8.3
  Net interest income including
   interest carry on free standing
   derivatives ($ millions)                   57.5        12.2        69.7
  Net interest margin including
   interest carry on free standing
   derivatives                               1.16%                   1.31%

  Reconciliation of Changes in Mortgage
   Holdings (3):
  Net change in mortgage-backed
   securities ($ billions)                    -1.1                    -1.1
  Additions to loans in portfolio
   ($ billions)                                1.4                     1.4
  Principal repayments of loans in
   portfolio ($ billions)                      0.0                     0.0
  Net additions to loans in portfolio
   ($ billions)                                1.4                     1.4
  Loans and mortgage-backed securities
   held - end of period ($ billions)          10.7                    10.7
  Mortgage-backed securities period end
   duration gap (in years)                    0.17                    0.17

  Loan Origination Segment:
  Loan originations ($ billions)              31.7                    31.7
     Refinance                                 45%                     45%
     ARM                                       50%                     50%

  Average mortgage loans, net
   ($ billions) (3)                            5.3        -1.2         4.1
  Net interest income excluding trust
   preferred and other interest expense
   ($ millions)                               92.8       -22.4        70.4
  Net interest margin excluding trust
   preferred and other interest expense      2.40%                   2.32%
  Trust preferred and other interest
   expense ($ millions)                        3.2                     3.2
  Net interest income ($ millions)            89.6       -22.4        67.2
  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

  Gain on sales of loans, net of hedge
   gains ($ millions) (4)                    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       -43.5       499.8

  Gain on sales of loans, net of hedge
   gains (% of principal) (4)                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
  Interest expense ($ millions)                4.7                     4.7
  Weighted average note rate                 5.73%                   5.73%
  Weighted average service fee              0.331%                  0.331%
  Average age (in months)                       13                      13

  Notes:
  (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.
  (2) Excludes loans held for investment pending securitization.
  (3) Includes loans held for investment pending securitization.
  (4) Prior to the fourth quarter of 2005, includes gain on current period
      securitizations, net of hedge gains.


                                Table A-2

           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 and impairment of
     mortgage servicing rights              (41,790)       (122)    (41,912)
    Change in fair value of mortgage
     servicing rights                           -           -           -
         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 expense      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.


DATASOURCE: American Home Mortgage Investment Corp.



CONTACT:  Mary M. Feder, Vice President, Investor Relations, American

Home Mortgage Investment Corp., [phone],  



Web site:  http://www.americanhm.com/ 

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