American Home Mortgage Holdings Announces Commonwealth Bank Deal

Business Wire, Feb 9, 2001

Business Editors

NEW YORK--(BUSINESS WIRE)--Feb. 9, 2001

Transaction Will Add to Rapidly Growing Loan Volume, Be

Immediately Accretive to Earnings, and

Further Diversify Offline Network

American Home Mortgage Holdings, Inc. (NASDAQ: AHMH), a leading online and offline retail mortgage banker, today announced that it has entered into an acquisition and marketing agreement with Commonwealth Bank, a subsidiary of Commonwealth Bancorp, Inc. (NASDAQ: CMSB).

Like the Company's other offline acquisitions over the past 14 months, this deal will be immediately accretive to its earnings and further diversify its loan office network geographically. In the year after closing, this transaction is expected to add $250-$350 million to American Home Mortgage's loan origination volume, which was in excess of $3 billion last year.

Under this agreement, American Home Mortgage will acquire the five loan production offices of the bank's residential mortgage division, ComNet Mortgage Services, and make its broader mortgage product line available to the bank's customers through bank personnel at 60 branch locations. The terms of this transaction include a nominal amount of cash for the purchase of ComNet's mortgage application pipeline, fixed assets, and trademark, as well as the assumption of real property leases of branch offices. The sale is expected to close in the first quarter of 2001, pending regulatory approvals and other normal closing conditions.

Commenting on the transaction, Michael Strauss, the Chairman, President and CEO of American Home Mortgage Holdings, said: "This transaction is the latest in a series of immediately accretive, community loan office acquisitions. In line with our growth strategy, we will continue to seek out and pursue these types of acquisition and consolidation opportunities within the industry, as we target $4-$5 billion in loan originations for 2001."

Mr. Strauss added: "As with all prior acquisitions, these acquired offices will be equipped with our enterprise platform and its full menu of competitively priced mortgage loans, which should enable us to gain market share going forward."

The five offices to be acquired are in Pennsylvania and Maryland. Most office personnel will be retained. However, they will be empowered to do more business because they will gain access, among other things, to American Home Mortgage's wider product line. This broad product line, particularly in the area of prime, non-conforming loans, is but one facet of a business model that has proven to be exceptionally cost-effective both offline and online, where the Company operates under the name MortgageSelect.com

American Home Mortgage Holdings (NASDAQ: AHMH) is a leading independent retail originator of residential mortgage loans both online and offline. Its online operation, Mortgageselect.com, is ranked #3 in closed loan volume, and has outperformed its online competitors in terms of profitability. Offline, the Company has grown organically and by acquisition and now has 60 community loan offices in 12 states across the country. The Company has overcome the cyclical nature of its industry by focusing on the homebuyers market rather than the refinance market, and by gaining market share with its broad product line, competitive rates, and consultative sales approach. For additional information, please visit the Company's Web site at www.mortgageselect.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This news release contains statements about future events and expectations, which are "forward-looking statements." Any statement in this release that is not a statement of historical fact may be deemed to be a forward-looking statement. Such forward-looking statements involve know and unknown risks, uncertainties and other factors which may cause the company's actual results to be materially different from any future results, performance or achievements expresses or implied by such forward-looking statements. Specific factors that might cause such a difference include, but are not limited to: the potential fluctuations in the company's operating results; the company's potential need for additional capital, the direction of interest rates and their subsequent effect on the company's business, federal and state regulation of mortgage banking; the company's competition; the company's ability to attract and retain skilled personnel; and those risks and uncertainties discussed in filings made by the company with the Securities and Exchange Commission, including those risks and uncertainties contained under the heading "Risk Factors" in the company's Registration Statement on Form S-1 as filed with the Securities and Exchange Commission.