American Home Mortgage Reports Fourth Quarter Results; Achieves Record EPS, Revenues and Loan Production for the Quarter and Year

Business Wire, Jan 29, 2002

Business Editors

NEW YORK--(BUSINESS WIRE)--Jan. 29, 2002

American Home Mortgage Holdings, Inc. (NASDAQ: AHMH), one of the nation's largest independent retail mortgage bankers, reported today record earnings, earnings per share, revenue, and loan production for the fourth quarter of 2001.

The company also reported record results in these categories for its fiscal year ended December 31, 2001.

FINANCIAL HIGHLIGHTS

- Fully diluted earnings per share for the fourth quarter was $0.77, an
increase of 285.0% over $0.20 for the same period in 2000. For the year ended
December 31, 2001, fully diluted earnings per share before the cumulative
effect of change in accounting principle was $2.14, an increase of 239.7% over
$0.63 for the year 2000.

- Total revenue in the fourth quarter rose to $41.7 million, an increase of
104.7% over $20.4 million for the same period in 2000. For the year, revenue
totaled $128.1 million, an increase of 119.7% over $58.3 million in the same
period in 2000.

- Total loan closings in the fourth quarter rose to $2.6 billion, an increase
of 173.5% over $962 million during the same period in 2000. For the year, total
loan closings were $7.8 billion, an increase of 155.2% over $3.0 billion in the
same period in 2000.

- Total Internet loan closings in the fourth quarter rose to $484 million, an
increase of 218.4% over $152 million for the same period in 2000. For the year,
total Internet loan closings were $1.4 billion, an increase of 161.8% over $519
million in the same period in 2000.

- Fourth quarter net income rose to $9.6 million, an increase of 433.5% over
$1.8 million during the same period in 2000. For the year, net income before
the cumulative effect of change in accounting principle totaled $23.3 million,
an increase of 332.3% over $5.4 million in the same period in 2000.

Michael Strauss, American Home Mortgage's President and CEO commented, "The fourth quarter was marked by very high loan production due to low interest rates causing record setting refinance activity. Revenue and income benefited accordingly, although operating inefficiencies associated with production levels above normal capacity led to extraordinary expenses, including approximately $1.8 million of overtime. Gross margins during the quarter were 1.62% compared to 1.71% during the third quarter. This decrease was primarily caused by no-fee refinance loans in certain regions to meet local competition, and a higher than usual percentage of business produced by our lower-margin broker channel, which is prone to a surge in volume in a refinance environment. The unclosed application pipeline at the end of the quarter was $3 billion, the same as at the end of the third quarter. Application activity in the quarter peaked in late October and early November. Application activity returned to more normal levels during late November and December as the extraordinary levels of refinance applications diminished."

CORPORATE HIGHLIGHTS

- MortgageSelect.com entered into a multi-year agreement to

become the exclusive provider of mortgage loans on Motley

Fool. It also entered into outsourcing agreements with four

new banks: Mesa National of Colorado, Citizen Bank of

Tennessee, Tipton Bank of Tennessee, and Fordyce Bank & Trust

of Arkansas.

- The company finalized plans to form a mortgage reinsurance

subsidiary as part of its ongoing strategy to reach the

benefits afforded by scale opportunities in the mortgage

industry.

- The company renegotiated its warehouse facility with UBS

Warburg, negotiated a new facility with CDC Mortgage Capital

Inc., and entered into a financing agreement with Residential

Funding Corporation. Together, these providers expand the

company's warehouse lines of credit to $675 million and its

gestation facilities to $613 million.

- The company's Board of Directors declared a dividend of $0.03

per share for the fourth quarter, marking a total of $0.12 for

the year. 2001 was the first year in which American Home

Mortgage paid dividends.

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      Operating Statistics


                                           4Q'01            4Q'00
                                          -------          -------


   Total Loan Production                 $2.6 billion    $962 million
   Retail E-Commerce Loan Production     $484 million    $152 million
   Loans Sold                            $2.4 billion    $863 million
   Principal Amount of
     Applications Accepted               $4.0 billion    $1.5 billion
   Principal Amount of End of
     Period Application Pipeline         $3.0 billion    $1.0 billion
   Number of Branches                         63               47

OUTLOOK FOR Q1 AND FULL YEAR 2002

"2002 will be a pivotal year for American Home Mortgage", continued Michael Strauss. "The first quarter will be marked by relatively high closings, albeit at levels well below the fourth quarter of 2001, due in part to closing the remaining refinance pipeline. It is expected that during the second, third and fourth quarters, loan production will return to normal, non-refinance enhanced levels. We continue to estimate that baseline, non-refinance enhanced loan production will approximate $1.55 billion per quarter.