FINANCIAL HIGHLIGHTS

Comparison of the Three Months Ended December 31, 2006 and 2005

— Revenue for the fourth quarter of 2006 was $257.7 million,
compared to revenue of $150.5 million for the fourth quarter
of 2005, an increase of 71.3%.

— Net earnings for the fourth quarter of 2006 were $64.7
million, compared to net earnings of $16.7 million for the
fourth quarter of 2005, an increase of 287.5%.

— Earnings per diluted share for the fourth quarter of 2006 were
$1.21, compared to earnings per diluted share of $0.27 for the
fourth quarter of 2005, an increase of 348.1%.

— Dividends declared per common share for the fourth quarter of
2006 were $1.06, compared to $0.91 for the fourth quarter of
2005, an increase of 16.5%.

— Book value per common share was $22.64 at December 31, 2006,
compared to book value per common share of $21.62 at December
31, 2005, an increase of 4.7%.

Comparison of the Three Months Ended December 31, 2006 and September 30, 2006

— Revenue for the fourth quarter of 2006 was $257.7 million,
compared to revenue of $258.9 million for the third quarter of
2006, a decrease of 0.5%.

— Net earnings for the fourth quarter of 2006 were $64.7
million, compared to net earnings of $72.0 million for the
third quarter of 2006, a decrease of 10.2%.

— Earnings per diluted share for the fourth quarter of 2006 were
$1.21, compared to earnings per diluted share of $1.36 for the
third quarter of 2006, a decrease of 11.0%.

— Dividends declared per common share for the fourth quarter of
2006 were $1.06, compared to $1.01 for the third quarter of
2006, an increase of 5.0%.

— Book value per common share was $22.64 at December 31, 2006,
compared to book value per common share of $22.52 at September
30, 2006, an increase of 0.5%.

Comparison of the Year Ended December 31, 2006 and 2005

— Revenue for the year ended December 31, 2006 was $1.03
billion, compared to adjusted revenue of $722.6 million for
the year ended December 31, 2005, an increase of 42.0%. GAAP
revenue for the year ended December 31, 2005 was $793.9
million.

— Net earnings for the year ended December 31, 2006 were $263.5
million compared to adjusted net earnings of $189.4 million
for the year ended December 31, 2005, an increase of 39.1%.
GAAP net earnings for the year ended December 31, 2005 were
$260.8 million.

— Earnings per diluted share for the year ended December 31,
2006 were $4.96 compared to adjusted earnings per diluted
share of $3.97 for the year ended December 31, 2005, an
increase of 24.9%. GAAP earnings per diluted share for the
year ended December 31, 2005 were $5.58.

— Dividends per common share for the year ended December 31,
2006 were $3.94, compared to $3.24 for the year ended December
31, 2005, an increase of 21.6%.

Michael Strauss, American Home’s Chief Executive Officer commented, “The fourth quarter was highly successful for our company with earnings of $1.21 per diluted share. During the quarter, we added $1.0 billion of recently originated loans to our portfolio, which are carried at cost. Loan origination volume was a record $15.5 billion due to our company achieving a record market share of 2.48% of national originations. Net interest income was stable while our servicing portfolio produced record revenues. During the quarter, our company did however experience its highest delinquency related charges to date, which reduced our quarterly earnings.

The fourth quarter concluded a very successful year for our company, with earnings per diluted share reaching a record $4.96. By comparison, diluted earnings per share were $3.97 in 2005, $3.74 in 2004, $4.07 in 2003 and $2.65 in 2002*. A key financial goal for our company in 2007 is to continue our multi-year growth trend in earnings per share. During 2006, our company’s return on average common equity was 22.7%, which surpassed our target of 20%, and compares favorably to 2005 when our adjusted return on average common equity was 19.7%. Also during 2006 our company originated $58.9 billion of loans compared to $45.3 billion in 2005. Finally, during 2006, our company reached a milestone as, for the first time; its revenues exceeded $1.0 billion.

In this earnings release, our company is providing 2007 earnings guidance of $5.40 to $5.70 per fully diluted share with the earnings per diluted share for each quarter in 2007 projected to be approximately 9% to 15% higher than for the comparable quarter in 2006. Our earnings guidance is based on stable net interest margins applied to a growing portfolio of loans held for investment, loan production of $68 billion to $74 billion, and a reduction in gain on sale margins of approximately 12 basis points. Lower gain on sale margins are expected in part because delinquency losses on loans held for sale, including losses due to repurchases, are projected to continue at high levels throughout 2007. Projections for continued high losses are based on our company’s view that while there are signs that housing prices are starting to stabilize, future abatements in foreclosure activity will lag a recovery in the housing market. As a result, our 2007 earnings guidance anticipates a highly stressed credit environment.

Not included in our earnings guidance are potential benefits from new strategies that offer the possibility of higher portfolio income, increased loan production and reduced income tax expense. Our company will keep investors apprised if material benefits from these strategies become likely.

I am very pleased to announce that based on our company’s results and prospects, our Board of Directors has voted to increase our company’s dividend policy by $0.06 to $1.12 per share per quarter or $4.48 per share on an annualized basis. The new dividend policy is expected to take effect with our April dividend payment. Please note, however, that 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.”

FOURTH QUARTER RESULTS

During the fourth quarter, the Company’s net interest income, plus the positive carry from interest rate swaps, was $48.9 million compared to $50.5 million in the third quarter of 2006. Of the $48.9 million, $12.4 million was from portfolio loans, $14.7 million was from mortgage-backed securities, $6.3 million was from swaps associated with mortgage-backed securities, $0.6 million was from Flower Bank, and $26.8 million was from loans in warehouse, reduced by $11.9 million of interest expense on trust preferred securities and the financing of servicing assets. By comparison, the components of the $50.5 million of net interest income, plus the positive carry from interest rate swaps, earned in the third quarter were $11.8 million from portfolio loans, $16.6 million from mortgage-backed securities, $7.5 million from swaps associated with mortgage-backed securities and $25.1 million from loans in warehouse, including loans held for investment pending securitization, reduced by $10.5 million of interest expense on trust preferred securities and the financing of servicing assets.

During the fourth quarter, portfolio loans earned a net interest margin of 1.42% and had an average balance of $3.5 billion, compared to a net interest margin of 1.27% and an average balance of $3.7 billion in the third quarter of 2006. During the fourth quarter, mortgage-backed securities had an average balance of $9.2 billion, earned a net interest margin on a stand-alone basis of 0.64%, and earned a net interest margin including income from associated swaps of 0.91%. By comparison, in the third quarter of 2006, mortgage-backed securities had an average balance of $9.3 billion, earned net interest margin on a stand-alone basis of 0.72%, and earned a net interest margin including income from associated swaps of 1.04%. In the fourth quarter, loans in warehouse, including loans held for investment pending securitization, had an average balance of $10.0 billion and earned a net interest margin of 1.08%. By comparison, during the third quarter of 2006 loans in warehouse, including loans held for investment pending securitization, had an average balance of $8.1 billion and earned a net interest margin of 1.24%.

Delinquencies and delinquency related charges were up sharply in the fourth quarter and are expected to remain at elevated levels throughout 2007. For the fourth quarter, the Company’s provision expense associated with loans held for investment was $6.7 million, while its quarter-end allowance for loan loss balance was $14.2 million and its non-performing loans held for investment were $82.4 million. By comparison, for the third quarter of 2006, the Company’s provision expense was $5.4 million, while its quarter-end allowance for loan loss balance was $10.9 million and its non-performing loans held for investment were $66.9 million. Additionally, in the fourth quarter, the Company added $14.5 million to its reserves for delinquent loans held for sale which include repurchased loans. These added reserves resulted in a charge to the Company’s gain on sale which reduced its net gain on sale revenue. At quarter-end, reserves associated with delinquent loans held for sale were $22.0 million, while non-performing loans held for sale were $124.3 million. By comparison, in the third quarter, additions to reserves charged to gain on sale were $2.8 million, reserves associated with loans held for sale were $8.7 million, and non-performing loans held for sale were $50.3 million. During the fourth quarter, the value of the Company’s residual assets decreased approximately $12.1 million due to changes in anticipated credit losses, future interest rates and prepayment speeds, and consequently resulted in a write-down that was charged to income. The Company estimates that approximately half of the write-down in the value of residual securities was attributable to delinquencies.

During the fourth quarter, the Company completed foreclosures and sold repossessed real estate for loans with an aggregate unpaid principal balance of $43.4 million. Losses on these loans were $7.0 million, net of mortgage insurance, resulting in a severity rate of 16.2%. By comparison, during the third quarter, the Company completed foreclosures and sold repossessed real estate for loans with an aggregate unpaid principal balance of $29.4 million. Losses on those loans were $4.6 million, net of mortgage insurance, resulting in a severity rate of 15.7%.

Throughout the fourth quarter, the Company continued to pursue a strategy of matching the duration of its portfolio assets with the duration of its liabilities, net of hedges. At December 31, 2006, the composition of the Company’s loans held for investment and loans underlying its mortgage-backed securities was 45.0% 5/1 ARM loans, 26.0% short reset ARMs, 13.7% fixed rate loans, 8.9% 7/1 ARM loans, 2.0% 3/1 ARM loans, 1.3% HELOC and closed-end seconds, and 3.1% other ARM types. On December 31, 2006, the mortgage-backed securities portfolio’s duration, net of liabilities and hedges, was estimated to be 0.07 years and its projected average life was 2.36 years. The composition of the mortgage-backed securities portfolio by credit quality based on Standard & Poor’s ratings was 93.9% Agency and AAA, 3.8% AA, A, and BBB and 2.3% BB and unrated.

During the fourth quarter, the Company’s loan origination business continued to produce strong results. Loan originations reached a record $15.5 billion compared to $15.3 billion in this year’s third quarter. During the fourth quarter, the Company sold $14.3 billion of loans to third parties for a gross gain on sale excluding reserving for delinquencies of $217.4 million equal to a gross gain on sale margin of 1.52%. By comparison, during this year’s third quarter, the Company sold $14.3 billion of loans to third parties for a gross gain on sale of $213.4 million equal to a gain on sale margin of 1.49%. The Company’s gain on sale net of additions to its reserves for delinquent loans held for sale was $202.9 million in the fourth quarter compared to $210.6 million in the third quarter of 2006.

During the fourth quarter, the Company’s loan origination expenses were $157.9 million, or 1.11% of loans sold, or 1.02% of loans originated, compared to $152.6 million, or 1.06% of loans sold, or 1.00% of loans originated in the third quarter. The Company estimates that its national market share, based on Freddie Mac’s recent, revised estimate of national market size, was 2.48% in the fourth quarter compared to 2.24% in this year’s third quarter and 1.69% during the fourth quarter of 2005. At the end of the fourth quarter, the Company employed approximately 2,450 loan officers and account executives, including call center representatives, but excluding sales assistants, compared to approximately 2,640 on September 30, 2006.

During the fourth quarter, the Company’s servicing income and ancillary fees reached a record $47.3 million gross, and $18.4 million net of $28.9 million of reduction of fair value due to realization of servicing cash flows. By comparison, during the third quarter, servicing income and ancillary fees were $43.4 million gross, and $14.6 million net of $28.8 million reduction of fair value due to realization of servicing cash flows. At the end of the fourth quarter, the principal amount of the loans underlying the Company’s servicing assets was $38.5 billion. By comparison, the amount of loans underlying the Company’s servicing assets at the end of this year’s third quarter was $35.9 billion. The principal amount of the servicing portfolio, including warehouse loans, was $46.3 billion at the end of the fourth quarter and $43.0 billion at the end of this year’s third quarter.

The Company’s total revenues in the fourth quarter were $257.7 million. Of these revenues, $42.7 million was from net interest income, $202.9 million was from sales of newly originated mortgage loans including origination fees and net of hedges and additions to loss reserves, $47.3 million was from mortgage servicing fees, $3.9 million was from an increase in the value of servicing due to changes in assumptions, net of hedges, $6.3 million was from interest carry on free-standing swaps and $2.9 million was from other sources. Revenues were decreased by $28.9 million due to realization of servicing cash flows, $12.7 million due to realized and unrealized losses on mortgage-backed securities held, net of hedges and $6.7 million due to provisioning for loan losses. During the fourth quarter, the Company’s expenses were $173.4 million, and the Company’s pre-tax income was $84.3 million. Also during the quarter, the Company’s tax expense was $19.6 million. Consequently, net income for the quarter was $64.7 million while preferred dividends were $3.3 million and net income available to common stockholders was $61.4 million, resulting in earnings per diluted share of $1.21. Book value attributable to common stockholders at December 31, 2006 was $1.14 billion, or $22.64 per common share, compared to $1.13 billion, or $22.52 per common share, at September 30, 2006.

EARNINGS GUIDANCE

The Company is providing earnings guidance for 2007 of $5.40 to $5.70 per diluted share. Quarterly earnings per diluted share are projected to be approximately 9% to 15% higher for each quarter in 2007 compared to the comparable quarter in 2006. Key projections underlying the Company’s guidance are that 1) net interest margins will remain stable and the balance of loans held for investment and carried at cost will continue to grow, 2) that loan production will range between $68 billion and $74 billion with higher production in the second and third quarters, and lower production in the first and fourth quarter, 3) that the Company’s gain on sale margin from loans sold will decline by approximately 12 basis points, in part due to continued high delinquency charges associated with the Company’s loans held for sale, and 4) that the Company will not experience significant losses net of hedges due to write-downs of its portfolio assets and / or its servicing assets. It is important to note that actual results, which are different than any one or more than one of the key projections, may prevent the Company from achieving its earnings guidance, and may instead result in losses. In addition, factors other than the key projections listed herein may cause the Company to fail to achieve its earnings guidance and may result in losses as more fully described under Risk Factors in the Company’s Annual Report filed on Form 10-K with the Securities and Exchange Commission.

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 $1.12 per share per quarter, or $4.48 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 $1.12 per share per quarter is expected to commence beginning in April 2007.

OTHER HIGHLIGHTS

During the fourth quarter, the Company completed its acquisition of Flower Bank, fsb and consequently became a thrift holding company. As a result of its acquisition of Flower, a small portion of the Company’s liabilities are now deposits. The Company expects to grow Flower slowly at first, but over the long term believes Flower will become a significant contributor to the Company’s earnings. In connection with its acquisition of Flower, the Company has hired Lou Dunham to serve as Flower’s President. Mr. Dunham has over thirty-two years of banking experience, most recently as President of Ameribank, a Florida based federal thrift. Previously, Mr. Dunham was the Senior EVP and Chief Risk Officer at Republic Security Bank. The Company also elected Tom Wren to serve as an independent Director of Flower. Mr. Wren was recently the Treasurer of MBNA where he served ten years, and previously was a senior bank regulator in the Office of the Controller of the Currency where he served for eighteen years.

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

CONFERENCE CALL TODAY

American Home will hold an investor conference call today, January 25, 2007, 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, www.americanhm.com. A replay of the online broadcast will be available on the site through February 8, 2007.

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 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 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.

* 2004 and 2005 As Adjusted. See the section titled “Adjusted Financial Measures” on page 5 of this release.

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.

Financial Tables to Follow on Next Page

AMERICAN HOME MORTGAGE INVESTMENT CORP. AND SUBSIDIARIES
OPERATING STATISTICS

As of and for the As of and for the
Three Months Ended Year Ended
—————— ———————-
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2006 2005 2006 2005
——— ——– ———- ———–
(1)
As Adjusted
——— ——– ———- ———–
Mortgage Holdings Segment:
—————————
Investment Portfolio
Performance (2):
—————————
Average loans and mortgage-
backed securities in
portfolio ($ billions) 12.7 10.5 12.3 8.0
Interest income ($
millions) 193.7 138.0 725.5 377.8
Average portfolio yield 6.08% 5.27% 5.89% 4.75%

Interest expense ($
millions) 166.6 108.2 615.5 270.0
Average cost of funds and
hedges 5.43% 4.36% 5.25% 3.65%

Net interest income ($
millions) 27.1 29.8 110.0 107.8
Net interest margin 0.85% 1.17% 0.89% 1.36%

Interest carry on free
standing derivatives ($
millions) 6.3 1.0 23.5 -7.3
Net interest income plus
interest carry on free
standing derivatives ($
millions) 33.4 30.8 133.5 100.5
Net interest margin
including interest carry
on free standing
derivatives 1.05% 1.21% 1.08% 1.26%

Reconciliation of Changes
in Mortgage Holdings (3):
—————————
Net change in mortgage-
backed securities ($
billions) 0.3 1.4 -1.3 0.3
Additions to loans in
portfolio ($ billions) 1.0 2.1 4.1 3.5
Principal repayments and
other dispositions of
loans in portfolio ($
billions) 0.5 0.0 1.3 0.0
Net additions to loans in
portfolio ($ billions) 0.5 2.1 2.8 3.5
Loans and mortgage-backed
securities held – end of
period ($ billions) 15.6 14.1 15.6 14.1
Mortgage-backed securities
period end duration gap
(in years) 0.07 -0.03 0.07 -0.03

Loan Origination Segment:
—————————
Loan originations ($
billions) (4) 15.5 13.6 58.9 45.3
Refinance 60% 51% 54% 47%
ARM 51% 50% 53% 50%

Average mortgage loans, net
($ billions) (3) 10.0 8.6 9.1 5.2
Net interest income
excluding trust preferred
and other interest expense
($ millions) 26.8 26.4 111.5 96.8
Net interest margin
excluding trust preferred
and other interest expense 1.08% 1.28% 1.22% 1.85%
Trust preferred and other
interest expense ($
millions) 7.4 3.3 24.4 6.5
Net interest income ($
millions) 19.4 23.1 87.1 90.3
Loans securitized and held
($ billions) 0.0 0.0 0.0 2.9
Loans securitized and sold
($ billions) 0.0 0.0 0.0 10.3
Loans sold to third parties
($ billions) 14.3 11.0 56.0 28.5

Gain on sales of loans, net
of hedge gains ($
millions) (5) 202.9 105.4 810.0 577.4
Excess of fair value over
carrying value of loans
added to investment
portfolio ($ millions) 8.7 30.2 57.1 58.0
——— ——– ———- ———–
Total ($ millions) 211.6 135.6 867.1 635.4
——— ——– ———- ———–

Gain on sales of loans, net
of hedge gains (% of
principal) (5) 1.42% 0.96% 1.45% 1.42%
Excess of fair value over
carrying value of loans
added to investment
portfolio (% of principal) 0.82% 1.43% 1.36% 1.63%
Total (% of principal) 1.38% 1.03% 1.44% 1.44%
Applications accepted ($
billions) 23.1 17.8 89.4 67.8
Application pipeline ($
billions) 11.3 9.2 11.3 9.2

Loan Servicing Segment:
—————————
Loan servicing portfolio -
total with warehouse ($
billions) 46.3 30.7
Loan servicing portfolio -
loans sold or securitized
($ billions) 38.5 25.0
Interest expense ($
millions) 4.5 2.6 15.3 7.3
Weighted average note rate 7.08% 5.79%
Weighted average service
fee 0.347% 0.330%
Average age (in months) 15 15

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 pages 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

As of and for the Three Months Ended
———————————————-
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
2006 2006 2006 2006 2005
——– ——— ——– ——— ——–
Mortgage Holdings
Segment:
———————–
Investment Portfolio
Performance (1):
———————–
Average loans and
mortgage-backed
securities in
portfolio ($ billions) 12.7 13.0 12.5 11.1 10.5
Interest income ($
millions) 193.7 195.6 181.3 154.9 138.0
Average portfolio yield 6.08% 6.03% 5.82% 5.60% 5.27%

Interest expense ($
millions) 166.6 167.2 153.2 128.5 108.2
Average cost of funds
and hedges 5.43% 5.37% 5.19% 4.96% 4.36%

Net interest income ($
millions) 27.1 28.4 28.1 26.4 29.8
Net interest margin 0.85% 0.88% 0.90% 0.95% 1.17%

Interest carry on free
standing derivatives
($ millions) 6.3 7.5 5.8 3.9 1.0
Net interest income
plus interest carry on
free standing
derivatives ($
millions) 33.4 35.9 33.9 30.3 30.8
Net interest margin
including interest
carry on free standing
derivatives 1.05% 1.11% 1.09% 1.09% 1.21%

Reconciliation of
Changes in Mortgage
Holdings (2):
———————–
Net change in mortgage-
backed securities ($
billions) 0.3 -0.3 -0.3 -1.0 1.4
Additions to loans in
portfolio ($ billions) 1.0 0.9 1.2 1.0 2.1
Principal repayments
and other dispositions
of loans in portfolio
($ billions) 0.5 0.4 0.2 0.2 0.0
Net additions to loans
in portfolio ($
billions) 0.5 0.5 1.0 0.8 2.1
Loans and mortgage-
backed securities held
– end of period ($
billions) 15.6 14.8 14.6 13.9 14.1
Mortgage-backed
securities period end
duration gap (in
years) 0.07 -0.12 0.10 0.15 -0.03

Loan Origination
Segment:
———————–
Loan originations ($
billions) (3) 15.5 15.3 14.9 13.2 13.6
Refinance 60% 54% 51% 51% 51%
ARM 51% 53% 55% 51% 50%

Average mortgage loans,
net ($ billions) (2) 10.0 8.1 8.8 9.6 8.6
Net interest income
excluding trust
preferred and other
interest expense ($
millions) 26.8 25.1 31.6 28.0 26.4
Net interest margin
excluding trust
preferred and other
interest expense 1.08% 1.24% 1.44% 1.17% 1.28%
Trust preferred and
other interest expense
($ millions) 7.4 6.6 5.7 4.7 3.3
Net interest income ($
millions) 19.4 18.5 25.9 23.3 23.1
Loans securitized and
held ($ billions) 0.0 0.0 0.0 0.0 0.0
Loans securitized and
sold ($ billions) 0.0 0.0 0.0 0.0 0.0
Loans sold to third
parties ($ billions) 14.3 14.3 13.9 13.5 11.0

Gain on sales of loans,
net of hedge gains ($
millions) 202.9 210.6 224.6 171.9 105.4
Excess of fair value
over carrying value of
loans added to
investment portfolio
($ millions) 8.7 15.6 18.8 14.0 30.2
——– ——— ——– ——— ——–
Total ($ millions) 211.6 226.2 243.4 185.9 135.6
——– ——— ——– ——— ——–

Gain on sales of loans,
net of hedge gains (%
of principal) 1.42% 1.47% 1.62% 1.27% 0.96%
Excess of fair value
over carrying value of
loans added to
investment portfolio
(% of principal) 0.82% 1.71% 1.49% 1.44% 1.43%
Total (% of
principal) 1.38% 1.48% 1.61% 1.28% 1.03%
Applications accepted
($ billions) 23.1 23.4 22.1 20.8 17.8
Application pipeline ($
billions) 11.3 12.3 12.1 11.8 9.2

Loan Servicing Segment:
———————–
Loan servicing
portfolio – total with
warehouse ($ billions) 46.3 43.0 39.1 34.8 30.7
Loan servicing
portfolio – loans sold
or securitized ($
billions) 38.5 35.9 32.6 29.0 25.0
Interest expense ($
millions) 4.5 3.9 3.8 3.1 2.6
Weighted average note
rate 7.08% 6.77% 6.38% 6.09% 5.79%
Weighted average
service fee 0.347% 0.339% 0.336% 0.329% 0.330%
Average age (in months) 15 15 14 14 15

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.

AMERICAN HOME MORTGAGE INVESTMENT CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands, except per share amounts)

Three Months Ended Year Ended
——————— ———————–
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2006 2005 2006 2005
———- ———- ———— ———-
(1)
As
Adjusted
———-
Net interest income:
Interest income $ 364,810 $ 265,435 $ 1,328,494 $ 700,760
Interest expense (322,134) (215,057) (1,146,039) (509,887)
———- ———- ———— ———-
Net interest
income 42,676 50,378 182,455 190,873
———- ———- ———— ———-

Provision for loan
losses (6,725) (2,142) (17,380) (2,142)

———- ———- ———— ———-
Net interest
income after
provision for
loan losses 35,951 48,236 165,075 188,731
———- ———- ———— ———-

Non-interest income:
Gain on sales of
mortgage loans 202,884 98,777 810,006 335,065
Gain on sales of
current period
securitized mortgage
loans – – – 168,998
Gain on sales of
mortgage-backed
securities and
derivatives 3,305 38,068 12,257 49,536
Unrealized loss on
mortgage-backed
securities and
derivatives (9,663) (44,778) (7,028) (45,799)

Loan servicing fees 47,300 26,715 145,429 78,947
Amortization and
impairment of mortgage
servicing rights – (18,745) – (60,657)
Change in fair value of
mortgage servicing
rights:
Due to realization of
cash flows (28,940) – (102,820) -
Due to changes in
valuation
assumptions, net of
hedge gain (loss) 3,920 – (5,289) -
———- ———- ———— ———-
Net loan servicing
fees 22,280 7,970 37,320 18,290
———- ———- ———— ———-

Other non-interest
income 2,902 2,181 8,814 7,775
———- ———- ———— ———-
Non-interest
income 221,708 102,218 861,369 533,865
———- ———- ———— ———-

Non-interest expenses:
Salaries, commissions
and benefits, net 105,908 95,237 414,008 359,949
Occupancy and equipment 20,396 16,459 77,357 58,855
Data processing and
communications 6,346 6,402 25,905 24,788
Office supplies and
expenses 4,324 4,612 19,147 19,722
Marketing and promotion 4,574 5,951 21,625 20,311
Travel and
entertainment 8,966 6,982 31,310 21,007
Professional fees 7,902 3,586 24,322 14,232
Other 14,952 10,946 64,614 32,018
———- ———- ———— ———-
Non-interest
expenses 173,368 150,175 678,288 550,882
———- ———- ———— ———-

Net income before income
tax expense (benefit) 84,291 279 348,156 171,714

Income tax expense
(benefit) 19,594 (16,419) 84,629 (17,721)
———- ———- ———— ———-

Net income $ 64,697 $ 16,698 $ 263,527 $ 189,435
========== ========== ============ ==========

Dividends on preferred
stock 3,304 3,304 13,218 13,217

———- ———- ———— ———-
Net income available to
common shareholders $ 61,393 $ 13,394 $ 250,309 $ 176,218
========== ========== ============ ==========

Per share data:
Basic $ 1.22 $ 0.27 $ 5.00 $ 4.01
Diluted $ 1.21 $ 0.27 $ 4.96 $ 3.97

Weighted average
number of shares -
basic 50,192 49,605 50,030 43,897
Weighted average
number of shares -
diluted 50,602 49,998 50,421 44,375

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 pages 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
————————————————-
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
2006 2006 2006 2006 2005
——— ——— ——— ——— ———
Net interest income:
Interest income $364,810 $332,875 $330,196 $300,613 $265,435
Interest expense (322,134) (289,878) (279,992) (254,035) (215,057)
——— ——— ——— ——— ———
Net interest
income 42,676 42,997 50,204 46,578 50,378
——— ——— ——— ——— ———

Provision for loan
losses (6,725) (5,365) (3,979) (1,311) (2,142)

——— ——— ——— ——— ———
Net interest
income after
provision for
loan losses 35,951 37,632 46,225 45,267 48,236
——— ——— ——— ——— ———

Non-interest income:
Gain on sales of
mortgage loans 202,884 210,621 224,594 171,907 98,777
Gain (loss) on
sales of mortgage-
backed securities
and derivatives 3,305 9,849 (47) (850) 38,068
Unrealized (loss)
gain on mortgage-
backed securities
and derivatives (9,663) 1,050 (7,730) 9,315 (44,778)

Loan servicing fees 47,300 43,379 30,417 24,333 26,715
Amortization and
impairment of
mortgage servicing
rights – – – – (18,745)
Change in fair
value of mortgage
servicing rights:
Due to
realization of
cash flows (28,940) (28,839) (26,306) (18,735) -
Due to changes in
valuation
assumptions, net
of hedge gain
(loss) 3,920 (16,799) 7,476 114 -
——— ——— ——— ——— ———
Net loan
servicing
fees (loss) 22,280 (2,259) 11,587 5,712 7,970
——— ——— ——— ——— ———

Other non-interest
income 2,902 2,018 2,125 1,769 2,181
——— ——— ——— ——— ———
Non-interest
income 221,708 221,279 230,529 187,853 102,218
——— ——— ——— ——— ———

Non-interest
expenses:
Salaries,
commissions and
benefits, net 105,908 105,676 103,157 99,267 95,237
Occupancy and
equipment 20,396 19,228 19,763 17,970 16,459
Data processing and
communications 6,346 5,700 6,733 7,126 6,402
Office supplies and
expenses 4,324 5,346 5,145 4,332 4,612
Marketing and
promotion 4,574 4,868 6,383 5,800 5,951
Travel and
entertainment 8,966 7,798 7,793 6,753 6,982
Professional fees 7,902 6,076 5,013 5,331 3,586
Other 14,952 16,588 17,192 15,882 10,946
——— ——— ——— ——— ———
Non-interest
expenses 173,368 171,280 171,179 162,461 150,175
——— ——— ——— ——— ———

Net income before
income tax expense
(benefit) 84,291 87,631 105,575 70,659 279

Income tax expense
(benefit) 19,594 15,611 33,224 16,200 (16,419)
——— ——— ——— ——— ———

Net income $64,697 $72,020 $72,351 $54,459 $16,698
========= ========= ========= ========= =========

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

——— ——— ——— ——— ———
Net income available
to common
shareholders $61,393 $68,715 $69,047 $51,154 $13,394
========= ========= ========= ========= =========

Per share data:
Basic $1.22 $1.37 $1.38 $1.03 $0.27
Diluted $1.21 $1.36 $1.37 $1.02 $0.27

Weighted average
number of shares
– basic 50,192 50,148 50,056 49,715 49,605
Weighted average
number of shares
– diluted 50,602 50,553 50,487 50,070 49,998

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

December 31, September 30, June 30,
2006 2006 2006
———— ————- ————
Assets:
Cash and cash equivalents $398,166 $298,079 $304,268
Accounts receivable and
servicing advances 432,418 350,965 342,244
Securities 9,308,032 8,957,546 9,299,343
Mortgage loans held for
sale, net 1,523,737 1,365,595 1,243,702
Loans held for investment,
net 6,329,721 5,797,801 5,337,138
Derivative assets 32,142 26,323 139,397
Mortgage servicing rights,
net 506,341 460,913 434,173
Premises and equipment,
net 86,211 82,288 80,296
Goodwill 133,128 111,890 110,759
Other assets 79,089 52,927 34,279
———— ————- ————
Total assets $18,828,985 $17,504,327 $17,325,599
============ ============= ============

Liabilities and
Stockholders’ Equity:
Liabilities:
Warehouse lines of credit $1,304,541 $1,890,034 $1,476,958
Commercial paper 1,273,965 1,283,858 888,476
Reverse repurchase
agreements 8,571,459 7,232,503 8,939,786
Deposits 24,016 – -
Collateralized debt
obligations 4,854,801 3,484,873 3,724,878
Payable for securities
purchased 289,716 1,221,105 -
Derivative liabilities 12,644 40,170 3,280
Trust preferred securities 336,078 282,340 252,780
Accrued expenses and other
liabilities 361,923 392,334 367,358
Notes payable 417,467 317,161 337,700
Income taxes payable 112,089 95,808 80,529
———— ————- ————
Total liabilities 17,558,699 16,240,186 16,071,745
———— ————- ————

Stockholders’ Equity:

Preferred stock 134,040 134,040 134,040
Common stock 502 502 501
Additional paid-in capital 963,617 962,903 960,995
Retained earnings 257,283 245,473 227,450
Accumulated other
comprehensive loss (85,156) (78,777) (69,132)
———— ————- ————
Total stockholders’
equity 1,270,286 1,264,141 1,253,854
———— ————- ————

Total liabilities and
stockholders’ equity $18,828,985 $17,504,327 $17,325,599
============ ============= ============

Number of shares outstanding
– preferred 5,600,000 5,600,000 5,600,000
Number of shares outstanding
– common 50,195,499 50,182,257 50,107,214

March 31, December 31,
2006 2005
———— ————
Assets:
Cash and cash equivalents $572,591 $575,650
Accounts receivable and servicing advances 327,586 329,132
Securities 9,580,974 10,602,115
Mortgage loans held for sale, net 1,589,613 2,208,749
Loans held for investment, net 4,315,384 3,479,721
Derivative assets 102,267 44,594
Mortgage servicing rights, net 371,974 319,671
Premises and equipment, net 75,594 68,782
Goodwill 110,330 99,527
Other assets 30,697 26,804
———— ————
Total assets $17,077,010 $17,754,745
============ ============

Liabilities and Stockholders’ Equity:
Liabilities:
Warehouse lines of credit $1,754,581 $3,474,191
Commercial paper 1,073,630 1,079,179
Reverse repurchase agreements 8,899,050 9,806,144
Deposits – -
Collateralized debt obligations 2,905,199 1,057,906
Payable for securities purchased 215,114 261,539
Derivative liabilities 7,512 16,773
Trust preferred securities 204,018 203,688
Accrued expenses and other liabilities 401,769 298,230
Notes payable 330,714 319,309
Income taxes payable 51,016 30,770
———— ————
Total liabilities 15,842,603 16,547,729
———— ————

Stockholders’ Equity:

Preferred stock 134,040 134,040
Common stock 500 496
Additional paid-in capital 958,175 947,512
Retained earnings 206,512 203,778
Accumulated other comprehensive loss (64,820) (78,810)
———— ————
Total stockholders’ equity 1,234,407 1,207,016
———— ————

Total liabilities and stockholders’
equity $17,077,010 $17,754,745
============ ============

Number of shares outstanding – preferred 5,600,000 5,600,000
Number of shares outstanding – common 50,004,965 49,639,646

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

Three Months Ended
————————————–
Dec. 31, Sept. 30, June 30,
2006 2006 2006
———– ———– ————

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

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

Additional paid-in capital
Balance at beginning of period $962,903 $960,995 $958,175
Issuance of common stock -
earnouts – 296 -
Issuance of common stock -
Omnibus Stock Plan 211 1,067 1,126
Stock-based employee
compensation expense 241 37 373
Tax benefit for stock options
exercised 102 332 1,198
Restricted shares amortization 160 176 123
———– ———– ————
Balance at end of period $963,617 $962,903 $960,995
———– ———– ————

Retained earnings
Balance at beginning of period $245,473 $227,450 $206,512
Cumulative-effect adjustment as
of beginning of period (1) 3,635 – -
Net income 64,697 72,020 72,351
Dividends declared (56,522) (53,997) (51,413)
———– ———– ————
Balance at end of period $257,283 $245,473 $227,450
———– ———– ————

Other comprehensive loss
Balance at beginning of period $(78,777) $(69,132) $(64,820)
Unrealized gain (loss) on
securities 870 75,535 (44,510)
(Loss) gain on derivatives (7,249) (85,180) 40,198
———– ———– ————
Balance at end of period $(85,156) $(78,777) $(69,132)
———– ———– ————

Total stockholders’ equity $1,270,286 $1,264,141 $1,253,854
=========== =========== ============

Three Months Ended Year Ended
————————- ———–
Mar. 31, Dec. 31, Dec. 31,
2006 2005 2006
———– ———– ———–

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

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

Additional paid-in capital
Balance at beginning of period $947,512 $946,105 $947,512
Issuance of common stock -
earnouts 9,555 – 9,851
Issuance of common stock -
Omnibus Stock Plan 651 857 3,055
Stock-based employee compensation
expense 410 – 1,061
Tax benefit for stock options
exercised – 434 1,632
Restricted shares amortization 47 116 506
———– ———– ———–
Balance at end of period $958,175 $947,512 $963,617
———– ———– ———–

Retained earnings
Balance at beginning of period $203,778 $235,556 $203,778
Cumulative-effect adjustment as
of beginning of period (1) (2,917) – 718
Net income 54,459 16,698 263,527
Dividends declared (48,808) (48,476) (210,740)
———– ———– ———–
Balance at end of period $206,512 $203,778 $257,283
———– ———– ———–

Other comprehensive loss
Balance at beginning of period $(78,810) $(51,091) $(78,810)
Unrealized gain (loss) on
securities (35,765) (7,730) (3,870)
(Loss) gain on derivatives 49,755 (19,989) (2,476)
———– ———– ———–
Balance at end of period $(64,820) $(78,810) $(85,156)
———– ———– ———–

Total stockholders’ equity $1,234,407 $1,207,016 $1,270,286
=========== =========== ===========

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
—————————————
Dec. 31, Sept. 30, June 30,
2006 2006 2006
———— ———— ————-
Cash flows from operating
activities:
Net income $64,697 $72,020 $72,351
Adjustments to reconcile net
income to net cash (used in)
provided by operating
activities:
Depreciation and amortization 5,003 4,275 5,014
Provision for loan losses 6,725 5,365 3,979
Change in fair value of
mortgage servicing rights 28,834 52,753 18,830
Amortization and impairment of
mortgage servicing rights – – -
Accretion and amortization of
mortgage-backed securities,
net 4,845 4,696 2,006
Deferred cash flow hedge
(loss) gain, net of
amortization (14,292) 5,509 10,509
(Gain) loss on sales of
mortgage-backed securities
and derivatives (930) (4,735) -
Unrealized loss (gain) on
mortgage-backed securities 10,890 (1,588) 14,591
Unrealized (gain) loss on free
standing derivatives (4,828) 20,629 (1,038)
(Decrease) increase in forward
delivery contracts (35,605) 42,315 (6,036)
Capitalized mortgage servicing
rights on sold loans (73,918) (79,493) (81,029)
Decrease (increase) in
interest rate lock
commitments 12,586 (5,069) (4,447)
(Increase) decrease in
mortgage loan basis
adjustments (4,917) (10,125) (2,156)
Excess tax benefits from
share-based payment
arrangements (102) (332) (1,198)
Other (1,450) (569) (633)
(Increase) decrease in
operating assets:
Accounts receivable (58,738) 2,740 (13,506)
Servicing advances (22,038) (11,461) (1,152)
Other assets 8,281 (18,648) (3,582)
Increase (decrease) in
operating liabilities:
Accrued expenses and
other liabilities (42,808) 25,988 (32,977)
Income taxes payable 20,018 15,611 30,711

Origination of mortgage loans
held for sale (15,080,212) (14,664,704) (14,371,439)
Principal received from sales
of mortgage loans held for
sale 14,371,049 14,241,440 14,013,921
Additions to mortgage-backed
securities and derivatives – – -
Principal proceeds from sales
of self-originated mortgage-
backed securities – – 99,086
Cash received from residual
assets in securitizations 14,710 16,785 20,947
Principal repayments of
mortgage-backed securities 29,491 35,677 60,485
———— ———— ————-
Net cash (used in)
provided by operating
activities (762,709) (250,921) (166,763)
———— ———— ————-

Cash flows from investing
activities:
Purchases of premises and
equipment (8,708) (6,267) (9,716)
Origination of mortgage loans
held for investment (450,263) (599,384) (560,003)
Proceeds from repayments and
dispositions of mortgage
loans held for investment 464,332 446,199 240,403
Purchases of mortgage-backed
securities (1,423,115) (1,666,650) (461,125)
Principal proceeds from sales
of purchased mortgage-backed
securities 482,336 1,503,760 -
Principal repayments of
purchased mortgage-backed
securities 535,465 529,441 501,239
Net increase in investment in
Federal Home Loan Bank stock,
at cost – (54) (108)
Acquisition of business (14,108) – -
———— ———— ————-
Net cash (used in)
provided by investing
activities (414,061) 207,045 (289,310)
———— ———— ————-

Cash flows from financing
activities:
(Decrease) increase in
warehouse lines of credit,
net (585,493) 413,076 (277,623)
Increase (decrease) in reverse
repurchase agreements, net 1,338,956 (1,707,283) 40,736
Decrease in deposits (6,673) – -
Increase (decrease) in
collateralized debt
obligations 1,369,928 (240,005) 819,679
(Decrease) increase in payable
for securities purchased (931,389) 1,221,105 (215,114)
(Decrease) increase in
commercial paper, net (9,893) 395,382 (185,154)
Increase (decrease) in drafts
payable, net 4,063 (3,600) (4,028)
Increase in trust preferred
securities 53,738 29,560 48,762
Increase (decrease) in notes
payable, net 97,306 (20,539) 6,986
Proceeds from issuance of
common stock 211 1,068 1,127
Excess tax benefits from
share-based payment
arrangements 102 332 1,198
Dividends paid (53,999) (51,409) (48,819)
———— ———— ————-
Net cash provided by
(used in) financing
activities 1,276,857 37,687 187,750
———— ———— ————-

Net increase (decrease) in
cash and cash equivalents 100,087 (6,189) (268,323)
Cash and cash equivalents,
beginning of period 298,079 304,268 572,591
———— ———— ————-
Cash and cash equivalents, end
of period $398,166 $298,079 $304,268
============ ============ =============

Supplemental disclosure of
non-cash investing
activities:
Net transfer of loans held for
sale to loans held for
investment $533,184 $307,431 $699,519
============ ============ =============

Three Months Ended
—————————
Mar. 31, Dec. 31,
2006 2005
———— ————
Cash flows from operating activities:
Net income $54,459 $16,698
Adjustments to reconcile net income to net
cash (used in) provided by operating
activities:
Depreciation and amortization 3,953 3,454
Provision for loan losses 1,311 2,142
Change in fair value of mortgage servicing
rights 18,621 -
Amortization and impairment of mortgage
servicing rights – 18,745
Accretion and amortization of mortgage-
backed securities, net 2,331 1,509
Deferred cash flow hedge (loss) gain, net
of amortization 3,909 (346)
(Gain) loss on sales of mortgage-backed
securities and derivatives – 876
Unrealized loss (gain) on mortgage-backed
securities 3,090 40,968
Unrealized (gain) loss on free standing
derivatives (4,765) 6,149
(Decrease) increase in forward delivery
contracts (24,041) 24,124
Capitalized mortgage servicing rights on
sold loans (69,768) (37,757)
Decrease (increase) in interest rate lock
commitments 7,131 (10,508)
(Increase) decrease in mortgage loan basis
adjustments 4,731 (32,201)
Excess tax benefits from share-based
payment arrangements – -
Other (198) (645)
(Increase) decrease in operating assets:
Accounts receivable 6,829 18,156
Servicing advances (3,281) (11,552)
Other assets (1,451) 4,882
Increase (decrease) in operating
liabilities:
Accrued expenses and other liabilities 93,876 31,696
Income taxes payable 16,173 (25,106)

Origination of mortgage loans held for sale (12,203,014) (11,482,292)
Principal received from sales of mortgage
loans held for sale 13,372,574 11,179,015
Additions to mortgage-backed securities and
derivatives – (152,666)
Principal proceeds from sales of self-
originated mortgage-backed securities 1,809,796 1,333,188
Cash received from residual assets in
securitizations 27,353 26,958
Principal repayments of mortgage-backed
securities 93,845 212,927
———— ————
Net cash (used in) provided by
operating activities 3,213,464 1,168,414
———— ————

Cash flows from investing activities:
Purchases of premises and equipment (10,765) (8,062)
Origination of mortgage loans held for
investment (970,335) (2,084,025)
Proceeds from repayments and dispositions
of mortgage loans held for investment 137,545 75,613
Purchases of mortgage-backed securities (1,389,336) (3,298,636)
Principal proceeds from sales of purchased
mortgage-backed securities – 24,592
Principal repayments of purchased mortgage-
backed securities 438,297 409,080
Net increase in investment in Federal Home
Loan Bank stock, at cost – -
Acquisition of business (550,077) -
———— ————
Net cash (used in) provided by
investing activities (2,344,671) (4,881,438)
———— ————

Cash flows from financing activities:
(Decrease) increase in warehouse lines of
credit, net (1,719,610) 1,309,037
Increase (decrease) in reverse repurchase
agreements, net (907,094) 1,764,565
Decrease in deposits – -
Increase (decrease) in collateralized debt
obligations 1,847,293 1,057,906
(Decrease) increase in payable for
securities purchased (46,425) (293,178)
(Decrease) increase in commercial paper,
net (5,549) (255,117)
Increase (decrease) in drafts payable, net (4,377) 1,991
Increase in trust preferred securities 330 106,724
Increase (decrease) in notes payable, net 11,405 13,543
Proceeds from issuance of common stock 652 857
Excess tax benefits from share-based
payment arrangements – -
Dividends paid (48,477) (42,078)
———— ————
Net cash provided by (used in)
financing activities (871,852) 3,664,250
———— ————

Net increase (decrease) in cash and cash
equivalents (3,059) (48,774)
Cash and cash equivalents, beginning of
period 575,650 624,424
———— ————
Cash and cash equivalents, end of period $572,591 $575,650
============ ============

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)

Year Ended
————-
December 31,
2006
————-
Cash flows from operating activities:
Net income $ 263,527
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 18,245
Provision for loan losses 17,380
Change in fair value of mortgage servicing rights 119,038
Accretion and amortization of mortgage-backed
securities, net 13,878
Deferred cash flow hedge gain, net of amortization 5,635
Gain on sales of mortgage-backed securities and
derivatives (5,665)
Unrealized loss on mortgage-backed securities 26,983
Unrealized loss on free standing derivatives 9,998
Decrease in forward delivery contracts (23,367)
Capitalized mortgage servicing rights on sold loans (304,208)
Decrease in interest rate lock commitments 10,201
Increase in mortgage loan basis adjustments (12,467)
Excess tax benefits from share-based payment
arrangements (1,632)
Other (2,850)
Increase in operating assets:
Accounts receivable (62,675)
Servicing advances (37,932)
Other assets (15,400)
Increase in operating liabilities:
Accrued expenses and other liabilities 44,079
Income taxes payable 82,513

Origination of mortgage loans held for sale (56,319,369)
Principal received from sales of mortgage loans held for
sale 55,998,984
Principal proceeds from sales of self-originated
mortgage-backed securities 1,908,882
Cash received from residual assets in securitizations 79,795
Principal repayments of mortgage-backed securities 219,498
————-
Net cash provided by operating activities 2,033,071
————-

Cash flows from investing activities:
Purchases of premises and equipment (35,456)
Origination of mortgage loans held for investment (2,579,985)
Proceeds from repayments and dispositions of mortgage
loans held for investment 1,288,479
Purchases of mortgage-backed securities (4,940,226)
Principal proceeds from sales of purchased mortgage-
backed securities 1,986,096
Principal repayments of purchased mortgage-backed
securities 2,004,442
Net increase in investment in Federal Home Loan Bank
stock, at cost (162)
Acquisition of business (564,185)
————-
Net cash used in investing activities (2,840,997)
————-

Cash flows from financing activities:
Decrease in warehouse lines of credit, net (2,169,650)
Decrease in reverse repurchase agreements, net (1,234,685)
Decrease in deposits (6,673)
Increase in collateralized debt obligations 3,796,895
Increase in payable for securities purchased 28,177
Increase in commercial paper, net 194,786
Decrease in drafts payable, net (7,942)
Increase in trust preferred securities 132,390
Increase in notes payable, net 95,158
Proceeds from issuance of common stock 3,058
Excess tax benefits from share-based payment
arrangements 1,632
Dividends paid (202,704)
————-
Net cash provided by financing activities 630,442
————-

Net decrease in cash and cash equivalents (177,484)
Cash and cash equivalents, beginning of period 575,650
————-
Cash and cash equivalents, end of period $ 398,166
=============

Supplemental disclosure of non-cash investing
activities:
Net transfer of loans held for sale to loans held for
investment $ 1,540,134
=============

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

December 31, 2006
————————————————–
Fair Value in Excess of
Carrying Value Fair Value Carrying Value
————– ———– ———————–
Assets:
Cash and cash
equivalents $398,166 $398,166 $-
Accounts
receivable and
servicing
advances 432,418 432,418 -
Securities 9,308,032 9,308,032 -
Mortgage loans
held for sale,
net 1,523,737 1,573,564 49,827
Loans held for
investment, net 6,329,721 6,461,449 131,728
Mortgage
servicing
rights, net 506,341 506,341 -
Derivative assets
(1) 32,142 130,091 97,949
———————–
$279,504
———————–

Carrying Value in
Excess of (Lower Than)
Fair Value
———————–
Liabilities:
Warehouse lines
of credit $1,304,541 $1,304,541 $-
Commercial paper 1,273,965 1,273,965 -
Reverse
repurchase
agreements 8,571,459 8,571,538 (79)
Collateralized
debt obligations 4,854,801 4,856,258 (1,457)
Derivative
liabilities 12,644 12,644 -
Trust preferred
securities 336,078 336,078 -
Notes payable 417,467 417,467 -
———————–
$(1,536)
———————–

Fair Value in Excess of
Carrying Value
———————–
$277,968
=======================

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.

AMERICAN HOME MORTGAGE INVESTMENT CORP. AND SUBSIDIARIES
OPERATING STATISTICS

As of and for the Year Ended
——————————–
December 31, 2005
——————————–
(1)
GAAP Adjustments As Adjusted
——- ———– ————
Mortgage Holdings Segment:
————————————-
Investment Portfolio Performance (2):
————————————-
Average loans and mortgage-backed
securities in portfolio ($ billions) 7.6 0.4 8.0
Interest income ($ millions) 357.9 19.9 377.8
Average portfolio yield 4.73% 4.75%

Interest expense ($ millions) 262.3 7.7 270.0
Average cost of funds and hedges 3.71% 3.65%

Net interest income ($ millions) 95.6 12.2 107.8
Net interest margin 1.26% 1.36%

Interest carry on free standing
derivatives ($ millions) -7.3 -7.3
Net interest income plus interest
carry on free standing derivatives
($ millions) 88.3 12.2 100.5
Net interest margin including interest
carry on free standing derivatives 1.17% 1.26%

Reconciliation of Changes in Mortgage
Holdings (3):
————————————-
Net change in mortgage-backed
securities ($ billions) 0.3 0.3
Additions to loans in portfolio ($
billions) 3.5 3.5
Principal repayments of loans in
portfolio ($ billions) 0.0 0.0
Net additions to loans in portfolio
($ billions) 3.5 3.5
Loans and mortgage-backed securities
held – end of period ($ billions) 14.1 14.1
Mortgage-backed securities period end
duration gap (in years) -0.03 -0.03

Loan Origination Segment:
————————————-
Loan originations ($ billions) 45.3 45.3
Refinance 47% 47%
ARM 50% 50%

Average mortgage loans, net ($
billions) (3) 6.1 -0.9 5.2
Net interest income excluding trust
preferred and other interest expense
($ millions) 119.2 -22.4 96.8
Net interest margin excluding trust
preferred and other interest expense 1.96% 1.85%
Trust preferred and other interest
expense ($ millions) 6.5 6.5
Net interest income ($ millions) 112.7 -22.4 90.3
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) 28.5 28.5

Gain on sales of loans, net of hedge
gains ($ millions) (4) 620.9 -43.5 577.4
Excess of fair value over carrying
value of loans added to investment
portfolio ($ millions) 58.0 58.0
——- ———– ————
Total ($ millions) 678.9 -43.5 635.4
——- ———– ————

Gain on sales of loans, net of hedge
gains (% of principal) (4) 1.53% 1.42%
Excess of fair value over carrying
value of loans added to investment
portfolio (% of principal) 1.63% 1.63%
Total (% of principal) 1.54% 1.44%
Applications accepted ($ billions) 67.8 67.8
Application pipeline ($ billions) 9.2 9.2

Loan Servicing Segment:
————————————-
Loan servicing portfolio – total with
warehouse ($ billions) 30.7 30.7
Loan servicing portfolio – loans sold
or securitized ($ billions) 25.0 25.0
Interest expense ($ millions) 7.3 7.3
Weighted average note rate 5.79% 5.79%
Weighted average service fee 0.330% 0.330%
Average age (in months) 15 15

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.

AMERICAN HOME MORTGAGE INVESTMENT CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands, except per share amounts)

Year Ended
———————————–
December 31, 2005
———————————–
(1)
GAAP Adjustments As Adjusted
———————————–
Net interest income:
Interest income $727,685 $(26,925) $700,760
Interest expense (526,653) 16,766 (509,887)
———————————–
Net interest income 201,032 (10,159) 190,873
———————————–

Provision for loan losses (2,142) – (2,142)
———————————–

Net interest income after
provision for loan losses 198,890 (10,159) 188,731
———————————–

Non-interest income:
Gain on sales of mortgage loans 335,065 – 335,065
Gain on sales of current period
securitized mortgage loans 194,256 (25,258) 168,998
Gain on sales of mortgage-backed
securities and derivatives 50,936 (1,400) 49,536
Unrealized loss on mortgage-
backed securities and
derivatives (8,536) (37,263) (45,799)

Loan servicing fees 76,096 2,851 78,947
Amortization and impairment of
mortgage servicing rights (60,535) (122) (60,657)
Change in fair value of mortgage
servicing rights – – -
———————————–
Net loan servicing fees 15,561 2,729 18,290
———————————–

Other non-interest income 7,775 – 7,775
———————————–
Non-interest income 595,057 (61,192) 533,865
———————————–

Non-interest expenses:
Salaries, commissions and
benefits, net 359,949 – 359,949
Occupancy and equipment 58,855 – 58,855
Data processing and
communications 24,788 – 24,788
Office supplies and expenses 19,722 – 19,722
Marketing and promotion 20,311 – 20,311
Travel and entertainment 21,007 – 21,007
Professional fees 14,232 – 14,232
Other 32,018 – 32,018
———————————–
Non-interest expenses 550,882 – 550,882
———————————–

Net income before income tax
expense 243,065 (71,351) 171,714

Income tax benefit (17,721) – (17,721)
———————————–

Net income $260,786 $(71,351) $189,435
===================================

Dividends on preferred stock 13,217 – 13,217

Net income available to common
shareholders $247,569 $(71,351) $176,218
===================================

Per share data:
Basic $5.64 $(1.63) $4.01
Diluted $5.58 $(1.61) $3.97

Weighted average number of
shares – basic 43,897 43,897 43,897
Weighted average number of
shares – diluted 44,375 44,375 44,375

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.