SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
----- EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2005
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
----- EXCHANGE ACT OF 1934
Commission File Number 0-23972
AMERICAN MORTGAGE ACCEPTANCE COMPANY
------------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Massachusetts 13-6972380
-------------------------------- ---------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
625 Madison Avenue, New York, New York 10022
------------------------------------------ ----------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 317-5700
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
----- -----
Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). Yes X No
----- -----
As of April 29, 2005, 8,336,803 shares of the Registrant's shares of beneficial
interest, $0.10 par value, were outstanding.
TABLE OF CONTENTS
AMERICAN MORTGAGE ACCEPTANCE COMPANY
FORM 10-Q
PAGE
PART I
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 14
Item 3. Quantitative and Qualitative Disclosures about Market Risk 20
Item 4. Controls and Procedures 21
PART II
Item 1. Legal Proceedings 22
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 22
Item 3. Defaults Upon Senior Securities 22
Item 4. Submission of Matters to a Vote of Security Holders 22
Item 5. Other Information 22
Item 6. Exhibits 22
SIGNATURES 23
See accompanying notes to condensed consolidated financial statements.
2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AMERICAN MORTGAGE ACCEPTANCE COMPANY AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands, except per share amounts)
ASSETS
March 31, December 31,
2005 2004
----------- -----------
(Unaudited)
Investments in debt securities $ 223,429 $ 194,587
Investments in mortgage loans, net 21,395 21,376
Notes receivable, net 16,584 23,111
Investments in revenue bonds 6,604 6,672
Investment in ARCap 20,240 20,240
Real Estate Owned - Held and Used, net 51,869 60,211
Real Estate Owned - Held for Sale 19,122 17,924
Cash and cash equivalents 10,128 2,674
Other assets 3,938 2,238
--------- ---------
Total assets $ 373,309 $ 349,033
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Repurchase facilities payable $ 178,325 $ 157,633
Warehouse facility payable 4,070 3,827
Line of credit - due to related party -- 4,600
Mortgages payable on real estate owned 40,875 56,993
Preferred shares of subsidiary (subject to mandatory repurchase) 25,000 --
Accounts payable and accrued expenses 1,319 1,344
Due to Advisor and affiliates 1,651 770
Distributions payable 3,334 3,334
--------- ---------
Total liabilities 254,574 228,501
--------- ---------
Commitments and contingencies
Shareholders' equity:
Shares of beneficial interest; $.10 par value; 25,000 shares authorized;
8,718 issued and 8,337 outstanding in 2005 and 8,716 issued and 8,337
outstanding in 2004 871 871
Treasury shares of beneficial interest at par; 381 shares in 2005 and 379
shares in 2004 (38) (38)
Additional paid-in capital 126,748 126,800
Share based compensation (6) (16)
Distributions in excess of net income (17,711) (17,202)
Accumulated other comprehensive income 8,871 10,117
--------- ---------
Total shareholders' equity 118,735 120,532
--------- ---------
Total liabilities and shareholders' equity $ 373,309 $ 349,033
========= =========
See accompanying notes to condensed consolidated financial statements.
3
AMERICAN MORTGAGE ACCEPTANCE COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(In thousands except per share amounts)
(Unaudited)
Three Months Ended
March 31,
------------------
2005 2004
------ ------
Revenues:
Interest income:
Debt securities $3,032 $2,337
Mortgage loans 615 418
Notes receivable 479 667
Revenue bonds 147 168
Temporary investments 17 12
Rental income 1,806 263
Other revenues 158 13
------ ------
Total revenues 6,254 3,878
------ ------
Expenses:
Interest 1,182 892
Interest - distributions to preferred shareholders of subsidiary
(subject to mandatory repurchase) 68 --
General and administrative 437 256
Fees to Advisor 694 482
Property operations 1,393 251
Depreciation 366 249
Amortization and other 133 139
------ ------
Total expenses 4,273 2,269
------ ------
Other income:
Equity in earnings of ARCap 600 600
Income from Real Estate Owned - Held for Sale 246 1,116
------ ------
Total other income 846 1,716
------ ------
Net income $2,827 $3,325
====== ======
Net income per share (basic and diluted) $ 0.34 $ 0.40
====== ======
Dividends per share $ 0.40 $ 0.40
====== ======
Weighted average shares outstanding:
Basic 8,337 8,338
====== ======
Diluted 8,344 8,362
====== ======
See accompanying notes to condensed consolidated financial statements.
4
AMERICAN MORTGAGE ACCEPTANCE COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended
March 31,
-----------------------
2005 2004
-------- --------
Cash flows from operating activities:
Net income $ 2,827 $ 3,325
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation expense 366 249
Amortization and accretion 79 21
Changes in operating assets and liabilities:
Accrued interest receivable (264) 560
Other assets (203) (70)
Due to Advisor and affiliates 882 52
Accounts payable and accrued expenses 77 (465)
Accrued interest payable (103) (549)
-------- --------
Net cash provided by operating activities 3,661 3,123
-------- --------
Cash flows from investing activities:
Investment in debt securities (36,574) (4,199)
Principal repayments of debt securities 5,910 14,742
Purchase of mortgage on real estate owned (17,150) --
Proceeds from sale of real estate owned 7,474 --
Repayment of notes receivable 6,829 2,703
Funding of notes receivable (294) (95)
Paydown on property classified as real estate owned - held and used 480 --
Additions to real estate owned (103) (468)
Principal repayments on revenue bonds 51 17
Funding of mortgage loans -- (94)
Repayment of mortgage loans -- 79
-------- --------
Net cash (used in) provided by investing activities (33,377) 12,685
-------- --------
continued
5
AMERICAN MORTGAGE ACCEPTANCE COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended
March 31,
-----------------------
2005 2004
-------- --------
Cash flows from financing activities:
Proceeds from repurchase facilities 40,402 6,060
Repayments of repurchase facilities (19,710) (9,795)
Proceeds from warehouse facility 243 95
Proceeds from line of credit - due to related party 14,761 --
Repayment of line of credit - due to related party (19,361) --
Deferred financing costs (802) --
Distributions paid to shareholders (3,334) (3,335)
Treasury stock purchases (29) --
Issuance of preferred shares of subsidiary 25,000 --
-------- --------
Net cash provided by (used in) financing activities 37,170 (6,975)
-------- --------
Net increase in cash and cash equivalents 7,454 8,833
Cash and cash equivalents at the beginning of the year 2,674 2,028
-------- --------
Cash and cash equivalents at the end of the period $ 10,128 $ 10,861
======== ========
See accompanying notes to condensed consolidated financial statements.
6
AMERICAN MORTGAGE ACCEPTANCE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 2005
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The condensed consolidated financial statements include the accounts of American
Mortgage Acceptance Company and its wholly owned subsidiaries. All intercompany
accounts and transactions have been eliminated on consolidation. Unless
otherwise indicated, we herein refer to American Mortgage Acceptance Company and
its subsidiaries as "AMAC", "we", "us", "our", and "our Company". We are
externally managed by Related AMI Associates, Inc., which acts as our Advisor.
We operate in one business segment.
In March 2005, we formed AMAC Capital Financing I ("ACFI"), a wholly owned
trust, for the purpose of issuing trust preferred securities, which are subject
to mandatory repurchase in March 2035 and are callable in March 2010 (see Note
5).
The condensed consolidated financial statements have been prepared without
audit. In the opinion of management, the financial statements contain all
adjustments (consisting of only normal recurring adjustments) necessary to
present fairly our financial position as of March 31, 2005, and the results of
our operations and our cash flows. However, the operating results for interim
periods may not be indicative of the results for the full year.
Certain information and footnote disclosures normally included in annual
consolidated financial statements prepared in accordance with accounting
principles generally accepted in the United States of America ("GAAP") have been
condensed or omitted. It is suggested that these financial statements should be
read in conjunction with the consolidated financial statements and notes thereto
included in our Form 10-K for the year ended December 31, 2004.
Our annual report on Form 10-K for the year ended December 31, 2004, contains a
summary of our significant accounting policies. There have been no material
changes to these items since December 31, 2004; however, we have entered into a
transaction during 2005 which involves a new significant accounting policy (see
Note 5).
The preparation of the consolidated financial statements in conformity with GAAP
requires us to make estimates and assumptions that affect the reported amounts
of assets and liabilities and the disclosure of contingent assets and
liabilities as of the date of the financial statements as well as the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
Certain prior year amounts have been reclassified to conform to the current year
presentation.
NOTE 2 - INVESTMENTS IN DEBT SECURITIES - AVAILABLE FOR SALE
During the first quarter of 2005, we purchased six Fannie Mae ("FNMA")
certificates with principal amounts totaling approximately $34.3 million. The
certificates were purchased at premiums totaling approximately $96,000 and bear
interest at rates ranging from 4.90% per year to 6.65% per year.
During January 2005, one Ginnie Mae ("GNMA") certificate, Western Manor, paid
off at par. We received approximately $2.4 million in proceeds resulting from
the payoff.
During February 2005, one FNMA certificate, Orchard Park, paid off. We received
approximately $3.2 million in proceeds, resulting in a net gain of approximately
$47,000, which is included in other income in the condensed consolidated
statements of income.
7
AMERICAN MORTGAGE ACCEPTANCE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 2005
(Unaudited)
Information regarding our investments in debt securities is as follows:
(In thousands)
March 31, December 31,
2005 2004
--------- -----------
Amortized cost $ 215,203 $ 184,576
Unrealized gains 9,928 11,370
Unrealized losses (1,702) (1,359)
--------- ---------
Net unrealized gain 8,226 10,011
--------- ---------
Fair value $ 223,429 $ 194,587
========= =========
The fair value and gross unrealized losses of our debt securities aggregated by
length of time that these individual debt securities have been in a continuous
unrealized loss position, at March 31, 2005, and December 31, 2004, is
summarized in the table below:
(Dollars in thousands)
March 31, 2005 December 31, 2004
--------------------------------- ---------------------------------
Fewer than 12 Months Fewer than 12 Months
12 Months or More Total 12 Months or More Total
----------- --------- ------- ----------- --------- -------
Number of securities 9 10 19 11 7 18
Fair value $38,564 $26,594 $65,158 $46,055 $16,832 $62,887
Gross unrealized loss
$ 552 $ 1,150 $ 1,702 $ 515 $ 844 $ 1,359
These unrealized losses are as a result of increases in interest rates
subsequent to the acquisition of the securities. All of the debt securities are
performing according to their terms. Furthermore, we have the intent and ability
to hold these securities to maturity, or at least until interest rates change
such that the fair value is no longer less than book value. Accordingly, we have
concluded that these impairments are temporary.
At March 31, 2005, 31 of these debt securities, with a fair value of
approximately $193.1 million, are partially or wholly pledged as collateral
under our repurchase facilities.
NOTE 3 - NOTES RECEIVABLE
During February 2005, the Noble Towers note receivable was partially repaid. We
received approximately $5.9 million in proceeds. The remaining balance at March
31, 2005 is $1.4 million.
During March 2005, the Georgia King note in the amount of approximately $945,000
was repaid at par.
8
AMERICAN MORTGAGE ACCEPTANCE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 2005
(Unaudited)
NOTE 4 - REAL ESTATE OWNED
Our real estate owned at March 31, 2005, and December 31, 2004, consisted of the
following:
(dollars in thousands)
Carrying Value
Carrying Value as of
as of December 31,
Units Location March 31, 2005 2004
-------- --------------- -------------- --------------
Real Estate Owned - Held and Used
---------------------------------
Plaza at San Jacinto (1) 132 La Porte, TX $ -- $ 7,929
Less: accumulated depreciation -- -- (425)
-------- ------- -------
Total Plaza at San Jacinto, net 132 -- 7,504
------- -------
Concord portfolio (2) 852 Houston, TX 53,923 54,425
Less: accumulated depreciation -- (2,054) (1,718)
-------- ------- -------
Total Concord Mezzanine, net 852 51,869 52,707
------- -------
Total Real Estate Owned - Held and Used, net
984 $51,869 $60,211
======== ======= =======
Real Estate Owned - Held for Sale
---------------------------------
Reserve at Autumn Creek (3) 212 Friendswood, TX $19,122 $17,924
======== ======= =======
Mortgages Payable on Real Estate Owned
Concord portfolio $40,875 $41,000
Reserve at Autumn Creek (3) -- 15,993
------- -------
Total Mortgages Payable on Real Estate Owned
$40,875 $56,993
======= =======
(1) During February 2005, the Plaza at San Jacinto property was sold to an
unaffiliated third party. We received approximately $7.4 million in
proceeds from the sale, which approximated the property's carrying value.
Accordingly, no gain or loss was recorded.
(2) During March 2005, we received $480,000, representing a return of an escrow
funded from the refinancing of the Concord portfolio.
(3) During February 2005, we purchased the first mortgage on the Reserve at
Autumn Creek property at a foreclosure auction for approximately $17.2
million.
NOTE 5 - SUBSIDIARY EQUITY
ACFI has issued 25,000 of Floating Rate Preferred Securities, having a stated
liquidation amount of $1,000 per security. We received approximately $24.2
million in proceeds, net of closing costs, which are deferred and will be
amortized ratably over a 30-year period to the redemption date. The securities
bear a variable interest rate, re-set quarterly, equal to LIBOR plus 3.75% per
year. At March 31, 2005, the rate was 6.61%.
SFAS No. 150, ACCOUNTING FOR CERTAIN FINANCIAL INSTRUMENTS WITH CHARACTERISTICS
OF BOTH LIABILITIES AND EQUITY, requires that a mandatorily redeemable financial
instrument be classified as a liability in the consolidated financial statements
and the payments or accruals of "dividends" and other amounts to be paid to the
holders of these securities be reported as interest costs. Due to the stated
maturity date, we have classified these securities as liabilities and recorded
them at fair value.
9
AMERICAN MORTGAGE ACCEPTANCE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 2005
(Unaudited)
NOTE 6 - RELATED PARTY TRANSACTIONS
The costs incurred to our Advisor for the three months ended March 31, 2005, and
2004, were as follows:
Three Months Ended
(In thousands) March 31,
-----------------------
2005 2004
-------- --------
Shared services expenses $ 246 $ 169
Asset management fees 328 313
Incentive management fee* 120 --
-------- --------
$ 694 $ 482
======== ========
* Accrual based on our estimates of 2005 full year results.
In June 2004, we entered into a revolving credit facility (the "Revolving
Facility") with CharterMac, an affiliated company and parent of our Advisor. The
Revolving Facility, which is unsecured, will provide up to $20.0 million in
borrowings to be used to purchase new investments. As of March 31, 2005, we had
no outstanding borrowings on this facility. At December 31, 2004, we had
approximately $4.6 million in borrowings outstanding on this facility at an
interest rate of 5.42%.
NOTE 7 - COMPREHENSIVE INCOME
Comprehensive income for the three months ended March 31, 2005, and 2004, was as
follows:
Three Months Ended
(In thousands) March 31,
--------------------
2005 2004
------- -------
Net income $ 2,827 $ 3,325
Net unrealized gain (loss) on interest rate derivatives
arising during the period 556 (871)
Unrealized holding (loss) gain arising during the period (1,802) 845
------- -------
Total comprehensive income $ 1,581 $ 3,299
======= =======
10
AMERICAN MORTGAGE ACCEPTANCE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 2005
(Unaudited)
NOTE 8 - EARNINGS PER SHARE
Diluted net income per share is calculated using the weighted average number of
shares outstanding during the period plus the additional dilutive effect of
common share equivalents. The dilutive effect of outstanding share options is
calculated using the treasury stock method.
(In thousands, except per share amounts)
Three Months Ended March 31, 2005 Income Shares Per Share
------ ------ ----------
Basic EPS $2,827 8,337 $ 0.34
Effect of dilutive securities -- 7 --
------ ------ --------
Diluted EPS $2,827 8,344 $ 0.34
====== ====== ========
Three Months Ended March 31, 2004
Basic EPS $3,325 8,338 $ 0.40
Effect of dilutive securities -- 24 --
------ ------ --------
Diluted EPS $3,325 8,362 $ 0.40
====== ====== ========
NOTE 9 - COMMITMENTS AND CONTINGENCIES
a) Legal
On October 27, 2003, prior to taking possession of the real estate collateral
supporting a loan investment, we were named in a lawsuit, Concord Gulfgate, Ltd.
vs. Robert Parker, Sunrise Housing Ltd., and American Mortgage Acceptance
Company, Cause No. 2003-59290 in the State District Court of Harris County,
Texas. The suit claims, among other causes of action against the respective
defendants, that we conducted wrongful foreclosure in that the loan guarantor
did not derive any benefit from our loan and that the limited partners of the
loan guarantor did not authorize the loan transaction. The suit seeks, among
other relief, actual, consequential, exemplary, and punitive damages, a
declaration that the loan made by us is unenforceable, and that we were involved
in a conspiracy to defraud the loan guarantor. The discovery phase of this suit
has been completed and is proceeding to either summary judgment or trial. A
trial date has not been set.
Subsequently, we filed a countersuit on November 25, 2003, against the limited
partners of the loan guarantor seeking to recover unpaid taxes and
misappropriated property receipts. We are currently unable to determine the
possible outcome of the litigation.
b) Guarantees
In June and October of 2000, we originated two loans totaling $3.3 million under
an agreement with Fannie Mae that provided for our guaranteeing a first-loss
position on the loans. In September 2003, we transferred and assigned all of our
obligations to the two loans we originated under this program to CharterMac
Mortgage Capital Corp. ("CMC"), a subsidiary of CharterMac, both of which are
affiliates of the Advisor. Pursuant to the agreement with CMC, CharterMac
guaranteed CMC's obligations, and we agreed to indemnify both CMC and CharterMac
for any losses incurred in exchange for retaining all fees which we were
otherwise entitled to receive under the program. While provisions of this
agreement could potentially result in exposure of up to $7.5 million, the
maximum exposure at March 31, 2005, was $3.2 million, and we expect that we will
not be called upon to fund these guarantees.
In the first quarter of 2003, we discontinued our loan program with Fannie Mae
and will issue no further guarantees pursuant to such program.
11
AMERICAN MORTGAGE ACCEPTANCE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 2005
(Unaudited)
Standby and Forward Loan Commitments
------------------------------------
We issued the following standby and forward bridge and permanent loan
commitments for the purpose of funding constructing/rehabilitating certain
multifamily apartment complexes in various locations.
STANDBY AND FORWARD BRIDGE LOAN COMMITMENTS
-------------------------------------------
(In thousands)
MAXIMUM AMOUNT OF COMMITMENTS
-----------------------------
NO. OF APT. LESS THAN
ISSUE DATE PROJECT LOCATION UNITS 1 YEAR 1-3 YEARS
-----------------------------------------------------------------------------------------------------------
May-04 Oak Village Oakland, CA 117 $ 967 $ --
Jun-04 Woods of Mandarin Jacksonville, FL 401 428 --
Dec-03 Reserve at Thornton Thornton, CO 216 362 --
-------- -------- --------
TOTAL STANDBY AND FORWARD BRIDGE LOAN COMMITMENTS 734 $ 1,757 $ --
======== ======== ========
STANDBY AND FORWARD MEZZANINE LOAN COMMITMENTS
----------------------------------------------
MAXIMUM AMOUNT OF COMMITMENT
----------------------------
NO. OF APT. LESS THAN
ISSUE DATE PROJECT LOCATION UNITS 1 YEAR 1-3 YEARS
----------------------------------------------------------------------------------------------------------
Apr-03 Villas atHighpoint Lewisville, TX 304 $ 379 $ --
-------- -------- --------
TOTAL STANDBY AND FORWARD MEZZANINE LOAN COMMITMENTS 304 $ 379 $ --
======== ======== ========
TOTAL STANDBY AND FORWARD LOAN COMMITMENTS $ 2,136 $ --
======== =======
Mezzanine Loan/Preferred Stock Commitment
-----------------------------------------
In November 2004, we provided a commitment to fund up to $74.5 million to
Prime/Mansur Investment Partners, LLC in connection with its financing of an
acquisition. In connection with providing the commitment, we received a
commitment fee of $435,000, which was deferred on our balance sheet at March 31,
2005 and recognized on May 1, 2005, after the commitment had expired (see Note
10).
12
AMERICAN MORTGAGE ACCEPTANCE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 2005
(Unaudited)
Stabilization Loan Guarantees
-----------------------------
During 2002, we entered into an agreement with Wachovia Bank ("Wachovia") to
provide stabilization guarantees for new construction of multifamily properties
under the LIHTC program in designated areas. As per the agreement, we guarantee
that properties which have completed construction will stabilize and that the
associated construction loans will convert to permanent Fannie Mae loans. We
receive origination and guarantee fees from the developers for providing the
guarantees. If the properties do not stabilize, by a date specific, with enough
net operating income for Fannie Mae to fully fund its commitment for a permanent
loan, we may be required to purchase the construction loan from Wachovia or to
fund the difference between the construction loan amount and the reduced Fannie
Mae permanent loan amount.
Maximum Amount of Guarantee
(in thousands)
Loan
Administration
Fee (1)
Date Closed Project Location Units Year 1-3 Years (annual percentage)
----------- --------------- -------------------- ------- ------ --------- -----------------
Sep-02 Creekside Apts. Colorado Springs, CO 144 $7,500 $ -- 0.375%
------- ------ --------- ------
Total Stabilization Loan Guarantees 144 $7,500 $ -- 0.375%
======= ====== ========= ======
(1) Loan Administration Fee is paid quarterly during the guarantee period.
For this guarantee, and for the guarantees issued under the Fannie Mae loan
program discussed above, we monitor the status of the underlying properties and
evaluate our exposure under the guarantees. To date, we have concluded that no
accrual for probable losses is required under SFAS No. 5, ACCOUNTING FOR
CONTINGENCIES.
NOTE 10 - SUBSEQUENT EVENTS
During April 2005, in accordance with our share repurchase program, we
repurchased a total of 24,800 of our common shares for approximately $339,000.
During April 2005, the Clarks Crossing note receivable paid down at par. We
received proceeds of approximately $926,000.
On May 1, 2005, we recognized approximately $412,000, net of related legal
expenses, in relation to a deferred commitment fee that expired on April 30,
2005 (see Note 9).
13
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
Forward-Looking Statements
--------------------------
Certain statements made in this report may constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended and Section 21E of the Securities Exchange Act of 1934, as amended. Such
forward-looking statements include statements regarding the intent, belief or
current expectations of us and our management and involve known and unknown
risks, uncertainties and other factors which may cause the actual results,
performance or achievements to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. These factors, which are outlined in detail in our annual report on
Form 10-K for the year ended December 31, 2004, include the following:
o Risks of investing in uninsured and non-investment grade mortgage
assets and subordinated CMBS;
o Competition in acquiring desirable investments;
o Interest rate fluctuations and changes in prepayment rates which may
affect the value of our assets;
o Risks associated with investments in real estate generally and the
properties which secure many of our investments;
o General economic conditions, particularly as they affect the value of
our assets and the credit status of our borrowers;
o Dependence on our external Advisor for all services vital to our
operations;
o Conflicts which may arise among us and other entities affiliated with
our Advisor which have similar investment policies to ours; and
o Risks associated with the repurchase agreements we utilize to finance
our investments and the availability of financing generally.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this quarterly report.
Factors Affecting Comparability
-------------------------------
During 2004, we owned several properties through foreclosure, classified as Real
Estate Owned - Held and Used, - subject to Sales contracts and - Held for Sale
(see REAL ESTATE OWNED below). As a result of certain circumstances during 2004,
we reclassified some of these assets from Held for Sale to Held and Used,
resulting in a reduction in interest income recorded on Real Estate Owned - Held
for Sale and an increase in rental income, property operations, and depreciation
expense.
Results of Operations
---------------------
The following is a summary of our operations for the three months ended March
31, 2005 and 2004:
(In thousands)
Three Months Ended March 31,
--------------------------------------
2005 2004 Change
------ ------ ------
Total revenues $6,254 $3,878 61.3 %
Total expenses 4,273 2,269 88.3
Total other income 846 1,716 (50.7)
------ ------ ------
Net income $2,827 $3,325 (15.0)%
====== ====== ======
14
In the three months ended March 31, 2005, as compared to the three months ended
March 31, 2004, revenues increased mainly due to an increase in the purchases of
new FNMA certificates and an increase in rental income recorded due to the
reclassification of the concord properties from real estate owned - subject to
sales contract to Real Estate Owned - Held and Used (see Real Estate Owned
below). Expenses have also increased for these periods due to an increase in
expenses related to property operations from the reclassification of the Concord
properties as well as an increase in advisory, administrative and financing
costs (partially interest rates). Other income has decreased due to the
reclassification of the concord properties. Income and expenses from operations
of those properties are now classified in revenue and expense categories.
In addition, the decrease in net income was impacted largely by the loss of
investment yield from Real Estate Owned following the December 2004 refinancing
of the Concord portfolio that lowered our economic interest in the properties.
REVENUES
Three Months
Ended
March 31
% Change from
Prior Year
------------------------------ -------------
Interest income
Debt securities 29.7%
Mortgage loans 47.1
Notes receivable (28.2)
Revenue bonds (12.5)
Temporary investments 41.7
Rental income 586.7
Other revenues 1,115.4
----------
Total revenues 61.3%
==========
At March 31, 2005, and December 31, 2004, we had the following investments:
March 31, 2005 December 31, 2004
---------------------------- ----------------------------
Weighted Weighted
Carrying Average Carrying Average
Amount Interest Rate Amount Interest Rate
----------- ------------- ------------ -------------
Debt securities $ 223,429 6.33% $ 194,587 6.47%
Mortgage loans $ 21,395 11.68% $ 21,376 11.68%
Notes receivable $ 16,584 9.31% $ 23,111 9.43%
Revenue bonds $ 6,604 8.69% $ 6,672 8.69%
Interest income from debt securities increased, primarily due to the continued
advances on the Ellington Plaza GNMA certificate and the purchase of eight FNMA
certificates during the fourth quarter of 2004 and six FNMA certificates during
2005, partially offset by the repayment of the Reserve at Autumn Creek and
Western Manor GNMA certificates.
Interest income from mortgage loans increased for the three months ended March
31, 2005, as compared to 2004, primarily due to the funding of Champaign
Offices, Sawmill Plaza, and the Pines mezzanine loans.
Interest income from notes receivable decreased for the three months ended March
31, 2005, as compared to 2004, primarily due to the payoff of Mountain Valley
and Baywoods notes in 2004, partially offset by the funding of the Woods at
Mandarin note receivable.
15
Rental income increased for the three months ended March 31, 2005, as compared
to 2004, due to the classification of the Concord properties in December 2004 as
Real Estate Owned - Held and Used (see "Real Estate Owned" below).
Other revenues increased for the three months ended March 31, 2005, as compared
to 2004, primarily due to the paydown of the FNMA Orchard Park certificate,
resulting in a net gain, and the recognition of a non-refundable due diligence
fee into income in 2005. No such fees were recorded in 2004.
EXPENSES
Three Months
Ended
March 31
% Change from
Prior Year
----------------------------------------------------- --------------
Interest 32.5%
Distributions to preferred shareholders of subsidiary
(subject to mandatory repurchase) 100.0
General and administrative 70.7
Fees to Advisor 44.0
Property operations 455.0
Depreciation 47.0
Amortization and other (4.3)
---------
Total expenses 88.3%
=========
At March 31, 2005, excluding mortgages on real estate owned, we had total debt
of approximately $207.4 million with a weighted average interest rate of 3.43%
per year, including the effect of our swap agreement. At March 31, 2004, we had
a comparable balance of approximately $180.8 million with a weighted average
interest rate of 1.9% per year.
Interest expense increased for the three months ended March 31, 2005, as
compared to 2004, primarily due to the increased borrowings on the repurchase
facilities stemming from an increased investment base. This increase can also be
attributed to a steady increase in interest rates during 2004 and 2005.
Distributions to preferred shareholders of subsidiary (subject to mandatory
repurchase) were recorded on preferred securities issued in 2005. There were no
such securities issued during 2004.
General and administrative expenses increased for the three months ended March
31, 2005, as compared to 2004, primarily due to the increase in legal fees
related to foreclosed properties, the increase in accounting fees related to
Sarbanes-Oxley compliance, and the increase of certain other administrative
costs.
Fees to Advisor increased for the three months ended March 31, 2005, as compared
to 2004, primarily due to the accrual of incentive management fees and an
increase in overhead allocations.
Property operations increased for the three months ended March 31, 2005, as
compared to 2004, due to the classification of the Concord properties in
December 2004 as Real Estate Owned - Held and Used (see "Real Estate Owned"
below).
Depreciation expense increased for the three months ended March 31, 2005, as
compared to 2004, due to a higher base of depreciable real estate owned in 2005
as compared to the 2004 period. In 2004, only the Plaza at San Jacinto property
was depreciated. In 2005, the Concord properties are depreciating, partially
offset by the removal of Plaza at San Jacinto upon its sale.
16
OTHER INCOME
Other income decreased for the three months ended March 31, 2005, as compared to
2004, due to the reclassification of the Concord properties to Real Estate Owned
- Held and Used. Income from these properties is now being recognized in
operations and classified as rental revenues (see "Real Estate Owned" below).
REAL ESTATE OWNED
During 2004, we reclassified some of our investments in foreclosed properties as
Real Estate Owned-Held for Sale on our balance sheet and recognized income from
the operations of these properties. As a result of these circumstances, there
was a substantial decrease in interest income from these loans, as noted above.
During the time we have owned the real estate, certain circumstances have
occurred that warranted the reclassification of most of these assets. The
following is the March 31, 2005 classification of our real estate owned
portfolio:
o REAL ESTATE OWNED - HELD AND USED
During 2004, we had three properties classified as Real Estate Owned -
Subject to Sales Contracts, due to the fact that the sale of these
properties did not constitute a sale in accordance with GAAP. After
the properties were refinanced during December 2004, we reclassified
these properties on our balance sheet as Real Estate Owned - Held and
Used; we have recorded depreciation on the properties in 2004, as well
as retroactively for the period since foreclosure. We have recognized
income associated with the properties as income from real estate owned
on the income statement up to the date of refinancing. Subsequently,
we recognize income associated with a $13.4 million mezzanine loan as
rental income.
During 2005, we sold the Plaza at San Jacinto property to an
unaffiliated third party for approximately its carrying value.
o REAL ESTATE OWNED - HELD FOR SALE
One remaining property in our real estate owned portfolio, Reserve at
Autumn Creek, will continue to remain as Real Estate Owned - Held for
Sale as we continue to market the real estate. We have changed the
marketing strategy of this asset in order to reflect marketplace
behavior.
Funds from Operations
---------------------
Funds from operations ("FFO"), represents net income or loss (computed in
accordance with GAAP), excluding gains or losses from sales of property,
excluding depreciation and amortization related to real property and including
funds from operations for unconsolidated joint ventures calculated on the same
basis. FFO is calculated in accordance with the National Association of Real
Estate Investment Trusts ("NAREIT") definition. FFO does not represent cash
generated from operating activities in accordance with GAAP and is not
necessarily indicative of cash available to fund cash needs. FFO should not be
considered as an alternative to net income as an indicator of the Company's
operating performance or as an alternative to cash flows as a measure of
liquidity. Our management considers FFO a supplemental measure of operating
performance, and, along with cash flows from operating activities, financing
activities, and investing activities, it provides investors with an indication
of our ability to incur and service debt, make capital expenditures, and to fund
other cash needs.
17
The following table reconciles net income to FFO for the three months ended
March 31, 2005 and 2004:
========================
Three Months Ended
(In thousands) March 31,
------------------------
2005 2004
-------- --------
Net income $ 2,827 $ 3,325
Add back: depreciation of real property 366 249
-------- --------
FFO $ 3,193 $ 3,574
======== ========
Cash flows from:
Operating activities $ 3,661 $ 3,123
======== ========
Investing activities $(33,377) $ 12,685
======== ========
Financing activities $ 37,170 $ (6,975)
======== ========
Weighted average shares outstanding:
Basic 8,337 8,338
======== ========
Diluted 8,344 8,362
======== ========
Since not all companies calculate FFO in a similar fashion, our calculation
presented above may not be comparable to similarly titled measures reported by
other companies.
Liquidity and Capital Resources
-------------------------------
SOURCES OF FUNDS
We expect that cash generated from our investments, as well as our borrowing
capacity, will meet our needs for short-term liquidity and will be sufficient to
pay all expenses and distributions to our shareholders in amounts sufficient to
retain our Real Estate Investment Trust ("REIT") status in the foreseeable
future. In order to qualify as a REIT under the Internal Revenue Code, as
amended, we must, among other things, distribute at least 90% of our taxable
income. We believe that we are in compliance with the REIT-related provisions of
the Code.
We finance our investing activity primarily through borrowing from various
facilities at short-term rates. At March 31, 2005, we had approximately $48.5
million available to borrow, contractually, under our debt facilities without
exceeding limits imposed by debt covenants and our declaration of trust.
In August 2005, our warehouse facility will mature. We are currently in
negotiations with a financial institution to replace this facility with a
similar one with similar terms.
From time to time, we may also issue common shares or other equity to fund
investing activity. During 2005, our subsidiary issued $25.0 million of Floating
Rate Preferred Securities. The proceeds received were used to purchase FNMA
certificates.
We have capacity to raise approximately $170.0 million of additional funds by
issuing either common or preferred shares pursuant to a shelf registration
statement filed with the SEC in 2002. If market conditions warrant, we may seek
to raise additional funds for investment through further offerings, although the
timing and amount of such offerings cannot be determined at this time.
SUMMARY OF CASH FLOWS
During the three months ended March 31, 2005, as compared to the three months
ended March 31, 2004, the net change in cash and cash equivalents decreased
approximately $1.4 million. Operating cash flows improved by $538,000 primarily
due to the timing of payments of liabilities. An increase in net cash used in
investing activities (approximately $46.1 million) offset by an increase in net
cash provided by financing activities (approximately $44.1 million) was due to a
higher level of investing activity in debt securities and the purchase of a
mortgage loan on real estate owned during the 2005 period. This investing
activity was funded through borrowings from our repurchase facilities and
through the issuance of preferred shares.
18
OTHER
We are not aware of any trends or events, commitments or uncertainties, which
have not otherwise been disclosed that will or are likely to impact liquidity in
a material way.
Distributions
-------------
Of the total distributions of approximately $3.3 million for both the three
months ended March 31, 2005 and 2004, approximately $628,000 in 2005 ($0.08 per
share or 18.82%) and approximately $10,800 in 2004 (0.32%), represented a return
of capital determined in accordance with GAAP. As of March 31, 2005, the
aggregate amount of distributions made since our initial public offering
representing a return of capital, in accordance with GAAP, totaled approximately
$17.8 million. The portion of the distributions which constituted a return of
capital was more significant in our initial years in order to permit us to
maintain level distributions to shareholders while we were in the process of
investing the proceeds from our initial public offering.
Commitments, Contingencies and Off-Balance Sheet Arrangements
-------------------------------------------------------------
STABILIZATION GUARANTEES
Maximum Amount of Guarantee
(in thousands)
Loan
Administration
Less than Fee (1)
Date Closed Project Location Units 1 Year 1-3 Years (annual percentage)
----------- --------------- -------------------- ------- --------- --------- -----------------
Sep-02 Creekside Apts. Colorado Springs, CO 144 7,500 -- 0.375%
------- ------ --------- ------
Total Stabilization Loan Guarantees 144 $7,500 $ -- --
======= ====== ========= ======
(1) Loan Administration Fee is paid quarterly during the guarantee period.
See Note 9 of our condensed consolidated financial statements for a complete
summary of our guarantees and off-balance arrangements.
We have no unconsolidated subsidiaries, special purpose off-balance sheet
financing entities, or other off-balance sheet arrangements.
19
CONTRACTUAL OBLIGATIONS
In conducting business, we enter into various contractual obligations. Details
of these obligations, including expected settlement periods, are contained
below.
Payments Due by Period
(In thousands)
-------------------------------------------------------------------
Less than More than
Total 1 Year 1 - 3 Years 3 - 5 Years 5 Years
---------- ----------- ----------- ----------- ---------
Debt:
Lines of credit:
Repurchase facilities $ 178,325 $ 178,325 $ -- $ -- $ --
Warehouse facility 4,070 4,070 -- -- --
Mortgage loan on real estate owned (1) 40,875 476 1,696 2,014 36,689
Preferred shares of subsidiary
(subject to mandatory repurchase) 25,000 -- -- -- 25,000
Funding Commitments:
Funding commitment for
mezzanine/preferred stock (2) 74,500 74,500 -- -- --
Standby and forward bridge loan
commitments 1,757 1,757 -- -- --
Standby and forward mezzanine loan
commitments 379 379 -- -- --
---------- ----------- ---------- ---------- ---------
Total $ 324,906 $ 259,507 $ 1,696 $ 2,014 $ 61,689
---------- ----------- ---------- ---------- ---------
(1) Represents a first mortgage on properties we report as Real Estate Owned -
Held and Used (Concord Properties) as a sale of the properties did not meet
the criteria for sale recognition in accordance with GAAP. The first
mortgage loan is non-recourse with respect to AMAC, the debt service is
paid from the cash flows of the properties and we will not be required to
satisfy the obligation. (See Note 4).
(2) Pertains to a commitment made to Prime Realty Trust. Obligation to fund
this commitment expired on April 30, 2005.
Inflation
---------
Inflation did not have a material effect on our results for the periods
presented.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk is the exposure to loss resulting from changes in interest rates and
equity prices. The primary market risk to which the Company is exposed is
interest rate risk, which is highly sensitive to many factors, including
governmental monetary and tax policies, domestic and international economic and
political considerations and other factors beyond the control of the Company.
INTEREST RATE RISK
Interest rate fluctuations can adversely affect our income in many ways and
present a variety of risks, including the risk of mismatch between asset yields
and borrowing rates.
Our operating results depend in large part on differences between the income
from our assets (net of credit losses) and our borrowing costs. Most of our
assets generate fixed returns and have terms in excess of five years. We fund
the origination and acquisition of a significant portion of these assets with
borrowings which have variable interest rates that reset relatively rapidly,
such as monthly or quarterly. In most cases, the income from assets will respond
more slowly to interest rate fluctuations than the cost of borrowings, creating
a mismatch between asset yields and borrowing rates. Consequently, changes in
interest rates, particularly short-term interest rates, may influence our net
income. Our borrowings under repurchase and warehouse agreements bear interest
at rates that fluctuate with LIBOR.
20
Various financial vehicles exist which would allow our management to mitigate
the impact of interest rate fluctuations on our cash flows and earnings. During
March 2003, upon our management's analysis of the interest rate environment and
the costs and risks of such strategies, we entered into an interest rate swap in
order to hedge against increases in the floating interest rate on our repurchase
facilities. The swap is a five-year agreement with Bank of America ("BOA")
whereby we pay BOA a fixed 3.48% on a notional amount of $30.0 million. In
return, BOA pays us a floating rate equivalent to the 30-day LIBOR rate on the
same notional amount. A possible risk of such swap agreements is the possible
inability of BOA to meet the terms of the contracts with us; however, there is
no current indication of such an inability.
Based on the $177.4 million unhedged portion of the $207.4 million of borrowings
outstanding at March 31, 2005, a 1% change in LIBOR would impact our annual net
income and cash flows by approximately $1.8 million. However, as the interest
income from some of our loans is also based on LIBOR, a 1% increase in LIBOR
would increase our annual net income and cash flows from such loans by
approximately $160,000. Because the value of our debt securities fluctuate with
changes in interest rates, rate fluctuations will also affect the market value
of our net assets.
ITEM 4. CONTROLS AND PROCEDURES
(a) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. Our Chief Executive
Officer and Chief Financial Officer have evaluated the effectiveness of our
disclosure controls and procedures (as defined in Rule 13a-15(e) or Rule
15a-15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) as of the end of the period covered by this quarterly report. Based
on such evaluation, such officers have concluded that our disclosure
controls and procedures as of the end of the period covered by this
quarterly report were effective to ensure that information required to be
disclosed by the Company in the reports that the Company files or submits
under the Exchange Act is recorded, processed, summarized and reported,
within the time periods specified in the SEC rules and forms, and to ensure
that such information is accumulated and communicated to the Company's
management, including the Chief Executive Officer and Chief Financial
Officer, as appropriate to allow timely decisions regarding required
disclosure.
(b) INTERNAL CONTROL OVER FINANCIAL REPORTING. There have not been any
significant changes in our internal control over financial reporting during
the fiscal quarter to which this report relates that have materially
affected, or are reasonably likely to materially affect, our internal
control over financial reporting.
21
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On October 27, 2003, prior to taking possession of the real estate
collateral supporting a loan investment, we were named in a lawsuit,
Concord Gulfgate, Ltd. vs. Robert Parker, Sunrise Housing Ltd., and
American Mortgage Acceptance Company, Cause No. 2003-59290 in the
State District Court of Harris County, Texas. The suit claims, among
other causes of action against the respective defendants, that we
conducted wrongful foreclosure in that the loan guarantor did not
derive any benefit from our loan and that the limited partners of the
loan guarantor did not authorize the loan transaction. The suit seeks,
among other relief, actual, consequential, exemplary, and punitive
damages, a declaration that the loan made by us is unenforceable, and
that we were involved in a conspiracy to defraud the loan guarantor.
The discovery phase of this suit has been completed and is proceeding
to either summary judgment or trial. A trial date has not been set.
Subsequently, we filed a countersuit on November 25, 2003, against the
limited partners of the loan guarantor seeking to recover unpaid taxes
and misappropriated property receipts. We are currently unable to
determine the possible outcome of the litigation.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The following table sets forth information with respect to purchases
made by the Company of its common shares during the three months ended
March 31, 2005:
Total number of Maximum number
shares purchased as of shares that may
Total number of Average price part of publicly yet be purchased
Period shares purchased paid per share announced programs under the programs
-----------------------------------------------------------------------------------------------------------
March 31, 2005 2,100 $13.69 2,100 993,900
See also Note 5 of our condensed consolidated financial statements for
information relating to the issuance of Floating Rate Preferred
Securities by ACFI.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES - None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - None
ITEM 5. OTHER INFORMATION - None
ITEM 6. EXHIBITS
Exhibits
31.1 Chief Executive Officer certification pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.*
31.2 Chief Financial Officer certification pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.*
32.1 Certification pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.*
32.2 Certification pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.*
* Filed herewith.
22
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
AMERICAN MORTGAGE ACCEPTANCE COMPANY
(Registrant)
Date: May 10, 2005 By: /s/ Stuart J. Boesky
--------------------
Stuart J. Boesky
President and Chief Executive Officer
Date: May 10, 2005 By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes
Chief Financial Officer and Managing Trustee
Exhibit 31.1
CERTIFICATION
I, Stuart J. Boesky, hereby certify that:
1. I have reviewed this quarterly report on Form 10-Q for the period
ending March 31, 2005, of American Mortgage Acceptance Company;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
controls over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and we have:
a) designed such disclosure controls and procedures or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure the material information relating to the
registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in
which this quarterly report is being prepared;
b) designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting
principals;
c) evaluated the effectiveness of the registrant's disclosure controls
and procedures presented in this quarterly report our conclusions about
the effectiveness of the disclosure controls and procedures, as of the
end of the period covered by this report based on such evaluation; and
d) disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal quarter that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting.
5. The registrant's other certifying officer and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of
registrant's board of directors or persons performing the equivalent
functions:
a) all significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.
Date: May 10, 2005 By: /s/ Stuart J. Boesky
------------ --------------------
Stuart J. Boesky
Chief Executive Officer
Exhibit 31.2
CERTIFICATION
I, Alan P. Hirmes, hereby certify that:
1. I have reviewed this quarterly report on Form 10-Q for the period
ending March 31, 2005, of American Mortgage Acceptance Company;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
controls over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and we have:
a) designed such disclosure controls and procedures or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure the material information relating to the
registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in
which this quarterly report is being prepared;
b) designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting
principals;
c) evaluated the effectiveness of the registrant's disclosure controls
and procedures presented in this quarterly report our conclusions about
the effectiveness of the disclosure controls and procedures, as of the
end of the period covered by this report based on such evaluation; and
d) disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal quarter that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting.
5. The registrant's other certifying officer and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of
registrant's board of directors or persons performing the equivalent
functions:
a) all significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.
Date: May 10, 2005 By: /s/ Alan P. Hirmes
------------ ------------------
Alan P. Hirmes
Chief Financial Officer
Exhibit 32.1
CERTIFICATION PURSUANT TO
18.U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of American Mortgage Acceptance Company
(the "Company") on Form 10-Q for the period ending March 31, 2005 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
Stuart J. Boesky, Chief Executive Officer of the Company, certify, pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.
By: /s/ Stuart J. Boesky
--------------------
Stuart J. Boesky
Chief Executive Officer
May 10, 2005
A signed original of this written statement required by Section 906 has been
provided to the Company and will be retained by the Company and furnished to the
Securities and Exchange Commission or its staff upon request.
Exhibit 32.2
CERTIFICATION PURSUANT TO
18.U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of American Mortgage Acceptance Company
(the "Company") on Form 10-Q for the period ending March 31, 2005 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
Alan P. Hirmes, Chief Financial Officer of the Company, certify, pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.
By: /s/ Alan P. Hirmes
------------------
Alan P. Hirmes
Chief Financial Officer
May 10, 2005
A signed original of this written statement required by Section 906 has been
provided to the Company and will be retained by the Company and furnished to the
Securities and Exchange Commission or its staff upon request.