<PAGE>   1
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

[X]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES 
        EXCHANGE ACT OF 1934.

For the quarterly period ended: March 31, 1999

                                       OR

        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
        EXCHANGE ACT OF 1934.

For the transition period from _________________ to _________________

Commission File Number:  1-13485

                   AMERICAN RESIDENTIAL INVESTMENT TRUST, INC.
             (Exact name of registrant as specified in its charter)

              Maryland                                  33-0741174
              (State or other jurisdiction of           (I.R.S. Employer
              incorporation or organization)            Identification Number)

              445 Marine View Avenue, Suite 230
              Del Mar, California                       92014
              (Address of principal executive offices)  (Zip Code)

                                 (619) 350-5000
               Registrant's telephone number, including area code

              (Former name, former address and former fiscal year,
                         if changed since last report)

Indicate by check mark whether the Registrant (1) has filed all documents and
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 files such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                             [X]    YES    [ ]    NO

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

Common Stock ($.01 par value)                        8,055,500 as of May 7, 1999

<PAGE>   2

INDEX

<TABLE>
<CAPTION>
                                                                                 Page
                                                                                 ----
<S>                                                                              <C>
PART I.  FINANCIAL INFORMATION

Item 1.  Consolidated Financial Statements

Consolidated Balance Sheets at March 31, 1999 and December 31, 1998               1

Consolidated Statements of Operations and Comprehensive Income (Loss) 
for the three months ended March 31, 1999 and March 31, 1998                      2

Consolidated Statements of Cash Flows for the three months ended 
March 31, 1999 and March 31, 1998                                                 3

Notes to Consolidated Financial Statements                                        4

Item 2.  Management's Discussion and Analysis of Financial Condition 
         and Results of Operations                                               12

Item 3.  Quantitative and Qualitative Disclosures about Market Risk              17

PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings                                                       17

Item 2.  Changes in Securities and Use of Proceeds                               17

Item 3.  Defaults Upon Senior Securities                                         17

Item 4.  Submission of Matters to a Vote of Security Holders                     17

Item 5.  Other Information                                                       17

Item 6.  Exhibits and Reports on Form 8-K                                        17
</TABLE>

<PAGE>   3

           American Residential Investment Trust, Inc. and Subsidiary
                           Consolidated Balance Sheets
                        (in thousands, except share data)

                                     ASSETS

<TABLE>
<CAPTION>
                                                                  March 31,        December 31,
                                                                    1999              1998
                                                                  ---------        ------------
<S>                                                               <C>              <C>      
Cash and cash equivalents                                         $  34,858         $  34,645
Mortgage securities available-for-sale, net                           3,843             6,617
Mortgage loans held-for-investment, net, pledged                    249,008           179,009
Bond collateral                                                     366,926           417,808
Retained interest in securitization                                   9,609             8,762
Real estate owned                                                     2,960               490
Interest rate cap agreements                                            490               674
Accrued interest receivable                                           7,564             7,265
Due from affiliate                                                    1,173               606
Investment in American Residential Holdings                             812               708
Other assets                                                            462               188
                                                                  ---------------------------
                                                                  $ 677,705         $ 656,772
                                                                  ===========================

                      LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Short-term debt                                                   $ 230,599         $ 166,214
Long-term debt, net                                                 340,590           385,290
Accrued interest payable                                              1,473             1,226
Due to affiliate                                                        374               386
Accrued expenses and other liabilities                                  410               477
Management fees payable                                                 632                --
Accrued dividends                                                        --             1,208
                                                                  ---------------------------
   Total liabilities                                                574,078           554,801

Stockholders' Equity:
Preferred stock, par value $.01 per share; 1,000 shares
   authorized; no shares issued and outstanding                          --                --
Common stock, par value $.01 per share; 25,000,000 shares
   authorized; 8,055,500  shares issued and outstanding at               81                81
   March 31, 1999 and December 31, 1998
Additional paid-in-capital                                          109,271           109,271
Accumulated other comprehensive income                                  592               550
Accumulated deficit                                                  (6,317)           (7,931)
                                                                  ---------------------------
   Total stockholders' equity                                       103,627           101,971
                                                                  ---------------------------
                                                                  $ 677,705         $ 656,772
                                                                  ===========================
</TABLE>


          See accompanying notes to consolidated financial statements.



                                       1
<PAGE>   4

           American Residential Investment Trust, Inc. and Subsidiary
      Consolidated Statements of Operations and Comprehensive Income (Loss)
                        (in thousands, except share data)

<TABLE>
<CAPTION>
                                                                        For the         For the
                                                                     Three Months    Three Months
                                                                        Ended           Ended
                                                                    March 31, 1999  March 31, 1998
                                                                    --------------  --------------
<S>                                                                 <C>             <C>     
Interest income:
Mortgage assets                                                        $ 13,256        $ 14,381
Cash and investments                                                      1,528              72
                                                                       ------------------------
      Total interest income                                              14,784          14,453
Interest expense                                                         11,788          11,049
                                                                       ------------------------
   Net interest income                                                    2,996           3,404
Provision for loan losses                                                   950             136
                                                                       ------------------------
   Net interest income after provision for loan losses                    2,046           3,268
Other operating income:
   Management fee income                                                    102              --
   Equity in income of American Residential Holdings, Inc.                  104              --
   Prepayment penalty income                                                720              22
                                                                       ------------------------
      Total other operating income                                          926              22
                                                                       ------------------------
         Net operating income                                             2,972           3,290
Other expenses:
   Management fees                                                          632             469
   Interest rate cap and floor agreement expense                            598              46
   General and administrative expenses                                      128             498
                                                                       ------------------------
      Total other expenses                                                1,358           1,013
                                                                       ------------------------
Net income                                                                1,614           2,277
                                                                       ------------------------
Other comprehensive income (loss)
   Unrealized holding gains                                                  42              --
   Unrealized holding loss                                                   --          (4,000)
                                                                       ------------------------
      Unrealized holding gains (loss) arising during the period              42          (4,000)
                                                                       ------------------------
Comprehensive income (loss)                                            $  1,656        $ (1,723)
                                                                       ========================

Net income per share of Common Stock - Basic                           $   0.20        $   0.28
Net income per share of Common Stock - Diluted                         $   0.20        $   0.28
Dividends per share of Common Stock for the related period             $   0.20        $   0.28
</TABLE>



          See accompanying notes to consolidated financial statements.



                                       2
<PAGE>   5

           American Residential Investment Trust, Inc. and Subsidiary
                      Consolidated Statements of Cash Flows
                       (in thousands, except share data)


<TABLE>
<CAPTION>
                                                                         For the           For the
                                                                      Three Months      Three Months
                                                                          Ended             Ended
                                                                     March 31, 1999    March 31, 1998
                                                                     --------------------------------
<S>                                                                  <C>               <C>      
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                                              $   1,614         $   2,277
   Adjustments to reconcile net income to net cash provided
      by operating activities:
      Amortization of mortgage assets premiums                              3,715             1,915
      Amortization of interest rate cap agreements                            184                46
      Amortization of CMO capitalized costs                                    35                --
      Amortization of CMO premium                                             (40)               --
      Provision for loan losses                                               950               136
      Equity in income of American Residential Holdings, Inc.                (104)               --
      Deposits to over-collateralization account                             (847)               --
      Increase in accrued interest receivable                                (299)           (3,388)
      Decrease in other assets                                               (274)             (127)
      Increase in due from affiliate                                         (567)             (367)
      Increase in accrued interest payable                                    247             1,167
      Increase in accrued expenses and
         management fees payable                                              565               289
      Increase in due to affiliate                                            (12)               --
                                                                     --------------------------------
      Net cash provided by operating activities                             5,167             1,948
CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of mortgate loans held-for-investment                        (77,522)         (378,341)
   Principal payments on mortgage securities available-for-sale             2,811            34,106
   Principal payments on mortgage loans held-for-investment
      and bond collateral                                                  51,275             4,128
                                                                     --------------------------------
      Net cash used in investing activities                               (23,436)         (340,107)
CASH FLOWS FROM FINANCING ACTIVITIES:
   Increase in net borrowings from short-term debt                         64,385           334,648
   Increase in capitalized costs for CMO 1999-1                               (21)               --
   Dividends paid                                                          (1,208)           (1,298)
   Principal payments on CMO/FASIT bonds                                  (44,674)               --
   Other                                                                       --               (23)
                                                                     --------------------------------
      Net cash provided by financing activities                            18,482           333,327
Net increase in cash and cash equivalents                                     213            (4,832)
Cash and cash equivalents at beginning of period                           34,645             5,893
                                                                     --------------------------------
Cash and cash equivalents at end of period                              $  34,858         $   1,061
                                                                     ================================

Supplemental information - interest paid                                $   7,826         $   7,968
                                                                     ================================
Non-cash transactions:
   Increase (decrease) in accumulated other comprehensive income        $      42         $    (700)
                                                                     ================================
   Transfers from bond collateral to real estate owned                  $   2,470         $      --
                                                                     ================================
</TABLE>



          See accompanying notes to consolidated financial statements.



                                       3
<PAGE>   6

AMERICAN RESIDENTIAL INVESTMENT TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES

Basis of Financial Statement Presentation

The consolidated financial statements include the accounts of American
Residential Investment Trust, Inc. ("AmRES") and American Residential Eagle,
Inc. ("Eagle"), its wholly owned subsidiary (collectively "AmRIT").
Substantially all of the assets of Eagle are pledged or subordinated to support
long-term debt in the form of collateralized mortgage bonds ("Long-Term Debt")
and are not available for the satisfaction of general claims of AmRIT and
American Residential Holdings, Inc. ("Holdings"), (collectively the "Company").
The Company's exposure to loss on the assets pledged as collateral is limited to
its net investment, as the Long-Term Debt is non-recourse to the Company. All
significant intercompany balances and transactions with Eagle have been
eliminated in the consolidation of AmRIT.

During the first half of 1998, the Company formed Holdings, through which a
portion of the Company's non-conforming adjustable-rate and fixed-rate,
single-family whole loans (collectively, "Mortgage Loans") acquisition and
finance activities is conducted. AmRIT owns all of the preferred stock and has a
non-voting 95% economic interest in Holdings. Because AmRIT does not control
Holdings, its investment in Holdings is accounted for under the equity method.
Under this method, original equity investments in Holdings are recorded at cost
and adjusted by AmRIT's share of earnings or losses and decreased by dividends
received.

For financial reporting purposes, references to AmRIT means AmRES and Eagle;
while references to the "Company" mean AmRES, Eagle, and Holdings. Certain
amounts for prior periods have been reclassified to conform with the current
presentation.

The preparation of consolidated financial statements in conformity with
generally accepted accounting principles requires management of the Company to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the consolidated financial statements and the reported amounts of revenue and
expenses during the reported period. Actual results could differ from those
estimates.

Organization

American Residential Investment Trust, Inc., a Maryland corporation, commenced
operations on February 11, 1997. AmRES was financed through a private equity
funding from its manager, Home Asset Management Corporation (the "Manager").
AmRES operates as a mortgage real estate investment trust ("REIT") which has
elected to be taxed as a real estate investment trust for Federal income tax
purposes, which generally will allow AmRES to pass through its income to its
stockholders without payment of corporate level Federal income tax, provided
that the Company distributes at least 95% of its taxable income to stockholders.
During 1998, the Company formed Eagle, a special-purpose finance subsidiary.
Holdings, a non-REIT, taxable affiliate of the Company, was established during
the first half of 1998. The Company acquires residential mortgage-backed
securities and mortgage loans (collectively, "Mortgage Assets"). These Mortgage
Assets are typically secured by single-family real estate properties throughout
the United States. The Company utilizes both debt and equity to finance its
acquisitions. The Company may also use securitization techniques to enhance the
value and liquidity of the Company's Mortgage Assets and may sell Mortgage
Assets from time to time.

The Company diversified its residential mortgage loan sales activities in the
second quarter of 1998 to include the securitization of such loans through a
Real Estate Mortgage Investment Conduit ("REMIC"). The REMIC, which consisted of
pooled adjustable-rate first-lien mortgages, was issued by Holdings to the
public through the registration statement of the related underwriter.



                                       4
<PAGE>   7

Income Per Share

Effective December 31, 1997, the Company adopted Statement of Financial
Accounting Standards No. 128, "Earnings per Share" (SFAS No. 128"). This
statement replaces the previously reported primary and fully diluted earnings
per share with basic and diluted earnings per share. Unlike primary earnings per
share, basic earnings per share excludes any dilutive effect of options. Diluted
earnings per share is very similar to the previously reported fully diluted
earnings per share. All earnings per share amounts have been restated to conform
to the SFAS No. 128 requirements.

The following table illustrates the computation of basic and diluted earnings
per share (in thousands, except share data):

<TABLE>
<CAPTION>
                                                                     For the           For the
                                                                   Three Months      Three Months
                                                                      Ended              Ended
                                                                  March 31, 1999    March 31, 1998
                                                                  --------------    --------------
<S>                                                               <C>               <C>       
Numerator:
   Net income                                                       $    1,614        $    2,277
Denominator:
   Denominator for basic income per share - weighted average
      number of common shares outstanding during the period          8,055,500         8,114,000
Incremental common shares attributable to dilutive
   stock options                                                           273             7,700
                                                                    ----------        ----------
Denominator for diluted income per share                             8,055,773         8,121,700
Basic income per share                                              $     0.20        $     0.28
Diluted income per share                                            $     0.20        $     0.28
</TABLE>

At March 31, 1999 and 1998 there were 695,627 and 770,700, respectively, of
options that were antidilutive and, therefore, not included in the calculation
above.

Recent Accounting Developments

     Disclosure about Segments of an Enterprise and Related Information

In June 1997, the Financial Accounting Standards Board (FASB) issued SFAS No.
131, "Disclosure about Segments of an Enterprise and Related Information." SFAS
No. 131 established standards for the way that public enterprises report
information about operating segments in annual financial statements and requires
that selected information about these operating segments be reported in interim
financial statements. SFAS No. 131 requires that all public enterprises report
financial and descriptive information about its reportable operating segments.
Operating segments are defined as components evaluated regularly by the chief
operating decision maker in deciding how to allocate resources and in assessing
performance. This statement was effective for the Company beginning January 1,
1998. Management has concluded that the Company operates in one segment. The
previously reported segments of REIT and taxable subsidiary have been combined
as the taxable subsidiary does not represent more than 10% of the total for the
Company.

     Accounting for Derivative Instruments and Hedging Activities

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133 establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, (collectively referred to as
derivatives) and for hedging activities. It requires that an entity recognize
all derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. If certain



                                       5
<PAGE>   8

conditions are met, a derivative may be specifically designated as (a) a hedge
of the exposure to changes in the fair value of a recognized asset or liability
or an unrecognized firm commitment, (b) a hedge of the exposure to variable cash
flows of a forecasted transaction, or (c) a hedge of the foreign currency
exposure of a net investment in a foreign operation, an unrecognized firm
commitment, an available-for-sale security, or a foreign-currency-denominated
forecasted transaction.

Under SFAS No. 133, an entity that elects to apply hedge accounting is required
to establish at the inception of the hedge the method it will use for assessing
the effectiveness of the hedging derivative and the measurement approach for
determining the ineffective aspect of the hedge. Those methods must be
consistent with the entity's approach to managing risk.

SFAS No. 133 amends SFAS No. 32, "Foreign Currency Translation," to permit
special accounting for a hedge of a foreign currency forecasted transaction with
a derivative. It supersedes SFAS No. 80, "Accounting for Futures Contracts,"
SFAS No. 105, "Disclosure of Information about Financial Instruments with
Off-Balance-Sheet Risk and Financial Instruments with Concentrations of Credit
Risk," and SFAS No. 119, "Disclosure about Derivative Financial Instruments and
Fair Value of Financial Instruments." It amends SFAS No. 107, "Disclosures about
Fair Value of Financial Instruments," to include in SFAS No. 107 the disclosure
provisions about concentrations of credit risk from SFAS No. 105. This statement
also nullifies or modifies the consensuses reached in a number of issues
addressed by the Emerging Issues Task Force. This statement is effective for all
fiscal quarters of fiscal years beginning after June 15, 1999. The Company has
not yet determined the impact of adopting SFAS No. 133.

   Accounting for Mortgage-Backed Securities Retained

In October 1998, the FASB issued SFAS No. 134, "Accounting for Mortgage-Backed
Securities Retained after the Securitization of Mortgage Loans Held-for-Sale by
a Mortgage Banking Enterprise." SAFS No. 134 is an amendment to SFAS No. 65,
which required that after the securitization of a mortgage loan held-for-sale,
an entity engaged in mortgage banking activities classify the resulting
mortgage-backed securities as trading security. SFAS No. 134 further amends SFAS
No. 65 and requires that after the securitization of mortgage loans
held-for-sale, an entity engaged in mortgage banking activities classify the
resulting mortgage-backed securities or other retained interests based on its
ability and intent to sell or to hold those investments. SFAS No. 134 conforms
the subsequent accounting for securities retained after the securitization of
mortgage loans by a mortgage banking enterprise with the subsequent accounting
for securities retained after the securitization of other types of assets by
non-mortgage banking enterprises. SFAS No. 134 is effective for the first fiscal
quarter beginning after December 15, 1998. The adoption of SFAS No. 134 did not
have a material impact on the Company's financial position or results of
operation.

NOTE 2.  MORTGAGE SECURITIES AVAILABLE FOR SALE, NET

The Company's mortgage participation certificates issued by FHLMC, FNMA or GNMA
"(Agency Securities") and mortgage participation certificates issued by certain
private institutions ("Privately Issued Securities") (collectively, "Mortgage
Securities") consisted of the following (dollars in thousands):



                                       6
<PAGE>   9

<TABLE>
<CAPTION>
                                                 Federal 
                                 Federal Home    National
                                Loan Mortgage    Mortgage 
                                 Corporation    Association      Total
                                -------------- -------------    -------
<S>                            <C>             <C>              <C>
         AT MARCH 31, 1999
Mortgage Securities
available-for-sale,
   principal                        $1,659        $2,104        $3,763
Unamortized premium
                                        16            22            38
                                    ------        ------        ------
Amortized cost
                                     1,675         2,126         3,801
Net unrealized gain
                                        13            29            42
                                    ------        ------        ------
Fair Value                          $1,688        $2,155        $3,843
                                    ======        ======        ======
        AT DECEMBER 31, 1998
Mortgage Securities
available-for-sale,
   principal                        $4,345        $2,232        $6,577
Unamortized premium
                                        17            23            40
                                    ------        ------        ------
Amortized cost
                                     4,362         2,255         6,617
Net unrealized loss                     --            --            --
                                    ------        ------        ------
Fair Value                          $4,362        $2,255        $6,617
                                    ======        ======        ======
</TABLE>


At March 31, 1999 all investments in Mortgage Securities consisted of interests
in adjustable rate mortgage loans on residential properties. The securitized
interest in pools of adjustable rate mortgages from the Federal Home Loan
Mortgage Corporation and the Federal National Mortgage Association are
guaranteed as to principal and interest. The original maturity is subject to
change based on the prepayments of the underlying mortgage loans.

At March 31, 1999 and December 31, 1998, the weighted average net coupon on the
Mortgage Securities was 7.31% and 7.60% per annum, respectively, based on the
amortized cost of the Mortgage Securities. All Mortgage Securities have a
repricing frequency of one year or less.


NOTE 3.  MORTGAGE LOANS HELD FOR INVESTMENT, NET, PLEDGED

The Company purchases certain non-conforming Mortgage Loans to be held as
long-term investments. At March 31, 1999 and December 31, 1998, Mortgage Loans
held for investment consists of the following (dollars in thousands):


<TABLE>
<CAPTION>
                                           MARCH 31,        DECEMBER 31,
                                             1999               1998
                                           ---------        ------------
<S>                                        <C>              <C>      
Mortgage loans held-for-investment,
   principal                               $ 240,054         $ 171,420
Unamortized premium                           10,129             8,406
Allowance for loan losses                     (1,175)             (817)
                                           ---------         ---------
                                           $ 249,008         $ 179,009
                                           =========         =========
</TABLE>



                                       7
<PAGE>   10

A summary of the activity in the allowance for loan losses for the three months
ended March 31, 1999 is as follows (dollars in thousands):

<TABLE>
<CAPTION>
                                                MARCH 31, 1999
                                                --------------
<S>                                             <C>     
            Balance beginning of period            $    817
            Provision
               Charged to operating expense             358
                                                   --------
            Balance end of period                  $  1,175
                                                   ========
</TABLE>

At March 31, 1999, the weighted average net coupon on the Mortgage Loans was
9.39% per annum based on the amortized cost of the Mortgage Loans. At March 31,
1999, approximately 37% of the collateral was located in California with no
other state representing more than approximately 7%.

     As of March 31, 1999 there were no loans in non-accrual status. Interest is
accrued on all loans and allowances are provided for accrued interest deemed
uncollectable.  Non-performing, impaired loans included in the Mortgage Loan
portfolio at March 31, 1999 were approximately $8.4 million, which had an
aggregate specific related allowance as noted above.

NOTE 4.  BOND COLLATERAL

AmRIT has pledged collateral in order to secure the Long-Term Debt issued in the
form of Bond Collateral. This Bond Collateral consists primarily of
adjustable-rate, conventional, 30-year mortgage loans secured by first liens on
one- to four-family residential properties. All Bond Collateral is pledged to
secure repayment of the related Long-Term Debt obligation. All principal and
interest (less servicing and related fees) on the Bond Collateral is remitted to
a trustee and is available for payment on the Long-Term Debt obligation. AmRIT's
exposure to loss on the Bond Collateral is limited to its net investment, as the
Long-Term Debt is non-recourse to AmRIT.

The components of the Bond Collateral at March 31, 1999 and December 31, 1998
are summarized as follows (dollars in thousands):


<TABLE>
<CAPTION>
                                                     MARCH 31, 1999     DECEMBER 31, 1998
                                                     --------------     -----------------
<S>                                                  <C>                <C>        
            Mortgage loans                            $   343,611          $   390,875
            Unamoritized premium                           28,556               31,899
            Allowance for loan losses                      (5,241)              (4,966)
                                                      -----------          -----------
                                                      $   366,926          $   417,808
                                                      -----------          -----------

            Weighted average gross coupon                   10.16%               10.21%
            Weighted average net coupon                      9.54%                9.55%
            Weighted average pass-through rate               9.53%                9.54%
</TABLE>



                                       8
<PAGE>   11

A summary of the activity in the allowance for loan losses at March 31, 1999 is
as follows (dollars in thousands):

<TABLE>
<CAPTION>
                                               MARCH 31, 1999
                                               --------------
<S>                                            <C>    
            Balance beginning of period            $ 4,966
            Provision
               Charged to operating expense            592
            Loans charged-off
               Net of recoveries                      (317)
                                                   -------
            Balance end of period                  $ 5,241
                                                   =======
</TABLE>

     As of March 31, 1999 there were no loans in non-accrual status. Interest is
accrued on all loans and allowances are provided for accrued interest deemed
uncollectable. Non-performing, impaired loans included in Bond Collateral at
March 31, 1999 were approximately $32.7 million, which had an aggregate specific
related allowance as noted above.

NOTE 5.  RETAINED INTEREST IN SECURITIZATION

Retained interest in securitization consist of assets generated and retained in
conjunction with the Company's loan securitization. These assets at March 31,
1999 and December 31, 9998 were as follows (dollars in thousands):


<TABLE>
<CAPTION>
                                                  March 31,      December 31, 
                                                    1999            1998
                                                  ---------      ------------ 
<S>                                               <C>            <C>     
            REMIC subordinate certificates        $  6,699        $  6,699
            Overcollateralization account            2,360           1,513
            Unrealized gain                            550             550
                                                  --------        --------

                                                  $  9,609        $  8,762
                                                  ========        ========
</TABLE>

The Company classifies REMIC securities as available-for-sale securities and
carries them at market value. The fair value of the retained interest is
determined by computing the present value of the excess of the weighted-average
coupon of the residential mortgages sold (9.32%) over the sum of: (1) the coupon
on the senior interest (5.95%), and (2) a servicing fee paid to servicer of the
residential mortgages (0.50%) and other fees, and taking into account expected
estimated losses to be incurred on the portfolio of residential mortgages sold
over the estimated lives of the residential mortgages and using an estimated
future average prepayment assumption (25%) per year. The prepayment assumption
used in estimating the cash flows is based on recent evaluations of the actual
prepayments of the related portfolio and on market prepayment rates on new
portfolios of similar residential mortgages, taking into consideration the
current interest rate environment and its expected impact on the estimated
future prepayment rate. The estimated cash flows expected to be received by the
Company are discounted at an interest rate that the Company believes is
commensurate with the risk of holding such a financial instrument. The rate used
to discount the cash flows coming out of the trust was approximately 12%. To the
extent that actual future excess cash flows are different from estimated excess
cash flows, the fair value of the Company's retained interest could decline.



                                       9
<PAGE>   12

Under the terms of the securitization, the retained interest is required to
build over collateralization to specified levels using the excess cash flows
described above until set percentages of the securitized portfolio are attained.
Future cash flows to the retained interest holder are all held by the REMIC
trust until a specific percentage of either the original or current certificate
balance is attained which percentage can be raised if certain charge-offs and
delinquency ratios are exceeded. The certificate holders' recourse for credit
losses is limited to the amount of over collateralization held in the REMIC
trust. Upon maturity of the certificates or upon exercise of an option ("clean
up call") to repurchase all the remaining residential mortgages once the balance
of the residential mortgages in the trust are reduced to 10% of the original
balance of the residential mortgages in the trust, any remaining amounts in the
trust are distributed. The current amount of any over collateralization balance
held by the trust is recorded as part of the retained interest.

In future periods, the Company will recognize additional revenue from the
retained interest if the actual performance of the mortgage loans is higher than
the original estimate or the Company may increase the estimated fair value of
the retained interest. If the actual performance of the mortgage loans is lower
than the original estimate, then an adjustment to the carrying value of the
retained interest may be required if the estimated fair value of the retained
interest is less than its carrying value.

NOTE 6.  REAL ESTATE OWNED

Real estate owned consists of 17 properties with a principal balance outstanding
of approximately $3.2 million and an average principal balance outstanding of
approximately $189 thousand. Upon transfer of the loans to real estate owned,
the Company recorded a corresponding charge against the allowance for loan
losses to write down the real estate owned to fair value less cost of disposal.
Any subsequent adjustments to real estate owned will be provided for with the
establishment of a valuation allowance. At March 31, 1999 and December 31, 1998,
real estate owned had the following characteristics (dollars in thousands):

<TABLE>
<CAPTION>
                                    March 31,    December 31, 
                                      1999          1998
                                    ---------    ------------
<S>                                 <C>          <C>   
            Real estate owned        $2,960        $  490
                                     ======        ======
</TABLE>

NOTE 7.  INTEREST RATE AGREEMENTS

The amortized cost of the Company's interest rate agreements was $490 thousand
net of accumulated amortization of $552 thousand and $674 thousand net of
accumulated amortization of $368 thousand at March 31, 1999 and December 31,
1998, respectively.

NOTE 8.  SHORT-TERM DEBT

The Company entered into a reverse repurchase agreement for $300 million with
Bear Stearns to finance the acquisition of its Mortgage Assets, however, the
agreement expired April 30, 1999. The agreement provides for $100 million of
committed and $200 million of uncommitted financing. The agreement was extended
for three months on April 30, 1999 to July 31,1999. The extended agreement
provides for $200 million of committed and $100 million of uncommitted
financing. This reverse repurchase agreement is collateralized by a portion of
the Company's Mortgage Assets.

The Company is currently in final negotiations with two other lenders to provide
an additional $200 million of committed reverse repurchase agreements. The
Company also believes that Bear Stearns will continue to extend the existing
agreement.



                                       10
<PAGE>   13

At March 31, 1999, the Company had approximately $230.6 million of reverse
repurchase agreements outstanding with a weighted average borrowing rate of
5.62% per annum and a weighted average remaining maturity of one day. At March
31, 1999 and December 31, 1998, the Mortgage Assets reverse repurchase
agreements had the following characteristics (dollars in thousands):

<TABLE>
<CAPTION>
                                                   Repurchase       Underlying     Interest Rate
                                                   Liability        Collateral      (per annum)
                                                  -----------      ------------   ---------------
<S>                                               <C>              <C>            <C>  
                  AT MARCH 31, 1999
            Bear Stearns                           $ 230,599        $ 235,900             5.62%
                                                   =========        =========        =========
                AT DECEMBER 31, 1998
            Bear Stearns                           $ 161,773        $ 166,937             5.66%
            Residential Funding Corporation            4,441            4,483             6.32%
                                                   ---------        ---------        ---------
                                                   $ 166,214        $ 171,420             5.68%
                                                   =========        =========        =========
</TABLE>

NOTE 9.  LONG-TERM DEBT, NET

During the second quarter of 1998, AmRIT, through its wholly owned subsidiary,
Eagle, issued approximately $457.0 million of collateralized mortgage bonds
(Long-Term Debt) through a Financial Asset Securitization Investment Trust
(FASIT). The bonds were assigned to a FASIT trust and trust certificates
evidencing the assets of the trust were sold to investors. The trust
certificates were issued in classes representing senior, mezzanine, and
subordinate payment priorities. Payments received on single-family mortgage
loans ("Bond Collateral") are used to make payments on the Long-Term Debt. The
obligations under the Long Term Debt are payable solely from the Bond Collateral
and are otherwise non-recourse to AmRIT. The maturity of each class of trust
certificates is directly affected by the rate of principal repayments on the
related Bond Collateral. The Long-Term Debt is also subject to redemption
according to the specific terms of the indenture pursuant to which the bonds
were issued and the FASIT trust. As a result, the actual maturity of the
Long-Term Debt is likely to occur earlier than its stated maturity.

The components of the Long-Term Debt at March 31, 1999 and December 31, 1998,
along with selected other information are summarized below (dollars in
thousands):

<TABLE>
<CAPTION>
                                                          March 31, 1999      December 31, 1998
                                                          --------------      -----------------
<S>                                                       <C>                 <C>         
            Long-term debt                                 $    340,565         $    385,239
            CMO premium, net                                        356                  396
            Capitalized costs on long-term debt                    (331)                (345)
                                                           ------------         ------------
            Total long-term debt                           $    340,590         $    385,290
                                                           ============         ============

            Range of Certificate pass-through rates          5.74%-7.05%          5.74%-7.05%

            Stated maturities                                 2008-2028            2008-2028
</TABLE>

NOTE 10.  COMMITMENTS AND CONTINGENCIES

As of March 31, 1999, the Company had entered into agreements to purchase
approximately $389 million in Mortgage Loans. The characteristics of the loans
committed for purchase are generally similar to the Mortgage Loans the Company
currently owns.



                                       11
<PAGE>   14

NOTE 11.  SUBSEQUENT EVENTS

On April 22, 1999, the Company declared a $0.20 per share dividend payable on
May 10, 1999 to stockholders of record as of May 3, 1999.



ITEM 2.        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                      CONDITION AND RESULTS OF OPERATIONS.

The statements contained in this Report that are not purely historical are
forward looking statements, including statements regarding the Company's
expectations, hopes, beliefs, intentions or strategies regarding the future.
Statements which use the words "intends", "expects", "will", "may",
"anticipates" and "seeks" are forward looking statements. These forward looking
statements, including statements regarding changes in the Company's future
income and intent to acquire fixed rate Mortgage Loans, are based on information
available to the Company on the date hereof, and the Company assumes no
obligation to update any such forward looking statement. It is important to note
that the Company's actual results could differ materially from those in such
forward looking statements. Among the factors that could cause actual results to
differ materially are the factors set forth below under the heading "Business
Risks". In particular, the Company's future income could be affected by changes
in levels of repayments, changes in interest rates, lack of available Mortgage
Assets which meet the Company's acquisition criteria, the type of Mortgage
Assets acquired by the Company and the credit characteristics of the borrowers
under Mortgage Loans acquired by the Company.

OVERVIEW

The Company's income consisted of interest income generated from its Mortgage
Assets and its cash balances (collectively, "earning assets"), income generated
by equity in American Residential Holdings, Inc., prepayment penalty income and
management fee income).

The Company funds its acquisitions of earning assets with both its equity
capital and with borrowings. For that portion of the Company's earning assets
funded with equity capital ("equity-funded lending"), net interest income is
derived from the average yield on earning assets. Due to the adjustable-rate
nature of the majority of its earning assets, the Company expects that income
from this source will tend to increase as interest rates rise and will tend to
decrease as interest rates fall.

For that portion of the Company's earning assets funded with borrowings ("spread
lending"), resulting net interest income is a function of the volume of spread
lending and the difference between the Company's average yield on earning assets
and the cost of borrowed funds and interest rate hedging agreements (caps and
floors). Income from spread lending may initially decrease following an increase
in interest rates and then, after a lag period, be restored to its former level
as the yields on earning assets adjust to market conditions. Income from spread
lending may likewise increase following a fall in interest rates, but then
decrease as earning asset yields adjust to the new market conditions after a lag
period.

The Company may seek to generate growth in net income in a variety of ways,
including through (i) improving productivity by increasing the size of the
earning assets at a rate faster than operating expenses increase, (ii) changing
the mix of Mortgage Asset types among the earning assets in an effort to improve
returns, and (iii) issuing new Common Stock and increasing the size of the
earning assets when opportunities in the mortgage market are likely to allow
growth in net income per share of Common Stock, (iv) increasing the efficiency
with which the Company uses its equity capital over time by increasing the
Company's use of debt when prudent and by issuing subordinated debt, preferred
stock or other forms of debt and equity. There can be no assurance, however,
that the Company's efforts will be successful or that the Company will increase
or maintain its income level.



                                       12
<PAGE>   15

RESULTS OF OPERATIONS

For the three months ended March 31, 1999 the Company generated net income of
approximately $1.6 million and diluted net income per share of Common Stock of
$0.20 compared to the three months ended March 31, 1998 where the Company
generated net income of approximately $2.3 million and diluted net income per
share of $ 0.28.

Net interest income, after provision for loan losses, decreased 37.4% from $3.3
million for the three months ended March 31, 1998, to $2.0 million for the three
months ended March 31, 1999. Also, other operating income increased from $22
thousand to $926 thousand for the three months ended March 31, 1998 and 1999,
respectively.

The decrease in net interest income between the three months ended March 31,
1998 and the three months ended March 31, 1999 was due to the decrease of $268
million in Mortgage Assets and to increased prepayment rates on the Bond
Collateral. During the period ended March 31, 1998, there was no income from
American Residential Holdings, Inc. or from management fees. The increase in
other operating income is primarily attributable to an increase in prepayment
penalty income from $22 thousand in the three months ended March 31, 1998 to
$720 thousand in the three months ended March 31, 1999. In addition, the three
months ended March 31, 1999 had management fee income of $102 thousand and
operating income for American Residential Holdings, Inc. of $104 thousand,
whereas the corresponding period in 1998 had no income from these sources. Other
expenses increased approximately 34%, from $1.0 million for the three months
ended March 31, 1998 to $1.4 million for the three months ended March 31, 1999.
The increase in other expenses is due to a $163 thousand increase in management
fees and $552 thousand increase in hedging expense for floor agreements. This
increase is partially offset by a decrease of $370 thousand in general and
administrative expenses, comprised primarily of a $210 thousand decrease in
printing expenses and a $130 thousand decrease in professional fees.

The Company continued to experience high levels of prepayments in the three
months ended March 31, 1999. The annualized mortgage principal prepayment rate
for the Company was approximately 34.0% for the three months ended March 31,
1999 compared with approximately 37.4% for the three months ended March 31,
1998. Many of the intermediate adjustable rate mortgages have reached their
first adjustment resulting in possible refinancing and principal prepayments.
The Company anticipates that prepayment rates will continue at high levels for
an indefinite period. There can be no assurance that the Company will be able to
achieve or maintain lower prepayment rates or that prepayment rates will not
increase. The Company's financial condition and results of operations could be
materially adversely affected if prepayments continue at high levels.

The Company held Mortgage Assets of approximately $619.0 million as of March 31,
1999. Mortgage Assets at March 31, 1999 are comprised of Mortgage Securities
available-for-sale of $3.8 million, Mortgage Loans held-for-investment, pledged,
of $249.0 million and Bond Collateral of $366.2 million. As of December 31,
1998, the Company held Mortgage Assets with a carrying value of approximately
$603.4 million; comprised of Mortgage Securities available-for-sale, of $6.6
million and Mortgage Loans held-for-investment, pledged of $179.0 million and
Bond Collateral of $417.8 million.

LIQUIDITY AND CAPITAL RESOURCES

During the three months ended March 31, 1999, net cash provided by operating
activities was approximately $5.2 million. The difference between net cash
provided by operating activities and the net income of $1.6 million was
primarily the result of amortization of mortgage asset premiums and provisions
for loan losses. Both amortization of mortgage premium and provisions for loan
losses are non-cash charges. Cash charges that decreased net cash provided by
operating activities primarily included an increase in due from affiliate and
deposits to the over-collateralization account.



                                       13
<PAGE>   16

Net cash used in investing activities for the three months ended March 31, 1999
was approximately $23.4 million made up of approximately $77.5 million of
Mortgage Loans purchased offset by principal prepayments of Mortgage Assets of
approximately $54.1 million.

For the three months ended March 31, 1999, net cash provided by financing
activities was approximately $18.5 million. Net cash provided by financing
activities was primarily the results of an increase in net borrowings from
reverse repurchase agreements of $64.4 million offset by payments on the
CMO/FASIT bonds of $44.7 million.


YEAR 2000 ISSUE

The Year 2000 issue is the result of computer programs being written using two
digits rather than four to define the applicable year. Computer systems,
software, and devices with embedded technology that are date-sensitive may
recognize a date using "00" as the year 1900 rather than the year 2000. This
could result in systems failures, miscalculations or disruptions in operations,
including, among other things, a temporary inability to process transactions or
engage in similar normal business activities.

The Company is currently in the process of assessing how it may be impacted by
the Year 2000 issue and formulating and implementing a comprehensive plan to
address all known aspects of the issue.

Based on the Company's recent assessment of its internal computer systems
(including related hardware, software, customized applications and network
systems) with respect to the Year 2000 issue, the Company determined that its
existing network and operating systems are Year 2000 compliant, with minor
issues. The Company has hired an external systems consultant to rectify these
minor issues. The Company believes that these measures, the actual and estimated
costs of which have been and are expected to continue to be immaterial in the
aggregate, will enable its internal computer systems to be Year 2000 compliant.

The Company is also reviewing the efforts of its significant hardware, software,
and service providers to become Year 2000 compliant. The Company has contacted
all critical entities with which the Company does business to assess their Year
2000 readiness. As of March 31, 1999 a majority of these entities have responded
to the Company's inquiries. The Company is in the process of reviewing the
written responses to the inquiries, and is assessing the impact that the Year
2000 readiness status of such entities may have on the Company's operations, and
is taking whatever action is deemed necessary. Based on the responses received
to date, there has been no indication that the respondents have any material
concerns related to their ability to address all of their known significant Year
200 issues on a timely basis. The Company anticipates that these review
activities will be on-going for the remainder of 1999 and will include any
necessary follow-up efforts. The Company, however, cannot presently estimate the
total cost of this phase of its Year 2000 readiness program. Although the review
of such entities is continuing, the Company is not aware of any third party
circumstances with respect to the Year 2000 issue that may have a material
adverse impact on the Company. The Company can provide no assurance that the
Year 2000 compliance plans of such third parties will be successfully completed
in a timely manner.

Based on the results to date of the Company's internal assessment and external
inquiries, the Company does not believe that the Year 2000 issue will pose
significant operational problems for the Company or otherwise have a material
adverse effect on its results of operation or financial position. Although
management believes it has undertaken a careful and thorough analysis, if all
Year 2000 issues are not properly identified, or assessment, remediation and
testing efforts are not completed in a timely manner with respect to the
problems that are identified, there can be no assurance that the Year 2000 issue
will not have a material adverse effect on the Company's results of operations
or adversely affect the Company's relationship with hardware, software, and
service providers. Further, management believes it has undertaken a careful
survey of third party entities and does not believe there to be material concern
based upon the potential third party risks that have been identified, however,
there can be no assurance that the Year 2000 issues of the other entities will
not have a material adverse effect on the Company's systems or results of
operations.



                                       14
<PAGE>   17

As of March 31, 1999, a contingency plan has not yet been developed for dealing
with the most reasonably likely worst case scenario resulting from the Year 2000
issues as such scenario has not been clearly identified. The contingency plan
will provide timetables to pursue various alternatives, for all external systems
classified as critical, based upon the failure of a hardware, software or
service provider documentation that there product has been adequately modified,
tested, and validated to ensure Year 2000 compliance. The Company currently
plans to complete such contingency planning by June 30, 1999.

BUSINESS RISKS

SUDDEN INTEREST RATE FLUCTUATIONS MAY REDUCE INCOME FROM OPERATIONS

Substantially all of the Company's Mortgage Assets have a repricing frequency of
two years or less, and a majority of the Company's borrowings have a repricing
frequency of six months or less. The interest rates on the Company's borrowings
may be based on interest rate indices which are different from, and adjust more
rapidly than, the interest rate indices of its related Mortgage Assets.
Consequently, changes in interest rates may significantly influence the
Company's net interest income. While increases in interest rates will generally
increase the yields on the Company's adjustable-rate Mortgage Assets, rising
rates will also increase the cost of borrowings by the Company. To the extent
such costs rise more rapidly than the yields on such Mortgage Assets, the
Company's net interest income will be reduced or a net interest loss may result.

Adjustable-rate Mortgage Assets are typically subject to periodic and lifetime
interest rate caps which limit the amount an adjustable-rate Mortgage Asset
interest rate can change during any given period. The Company's borrowings will
not be subject to similar restrictions. Hence, in a period of increasing
interest rates, the cost of the Company's borrowings could increase without
limitation by caps while the yields on the Company's Mortgage Assets could be
limited. Further, some adjustable-rate Mortgage Assets may be subject to
periodic payment caps that result in some portion of the interest being deferred
and added to the principal outstanding. This could result in receipt by the
Company of a lesser amount of cash income on its adjustable-rate Mortgage Assets
than is required to pay interest on the related borrowings, which will not have
such payment caps. These factors could lower the Company's net interest income
or cause a net interest loss during periods of rising interest rates, which
would negatively impact the Company's financial condition and results of
operations.

BORROWER CREDIT MAY DECREASE VALUE OF MORTGAGE LOANS

During the time the Company holds Mortgage Loans, it is subject to credit risks,
including risks of borrower defaults and bankruptcies and special hazard losses
that are not covered by standard hazard insurance (such as those occurring from
earthquakes or floods). In the event of a default on any Mortgage Loan held by
the Company, the Company will bear the risk of loss of principal to the extent
of any deficiency between the value of the secured property, and the amount
owing on the Mortgage Loan, less any payments from an insurer or guarantor.
Defaulted Mortgage Loans will also cease to be eligible collateral for
borrowings, and will have to be financed by the Company out of other funds until
ultimately liquidated. Although the Company has established an allowance for
Mortgage Loan losses in an amount adequate to cover these risks, in view of its
limited operating history and lack of experience with the Company's current
Mortgage Loans and Mortgage Loans that it may acquire, there can be no assurance
that any allowance for Mortgage Loan losses which is established will be
sufficient to offset losses on Mortgage Loans in the future.

Credit risks associated with non-conforming Mortgage Loans, especially sub-prime
Mortgage Loans, may be greater than those associated with Mortgage Loans that
conform to FNMA and FHLMC guidelines. The principal difference between
non-conforming Mortgage Loans and conforming Mortgage Loans include, the credit
and income histories of the mortgagors, the applicable loan-to-value ratios, the
documentation required for approval of the mortgagors, the types of properties
securing the Mortgage Loans, loan sizes and the mortgagors' occupancy status
with respect to the mortgaged property. As a result of these and other factors,
the interest rates charged on non-conforming Mortgage Loans are often higher
than those 



                                       15
<PAGE>   18

charged for conforming Mortgage Loans. The combination of different underwriting
criteria and higher rates of interest may lead to higher delinquency rates
and/or credit losses for non-conforming as compared to conforming Mortgage Loans
and could have an adverse effect on the Company to the extent that the Company
invests in such Mortgage Loans or securities secured by such Mortgage Loans.

Even assuming that properties secured by the Mortgage Loans held by the Company
provide adequate security for such Mortgage Loans, substantial delays could be
encountered in connection with the foreclosure of defaulted Mortgage Loans, with
corresponding delays in the receipt of related proceeds by the Company. State
and local statutes and rules may delay or prevent the Company's foreclosure on
or sale of the mortgaged property and may prevent the Company from receiving net
proceeds sufficient to repay all amounts due on the related Mortgage Loan. In
addition, the Company's servicing agent may be entitled to receive all expenses
reasonably incurred in attempting to recover amounts due and not yet repaid on
liquidated Mortgage Loans, thereby reducing amounts available to the Company.
Some properties which will collateralize the Company's Mortgage Loans may have
unique characteristics or may be subject to seasonal factors which could
materially prolong the time period required to resell such properties.

REAL ESTATE MARKET CONDITIONS MAY ADVERSELY AFFECT RESULTS OF OPERATIONS

The Company's business may be adversely affected by periods of economic slowdown
or recession which may be accompanied by declining real estate values. Any
material decline in real estate values reduces the ability of borrowers to use
home equity to support borrowings and increases the loan-to-value ratios of
Mortgage Loans previously made, thereby weakening collateral coverage and
increasing the possibility of a loss in the event of default. In addition,
delinquencies, foreclosures and losses generally increase during economic
slowdowns and recessions.

CONTINUED HIGH LEVELS OF MORTGAGE ASSET PREPAYMENTS WILL REDUCE OPERATING INCOME

Prepayments of Mortgage Assets could continue to adversely affect the Company's
results of operations in several ways. The Company anticipates that a portion of
the adjustable-rate Mortgage Assets to be acquired by the Company may bear
initial "teaser" interest rates which are lower than their "fully-indexed" rates
(the applicable index plus a margin). In the event that such an adjustable-rate
Mortgage Asset is prepaid prior to or soon after the time of adjustment to a
fully-indexed rate, the Company will have held the Mortgage Asset during its
least profitable period and lost the opportunity to receive interest at the
fully-indexed rate over the expected life of the adjustable-rate Mortgage Asset.
In addition, the prepayment of any Mortgage Asset that had been purchased with a
premium by the Company would result in the immediate write-off of any remaining
capitalized premium amount and consequent reduction of the Company's net
interest income by such amount. Finally, in the event that the Company is unable
to acquire new Mortgage Assets to replace the prepaid Mortgage Assets, the
Company's financial condition and results of operations could be materially
adversely affected.

Mortgage Asset prepayment rates generally increase when new Mortgage Loan
interest rates fall below the interest rates on the adjustable-rate Mortgage
Assets. Prepayment experience also may be affected by the geographic location of
the property securing the adjustable-rate Mortgage Loans, the assumability of an
adjustable-rate Mortgage Loan, the ability of the borrower to obtain or convert
to a fixed-rate Mortgage Loan, conditions in the housing and financial markets
and general economic conditions. The level of prepayments is also subject to the
same seasonal influences as the residential real estate industry with prepayment
rates generally being highest in the summer months and lowest in the winter
months. The Company has experienced high levels of prepayments during 1997,
1998, and the period ended March 31, 1999 and the Company anticipates that
prepayment rates are likely to continue at high levels for an indefinite period.
There can be no assurance that the Company will be able to achieve or maintain
lower prepayment rates. Accordingly, the Company's financial condition and
results of operations could be materially adversely affected.

Certain Mortgage Loans acquired by the Company may contain provisions
restricting prepayments of such Mortgage Loans and require a charge in
connection with the prepayment thereof. Such prepayment restrictions can, but do
not necessarily, provide a deterrent to prepayments. Prepayment charges may be
in 



                                       16
<PAGE>   19

an amount which is less than the figure which would fully compensate the Company
for a lower yield upon reinvestment of the prepayment proceeds.

INVESTMENTS IN MORTGAGE ASSETS MAY BE ILLIQUID

Although the Company expects that a majority of the Company's investments will
be in Mortgage Assets for which a resale market exists, certain of the Company's
investments may lack a regular trading market and may be illiquid. In addition,
during turbulent market conditions, the liquidity of all of the Company's
Mortgage Assets may be adversely impacted. There is no limit to the percentage
of the Company's investments that may be invested in illiquid Mortgage Assets.
In the event the Company requires additional cash as a result of a margin call
pursuant to its financing agreements or otherwise, the Company may be required
to liquidate Mortgage Assets on unfavorable terms. The Company's inability to
liquidate Mortgage Assets could render it insolvent.



Item 3. Quantitative and Qualitative Disclosures about Market Risk

        The Company is exposed to a variety of risks including changes in
        interest rates which offset the return of its investments and the cost
        of its debt. At March 31, 1999 there have not been any material changes
        in market risk as reported by the Company in its Annual Report on Form
        10-K for the year ended December 31, 1998.

PART II.  OTHER INFORMATION

Item. 1. Legal Proceedings

         None

Item 2.  Changes in Securities and Use of Proceeds

         None.

Item 3.  Defaults Upon Senior Securities

         Not applicable.

Item 4.  Submission of Matters to a Vote of Security Holders

         None.

Item 5.  Other Information

         None

Item 6.  Exhibits and Reports on Form 8-K:

(a)      Exhibits

         *3.1    Articles of Amendment and Restatement of the Registrant

         *3.2    Amended and Restated Bylaws of the Registrant

          27.    Financial Data Schedule

        *       Incorporated by reference to Registration Statement on Form S-11
                (File No. 333-33679)


(b)     Reports on Form 8-K

        Current Report on Form 8-K filed with the Commission on February 17,
        1999



                                       17
<PAGE>   20

SIGNATURES

Pursuant to the requirements of 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 RESIDENTIAL INVESTMENT TRUST, INC.



Dated:  May 10, 1999               By:    /s/ Mark A. Conger           
                                        ----------------------------------------
                                            Mark A. Conger,
                                            Executive Vice President
                                            Chief Financial Officer



                                       18