ARLINGTON, Va., April 24 /PRNewswire-FirstCall/ -- Friedman,
Billings, Ramsey Group, Inc. (FBR Group; NYSE: FBR) today reported
net after-tax earnings of $45.1 million, or $0.30 per share
(diluted), for the quarter ended March 31, 2008 compared to a net
after-tax loss of $185.9 million, or $1.08 per share (diluted) in
the first quarter of 2007. FBR Group ended the quarter with $667
million of consolidated total capital, including $318 million of
trust preferred securities. Of this capital, $259 million was
attributable to FBR Group's 52% ownership interest in FBR Capital
Markets Corporation (FBR Capital Markets) (NASDAQ:FBCM). Of the
remaining $408 million in capital, FBR Group had approximately $240
million invested in cash and agency securities at the end of the
first quarter. Book value net of Accumulated Other Comprehensive
Income (AOCI)(1) as of March 31, 2008 was $3.02 per share compared
to book value net of AOCI of $2.70 as of December 31, 2007. The
first quarter 2008 results reflect: -- a $73.0 million non-cash
GAAP reversal of pre-bankruptcy losses relating to First NLC
Financial Services (FNLC), -- $3.4 million of losses related
primarily to pre-bankruptcy FNLC activities, -- $15.0 million of
investment-related losses, including $3.6 million related to
merchant banking and $10.6 million related to non-prime securities,
-- a $4.2 million net operating loss at FBR Group for the quarter,
and -- a $5.3 million loss, representing FBR Group's proportionate
share of 52%-owned FBR Capital Markets' first quarter loss. The
$372 million net operating loss carry-forward and the $268 million
of capital loss carry-forward disclosed last quarter remain a
potential future economic benefit. "We benefited from low leverage
and a strong liquidity position during the quarter," said J. Rock
Tonkel, Jr., President and Chief Operating Officer of FBR Group.
"Going forward, we expect to benefit from the full effect of the
$578 million of agency hybrid securities added during the first
quarter which had a spread in excess of 225 basis points on March
31st. In addition, we have reduced operating expenses from ongoing
operations by 28% from the average 2007 quarterly run-rate, and we
expect additional cost reductions during the remainder of 2008."
Mortgage Investment Portfolio Excluding FBR Capital Markets, FBR
Group's investments in mortgage-backed securities (MBS), primarily
government agency securities, averaged $1.9 billion with a
one-month CPR of 9.9, and an ending net premium of $13 million. The
net yield on MBS for the first quarter was 4.76% with a
corresponding cost of funds of 3.76% for a net spread of 1.00%. At
the end of the quarter, total MBS was $2.5 billion with a yield of
4.22% and a cost of funds of 2.81% for a net spread of 1.41%.
Merchant Banking Excluding merchant banking investments of $54.0
million at FBR Capital Markets, the total value of the merchant
banking investments held by FBR Group at the close of the first
quarter was $44.5 million. Looking Ahead "We continue to examine
strategies to maximize the economic benefit that can be derived
from the Company's substantial net operating and capital loss
carry-forwards," said Eric F. Billings, Chairman and Chief
Executive Officer of FBR Group. "Our balance sheet at the end of
the quarter includes $408 million of long-term capital,
approximately $240 million of which is in cash and highly liquid
agency securities. This financial strength positions us well to
manage through the current environment with a goal of growing
earnings and capital and increasing shareholder value as we
continue to implement our core strategy of investing in a leveraged
portfolio of hybrid agency mortgage- backed securities on a hedged
basis." FBR Capital Markets Corporation FBR Capital Markets
yesterday reported a net after-tax loss of $10.2 million, or $0.16
per share (diluted), for the quarter ended March 31, 2008, compared
to net after-tax income of $11.0 million, or $0.17 per share
(diluted) in the first quarter of 2007. Net revenues for the first
quarter were $104.0 million compared to net revenues of $60.7
million in the fourth quarter of 2007 and $143.2 million in first
quarter of 2007. At the close of the first quarter, FBR Capital
Markets had $503.0 million in equity, $313.3 million of cash, and a
book value of $7.77 per share. Complete financial results and
tables for FBR Capital Markets can be found at http://www.fbr.com/
. FBR Group will host an earnings conference call this morning,
Thursday, April 24, 2008 at 9:00 A.M. U.S. EDT. Investors wishing
to listen to the call may do so via the web at:
http://phx.corporate-ir.net/phoenix.zhtml?c=71352&p=irol-irhome
. Replays of the webcast will be available after the call.
Friedman, Billings, Ramsey Group, Inc. (FBR) invests in
mortgage-related assets, merchant banking opportunities and is the
majority owner of FBR Capital Market Corporation, a separate
publicly traded company. FBR is headquartered in the Washington,
D.C. metropolitan area. For more information, please visit
http://www.fbr.com/ . (1) Accumulated Other Comprehensive Income
(AOCI) includes changes in the value of available-for-sale
securities and cash flow hedges. FBR believes that such changes
represent temporary market fluctuations, are not reflective of our
market strategy, and, therefore, the exclusion of AOCI provides a
reasonable basis for calculating returns. Statements concerning
future performance, developments, events, market forecasts,
revenues, expenses, earnings, run rates and any other guidance on
present or future periods, constitute forward-looking statements
that are subject to a number of factors, risks and uncertainties
that might cause actual results to differ materially from stated
expectations or current circumstances. These factors include, but
are not limited to, the effect of demand for public offerings,
activity in the secondary securities markets, interest rates, costs
of borrowing, interest spreads, mortgage pre-payment speeds, risks
associated with merchant banking investments, the realization of
gains and losses on principal investments, available technologies,
competition for business and personnel, and general economic,
political and market conditions. These and other risks are
described in the Company's Annual Report and Form 10-K and
quarterly reports on Form 10-Q that are available from the company
and from the SEC. Financial data follows. FRIEDMAN, BILLINGS,
RAMSEY GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts) (Unaudited) Three
Months Ended March 31, 2008 % 2007 % ---------- ------- ----------
-------- REVENUES: Investment banking: Capital raising $64,910
70.3% $97,247 787.6% Advisory 5,076 5.5% 6,458 52.3% Institutional
brokerage: Principal transactions 5,957 6.5% 2,036 16.5% Agency
commissions 25,850 28.0% 23,818 192.9% Asset management: Base
management fees 4,644 5.0% 5,528 44.8% Incentive allocations and
fees - 0.0% 104 0.8% Principal investment: Interest 25,914 28.1%
181,696 1471.6% Net investment loss (19,687) -21.3% (59,713)
-483.6% Dividends 429 0.5% 959 7.8% Mortgage banking: Interest 36
0.0% 26,530 214.9% Net investment income (loss) 468 0.5% (106,859)
-865.5% Other 2,335 2.5% 4,094 33.1% ---------- ------- ----------
-------- Total revenues 115,932 125.6% 181,898 1473.2% Interest
expense 23,650 25.6% 169,551 1373.2% ---------- ------- ----------
-------- Revenues, net of interest expense 92,282 100.0% 12,347
100.0% ---------- ------- ---------- -------- NON-INTEREST
EXPENSES: Compensation and benefits 76,954 83.4% 103,982 842.2%
Professional services 12,467 13.5% 13,854 112.2% Business
development 12,294 13.3% 13,769 111.5% Clearing and brokerage fees
3,630 3.9% 2,701 21.9% Occupancy and equipment 9,189 10.0% 13,117
106.2% Communications 6,018 6.5% 7,051 57.1% Other operating
expenses 5,384 5.8% 31,716 256.8% Goodwill impairment - 0.0% 25,852
209.3% Restructuring charges - 0.0% 15,485 125.3% ----------
------- ---------- -------- Total non-interest expenses 125,936
136.4% 227,527 1842.5% ---------- ------- ---------- --------
Operating loss (33,654) -36.4% (215,180) -1742.5% ----------
------- ---------- -------- OTHER INCOME: Gain on disposition of
subsidiary and other income 73,037 79.1% 831 6.7% ----------
------- ---------- -------- Income (loss) before income taxes and
minority interest 39,383 42.7% (214,349) -1736.0% Income tax
benefit (806) -0.9% (31,550) -255.5% Minority interest in (losses)
earnings of consolidated subsidiary (4,913) -5.3% 3,079 24.9%
---------- ------- ---------- -------- Net income (loss) $45,102
48.9% $(185,878) -1505.4% ========== ======= ========== ========
Basic earnings (loss) per share $0.30 $(1.08) ========== ==========
Diluted earnings (loss) per share $0.30 $(1.08) ==========
========== Weighted average shares - basic (in thousands) 150,784
172,850 ========== ========== Weighted average shares - diluted (in
thousands) 151,419 172,850 ========== ========== FRIEDMAN,
BILLINGS, RAMSEY GROUP, INC. Financial & Statistical Supplement
- Operating Results (Dollars in thousands, except per share data)
(Unaudited) Q-1 08 Revenues --------- Investment banking: Capital
raising $64,910 Advisory 5,076 Institutional brokerage: Principal
transactions 5,957 Agency commissions 25,850 Asset management: Base
management fees 4,644 Principal investment: Interest 25,914 Net
investment loss (19,687) Dividends 429 Mortgage banking: Interest
36 Net investment income 468 Other 2,335 --------- Total revenues
115,932 Interest expense 23,650 --------- Revenues, net of interest
expense 92,282 --------- Non-interest expenses Compensation and
benefits 76,954 Professional services 12,467 Business development
12,294 Clearing and brokerage fees 3,630 Occupancy and equipment
9,189 Communications 6,018 Other operating expenses 5,384 ---------
Total non-interest expenses 125,936 --------- Operating loss
(33,654) Other income Gain on disposition of subsidiary and other
income 73,037 --------- Net income before income taxes and minority
interest 39,383 Income tax benefit (806) Minority interest in
losses of consolidated subsidiary (4,913) --------- Net income
$45,102 ========= ROE (annualized) 48.9% ROE (annualized-excluding
AOCI)(1) 41.8% Total shareholders' equity $344,408 Total
shareholders' equity, net of AOCI(1) $455,761 Basic earnings per
share $0.30 Diluted earnings per share $0.30 Ending shares
outstanding (in thousands) 150,915 Book value per share $2.28 Book
value per share, net of AOCI (1) $3.02 Gross assets under
management (in millions) Managed accounts $333.9 Hedge &
offshore funds 45.1 Mutual funds 1,702.9 Private equity and venture
capital funds 21.4 --------- Total $2,103.3 ========= Net assets
under management (in millions) Managed accounts $333.9 Hedge &
offshore funds 40.4 Mutual funds 1,698.0 Private equity and venture
capital funds 20.2 --------- Total $2,092.5 ========= Employee
count 726 ========= FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.
Financial & Statistical Supplement - Operating Results (Dollars
in thousands, except per share data) (Unaudited) For the twelve
months ended December 31, 2007 Q-4 07 Q-3 07 Q-2 07 Q-1 07 Revenues
--------- -------- -------- -------- -------- Investment banking:
Capital raising $282,619 $25,648 $49,692 $110,032 $97,247 Advisory
34,063 4,973 16,480 6,152 6,458 Institutional brokerage: Principal
transactions 10,152 2,996 968 4,152 2,036 Agency commissions
104,792 26,153 26,257 28,564 23,818 Asset management: Base
management fees 23,549 5,542 6,119 6,360 5,528 Incentive
allocations and fees 401 99 82 116 104 Principal investment:
Interest 501,130 51,057 115,450 152,927 181,696 Net investment loss
(221,956) (22,327) (136,475) (3,441) (59,713) Dividends 3,173 805
526 883 959 Mortgage banking: Interest 51,245 4,059 7,194 13,462
26,530 Net investment loss (222,032) (83,174) (27,968) (4,031)
(106,859) Other 15,808 3,242 3,990 4,482 4,094 --------- --------
-------- -------- -------- Total revenues 582,944 19,073 62,315
319,658 181,898 Interest expense 477,437 52,583 112,072 143,231
169,551 --------- -------- -------- -------- -------- Revenues, net
of interest expense 105,507 (33,510) (49,757) 176,427 12,347
--------- -------- -------- -------- -------- Non-interest expenses
Compensation and benefits 361,355 69,533 80,955 106,885 103,982
Professional services 55,741 15,598 12,281 14,008 13,854 Business
development 43,518 10,878 7,713 11,158 13,769 Clearing and
brokerage fees 12,514 2,797 3,953 3,063 2,701 Occupancy and
equipment 52,302 13,791 12,695 12,699 13,117 Communications 28,690
6,899 7,148 7,592 7,051 Other operating expenses 82,246 15,706
16,140 18,684 31,716 Impairment of goodwill 162,765 108,013 -
28,900 25,852 Restructuring charges 46,985 21,466 6,172 3,862
15,485 --------- -------- -------- -------- -------- Total
non-interest expenses 846,116 264,681 147,057 206,851 227,527
--------- -------- -------- -------- -------- Operating loss
(740,609) (298,191) (196,814) (30,424) (215,180) Other income
(loss) Gain (loss) on sale of subsidiary shares 104,062 4 (2,450)
105,677 831 --------- -------- -------- -------- -------- (Loss)
income before income taxes and minority interest (636,547)
(298,187) (199,264) 75,253 (214,349) Income tax provision (benefit)
22,932 (15,817) 15,288 55,011 (31,550) Minority interest in
earnings (losses) of consolidated subsidiary 774 (12,008) 165 9,538
3,079 --------- -------- -------- -------- -------- Net (loss)
income $(660,253)$(270,362)$(214,717) $10,704 (185,878) =========
======== ======== ======== ======== ROE (annualized) -84.4% -138.2%
-91.9% 3.9% -68.8% ROE (annualized- excluding AOCI)(1) -82.9%
-135.8% -90.5% 3.9% -68.2% Total shareholders' equity $393,691
$393,691 $698,214 $1,012,635 $989,213 Total shareholders' equity,
net of AOCI(1) $406,537 $406,537 $711,693 $1,000,071 $993,753 Basic
(loss) earnings per share $(3.95) $(1.77) $(1.28) $0.06 $(1.08)
Diluted (loss) earnings per share $(3.95) $(1.77) $(1.28) $0.06
$(1.08) Ending shares outstanding (in thousands) 150,674 150,674
158,671 173,756 172,846 Book value per share $2.61 $2.61 $4.40
$5.83 $5.72 Book value per share, net of AOCI(1) $2.70 $2.70 $4.49
$5.76 $5.75 Gross assets under management (in millions) Managed
accounts $347.1 $347.1 $345.6 $291.3 $258.8 Hedge & offshore
funds 52.1 52.1 61.7 61.7 67.1 Mutual funds 2,046.5 2,046.5 2,292.3
2,482.6 2,412.9 Private equity and venture capital funds 23.8 23.8
31.3 33.8 41.2 --------- -------- -------- -------- -------- Total
$2,469.5 $2,469.5 $2,730.9 $2,869.4 $2,780.0 ========= ========
======== ======== ======== Net assets under management (in
millions) Managed accounts $347.1 $347.1 $345.6 $291.3 $258.8 Hedge
& offshore funds 50.7 50.7 58.1 58.1 62.5 Mutual funds 2,034.6
2,034.6 2,285.1 2,474.7 2,406.4 Private equity and venture capital
funds 22.6 22.6 29.8 32.0 38.0 --------- -------- -------- --------
-------- Total $2,455.0 $2,455.0 $2,718.6 $2,856.1 $2,765.7
========= ======== ======== ======== ======== Employee count 1,025
1,025 1,290 2,151 2,592 ========= ======== ======== ========
======== (1) Accumulated Other Comprehensive Income (AOCI) includes
changes in value of available-for-sale securities and cash flow
hedges. We believe that such changes represent temporary market
fluctuations, are not reflective of our market strategy, and
therefore, exclusion of AOCI provides a reasonable basis for
calculating returns. FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.
CONSOLIDATED BALANCE SHEETS (Dollars and shares in thousands,
except per share amounts) (Unaudited) ASSETS 31-Mar-08 31-Dec-07
----------- ----------- Cash and cash equivalents $337,041 $692,360
Restricted cash 178 14,166 Receivables 69,322 75,357 Investments:
Mortgage-backed securities, at fair value 2,770,334 1,791,480 Loans
held for sale, net - 65,074 Long-term investments 145,465 169,274
Trading securities, at fair value 42,675 19,057 Due from clearing
broker 15,950 - Derivative assets, at fair value 1,699 3,514
Intangible assets, net 10,147 9,837 Furniture, equipment, software
and leasehold improvements, net 27,742 30,451 Prepaid expenses and
other assets 70,183 74,385 ----------- ----------- Total assets
$3,490,736 $2,944,955 =========== =========== LIABILITIES AND
SHAREHOLDERS ' EQUITY Liabilities: Trading account securities sold
short but not yet purchased, at fair value $60 $206 Repurchase
agreements 2,458,550 1,744,377 Derivative liabilities, at fair
value 10,937 3,558 Interest payable 2,697 2,991 Accrued
compensation and benefits 38,480 57,000 Accounts payable, accrued
expenses and other liabilities 69,287 105,456 Due to clearing
broker - 7,059 Short-term loan financing - 63,981 Long-term debt
322,155 323,575 ----------- ----------- Total liabilities 2,902,166
2,308,203 ----------- ----------- Minority interest 244,162 243,061
Shareholders' equity: Common stock, 159,505 and 151,883 shares
1,595 1,519 Additional paid-in capital 1,472,623 1,468,801
Accumulated other comprehensive loss, net of taxes (111,353)
(12,846) Accumulated deficit (1,018,457) (1,063,783) -----------
----------- Total shareholders' equity 344,408 393,691 -----------
----------- Total liabilities and shareholders' equity $3,490,736
$2,944,955 =========== =========== DATASOURCE: Friedman, Billings,
Ramsey Group, Inc. CONTACT: Media, Lauren Burk, +1-703-469-1004, ;
or Investors, Paul Beattie, +1-703-312-9673, , both of Friedman,
Billings, Ramsey Group, Inc. Web site: http://www.fbr.com/
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