ARLINGTON, Va., Feb. 22 /PRNewswire-FirstCall/ -- Friedman,
Billings, Ramsey Group, Inc. (FBR Group; NYSE: FBR) today reported
net after-tax earnings of $3.8 million, or $0.02 per share
(diluted), for the quarter ended December 31, 2006 compared to a
net after-tax loss of $271.6 million, or $1.60 per share (diluted)
in the fourth quarter of 2005. For the year, FBR had a net
after-tax loss of $67.3 million, or $0.39 per share (diluted),
compared to a net after-tax loss of $170.9 million, or $1.01 per
share (diluted), in 2005. Core book value net of Accumulated Other
Comprehensive Income (AOCI) at year end was $6.87 compared to $7.67
at year end 2005(1). The fourth quarter results for FBR Group
included higher than historical income tax expense of $6.4 million
or $0.04 per share (diluted) attributable primarily to the effects
of FASB 123R (an accounting rule adopted in 2006 relating to stock
compensation), deferred tax valuation allowances and other tax
items. In addition, the company incurred "other than temporary
impairment" charges of $17.2 million, or $0.10 per share (diluted),
on merchant banking investments in the sub-prime mortgage industry.
FBR Capital Markets Corporation Results FBR Capital Markets
Corporation (FBR Capital Markets), FBR Group's 72%- owned
investment banking, institutional brokerage and asset management
subsidiary, reported for the fourth quarter pre-tax earnings of
$17.6 million on net revenues of $120.0 million. Net after-tax
earnings for the fourth quarter were $7.0 million. Excluding FASB
123R-related and other non-cash tax charges of $3 million,
after-tax earnings were $10.0 million. Complete financial results
for FBR Capital Markets, which is a privately held company, are
included in the tabular material in this release along with those
of FBR Group. Investment Banking In the fourth quarter, FBR Capital
Markets generated investment banking revenues of $81.1 million. The
firm raised a total of $4.2 billion in 17 transactions and
undertook eight merger and acquisition advisory assignments. Also
in the fourth quarter, the firm executed a $777 million private
placement and advisory assignment for a power generation company,
FBR's first capital raise in that sector. Because the transaction
was subject to regulatory approval by power authorities, it did not
close until the first quarter of 2007. As a result, $40 million of
the revenues associated with this capital raise will be recognized
in that quarter. In 2006, FBR was ranked as: * #1 book-running
manager of all common stock offerings for U.S. companies with a
market capitalization of $1 billion or less,(2) * #7 book-running
manager for all U.S. IPOs and 144A equity placements combined for
all industries,(3) * #1 book-running manager of all common stock
offerings for domestic mining, oil and gas, and utility and energy
companies, with a market capitalization of $1 billion or less,(4)
and * #1 book-running manager of all common stock offerings for
U.S. and Bermuda finance and insurance companies with a market
capitalization of $1 billion or less.(5) On February 8, 2007, FBR
Capital Markets announced the completion of an important step in
further expanding its M&A platform. The company acquired the
26-person banking team along with certain assets from Legacy
Partners Group, LLC. With offices in New York and Washington, D.C.,
this banking unit specializes in middle market merger and
acquisition advisory services and in the raising of private
capital. Institutional Brokerage and Research In a very competitive
market environment, FBR Capital Markets grew its agency commission
revenue from $82.5 million in 2005 to $100.9 million in the year
just ended, a 22% increase. Overall, agency commissions and revenue
from principal transactions increased 8% year to year. Asset
Management In FBR Capital Markets' asset management/private wealth
business, asset management base fees and incentive fees were $5.5
million for the fourth quarter of 2006. Assets under management
increased slightly between the close of the third quarter of 2006
and year end, and continued asset growth is anticipated in the
first quarter of 2007. This reverses a trend of asset outflows that
began with the closing and repositioning of some of the firm's
alternative investment products in 2005. In October 2006 a new
long/short hedge fund was launched, and in January 2007, the FBR
Small Cap Mutual Fund, which had been closed to new investors since
October 2004, was reopened to investors. FBR Group Results Mortgage
Investment Portfolios For the fourth quarter, FBR Group's mortgage
investments generated portfolio earnings of $20.7 million on
average investment balances of $11.1 billion held during the
quarter. These portfolios yielded gross income of 6.40% with
associated cost of funds of 5.15%, resulting in earned net interest
income of 1.25%. Merchant Banking For the fourth quarter, earnings
from the consolidated merchant banking portfolio and other
long-term investments were $3.7 million. These earnings include a
$17.2 million write-down in the value of certain non-prime mortgage
company investment positions, the largest of which was a $13.7
million reduction in the carrying value of shares in Fieldstone
Investment Corp., which has agreed to be acquired for cash.
Excluding the Fieldstone Investment position, merchant banking
investments in non-prime companies at year end was $19 million. The
total value of FBR's merchant banking portfolio and other long-term
equity securities was $150 million as of December 31, 2006. First
NLC First NLC (FNLC), our non-conforming mortgage origination
subsidiary, lost $1.8 million on a pre-tax basis in the fourth
quarter. During the quarter, FNLC continued to build additional
reserves related to the impact of an industry-wide increase in
requests for buy-backs of loans related to early pay defaults
(EPDs). Loan provisions, including EPD expense, averaged 70 basis
points for the fourth quarter. FNLC originated $2.1 billion in
loans in the fourth quarter and $7.5 billion for the full year,
compared to $1.5 billion in the final quarter of 2005 and $6.0
billion for all of 2005. FNLC's cost to originate loans dropped
from an average of 244 basis points in 2005 to an average of 191
basis points in 2006. In 2007, FNLC management has further reduced
expenses and has aggressively adapted its lending standards to a
continuing difficult environment. Looking Ahead "The acquisition of
Legacy Partners was a major step in the execution of our strategic
plan, broadening our array of banking services and increasing our
ability to significantly grow our advisory practice," said Eric F.
Billings, FBR Group Chairman and Chief Executive Officer. "In
addition, as we continue to execute our plan by selling our
non-prime mortgage residuals and exiting our non-prime merchant
banking investments, we believe that the stability and
predictability of our earnings will become more apparent. Although
2006 was a challenging and difficult year, we closed with a solid
fourth quarter in our capital markets businesses, and we are off to
a strong start in 2007." The firm will host an earnings conference
call this morning, Thursday, February 22, 2007 at 9:00 A.M. U.S.
EST. 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 following the call.
Friedman, Billings, Ramsey Group, Inc. (FBR) invests in
mortgage-related assets and merchant banking opportunities. Through
its 72% owned FBR Capital Markets Corporation (FBRCM) subsidiary,
FBR provides investment banking*, merger and acquisition advisory
services*, institutional brokerage*, asset management, and private
wealth services. FBRCM focuses capital and financial expertise on
eight industry sectors: consumer, diversified industrials, energy
and natural resources, financial institutions, healthcare,
insurance, real estate, and technology, media and
telecommunications. FBR is headquartered in the Washington, D.C.
metropolitan area with offices in Arlington, Va., Boston, Dallas,
Houston, Irvine, London, New York, Phoenix and San Francisco.
Friedman, Billings, Ramsey Group, Inc. is the parent company of
First NLC Financial Services, Inc., a non-conforming residential
mortgage originator headquartered in Deerfield Beach, Florida. For
more information, see http://www.fbr.com/. * Friedman, Billings,
Ramsey & Co., Inc. (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. (2) Source: Dealogic.
Relates to total deal value of all common stock or common equity,
including private placements, offered for all U.S. companies with a
market capitalization of $1 billion or less. Transactions priced
between 1/1/06 and 12/31/06, with apportioned credit to all
book-runners. Includes only rank eligible transactions. (3) Source:
Dealogic. Relates to total deal value of all common stock of U.S.
issuers offered in IPOs or transactions exempt from SEC
registration pursuant to rule 144A, on a combined basis.
Transactions priced between 1/1/06 through 12/31/06 with
apportioned credit to all book-runners. Includes only rank eligible
transactions. (4) Source: Dealogic. Relates to total deal value of
all common stock or common equity, including private placements,
offered for all U.S. mining, oil and gas, and utility and energy
companies with a market capitalization of $1 billion or less.
Transactions priced between 1/1/06 and 12/31/06, with apportioned
credit to all book-runners. Includes only rank eligible
transactions. (5) Source: Dealogic. Relates to total deal value of
all common stock or common equity, including private placements,
offered for all U.S. and Bermuda finance and insurance companies
with a market capitalization of $1 billion or less. Transactions
priced between 1/1/06 and 12/31/06, with apportioned credit to all
book-runners. Includes only rank eligible transactions. 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. FRIEDMAN, BILLINGS, RAMSEY GROUP, INC. CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except
per share amounts) (Unaudited) Quarter ended December 31, 2006 %
2005 % ------------------------------------ REVENUES: Investment
banking: Capital raising $71,883 40.9% $88,866 -77.9% Advisory
9,172 5.2% 7,415 -6.5% Institutional brokerage: Principal
transactions (8) 0.0% 3,788 -3.3% Agency commissions 24,720 14.1%
21,006 -18.4% Mortgage trading interest 2,509 1.4% 19,555 -17.1%
Mortgage trading net investment loss (309) -0.2% (1,419) 1.2% Asset
management: Base management fees 5,051 2.9% 6,153 -5.4% Incentive
allocations and fees 403 0.2% 742 -0.7% Principal investment:
Interest 181,491 103.3% 189,811 -166.3% Net investment loss (8,826)
-5.0% (258,500) 226.5% Dividends 2,043 1.2% 16,039 -14.1% Mortgage
banking: Interest 21,806 12.4% 28,825 -25.3% Net investment income
(loss) 27,555 15.6% (21,899) 19.2% Other 3,162 1.8% 5,164 -4.4%
------------------------------------ Total revenues 340,652 193.8%
105,546 -92.5% Interest expense 164,891 93.8% 211,393 -185.3%
Provision for loan losses - 0.0% 8,263 -7.2%
------------------------------------ Revenues, net of interest
expense and provision for loan losses 175,761 100.0% (114,110)
100.0% ------------------------------------ NON-INTEREST EXPENSES:
Compensation and benefits 84,431 48.0% 87,330 -76.5% Professional
services 18,224 10.4% 16,556 -14.5% Business development 11,884
6.8% 10,433 -9.2% Clearing and brokerage fees 3,505 2.0% 2,447
-2.1% Occupancy and equipment 13,668 7.8% 10,151 -8.9%
Communications 6,307 3.6% 5,741 -5.0% Other operating expenses
20,116 11.4% 24,984 -21.9% ------------------------------------
Total non-interest expenses 158,135 90.0% 157,642 -138.1%
------------------------------------ Operating income (loss) 17,626
10.0% (271,752) 238.1% OTHER INCOME: Gain on sale of subsidiary
shares - 0.0% - 0.0% ------------------------------------ Net
income (loss) before income taxes and minority interest 17,626
10.0% (271,752) 238.1% Income tax provision (benefit) 11,859 6.7%
(142) 0.1% Minority interest in earnings of consolidated subsidiary
1,957 1.1% - 0.0% ------------------------------------ Net income
(loss) $3,810 2.2% $(271,610) 238.0%
==================================== Basic earnings (loss) per
share $0.02 $(1.60) ======== ======== Basic earnings (loss) per
share $0.02 $(1.60) ======== ======== Weighted average shares -
basic 172,531 169,921 ======== ======== Weighted average shares -
diluted 172,600 169,921 ======== ======== FRIEDMAN, BILLINGS,
RAMSEY GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts) (Unaudited) Years
Ended December 31, 2006 % 2005 %
----------------------------------- REVENUES: Investment banking:
Capital raising $190,187 50.0% $356,753 82.1% Advisory 24,148 6.3%
17,759 4.1% Institutional brokerage: Principal transactions 5,814
1.5% 17,950 4.1% Agency commissions 101,009 26.6% 82,778 19.0%
Mortgage trading interest 51,147 13.4% 30,859 7.1% Mortgage trading
net investment loss (3,301) -0.9% (3,820) -0.9% Asset management:
Base management fees 20,093 5.3% 30,348 7.0% Incentive allocations
and fees 1,327 0.3% 1,929 0.4% Principal investment: Interest
594,879 156.4% 549,832 126.5% Net investment loss (184,552) -48.5%
(239,754) -55.2% Dividends 14,551 3.8% 36,622 8.4% Mortgage
banking: Interest 88,662 23.3% 78,007 17.9% Net investment income
83,786 22.0% 13,741 3.2% Other 20,154 5.3% 22,302 5.1%
------------------------------------ Total revenues 1,007,904
264.8% 995,306 228.8% Interest expense 611,800 160.8% 546,313
125.7% Provision for loan losses 15,740 4.0% 14,291 3.1%
------------------------------------ Revenues, net of interest
expense and provision for loan losses 380,364 100.0% 434,702 100.0%
------------------------------------ NON-INTEREST EXPENSES:
Compensation and benefits 309,065 81.3% 331,492 76.3% Professional
services 59,722 15.7% 66,550 15.3% Business development 42,150
11.1% 46,648 10.7% Clearing and brokerage fees 11,820 3.1% 8,882
2.0% Occupancy and equipment 50,051 13.2% 34,044 7.8%
Communications 24,398 6.4% 20,634 4.7% Other operating expenses
89,377 23.5% 70,679 16.3% ------------------------------------
Total non-interest expenses 586,583 154.3% 578,929 133.1%
------------------------------------ Operating loss (206,219)
-54.3% (144,227) -33.1% OTHER INCOME: Gain on sale of subsidiary
shares 121,511 31.9% - 0.0% ------------------------------------
Net loss before income taxes and minority interest (84,708) -22.3%
(144,227) -33.2% Income tax (benefit) provision (14,682) -3.9%
26,683 6.1% Minority interest in loss of consolidated subsidiary
(2,751) -0.7% - 0.0% ------------------------------------ Net loss
$(67,275) -17.7% $(170,910) -39.3%
==================================== Basic loss per share $(0.39)
$(1.01) ========= ========= Diluted loss per share $(0.39) $(1.01)
========= ========= Weighted average shares - basic 171,667 169,333
========= ========= Weighted average shares - diluted 171,667
169,333 ========= ========= FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.
Financial & Statistical Supplement - Operating Results (Dollars
in thousands, except per share data) (Unaudited) For the year ended
December 31, 2006 Q-4 06 Q-3 06 Q-2 06 Q-1 06
----------------------------------------------------- Revenues
Investment banking: Capital raising $190,187 $71,883 $6,852 $45,117
$66,335 Advisory 24,148 9,172 5,826 6,281 2,869 Institutional
brokerage: Principal transactions 5,814 (8) (1,658) 1,760 5,720
Agency commissions 101,009 24,720 24,388 28,492 23,409 Mortgage
trading interest 51,147 2,509 13,845 17,143 17,650 Mortgage trading
net investment loss (3,301) (309) (1,546) (209) (1,237) Asset
management: Base management fees 20,093 5,051 4,880 5,065 5,097
Incentive allocations and fees 1,327 403 (31) (53) 1,008 Principal
investment: Interest 594,879 181,491 150,649 113,613 149,126 Net
investment (loss) income (184,552) (8,826) (170,621) (31,290)
26,185 Dividends 14,551 2,043 4,750 4,059 3,699 Mortgage banking:
Interest 88,662 21,806 22,476 21,267 23,113 Net investment income
83,786 27,555 16,092 29,401 10,738 Other 20,154 3,162 6,540 5,465
4,987 ----------------------------------------------------- Total
revenues 1,007,904 340,652 82,442 246,111 338,699 Interest expense
611,800 164,891 165,237 128,189 153,483 Provision for loan losses
15,740 - - 7,348 8,392
----------------------------------------------------- Revenues, net
of interest expense and provision for loan losses 380,364 175,761
(82,795) 110,574 176,824
----------------------------------------------------- Non-interest
expenses Compensation and benefits 309,065 84,431 69,405 71,732
83,497 Professional services 59,722 18,224 14,308 12,925 14,265
Business development 42,150 11,884 7,577 8,604 14,085 Clearing and
brokerage fees 11,820 3,505 2,917 3,082 2,316 Occupancy and
equipment 50,051 13,668 12,909 12,232 11,242 Communications 24,398
6,307 6,471 6,013 5,607 Other operating expenses 89,377 20,116
23,291 24,993 20,977
----------------------------------------------------- Total
non-interest expenses 586,583 158,135 136,878 139,581 151,989
----------------------------------------------------- Operating
(loss) income (206,219) 17,626 (219,673) (29,007) 24,835 Other
income: Gain on sale of subsidiary shares 121,511 - 121,511 - -
----------------------------------------------------- Net (loss)
income before income taxes and minority interest (84,708) 17,626
(98,162) (29,007) 24,835 Income tax (benefit) provision (14,682)
11,859 (26,062) 1,240 (1,719) Minority interest in (loss) earnings
of consolidated subsidiary (2,751) 1,957 (4,708) - -
----------------------------------------------------- Net (loss)
income $(67,275) $3,810 $(67,392) $(30,247) $26,554
===================================================== Net (loss)
income before income taxes and minority interest as a percentage of
net revenue -22.3% 10.0% 118.6% -26.2% 14.0% ROE (annualized) -5.4%
1.3% -22.1% -9.4% 8.2% ROE (annualized- excluding AOCI)(1) -5.4%
1.3% -22.2% -9.5% 8.1% Total shareholders' equity $1,171,045
$1,171,045 $1,163,681 $1,270,361 $1,301,949 Total shareholders'
equity, net of AOCI (1) $1,186,181 $1,186,181 $1,181,372 $1,250,117
$1,306,450 Basic (loss) earnings per share $(0.39) $0.02 $(0.39)
$(0.18) $0.16 Diluted (loss) earnings per share $(0.39) $0.02
$(0.39) $(0.18) $0.16 Ending shares outstanding (in thousands)
172,759 172,759 172,506 171,812 171,236 Book value per share $6.78
$6.78 $6.75 $7.39 $7.60 Book value per share, net of AOCI (1) $6.87
$6.87 $6.85 $7.28 $7.63 Gross assets under management (in millions)
Managed accounts $259.9 $259.9 $376.6 $386.8 $383.9 Hedge &
offshore funds 97.5 97.5 102.1 125.8 136.6 Mutual funds 1,961.9
1,961.9 1,825.1 1,750.6 1,849.5 Private equity and venture capital
funds 42.2 42.2 48.5 48.2 50.5
----------------------------------------------------- Total
$2,361.5 $2,361.5 $2,352.3 $2,311.4 $2,420.5
===================================================== Net assets
under management (in millions) Managed accounts $259.9 $259.9
$376.6 $386.8 $380.9 Hedge & offshore funds 96.4 96.4 98.3
116.1 125.4 Mutual funds 1,954.7 1,954.7 1,817.8 1,742.6 1,843.4
Private equity and venture capital funds 40.5 40.5 46.9 46.7 49.1
----------------------------------------------------- Total
$2,351.5 $2,351.5 $2,339.6 $2,292.2 $2,398.8
===================================================== Employee
count 3,019 3,019 2,909 2,651 2,531
===================================================== (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. Financial & Statistical
Supplement - Operating Results (Dollars in thousands, except per
share data) (Unaudited) For the year ended December 31, 2005 Q-4 05
Q-3 05 Q-2 05 Q-1 05
----------------------------------------------------- Revenues
Investment banking: Capital raising $356,753 $88,866 $86,035
$95,039 $86,813 Advisory 17,759 7,415 3,026 6,180 1,138
Institutional brokerage: Principal transactions 17,950 3,788 4,348
4,187 5,627 Agency commissions 82,778 21,006 20,445 19,170 22,157
Mortgage trading interest 30,859 19,555 11,304 - - Mortgage trading
net investment loss (3,820) (1,419) (2,401) - - Asset management:
Base management fees 30,348 6,153 7,914 7,813 8,468 Incentive
allocations and fees 1,929 742 832 730 (375) Principal investment:
Interest 549,832 189,811 144,401 116,724 98,896 Net investment
(loss) income (239,754) (258,500) 4,866 17,738 (3,858) Dividends
36,622 16,039 8,772 8,371 3,440 Mortgage banking: Interest 78,007
28,825 27,280 15,543 6,359 Net investment income (loss) 13,741
(21,899) 17,600 14,559 3,481 Other 22,302 5,164 5,479 6,030 5,629
----------------------------------------------------- Total
revenues 995,306 105,546 339,901 312,084 237,775 Interest expense
546,313 211,393 156,373 103,725 74,822 Provision for loan losses
14,291 8,263 4,890 1,138 -
----------------------------------------------------- Revenues, net
of interest expense and provision for loan losses 434,702 (114,110)
178,638 207,221 162,953
----------------------------------------------------- Non-interest
expenses Compensation and benefits 331,492 87,330 88,348 80,015
75,799 Professional services 66,550 16,556 16,158 20,186 13,650
Business development 46,648 10,433 8,815 11,962 15,438 Clearing and
brokerage fees 8,882 2,447 2,363 2,040 2,032 Occupancy and
equipment 34,044 10,151 9,397 8,772 5,724 Communications 20,634
5,741 5,561 5,300 4,032 Other operating expenses 70,679 24,984
16,861 12,540 16,294
----------------------------------------------------- Total
non-interest expenses 578,929 157,642 147,503 140,815 132,969
----------------------------------------------------- Net (loss)
income before income taxes (144,227) (271,752) 31,135 66,406 29,984
Income tax provision (benefit) 26,683 (142) 8,090 13,163 5,572
----------------------------------------------------- Net (loss)
income $(170,910) $(271,610) $23,045 $53,243 $24,412
===================================================== Net (loss)
income before income taxes as a percentage of net revenue -33.2%
238.1% 17.4% 32.0% 8.4% ROE (annualized) -11.9% -80.5% 6.3% 14.3%
6.4% ROE (annualized- excluding AOCI)(1) -11.7% -74.7% 5.9% 13.8%
6.0% Total shareholders' equity $1,304,170 $1,304,170 $1,394,137
$1,519,021 $1,458,861 Total shareholders' equity, net of AOCI (1)
$1,305,147 $1,305,147 $1,603,305 $1,631,955 $1,629,293 Basic (loss)
earnings per share $(1.01) $(1.60) $0.14 $0.31 $0.15 Diluted (loss)
earnings per share $(1.01) $(1.60) $0.14 $0.31 $0.14 Ending shares
outstanding (in thousands) 170,264 170,264 169,891 169,617 169,214
Book value per share $7.66 $7.66 $8.21 $8.96 $8.62 Book value per
share, net of AOCI (1) $7.67 $7.67 $9.44 $9.62 $9.63 Gross assets
under management (in millions) Managed accounts $463.4 $463.4
$437.2 $510.4 $242.4 Hedge & offshore funds 154.3 154.3 239.0
463.1 601.1 Mutual funds 1,883.3 1,883.3 2,078.1 2,185.0 2,213.9
Private equity and venture capital funds 56.2 56.2 42.7 41.3 69.5
----------------------------------------------------- Total
$2,557.2 $2,557.2 $2,797.0 $3,199.8 $3,126.9
===================================================== Net assets
under management (in millions) Managed accounts $329.5 $329.5
$255.5 $257.3 $223.0 Hedge & offshore funds 150.5 150.5 227.8
401.1 490.3 Mutual funds 1,872.8 1,872.8 2,069.9 2,176.6 2,204.2
Private equity and venture capital funds 46.8 46.8 39.9 37.8 66.3
----------------------------------------------------- Total
$2,399.6 $2,399.6 $2,593.1 $2,872.8 $2,983.8
===================================================== Employee
count 2,449 2,449 2,455 2,226 2,123
===================================================== (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 in thousands, except per share amounts) (Unaudited) ASSETS
31-Dec-06 31-Dec-05 ----------- ----------- Cash and cash
equivalents $189,956 $238,615 Restricted cash 132 6,101 Receivables
217,249 259,519 Investments: Mortgage-backed securities, at fair
value 6,870,661 8,002,561 Loans held for investment, net -
6,841,266 Loans held for sale, net 5,367,934 963,807 Long-term
investments 185,492 347,644 Reverse repurchase agreements - 283,824
Trading securities, at fair value 18,180 1,032,638 Due from
clearing broker 28,999 71,065 Derivative assets, at fair value
36,875 70,636 Goodwill 162,765 162,765 Intangible assets, net
21,825 26,485 Furniture, equipment and leasehold improvements, net
44,111 46,382 Prepaid expenses and other assets 208,339 82,482
----------- ----------- Total assets $13,352,518 $18,435,790
=========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities: Trading account securities sold short but not yet
purchased, at fair value $202 $150,547 Commercial paper 3,971,389
6,996,950 Repurchase agreements 3,059,330 2,698,619 Derivative
liabilities, at fair value 44,582 31,952 Dividends payable 8,743
34,588 Interest payable 12,239 12,039 Accrued compensation and
benefits 57,227 82,465 Accounts payable, accrued expenses and other
liabilities 81,819 82,576 Temporary subordinated loan payable -
75,000 Securitization financing, net 4,486,046 6,642,198 Long-term
debt 324,453 324,686 ----------- ----------- Total liabilities
12,046,030 17,131,620 ----------- ----------- Minority Interest
135,443 - Shareholders' equity: Common stock, 174,712 and 172,854
shares 1,747 1,729 Additional paid-in capital 1,562,497 1,547,128
Employee stock loan receivable including accrued interest (2 and
551 shares) (12) (4,018) Deferred compensation, net - (15,602)
Accumulated other comprehensive loss, net of taxes (15,136) (977)
Accumulated deficit (378,051) (224,090) ----------- -----------
Total shareholders' equity 1,171,045 1,304,170 -----------
----------- Total liabilities and shareholders' equity $13,352,518
$18,435,790 =========== =========== FBR CAPITAL MARKETS CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS (Dollars in thousands, except
per share data) (Unaudited) For the year ended December 31, 2006
Q-4 06 Q-3 06 Q-2 06 Q-1 06
---------------------------------------------------- Revenues
Investment banking: Capital raising $190,576 $71,879 $6,852 $45,510
$66,335 Advisory 24,148 9,172 5,826 6,281 2,869 Institutional
brokerage: Principal transactions 5,814 (8) (1,658) 1,760 5,720
Agency commissions 100,855 24,683 24,359 28,447 23,366 Mortgage
trading interest 51,147 2,509 13,845 17,143 17,650 Mortgage trading
net investment loss (3,298) (309) (1,546) (209) (1,234) Asset
management: Base management fees 19,871 5,051 4,879 5,065 4,876
Incentive allocations and fees 1,327 403 (30) (54) 1,008 Interest
20,934 5,235 8,439 4,647 2,613 Net investment income (loss) 3,372
3,288 (3,070) 108 3,046 Other 3,893 1,280 482 816 1,315
--------------------------------------------------- Total revenues
418,639 123,183 58,378 109,514 127,564 Interest expense 54,543
3,136 16,390 18,155 16,862
--------------------------------------------------- Revenues, net
of interest expense 364,096 120,047 41,988 91,359 110,702
Non-interest expenses Compensation and benefits 225,712 61,326
46,398 54,436 63,552 Professional services 43,712 13,809 9,069
10,830 10,004 Business development 33,772 9,458 5,229 6,709 12,376
Clearing and brokerage fees 11,715 3,504 2,892 3,053 2,266
Occupancy and equipment 30,039 7,918 7,349 7,499 7,273
Communications 20,039 5,024 5,442 4,990 4,583 Other operating
expenses 12,219 1,434 4,561 2,960 3,264
--------------------------------------------------- Total
non-interest expenses 377,208 102,473 80,940 90,477 103,318
--------------------------------------------------- Net (loss)
income before income taxes (13,112) 17,574 (38,952) 882 7,384
Income tax (benefit) provision (3,271) 10,614 (16,346) (105) 2,566
--------------------------------------------------- Net (loss)
income $(9,841) $6,960 $(22,606) $987 $4,818
====================================================== Basic &
diluted (loss) earnings per share $(0.18) $0.11(1) $(0.37) $0.02
$0.10 Weighted average shares - basic & diluted 54,136,986
64,000,000 60,282,609 46,000,000 46,000,000 (1) Non-GAAP earnings
per share determined by using a 43% tax rate would be $0.16.
Management believes this information is relevant because it expects
the effective tax rate to approximate 43% after FASB 123R and other
non-cash tax charges. 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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