Federated Hermes (FHI) 8-K Federated Investors, Inc. Reports First Quarter 2006 Earnings

Exhibit 99.1

Press Release

Federated Investors, Inc. Reports First Quarter 2006 Earnings

• Total assets increase to record $217.5 billion at quarter end

• Equity assets reach record $31.6 billion and money market assets reach record $163.6 billion at quarter end

• Board increases quarterly dividend 20 percent from $0.15 to $0.18

(PITTSBURGH, Pa., April 27, 2006) — Federated Investors, Inc. (NYSE: FII), one of the nation’s largest investment managers, today reported earnings per diluted share of $0.45 for the quarter ended March 31, 2006. These results include net earnings of $2.8 million or $0.03 per share classified as income from discontinued operations related to the sale of the company’s trade-clearing operation. This sale, to be completed over a series of closings, began in Q1 2006 and is expected to be substantially complete by the end of Q2 2006. Federated’s Q1 2006 results also include a pre-tax charge of $2.0 million or $0.01 net per share for severance expense and $1.3 million pre-tax or $0.01 net per share in stock-based compensation expense resulting from the required adoption of SFAS 123(R). In addition, revenues were reduced by $1.0 million pre-tax or $0.01 net per share from the impact of advisory fee reductions implemented on Jan. 1, 2006.

Federated’s income from continuing operations was $0.43 per diluted share for the quarter ended March 31, 2006 compared with $0.06 per share for the same quarter last year. Income from continuing operations was $46.1 million for Q1 2006 compared to $6.8 million for Q1 2005.

Federated’s total managed assets were $217.5 billion at March 31, 2006, up $38.5 billion or 22 percent from $179.0 billion at March 31, 2005 and up $4.1 billion or 2 percent from the $213.4 billion reported at Dec. 31, 2005. Through its mutual funds and separately managed accounts, Federated managed $53.9 billion in equity and fixed-income assets as of March 31, 2006, a 1 percent increase from $53.2 billion as of March 31, 2005. Average managed assets for Q1 2006 were $217.5 billion, up $38.1 billion or 21 percent from $179.4 billion reported for Q1 2005 and up $7.4 billion or 4 percent from $210.1 billion in average managed assets reported for Q4 2005.

“Federated continues its commitment to enhance the investment performance of our equity portfolios, develop new products and complete acquisitions, such as the two transactions closed during the first quarter, in order to grow our assets under management,” said J. Christopher Donahue, president and CEO.

Contacts:   MEDIA Meghan McAndrew (412) 288-8103 mmcandrew@federatedinv.com MEDIA J.T. Tuskan (412) 288-7895 jtuskan@federatedinv.com ANALYSTS Ray Hanley (412) 288-1920 rhanley@federatedinv.com

Federated Reports Q1 Earnings

April 27, 2006

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Federated’s board of directors declared a quarterly dividend of $0.18 per share, an increase of 20 percent from $0.15 per share last quarter. The dividend is payable on May 15, 2006 to shareholders of record as of May 8, 2006. During Q1 2006, Federated purchased 632,607 shares of class B common stock for $22.9 million.

Federated’s equity assets were $31.6 billion at March 31, 2006, up $3.3 billion or 12 percent from $28.3 billion at March 31, 2005 and up $1.8 billion or 6 percent from $29.8 billion at Dec. 31, 2005. Federated’s top selling equity mutual funds on a net basis were: Federated Kaufmann Small Cap Fund, Federated Kaufmann Fund, Federated Strategic Value Fund and Federated Muni and Stock Advantage Fund. Federated continued to grow assets through strategic acquisitions in Q1 2006 as Federated Mid-Cap Index Fund acquired $218 million in assets from the Mason Street Index 400 Fund and Federated Kaufmann Fund acquired $158 million in assets from the Wayne Hummer Growth Fund.

Federated’s fixed-income assets were $22.3 billion at March 31, 2006, down $2.6 billion or 10 percent from $24.9 billion at March 31, 2005 and down $0.7 billion or 3 percent from $23.0 billion at Dec. 31, 2005. Federated’s top selling fixed-income mutual funds on a net basis were: Federated Total Return Government Fund, Federated Total Return Bond Fund and Federated Intermediate Government/Corporate Fund.

Money market assets in both funds and separate accounts were $163.6 billion at March 31, 2006, up $37.9 billion or 30 percent from $125.7 billion at March 31, 2005 and up $3.0 billion or 2 percent from $160.6 billion at Dec. 31, 2005. Money market mutual fund assets increased to $146.0 billion at the end of Q1 2006, up 33 percent from $109.9 billion at March 31, 2005 and up slightly from $145.3 billion Dec. 31, 2005.

Financial Summary

For Q1 2006, revenue increased $36.9 million or 18 percent to $238.8 million as compared to $201.9 million for the same quarter last year, primarily due to Federated’s acquisition of Alliance Capital Management L.P.’s cash management business in 2005 and to organic growth in money market assets. Higher equity assets also led to the increase in revenue, partially offset by lower fixed income assets. Revenue for Q1 2006 included the impact of $1.0 million in advisory-fee reductions implemented Jan. 1, 2006 related to the company’s settlement with the New York State Attorney General. For Q1 2006, Federated derived 47 percent of its revenue from money market assets, 38 percent from equity assets, 14 percent from fixed-income assets and 1 percent from other products.

Federated Reports Q1 Earnings

April 27, 2006

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Operating expenses for Q1 2006 of $164.6 million decreased by $8.7 million or 5 percent from $173.3 million for Q1 2005. Marketing and distribution expense was affected primarily by higher expenses related to the Alliance acquisition.

Discontinued operations for Q1 2006 reflects $1.0 million or $0.01 per share of primarily after-tax operating income related to Federated’s trade-clearing operation, which the company began to divest in Q1 2006, and $1.8 million or $0.02 per share for the reversal of a tax-valuation allowance for the portion of Federated’s capital loss carryforwards that will likely be realized as a result of the capital gain expected on the sale of the trade-clearing operation.

Federated’s assets by market definitions changed as of Jan. 1, 2006. Channels that had been included in the former Institutional market are now included in the Broker/Dealer and Wealth Management & Trust markets. For further explanations of these changes, please see the Managed Assets schedule herein or for historical data, please see the Historical Assets Under New Market Definitions chart on theAbout Us page ofFederatedInvestors.com.

Federated will host an earnings conference call at 9 a.m. Eastern on April 28, 2006. Investors are invited to listen to Federated’s Q1 earnings teleconference by calling 888-412-9259 (domestic) or 706-679-0848 (international) prior to the 9 a.m. start time for the teleconference. The call may also be accessed in real time on the Internet via theAbout Us section ofFederatedInvestors.com. A replay will be available after 12:30 p.m. and until May 5, 2006 by calling 800-642-1687 (domestic) or 706-645-9291 (international) and entering code 7696082.

Federated Investors, Inc. is one of the largest investment managers in the United States, managing $217.5 billion in assets as of March 31, 2006. With 140 mutual funds and a variety of separately managed accounts options, Federated provides comprehensive investment management to nearly 5,500 institutions and intermediaries including corporations, government entities, insurance companies, foundations and endowments, banks and broker/dealers. Federated ranks in the top two percent of money market fund managers in the industry, the top seven percent of fixed-income fund managers and the top seven percent of equity fund managers¹. For more information, visitFederatedInvestors.com.

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1 Strategic Insight, February 28, 2006. Based on assets under management in open-end funds.

Certain statements in this press release, such as those related to the development of enhanced investment performance, the development of new products and acquisition activity, constitute forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance or achievements of the company, or industry results, to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Among other risks and uncertainties is the ability of the Company to implement processes to enhance investment performance, increase sales as a result of new products it may create, identify and complete suitable acquisitions at acceptable prices and the risk factors discussed in the company’s annual and quarterly reports as filed with the Securities and Exchange Commission. Many of these factors may be impacted as a result of the ongoing threat of terrorism. As a result, no assurance can be given as to future results, levels of activity, performance or achievements, and neither the company nor any other person assumes responsibility for the accuracy and completeness of such statements in the future.

Federated Reports Q1 Earnings

April 27, 2006

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Federated Securities Corp. is distributor of the Federated funds.

Separately managed accounts are made available through Federated Investment Counseling, a registered investment advisor.

Federated Reports Q1 Earnings

April 27, 2006

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Unaudited Condensed Consolidated Statements of Income

(in thousands, except per share data)

	Quarter Ended March 31,						% Change Q1 2005 to Q1 2006		Quarter Ended Dec. 31, 2005			% Change Q4 2005 to Q1 2006
	2006			2005
Revenue
Investment advisory fees, net	$	148,055		$	134,879		10	%	$	148,643		(0	)%
Administrative service fees, net		36,098			30,056		20			36,227		(0	)
Other service fees, net		52,877			35,225		50			52,189		1
Other, net		1,751			1,785		(2	)		1,533		14
Total Revenue		238,781			201,945		18			238,592		0
Operating Expenses
Compensation and related		49,576			43,213		15			41,474		20
General and administrative
Marketing and distribution		69,952			37,357		87			65,618		7
Professional service fees		7,587			7,774		(2	)		8,443		(10	)
Office and occupancy		5,526			5,362		3			6,551		(16	)
Systems and communications		4,756			4,218		13			5,011		(5	)
Advertising and promotional		3,952			3,173		25			2,969		33
Travel and related		2,614			2,463		6			3,370		(22	)
Settlement expense		0			50,550		(100	)		42		(100	)
Other		2,912			3,093		(6	)		3,325		(12	)
Total general and administrative		97,299			113,990		(15	)		95,329		2
Amortization of deferred sales commissions		13,508			13,599		(1	)		12,246		10
Amortization of intangible assets		4,227			2,479		71			4,126		2
Total Operating Expenses		164,610			173,281		(5	)		153,175		7
Operating Income		74,171			28,664		159			85,417		(13	)
Nonoperating Income (Expenses)
Investment income, net		3,214			1,593		102			3,143		2
Debt expense––recourse		(65	)		(83	)	(22	)		(93	)	(30	)
Debt expense––nonrecourse		(2,153	)		(4,587	)	(53	)		(4,158	)	(48	)
Other, net		(1	)		(44	)	(98	)		0		0
Total Nonoperating Income (Expenses), net		995			(3,121	)	(132	)		(1,108	)	(190	)
Minority interest		1,501			2,449		(39	)		2,715		(45	)
Income from continuing operations before income taxes		73,665			23,094		219			81,594		(10	)
Income tax provision		27,580			16,302		69			30,244		(9	)
Income from continuing operations		46,085			6,792		579			51,350		(10	)
Discontinued operations, net of tax*		2,836			236		1,102			477		495
Net Income	$	48,921		$	7,028		596	%	$	51,827		(6	)%
Earnings Per Share—Basic
Income from continuing operations	$	0.44		$	0.06		633	%	$	0.48		(8	)%
Income from discontinued operations	$	0.03		$	0.00		0	%	$	0.00		0	%
Net Income**	$	0.46		$	0.07		557	%	$	0.49		(6	)%
Earnings Per Share—Diluted
Income from continuing operations	$	0.43		$	0.06		617	%	$	0.47		(9	)%
Income from discontinued operations	$	0.03		$	0.00		0	%	$	0.00		0	%
Net Income**	$	0.45		$	0.06		667	%	$	0.48		(4	)%
Weighted-average shares outstanding
Basic		105,639			106,326					106,108
Diluted		108,125			108,322					108,587
Dividends declared per share	$	0.150		$	0.125				$	0.150

* Discontinued operations reflects the after-tax operating income of Federated’s trade-clearing operation sold in Q1 2006 ($1.0 million) and the related reversal of a deferred tax asset valuation allowance ($1.8 million).

** May not sum due to rounding.

Federated Reports Q1 Earnings

April 27, 2006

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Unaudited Condensed Consolidated Balance Sheets

(in thousands)

	March 31, 2006			Dec. 31, 2005
Assets
Cash, restricted cash and other short-term investments	$	295,979		$	284,805
Other current assets		66,589			61,618
Deferred sales commissions, net		146,200			157,562
Intangible assets, net		377,452			370,026
Other long-term assets		23,557			22,610
Total Assets	$	909,777		$	896,621
Liabilities, Minority Interest and Shareholders’ Equity
Current liabilities	$	176,957		$	166,300
Long-term debt—recourse		223			243
Long-term debt—nonrecourse		147,674			159,784
Other long-term liabilities and minority interest		27,766			29,965
Shareholders’ equity excluding treasury stock		1,127,526			1,090,915
Treasury stock		(570,369	)		(550,586	)
Total Liabilities, Minority Interest and Shareholders’ Equity	$	909,777		$	896,621

Changes in Equity and Fixed-Income Fund Assets

(in millions)

	Quarter Ended March 31,
	2006			2005
Equity Funds
Beginning Assets	$	26,031		$	25,951
Sales		1,517			1,379
Redemptions		(1,922	)		(1,526	)
Net redemptions		(405	)		(147	)
Net exchanges		20			23
Acquisition and related		376			0
Other*		1,545			(548	)
Ending Assets	$	27,567		$	25,279
Fixed-Income Funds
Beginning Assets	$	19,037		$	21,137
Sales		1,297			1,485
Redemptions		(1,737	)		(1,988	)
Net redemptions		(440	)		(503	)
Net exchanges		(28	)		(33	)
Other*		10			(5	)
Ending Assets	$	18,579		$	20,596

* Includes changes in the market value of securities held by the funds, reinvested dividends and distributions and net investment income.

Federated Reports Q1 Earnings

April 27, 2006

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(in millions)

MANAGED ASSETS

	March 31, 2006		Dec. 31, 2005		Sept. 30, 2005		June 30, 2005		March 31, 2005
By Asset Class
Equity	$	31,552	$	29,785	$	29,650	$	28,886	$	28,345
Fixed-income		22,342		23,017		23,800		24,357		24,879
Money market		163,604		160,621		153,985		151,431		125,747
Total Managed Assets	$	217,498	$	213,423	$	207,435	$	204,674	$	178,971
By Market*
Wealth Management & Trust	$	107,885	$	105,918	$	101,980	$	104,190	$	96,477
Broker/Dealer		82,969		82,886		82,171		76,777		57,294
Global Institutional		20,441		18,592		17,300		17,821		19,314
Other		6,203		6,027		5,984		5,886		5,886
Total Managed Assets	$	217,498	$	213,423	$	207,435	$	204,674	$	178,971
By Product Type
Mutual Funds:
Equity	$	27,567	$	26,031	$	26,098	$	25,573	$	25,279
Fixed-income		18,579		19,037		19,744		20,237		20,596
Money market		145,978		145,289		139,621		136,852		109,895
Total Fund Assets	$	192,124	$	190,357	$	185,463	$	182,662	$	155,770
Separate Accounts:
Equity	$	3,985	$	3,754	$	3,552	$	3,313	$	3,066
Fixed-income		3,763		3,980		4,056		4,121		4,283
Money market		17,626		15,332		14,364		14,578		15,852
Total Separate Accounts	$	25,374	$	23,066	$	21,972	$	22,012	$	23,201
Total Managed Assets	$	217,498	$	213,423	$	207,435	$	204,674	$	178,971
AVERAGE MANAGED ASSETS
	Quarter Ended
	March 31, 2006		Dec. 31, 2005		Sept. 30, 2005		June 30, 2005		March 31, 2005
By Asset Class
Equity	$	30,696	$	29,386	$	29,542	$	28,279	$	28,558
Fixed-income		22,743		23,248		24,102		24,590		25,463
Money market		164,061		157,433		154,416		140,191		125,385
Total Avg. Assets	$	217,500	$	210,067	$	208,060	$	193,060	$	179,406
By Product Type
Mutual Funds:
Equity	$	26,779	$	25,760	$	26,043	$	25,114	$	25,521
Fixed-income		18,874		19,249		20,007		20,410		21,013
Money market		146,096		143,691		140,060		125,037		109,334
Total Avg. Fund Assets	$	191,749	$	188,700	$	186,110	$	170,561	$	155,868
Separate Accounts:
Equity	$	3,917	$	3,626	$	3,499	$	3,165	$	3,037
Fixed-income		3,869		3,999		4,095		4,180		4,450
Money market		17,965		13,742		14,356		15,154		16,051
Total Avg. Separate Accts.		25,751	$	21,367	$	21,950	$	22,499	$	23,538
Total Avg. Assets	$	217,500	$	210,067	$	208,060	$	193,060	$	179,406
ADMINISTERED ASSETS
	Quarter Ended
	March 31, 2006		Dec. 31, 2005		Sept. 30, 2005		June 30, 2005		March 31, 2005
Period End	$	18,555	$	18,271	$	18,632	$	17,612	$	18,169
Average	$	18,494	$	17,908	$	18,020	$	17,661	$	19,365

* Federated’s market definitions changed as of Jan. 1, 2006. Channels that had been included in the former Institutional market are now included in the Broker/Dealer and the Wealth Management & Trust markets. For further explanations of these changes and historical data, please see the Historical Assets Under New Market Definition chart on theAbout Us page ofFederatedInvestors.com.