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Contacts:
Media: Lauren Burk at 703.469.1004 or lburk@fbr.com
Investors: Paul Beattie at 703.312.9673 or pbeattie@fbr.com
FBR Group Announces
Second Quarter 2007 Financial Results
Agreement Signed on Sale, Recapitalization of First NLC Financial Services;
Company Increases Share Buyback Authorization
ARLINGTON, VA, July 26, 2007 - Friedman, Billings, Ramsey Group, Inc. (FBR Group) (NYSE: FBR) today announced results for the quarter ended June 30, 2007. The company reported net after-tax earnings of $10.7 million, or $0.06 per share (diluted), compared to a net after-tax loss of $30.2 million, or $0.18 per share (diluted), for the second quarter of 2006. FBR Group’s net after-tax loss for the first six months of 2007 was $175.2 million, or $1.01 per share (diluted), compared to a net after-tax loss of $3.7 million, or $0.02 per share (diluted) in first six months of 2006. Core book value net of Accumulated Other Comprehensive Income (AOCI) at the close of the second quarter was $5.76 compared to $5.75 at the end of the first quarter of 2007(1).
During the quarter, the company sold in an initial public offering 12.7 million shares of common stock of FBR Capital Markets Corporation (FBR Capital Markets) (NASDAQ: FBCM), FBR Group’s investment banking, M&A, institutional brokerage and asset management/private wealth subsidiary. This sale generated net proceeds of $200.1 million, which resulted in an after-tax gain of $61.0 million. Following the initial public offering, which took place on June 8th, FBR continues to maintain just over a 50% beneficial ownership interest in FBR Capital Markets.
The results also reflect a $28.9 million write-down of goodwill associated with FBR Group’s ownership of First NLC Financial Services, Inc. (FNLC), the firm's wholly-owned non-prime mortgage loan origination subsidiary. FBR Group’s earnings of $10.7 million for the quarter, net of this non-cash write-down, were $39.6 million, or $0.23 per share (diluted).
Share Buyback Authorization
The company additionally announced that on July 25, 2007, FBR Group’s board of directors passed a resolution increasing an existing share buyback authorization from 14 million to 50 million shares.
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Non-Prime Origination Businesses
On July 25, after the close of the quarter, FBR Group signed a definitive agreement with an affiliate of Sun Capital Partners that will result in a $75 million recapitalization of FNLC and a reduction FBR Group’s ownership interest in FNLC to 20%. Upon completion of the transaction, FNLC will cease to be a consolidated operating subsidiary of FBR Group and will be held, instead, as an equity investment.
“Two things are accomplished through this transaction,” said J. Rock Tonkel, Jr., President and Chief Operating Officer of FBR Group. “First, as discussed in our earlier press release today, FBR Group has substantially limited its exposure going forward as a result of FNLC’s recapitalization. The 20% ownership interest FBR Group retains will permit it to participate in FNLC’s upside potential when the mortgage market strengthens. Second, FNLC - with a $75 million cash infusion - will have liquidity to navigate through an exceptionally difficult mortgage market environment and to position itself for future growth.”
Mortgage Investment Portfolios
The company’s portfolio of mortgage-backed securities averaged $5.7 billion with an average coupon of 6.08%, a one-month CPR of 15.7, and an average net premium of $52.6 million. The net yield for the second quarter was 5.85% with a corresponding cost of funds of 5.43% for a net interest spread of .42%.
The company’s investments in non-conforming mortgage loans totaled $3.7 billion as of June 30, 2007, reflecting principal paydowns of $468 million during the quarter. As a result of net cash flows received during the quarter, the company’s equity risk relating to this portfolio, considering both the mortgage loans and related non-recourse debt, was reduced to approximately $90 million as of June 30, 2007.
Merchant Banking and Other Long-Term Investments
The investment gains and dividends in FBR Group's merchant banking and other long- term investment portfolio totaled $1.3 million during the second quarter. The total value of FBR Group's merchant banking and other long-term investments at the close of the second quarter was $169.6 million compared to $114.5 million at the close of the first quarter. Net unrealized gains in the portfolio totaled $41.3 million at the end of the second quarter.
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FBR Capital Markets Corporation
FBR Capital Markets yesterday reported second quarter after-tax earnings of $21.8 million, or $0.34 per share (diluted), compared to after-tax earnings of $1.0 million, or $0.02 per share (diluted) in the second quarter of 2006. FBR Capital Markets contributed $12.2 million to FBR Group’s earnings for the second quarter of 2007.
FBR Capital Market's book value at the close of the quarter was $8.20 per share compared to $7.81 at the end of the first quarter of 2007. At the close of the first quarter, FBR Capital Markets had $528.3 million in equity, $471.0 million of cash, and no debt. Complete financial results and tables for FBR Capital Markets can be found at www.fbr.com.
Looking Ahead
“The sale and recapitalization of FNLC is an important step for us,” said Eric F. Billings, Chairman and Chief Executive Officer of FBR Group. “This transaction coupled with the successful completion of the FBR Capital Markets IPO and strong second quarter results meaningfully alter the character of the company, putting us once again in a position to generate significant shareholder value.”
FBR Group firm will host an earnings conference call on Thursday, July 26, 2007 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)(NYSE:FBR) provides investment banking*, merger and acquisition advisory services*, institutional brokerage*, asset management and private wealth services through majority ownership of FBR Capital Markets Corporation (FBR Capital Markets)(NASDAQ:FBCM). FBR Capital Markets focuses capital and financial expertise on eight industry sectors: consumer, diversified industrials, energy & natural resources, financial institutions, healthcare, insurance, real estate, and technology, media & telecom. For the benefit of its shareholders, FBR Group also invests in mortgage-related assets and merchant banking opportunities. 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 Boca Raton, Florida. For more information, please visit 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.
3
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 follow.
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![]() | FRIEDMAN, BILLINGS, RAMSEY GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share amounts) (Unaudited) |
Quarter ended June 30, | |||||||||||||
2007 | % | 2006 | % | ||||||||||
REVENUES: | |||||||||||||
Investment banking: | |||||||||||||
Capital raising | $ | 110,032 | 62.4 | % | $ | 45,117 | 40.8 | % | |||||
Advisory | 6,152 | 3.5 | % | 6,281 | 5.7 | % | |||||||
Institutional brokerage: | |||||||||||||
Principal transactions | 4,152 | 2.4 | % | 1,760 | 1.6 | % | |||||||
Agency commissions | 28,564 | 16.2 | % | 28,492 | 25.8 | % | |||||||
Mortgage trading interest | - | 0.0 | % | 17,143 | 15.5 | % | |||||||
Mortgage trading net investment loss | - | 0.0 | % | (209 | ) | -0.2 | % | ||||||
Asset management: | |||||||||||||
Base management fees | 6,360 | 3.6 | % | 5,065 | 4.6 | % | |||||||
Incentive allocations and fees | 116 | (53 | ) | 0.0 | % | ||||||||
Principal investment: | |||||||||||||
Interest | 152,927 | 86.7 | % | 113,613 | 102.7 | % | |||||||
Net investment loss | (3,441 | ) | -2.0 | % | (31,290 | ) | -28.4 | % | |||||
Dividends | 883 | 0.6 | % | 4,059 | 3.7 | % | |||||||
Mortgage banking: | |||||||||||||
Interest | 13,462 | 7.6 | % | 21,267 | 19.2 | % | |||||||
Net investment (loss) income | (4,031 | ) | -2.3 | % | 29,401 | 26.6 | % | ||||||
Other | 4,482 | 2.5 | % | 5,465 | 4.9 | % | |||||||
Total revenues | 319,658 | 181.2 | % | 246,111 | 222.5 | % | |||||||
Interest expense | 143,231 | 81.2 | % | 128,189 | 115.9 | % | |||||||
Provision for loan losses | - | 0.0 | % | 7,348 | 6.6 | % | |||||||
Revenues, net of interest expense and provision for loan losses | 176,427 | 100.0 | % | 110,574 | 100.0 | % | |||||||
NON-INTEREST EXPENSES: | |||||||||||||
Compensation and benefits | 106,885 | 60.6 | % | 71,732 | 64.9 | % | |||||||
Professional services | 14,008 | 7.9 | % | 12,925 | 11.7 | % | |||||||
Business development | 11,158 | 6.3 | % | 8,604 | 7.8 | % | |||||||
Clearing and brokerage fees | 3,063 | 1.7 | % | 3,082 | 2.8 | % | |||||||
Occupancy and equipment | 12,699 | 7.2 | % | 12,232 | 11.1 | % | |||||||
Communications | 7,592 | 4.3 | % | 6,013 | 5.4 | % | |||||||
Other operating expenses | 18,684 | 10.6 | % | 24,993 | 22.5 | % | |||||||
Goodwill impairment | 28,900 | 16.4 | % | - | 0.0 | % | |||||||
Restructuring charges | 3,862 | 2.2 | % | - | 0.0 | % | |||||||
Total non-interest expenses | 206,851 | 117.2 | % | 139,581 | 126.2 | % | |||||||
Operating loss | (30,424 | ) | -17.2 | % | (29,007 | ) | -26.2 | % | |||||
OTHER INCOME: | |||||||||||||
Gain on sale of subsidiary shares | 105,677 | 59.9 | % | - | 0.0 | % | |||||||
Net income (loss) before income taxes and minority interest | 75,253 | 42.7 | % | (29,007 | ) | -26.2 | % | ||||||
Income tax provision | 55,011 | 31.2 | % | 1,240 | 1.1 | % | |||||||
Minority interest in earnings of consolidated subsidiary | 9,538 | 5.4 | % | - | 0.0 | % | |||||||
Net income (loss) | $ | 10,704 | 6.1 | % | $ | (30,247 | ) | -27.3 | % | ||||
Basic earnings (loss) per share | $ | 0.06 | $ | (0.18 | ) | ||||||||
Diluted earnings (loss) per share | $ | 0.06 | $ | (0.18 | ) | ||||||||
Weighted average shares - basic | 173,256 | 171,294 | |||||||||||
Weighted average shares - diluted | 173,256 | 171,294 |
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![]() | FRIEDMAN, BILLINGS, RAMSEY GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share amounts) (Unaudited) |
Six Months Ended June 30, | |||||||||||||
2007 | % | 2006 | % | ||||||||||
REVENUES: | |||||||||||||
Investment banking: | |||||||||||||
Capital raising | $ | 207,279 | 109.8 | % | $ | 111,452 | 38.8 | % | |||||
Advisory | 12,610 | 6.7 | % | 9,150 | 3.2 | % | |||||||
Institutional brokerage: | |||||||||||||
Principal transactions | 6,188 | 3.3 | % | 7,480 | 2.6 | % | |||||||
Agency commissions | 52,382 | 27.7 | % | 51,901 | 18.1 | % | |||||||
Mortgage trading interest | - | 0.0 | % | 34,793 | 12.1 | % | |||||||
Mortgage trading net investment loss | - | 0.0 | % | (1,446 | ) | -0.5 | % | ||||||
Asset management: | |||||||||||||
Base management fees | 11,888 | 6.3 | % | 10,162 | 3.5 | % | |||||||
Incentive allocations and fees | 220 | 0.1 | % | 955 | 0.3 | % | |||||||
Principal investment: | |||||||||||||
Interest | 334,623 | 177.3 | % | 262,739 | 91.4 | % | |||||||
Net investment loss | (63,154 | ) | -33.5 | % | (5,105 | ) | -1.7 | % | |||||
Dividends | 1,842 | 1.0 | % | 7,758 | 2.7 | % | |||||||
Mortgage banking: | |||||||||||||
Interest | 39,992 | 21.2 | % | 44,380 | 15.4 | % | |||||||
Net investment (loss) income | (110,890 | ) | -58.7 | % | 40,139 | 14.0 | % | ||||||
Other | 8,576 | 4.5 | % | 10,452 | 3.6 | % | |||||||
Total revenues | 501,556 | 265.7 | % | 584,810 | 203.5 | % | |||||||
Interest expense | 312,782 | 165.7 | % | 281,672 | 98.0 | % | |||||||
Provision for loan losses | - | 0.0 | % | 15,740 | 5.5 | % | |||||||
Revenues, net of interest expense and provision for loan losses | 188,774 | 100.0 | % | 287,398 | 100.0 | % | |||||||
NON-INTEREST EXPENSES: | |||||||||||||
Compensation and benefits | 210,867 | 111.7 | % | 155,229 | 54.0 | % | |||||||
Professional services | 27,862 | 14.8 | % | 27,190 | 9.5 | % | |||||||
Business development | 24,927 | 13.2 | % | 22,689 | 7.9 | % | |||||||
Clearing and brokerage fees | 5,764 | 3.1 | % | 5,398 | 1.9 | % | |||||||
Occupancy and equipment | 25,816 | 13.7 | % | 23,474 | 8.2 | % | |||||||
Communications | 14,643 | 7.8 | % | 11,620 | 4.0 | % | |||||||
Other operating expenses | 50,400 | 26.7 | % | 45,970 | 16.0 | % | |||||||
Impairment of goodwill | 54,752 | 29.0 | % | - | 0.0 | % | |||||||
Restructuring charges | 19,347 | 10.2 | % | - | 0.0 | % | |||||||
Total non-interest expenses | 434,378 | 230.2 | % | 291,570 | 101.5 | % | |||||||
Operating loss | (245,604 | ) | -130.2 | % | (4,172 | ) | -1.5 | % | |||||
OTHER INCOME: | |||||||||||||
Gain on sale of subsidiary shares | 106,508 | 56.5 | % | - | 0.0 | % | |||||||
Net loss before income taxes and minority interest | (139,096 | ) | -73.7 | % | (4,172 | ) | -1.5 | % | |||||
Income tax provision (benefit) | 23,461 | 12.4 | % | (479 | ) | -0.2 | % | ||||||
Minority interest in earnings of consolidated subsidiary | 12,617 | 6.7 | % | 0.0 | % | ||||||||
Net loss | $ | (175,174 | ) | -92.8 | % | $ | (3,693 | ) | -1.3 | % | |||
Basic loss per share | $ | (1.01 | ) | $ | (0.02 | ) | |||||||
Diluted loss per share | $ | (1.01 | ) | $ | (0.02 | ) | |||||||
Weighted average shares - basic | 173,054 | 171,012 | |||||||||||
Weighted average shares - diluted | 173,054 | 171,012 |
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![]() | FRIEDMAN, BILLINGS, RAMSEY GROUP, INC. Financial & Statistical Supplement - Operating Results (Dollars in thousands, except per share data) (Unaudited) |
For the six months ended June 30, 2007 | Q-2 07 | Q-1 07 | ||||||||
Revenues | ||||||||||
Investment banking: | ||||||||||
Capital raising | $ | 207,279 | $ | 110,032 | $ | 97,247 | ||||
Advisory | 12,610 | 6,152 | 6,458 | |||||||
Institutional brokerage: | ||||||||||
Principal transactions | 6,188 | 4,152 | 2,036 | |||||||
Agency commissions | 52,382 | 28,564 | 23,818 | |||||||
Asset management: | ||||||||||
Base management fees | 11,888 | 6,360 | 5,528 | |||||||
Incentive allocations and fees | 220 | 116 | 104 | |||||||
Principal investment: | ||||||||||
Interest | 334,623 | 152,927 | 181,696 | |||||||
Net investment loss | (63,154 | ) | (3,441 | ) | (59,713 | ) | ||||
Dividends | 1,842 | 883 | 959 | |||||||
Mortgage banking: | ||||||||||
Interest | 39,992 | 13,462 | 26,530 | |||||||
Net investment loss | (110,890 | ) | (4,031 | ) | (106,859 | ) | ||||
Other | 8,576 | 4,482 | 4,094 | |||||||
Total revenues | 501,556 | 319,658 | 181,898 | |||||||
Interest expense | 312,782 | 143,231 | 169,551 | |||||||
Revenues, net of interest expense | 188,774 | 176,427 | 12,347 | |||||||
Non-interest expenses | ||||||||||
Compensation and benefits | 210,867 | 106,885 | 103,982 | |||||||
Professional services | 27,862 | 14,008 | 13,854 | |||||||
Business development | 24,927 | 11,158 | 13,769 | |||||||
Clearing and brokerage fees | 5,764 | 3,063 | 2,701 | |||||||
Occupancy and equipment | 25,816 | 12,699 | 13,117 | |||||||
Communications | 14,643 | 7,592 | 7,051 | |||||||
Other operating expenses | 50,400 | 18,684 | 31,716 | |||||||
Impairment of goodwill | 54,752 | 28,900 | 25,852 | |||||||
Restructuring charges | 19,347 | 3,862 | 15,485 | |||||||
Total non-interest expenses | 434,378 | 206,851 | 227,527 | |||||||
Operating loss | (245,604 | ) | (30,424 | ) | (215,180 | ) | ||||
Other Income | ||||||||||
Gain on sale of subsidiary shares | 106,508 | 105,677 | 831 | |||||||
Net (loss) earnings before income taxes and minority interest | (139,096 | ) | 75,253 | (214,349 | ) | |||||
Income tax provision (benefit) | 23,461 | 55,011 | (31,550 | ) | ||||||
Minority interest in earnings of consolidated subsidiary | 12,617 | 9,538 | 3,079 | |||||||
Net (loss) earnings | $ | (175,174 | ) | $ | 10,704 | $ | (185,878 | ) | ||
Net (loss) earnings before income taxes and minority interest as a percentage of net revenue | -73.7 | % | 42.7 | % | -1736.0 | % | ||||
ROE (annualized) | -32.1 | % | 3.9 | % | -68.8 | % | ||||
ROE (annualized-excluding AOCI) (1) | -32.1 | % | 3.9 | % | -68.2 | % | ||||
Total shareholders' equity | $ | 1,012,635 | $ | 1,012,635 | $ | 989,213 | ||||
Total shareholders' equity, net of AOCI (1) | $ | 1,000,071 | $ | 1,000,071 | $ | 993,753 | ||||
Basic loss (earnings) per share | $ | (1.01 | ) | $ | 0.06 | $ | (1.08 | ) | ||
Diluted loss (earnings) per share | $ | (1.01 | ) | $ | 0.06 | $ | (1.08 | ) | ||
Ending shares outstanding (in thousands) | 173,756 | 173,756 | 172,846 | |||||||
Book value per share | $ | 5.83 | $ | 5.83 | $ | 5.72 | ||||
Book value per share, net of AOCI (1) | $ | 5.76 | $ | 5.76 | $ | 5.75 | ||||
Gross assets under management (in millions) | ||||||||||
Managed accounts | $ | 291.3 | $ | 291.3 | $ | 258.8 | ||||
Hedge & offshore funds | 61.7 | 61.7 | 67.1 | |||||||
Mutual funds | 2,482.6 | 2,482.6 | 2,412.9 | |||||||
Private equity and venture capital funds | 33.8 | 33.8 | 41.2 | |||||||
Total | $ | 2,869.4 | $ | 2,869.4 | $ | 2,780.0 | ||||
Net assets under management (in millions) | ||||||||||
Managed accounts | $ | 291.3 | $ | 291.3 | $ | 258.8 | ||||
Hedge & offshore funds | 58.1 | 58.1 | 62.5 | |||||||
Mutual funds | 2,474.7 | 2,474.7 | 2,406.4 | |||||||
Private equity and venture capital funds | 32.0 | 32.0 | 38.0 | |||||||
Total | $ | 2,856.1 | $ | 2,856.1 | $ | 2,765.7 | ||||
Employee count | 2,151 | 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. |
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![]() | FRIEDMAN, BILLINGS, RAMSEY GROUP, INC. Financial & Statistical Supplement - Operating Results (Dollars in thousands, except per share data) (Unaudited) |
For the year ended Decemeber 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. |
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![]() | FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except per share amounts) (Unaudited) |
ASSETS | 30-Jun-07 | 31-Dec-06 | |||||
Cash and cash equivalents | $ | 505,940 | $ | 189,956 | |||
Restricted cash | 110 | 132 | |||||
Receivables: | |||||||
Securities sold | 261,918 | - | |||||
Other | 168,871 | 217,249 | |||||
Investments: | |||||||
Mortgage-backed securities, at fair value | 6,047,375 | 6,870,661 | |||||
Loans held for sale, net | 3,681,090 | 5,367,934 | |||||
Long-term investments | 222,086 | 185,492 | |||||
Trading securities, at fair value | 43,363 | 18,180 | |||||
Due from clearing broker | 19,621 | 28,999 | |||||
Derivative assets, at fair value | 21,728 | 36,875 | |||||
Goodwill | 108,013 | 162,765 | |||||
Intangible assets, net | 11,274 | 21,825 | |||||
Furniture, equipment, software and leasehold improvements, net | 47,963 | 44,111 | |||||
Prepaid expenses and other assets | 180,246 | 208,339 | |||||
Total assets | $ | 11,319,598 | $ | 13,352,518 | |||
LIABILITIES AND SHAREHOLDERS ’ EQUITY | |||||||
Liabilities: | |||||||
Trading account securities sold short but not yet purchased, at fair value | $ | 601 | $ | 202 | |||
Commercial paper | 3,493,212 | 3,971,389 | |||||
Repurchase agreements | 2,336,998 | 3,059,330 | |||||
Securities purchased | 27,025 | - | |||||
Derivative liabilities, at fair value | 4,710 | 44,582 | |||||
Dividends payable | 8,770 | 8,743 | |||||
Interest payable | 9,185 | 12,239 | |||||
Accrued compensation and benefits | 96,921 | 57,227 | |||||
Accounts payable, accrued expenses and other liabilities | 105,219 | 81,819 | |||||
Securitization financing, net | 3,645,874 | 4,486,046 | |||||
Long-term debt | 323,526 | 324,453 | |||||
Total liabilities | 10,052,041 | 12,046,030 | |||||
Minority interest | 254,922 | 135,443 | |||||
Shareholders' equity: | |||||||
Common stock, 175,327 and 174,712 shares | 1,753 | 1,747 | |||||
Additional paid-in capital | 1,569,034 | 1,562,497 | |||||
Employee stock loan receivable, 2 and 2 shares | (12 | ) | (12 | ) | |||
Accumulated other comprehensive income (loss), net of taxes | 12,564 | (15,136 | ) | ||||
Accumulated deficit | (570,704 | ) | (378,051 | ) | |||
Total shareholders' equity | 1,012,635 | 1,171,045 | |||||
Total liabilities and shareholders' equity | $ | 11,319,598 | $ | 13,352,518 |
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