Contacts:
Media: 703.469.1004 or media@fbr.com
Investors: Paul Beattie at 703.312.9673 or pbeattie@fbr.com
FBR Group Reports Second Quarter Earnings
ARLINGTON, VA, July 23, 2008 - Friedman, Billings, Ramsey Group, Inc. (FBR Group) (NYSE: FBR) today reported a net after-tax loss of $25.1 million for the quarter ended June 30, 2008, or $0.17 per share (diluted), compared to net after-tax earnings of $10.2 million, or $0.06 per share (diluted), for the second quarter of 2007. FBR Group's net after-tax earnings for the first six months of 2008 were $20.1 million, or $0.13 per share (diluted), compared to a net after-tax loss of $177.5 million, or $1.03 per share (diluted) in first six months of 2007.
The second quarter 2008 results reflect:
§ | a $0.9 million cash operating loss for FBR Group’s core mortgage investment business during the quarter, |
§ | a $5.8 million loss relating primarily to write-downs and losses in non-prime mortgage investments, and |
§ | a $13.0 million loss, representing FBR Group’s proportionate share of 51%-owned FBR Capital Markets Corporation’s (FBR Capital Markets) (NASDAQ: FBCM) second quarter loss. |
Book value net of Accumulated Other Comprehensive Income (AOCI) (1) as of June 30, 2008 was $2.89 per share compared to book value net of AOCI of $3.02 as of March 31, 2008. Excluding FBR Group’s 51% ownership interest in FBR Capital Markets, FBR Group had total tangible capital at the end of the second quarter of $414 million, including $318 million of trust preferred securities.
As of June 30, 2008, approximately $270 million of tangible capital, or $1.79 per share, was invested in cash and readily marketable agency securities. The company expects that the remaining $144 million of tangible capital, including a $28 million IRS tax refund expected in the third quarter of 2008, will be redeployed over time to agency mortgage-backed securities. During the second quarter, $18 million of liquidations and pay-downs of capital invested in non-agency AAA securities and other investments was recovered and will be redeployed to the agency portfolio. Remaining non-prime investments totaled approximately $11 million at the end of the quarter.
“Increased liquidity during the quarter afforded us the opportunity to patiently expand the agency portfolio and, correspondingly, net interest income while maintaining leverage of approximately five times,” said J. Rock Tonkel, Jr., President and Chief Operating Officer of FBR Group. “As a consequence, operating results on a cash basis for the company’s core mortgage investing business are now at breakeven.”
Looking forward, the company intends to focus on maximizing return on equity on a number of fronts:
§ | continuing to examine strategic alternatives to maximize the potential economic benefit from operating and capital-loss tax carry-forwards totaling approximately $670 million, |
§ | redeploying capital realized from repayments and the revaluation of non-agency AAA mortgage and merchant banking portfolio assets, and |
§ | continuing to reduce all general and administrative expenses. |
Mortgage Investment Portfolio
Excluding FBR Capital Markets, FBR Group's investments in mortgage-backed securities (MBS), primarily government agency securities, averaged $2.3 billion with a one-month CPR of 12.9, and an ending net premium of $5.8 million. The net yield on MBS for the second quarter was 3.96% with a corresponding cost of funds of 2.82% for a net spread of 1.14%. At the end of the quarter, total MBS was $2.5 billion with a yield of 3.68% and a cost of funds of 2.55% for a net spread of 1.13%.
Merchant Banking
Excluding FBR Capital Markets, the total value of the merchant banking investments held by FBR Group at the close of the second quarter was $38.9 million. During the quarter, $4.7 million in merchant banking investments were sold at a gain. No additional investments were made in the portfolio during the quarter.
FBR Capital Markets Corporation
FBR Capital Markets Corporation reported a net after-tax loss of $25.2 million, or $0.39 per share (diluted), for the quarter ended June 30, 2008 compared to net after-tax earnings of $21.8 million, or $0.34 per share (diluted) in the second quarter of 2007. For the six months ending June 30, 2008, FBR Capital Markets lost $35.4 million after tax, or $0.55 per share (diluted), compared to after-tax earnings of $32.8 million, or $0.51 per share (diluted), for the first half of 2007.
Net revenues for the second quarter were $50.5 million compared to net revenues of $104.0 million in the first quarter of 2008 and $169.5 million in the second quarter of 2007. Net revenues for the first six months of 2008 were $154.5 million compared to net revenues of $312.6 million for the first six months of 2007.
During the quarter, FBR Capital Markets broadened its corporate finance capabilities through the establishment of a new convertible securities origination and trading operation and strengthened its investment banking and sales/trading teams through a series of senior-level hires. At the same time, in light of what it believes will be a prolonged difficult economic environment for the securities industry, the firm also is taking steps to further reduce expenses across its entire organization.
2
Complete financial results and tables for FBR Capital Markets can be found at www.fbrcapitalmarkets.com.
Looking Ahead
“It is our intent - as market conditions permit - to continue to execute our core strategy of deploying capital in a conservative, substantially hedged portfolio of agency mortgage-backed securities” said Eric F. Billings, Chairman and Chief Executive Officer of FBR Group. “This strategy, we believe, will produce attractive returns for this asset class as markets stabilize and begin to recover. As for FBR Capital Markets, the firm has historically performed well in challenging environments. The franchise is strong, and has substantial balance sheet strength with $482 million of capital - all equity - and more than $300 million in cash and cash equivalents. In line with its strategic plan, FBR Capital Markets is taking steps that, along with the flexibility and adaptability of the firm, should lead to reduced revenue volatility and greater profitability as it takes advantage of the adverse economic environment and the inevitable recovery.”
Investors wishing to listen to the earnings conference call at 9:00 A.M. U.S. EDT, Thursday, July 24, 2008, 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 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 follow.
# # #
3
FRIEDMAN, BILLINGS, RAMSEY GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share amounts) (Unaudited) |
Quarter Ended | |||||||||||||
June 30, | |||||||||||||
2008 | % | 2007 | % | ||||||||||
REVENUES: | |||||||||||||
Investment banking: | |||||||||||||
Capital raising | $ | 3,962 | 8.0 | % | $ | 110,032 | 62.5 | % | |||||
Advisory | 4,192 | 8.5 | % | 6,152 | 3.5 | % | |||||||
Institutional brokerage: | |||||||||||||
Principal transactions | 4,888 | 9.9 | % | 4,152 | 2.4 | % | |||||||
Agency commissions | 29,918 | 60.5 | % | 28,564 | 16.2 | % | |||||||
Asset management: | |||||||||||||
Base management fees | 4,153 | 8.4 | % | 6,360 | 3.6 | % | |||||||
Incentive allocations and fees | - | 0.0 | % | 116 | 0.1 | % | |||||||
Principal investment: | |||||||||||||
Interest | 26,827 | 54.2 | % | 152,368 | 86.6 | % | |||||||
Net investment loss | (4,797 | ) | -9.7 | % | (3,377 | ) | -1.9 | % | |||||
Dividends | 258 | 0.5 | % | 883 | 0.5 | % | |||||||
Mortgage banking: | |||||||||||||
Interest | - | 0.0 | % | 13,462 | 7.7 | % | |||||||
Net investment loss | (5 | ) | 0.0 | % | (4,031 | ) | -2.3 | % | |||||
Other | 1,932 | 3.9 | % | 4,482 | 2.5 | % | |||||||
Total revenues | 71,328 | 144.2 | % | 319,163 | 181.4 | % | |||||||
Interest expense | 21,858 | 44.2 | % | 143,231 | 81.4 | % | |||||||
Revenues, net of interest expense | 49,470 | 100.0 | % | 175,932 | 100.0 | % | |||||||
NON-INTEREST EXPENSES: | |||||||||||||
Compensation and benefits | 53,970 | 109.1 | % | 106,885 | 60.8 | % | |||||||
Professional services | 10,492 | 21.2 | % | 14,008 | 8.0 | % | |||||||
Business development | 6,812 | 13.8 | % | 11,158 | 6.3 | % | |||||||
Clearing and brokerage fees | 3,393 | 6.9 | % | 3,063 | 1.7 | % | |||||||
Occupancy and equipment | 8,580 | 17.3 | % | 12,699 | 7.2 | % | |||||||
Communications | 6,255 | 12.6 | % | 7,592 | 4.3 | % | |||||||
Other operating expenses | 7,055 | 14.3 | % | 18,684 | 10.6 | % | |||||||
Goodwill impairment | - | 0.0 | % | 28,900 | 16.4 | % | |||||||
Restructuring charges | - | 0.0 | % | 3,862 | 2.2 | % | |||||||
Total non-interest expenses | 96,557 | 195.2 | % | 206,851 | 117.5 | % | |||||||
Operating loss | (47,087 | ) | -95.2 | % | (30,919 | ) | -17.5 | % | |||||
OTHER INCOME: | |||||||||||||
(Loss) gain on issuance and sale of subsidiary shares and other income (loss) | (192 | ) | -0.4 | % | 105,677 | 60.1 | % | ||||||
(Loss) gain before income taxes and minority interest | (47,279 | ) | -95.6 | % | 74,758 | 42.6 | % | ||||||
Income tax (benefit) provision | (9,974 | ) | -20.2 | % | 55,011 | 31.3 | % | ||||||
Minority interest in (losses) earnings of consolidated subsidiary | (12,254 | ) | -24.8 | % | 9,538 | 5.4 | % | ||||||
Net (loss) income | $ | (25,051 | ) | -50.6 | % | $ | 10,209 | 5.9 | % | ||||
Basic (loss) earnings per share | $ | (0.17 | ) | $ | 0.06 | ||||||||
Diluted (loss) earnings per share | $ | (0.17 | ) | $ | 0.06 | ||||||||
Weighted average shares - basic | 150,948 | 173,256 | |||||||||||
Weighted average shares - diluted | 150,948 | 173,256 |
4
FRIEDMAN, BILLINGS, RAMSEY GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share amounts) (Unaudited) |
Six Months Ended | |||||||||||||
June 30, | |||||||||||||
2008 | % | 2007 | % | ||||||||||
REVENUES: | |||||||||||||
Investment banking: | |||||||||||||
Capital raising | $ | 68,872 | 48.6 | % | $ | 207,279 | 111.2 | % | |||||
Advisory | 9,268 | 6.5 | % | 12,610 | 6.8 | % | |||||||
Institutional brokerage: | |||||||||||||
Principal transactions | 10,845 | 7.7 | % | 6,188 | 3.3 | % | |||||||
Agency commissions | 55,768 | 39.3 | % | 52,382 | 28.1 | % | |||||||
Asset management: | |||||||||||||
Base management fees | 8,797 | 6.2 | % | 11,888 | 6.4 | % | |||||||
Incentive allocations and fees | - | 0.0 | % | 220 | 0.1 | % | |||||||
Principal investment: | |||||||||||||
Interest | 52,741 | 37.2 | % | 331,251 | 177.7 | % | |||||||
Net investment loss | (24,484 | ) | -17.3 | % | (62,142 | ) | -33.3 | % | |||||
Dividends | 687 | 0.5 | % | 1,842 | 1.0 | % | |||||||
Mortgage banking: | |||||||||||||
Interest | 36 | 0.0 | % | 39,992 | 21.5 | % | |||||||
Net investment income (loss) | 463 | 0.3 | % | (110,890 | ) | -59.5 | % | ||||||
Other | 4,267 | 3.1 | % | 8,576 | 4.5 | % | |||||||
Total revenues | 187,260 | 132.1 | % | 499,196 | 267.8 | % | |||||||
Interest expense | 45,508 | 32.1 | % | 312,782 | 167.8 | % | |||||||
Revenues, net of interest expense | 141,752 | 100.0 | % | 186,414 | 100.0 | % | |||||||
NON-INTEREST EXPENSES: | |||||||||||||
Compensation and benefits | 130,924 | 92.4 | % | 210,867 | 113.1 | % | |||||||
Professional services | 22,959 | 16.2 | % | 27,862 | 14.9 | % | |||||||
Business development | 19,106 | 13.5 | % | 24,927 | 13.4 | % | |||||||
Clearing and brokerage fees | 7,023 | 5.0 | % | 5,764 | 3.1 | % | |||||||
Occupancy and equipment | 17,769 | 12.5 | % | 25,816 | 13.8 | % | |||||||
Communications | 12,273 | 8.7 | % | 14,643 | 7.9 | % | |||||||
Other operating expenses | 12,439 | 8.8 | % | 50,400 | 27.0 | % | |||||||
Goodwill impairment | - | 0.0 | % | 54,752 | 29.4 | % | |||||||
Restructuring charges | - | 0.0 | % | 19,347 | 10.4 | % | |||||||
Total non-interest expenses | 222,493 | 157.1 | % | 434,378 | 233.0 | % | |||||||
Operating loss | (80,741 | ) | -57.1 | % | (247,964 | ) | -133.0 | % | |||||
OTHER INCOME: | |||||||||||||
(Loss) gain on issuance and sale of subsidiary shares | (189 | ) | -0.1 | % | 106,508 | 57.1 | % | ||||||
Gain on disposition of subsidiary and other income | 73,034 | 51.5 | % | - | 0.0 | % | |||||||
Loss before income taxes and minority interest | (7,896 | ) | -5.7 | % | (141,456 | ) | -75.9 | % | |||||
Income tax (benefit) provision | (10,780 | ) | -7.6 | % | 23,461 | 12.6 | % | ||||||
Minority interest in (losses) earnings of consolidated subsidiary | (17,167 | ) | -12.1 | % | 12,617 | 6.8 | % | ||||||
Net income (loss) | $ | 20,051 | 14.0 | % | $ | (177,534 | ) | -95.3 | % | ||||
Basic earnings (loss) per share | $ | 0.13 | $ | (1.03 | ) | ||||||||
Diluted earnings (loss) per share | $ | 0.13 | $ | (1.03 | ) | ||||||||
Weighted average shares - basic | 150,869 | 173,054 | |||||||||||
Weighted average shares - diluted | 151,345 | 173,054 |
5
FRIEDMAN, BILLINGS, RAMSEY GROUP, INC. Financial & Statistical Supplement - Operating Results (Dollars in thousands, except per share amounts) (Unaudited) |
Six Months Ended | ||||||||||
June 30, 2008 | Q-2 08 | Q-1 08 | ||||||||
Revenues | ||||||||||
Investment banking: | ||||||||||
Capital raising | $ | 68,872 | $ | 3,962 | $ | 64,910 | ||||
Advisory | 9,268 | 4,192 | 5,076 | |||||||
Institutional brokerage: | ||||||||||
Principal transactions | 10,845 | 4,888 | 5,957 | |||||||
Agency commissions | 55,768 | 29,918 | 25,850 | |||||||
Asset management: | ||||||||||
Base management fees | 8,797 | 4,153 | 4,644 | |||||||
Principal investment: | ||||||||||
Interest | 52,741 | 26,827 | 25,914 | |||||||
Net investment loss | (24,484 | ) | (4,797 | ) | (19,687 | ) | ||||
Dividends | 687 | 258 | 429 | |||||||
Mortgage banking: | ||||||||||
Interest | 36 | - | 36 | |||||||
Net investment income (loss) | 463 | (5 | ) | 468 | ||||||
Other | 4,267 | 1,932 | 2,335 | |||||||
Total revenues | 187,260 | 71,328 | 115,932 | |||||||
Interest expense | 45,508 | 21,858 | 23,650 | |||||||
Revenues, net of interest expense | 141,752 | 49,470 | 92,282 | |||||||
Non-interest expenses | ||||||||||
Compensation and benefits | 130,924 | 53,970 | 76,954 | |||||||
Professional services | 22,959 | 10,492 | 12,467 | |||||||
Business development | 19,106 | 6,812 | 12,294 | |||||||
Clearing and brokerage fees | 7,023 | 3,393 | 3,630 | |||||||
Occupancy and equipment | 17,769 | 8,580 | 9,189 | |||||||
Communications | 12,273 | 6,255 | 6,018 | |||||||
Other operating expenses | 12,439 | 7,055 | 5,384 | |||||||
Total non-interest expenses | 222,493 | 96,557 | 125,936 | |||||||
Operating loss | (80,741 | ) | (47,087 | ) | (33,654 | ) | ||||
Other income | ||||||||||
Gain on disposition of subsidiary and other income (loss) | 72,845 | (192 | ) | 73,037 | ||||||
Net (loss) income before income taxes and minority interest | (7,896 | ) | (47,279 | ) | 39,383 | |||||
Income tax benefit | (10,780 | ) | (9,974 | ) | (806 | ) | ||||
Minority interest in losses of consolidated subsidiary | (17,167 | ) | (12,254 | ) | (4,913 | ) | ||||
Net income (loss) | $ | 20,051 | $ | (25,051 | ) | $ | 45,102 | |||
ROE (annualized) | 10.9 | % | -27.2 | % | 48.9 | % | ||||
ROE (annualized-excluding AOCI) (1) | 9.5 | % | -23.8 | % | 41.8 | % | ||||
Total shareholders' equity | $ | 343,686 | $ | 343,686 | $ | 344,408 | ||||
Total shareholders' equity, net of AOCI (1) | $ | 436,093 | $ | 436,093 | $ | 455,761 | ||||
Basic earnings (loss) per share | $ | 0.13 | $ | (0.17 | ) | $ | 0.30 | |||
Diluted earnings (loss) per share | $ | 0.13 | $ | (0.17 | ) | $ | 0.30 | |||
Ending shares outstanding (in thousands) | 150,989 | 150,989 | 150,915 | |||||||
Book value per share | $ | 2.28 | $ | 2.28 | $ | 2.28 | ||||
Book value per share, net of AOCI (1) | $ | 2.89 | $ | 2.89 | $ | 3.02 | ||||
Gross assets under management (in millions) | ||||||||||
Managed accounts | $ | 275.7 | $ | 275.7 | $ | 333.9 | ||||
Hedge & offshore funds | 35.5 | 35.5 | 45.1 | |||||||
Mutual funds | 1,553.4 | 1,553.4 | 1,702.9 | |||||||
Private equity and venture capital funds | 21.1 | 21.1 | 21.4 | |||||||
Total | $ | 1,885.7 | $ | 1,885.7 | $ | 2,103.3 | ||||
Net assets under management (in millions) | ||||||||||
Managed accounts | $ | 275.7 | $ | 275.7 | $ | 333.9 | ||||
Hedge & offshore funds | 33.4 | 33.4 | 40.4 | |||||||
Mutual funds | 1,533.8 | 1,533.8 | 1,698.0 | |||||||
Private equity and venture capital funds | 20.2 | 20.2 | 20.2 | |||||||
Total | $ | 1,863.1 | $ | 1,863.1 | $ | 2,092.5 | ||||
Employee count | 719 | 719 | 726 |
(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.
6
FRIEDMAN, BILLINGS, RAMSEY GROUP, INC. Financial & Statistical Supplement - Operating Results (Dollars in thousands, except per share data) (Unaudited) |
Year 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 | 497,256 | 50,998 | 115,007 | 152,368 | 178,883 | |||||||||||
Net investment loss | (216,429 | ) | (22,327 | ) | (131,960 | ) | (3,377 | ) | (58,765 | ) | ||||||
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 | 584,597 | 19,014 | 66,387 | 319,163 | 180,033 | |||||||||||
Interest expense | 477,437 | 52,583 | 112,072 | 143,231 | 169,551 | |||||||||||
Revenues, net of interest expense | 107,160 | (33,569 | ) | (45,685 | ) | 175,932 | 10,482 | |||||||||
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 | (738,956 | ) | (298,250 | ) | (192,742 | ) | (30,919 | ) | (217,045 | ) | ||||||
Other income (loss) | ||||||||||||||||
Gain (loss) on issuance and sale of subsidiary shares | 104,062 | 4 | (2,450 | ) | 105,677 | 831 | ||||||||||
(Loss) income before income taxes | ||||||||||||||||
and minority interest | (634,894 | ) | (298,246 | ) | (195,192 | ) | 74,758 | (216,214 | ) | |||||||
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 | $ | (658,600 | ) | $ | (270,421 | ) | $ | (210,645 | ) | $ | 10,209 | $ | (187,743 | ) | ||
ROE (annualized) | -84.2 | % | -138.3 | % | -90.2 | % | 3.7 | % | -69.5 | % | ||||||
ROE (annualized-excluding AOCI) (1) | -82.7 | % | -135.8 | % | -88.7 | % | 3.7 | % | -69.0 | % | ||||||
Total shareholders' equity | $ | 393,691 | $ | 393,691 | $ | 698,214 | $ | 1,012,635 | $ | 989,213 | ||||||
Total shareholders' equity, net of AOCI (1) | $ | 406,762 | $ | 406,762 | $ | 714,566 | $ | 996,283 | $ | 990,460 | ||||||
Basic (loss) earnings per share | $ | (3.94 | ) | $ | (1.77 | ) | $ | (1.25 | ) | $ | 0.06 | $ | (1.09 | ) | ||
Diluted (loss) earnings per share | $ | (3.94 | ) | $ | (1.77 | ) | $ | (1.25 | ) | $ | 0.06 | $ | (1.09 | ) | ||
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 | $ | 4.50 | $ | 5.73 | $ | 5.73 | ||||||
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. |
(2) | Effective January 1, 2008, the Company elected to change its method of amortizing and accreting premiums, discounts and other deferred costs on its mortgage-backed securities portfolio to the "Contractual Method", in accordance with SFAS 91. See the Company's quarterly filing filed with the Securities and Exchange Commission for the period ending March 31, 2008 for further discussion. |
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FRIEDMAN, BILLINGS, RAMSEY GROUP, INC. CONSOLIDATED BALANCE SHEETS (Dollars and shares in thousands, except per share amounts) (Unaudited) |
30-Jun-08 | 31-Dec-07 | ||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 417,940 | $ | 692,360 | |||
Restricted cash | 162 | 14,166 | |||||
Receivables | 72,923 | 75,357 | |||||
Investments: | |||||||
Mortgage-backed securities, at fair value | 3,431,550 | 1,791,480 | |||||
Long-term investments | 133,808 | 169,274 | |||||
Trading securities, at fair value | 16,978 | 19,057 | |||||
Due from clearing broker | 12,521 | - | |||||
Derivative assets, at fair value | 9,481 | 3,514 | |||||
Intangible assets, net | 9,817 | 9,837 | |||||
Furniture, equipment, software and leasehold improvements, net | 26,731 | 30,451 | |||||
Prepaid expenses and other assets | 68,319 | 139,459 | |||||
Total assets | $ | 4,200,230 | $ | 2,944,955 | |||
LIABILITIES AND SHAREHOLDERS ’ EQUITY | |||||||
Liabilities: | |||||||
Trading account securities sold but | $ | 259 | $ | 206 | |||
not yet purchased, at fair value | |||||||
Repurchase agreements | 2,813,768 | 1,744,377 | |||||
Securities purchased | 375,361 | ||||||
Derivative liabilities, at fair value | 4,215 | 3,558 | |||||
Interest payable | 5,684 | 5,746 | |||||
Accrued compensation and benefits | 45,563 | 57,000 | |||||
Due to clearing broker | - | 7,059 | |||||
Accounts payable, accrued expenses and other liabilities | 57,398 | 105,456 | |||||
Short-term loan financing | - | 63,981 | |||||
Long-term debt | 320,051 | 320,820 | |||||
Total liabilities | 3,622,299 | 2,308,203 | |||||
Minority interest | 234,245 | 243,061 | |||||
Shareholders' equity: | |||||||
Common stock, 159,411 and 151,883 shares | 1,594 | 1,519 | |||||
Additional paid-in capital | 1,478,006 | 1,468,801 | |||||
Accumulated other comprehensive loss, net of taxes | (92,407 | ) | (13,071 | ) | |||
Accumulated deficit | (1,043,507 | ) | (1,063,558 | ) | |||
Total shareholders' equity | 343,686 | 393,691 | |||||
Total liabilities and shareholders' equity | $ | 4,200,230 | $ | 2,944,955 |
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