Arlington Asset Investment (AAIC) 8-K FBR Announces Results for First Quarter 2005

Exhibit 99.1

Contacts

Investor Contact: Kurt R. Harrington 703-312-9647 orkharrington@fbr.com

Media Contact: Lauren Burk 703-469-1004lburk@fbr.com

FBR Announces Results for First Quarter 2005

Arlington, Va., May 4, 2005 – Friedman, Billings, Ramsey Group, Inc. (NYSE: FBR) today announced final results for the quarter ended on March 31, 2005. Net income after tax for the quarter was $24.4 million, or $0.15 per share (basic) and $0.14 per share (diluted), compared to $89.6 million, or $0.54 per share (basic and diluted), for the first quarter of 2004. Net revenues for the quarter were $163 million, a decrease of 26% from net revenues of $221 million in the first quarter of 2004. Book value per share as of March 31, 2005 was $8.62, and book value per share net of Accumulated Other Comprehensive Income (AOCI)¹ was $9.63.

The firm will host an earnings conference call tomorrow morning, Thursday, May 5, 2005, at 9:00 a.m. U.S. EDT. Investors wishing to listen to the conference call may do so via the web at: http://www.corporate-ir.net/ireye/ir_site.zhtml?ticker=FBR.

Replays of the webcast will be available after the call.

Friedman, Billings, Ramsey Group, Inc. provides investment banking², institutional brokerage², asset management, and private client services through its operating subsidiaries and invests in mortgage-backed securities and merchant banking opportunities. FBR 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, headquartered in the Washington, D.C. metropolitan area, with offices in Arlington, Va. and Bethesda, Md., also has offices in Boston, Cleveland, Dallas, Denver, Houston, Irvine, London, New York, Phoenix, Portland, San Francisco, Seattle, and Vienna. For more information, please visit http://www.fbr.com.

¹Accumulated 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.

²Friedman, Billings, Ramsey & Co., Inc.

Financial data follows.

FRIEDMAN, BILLINGS, RAMSEY GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share amounts) (Unaudited)

	Three months ended March 31 ,
	2005			%		2004		%
REVENUES:
Investment banking:
Capital raising	$	86,813		53.3	%	$	89,793	40.7	%
Advisory		1,138		0.7	%		1,318	0.6	%
Institutional brokerage:
Principal transactions		5,627		3.5	%		6,019	2.7	%
Agency commissions		22,157		13.6	%		29,137	13.2	%
Asset management:
Base management fees		8,468		5.2	%		6,535	3.0	%
Incentive allocations and fees		(375	)	-0.2	%		2,665	1.2	%
Principal investment:
Interest		108,388		66.5	%		88,995	40.3	%
Net investment (loss)/income		(377	)	-0.2	%		26,609	12.1	%
Dividends		3,440		2.1	%		972	0.4	%
Other		2,496		1.5	%		1,316	0.6	%
Total revenues		237,775		146.0	%		253,359	114.8	%
Interest expense		74,822		46.0	%		32,647	14.8	%
Revenues, net of interest expense		162,953		100.0	%		220,712	100.0	%
NON-INTEREST EXPENSES:
Compensation and benefits		75,799		46.5	%		74,889	33.9	%
Professional services		13,650		8.4	%		10,164	4.6	%
Business development		15,438		9.5	%		16,538	7.5	%
Clearing and brokerage fees		2,032		1.2	%		2,773	1.3	%
Occupancy and equipment		5,724		3.5	%		2,904	1.3	%
Communications		4,032		2.5	%		2,942	1.4	%
Other operating expenses		16,294		10.0	%		5,973	2.7	%
Total non-interest expenses		132,969		81.6	%		116,183	52.7	%
Net income before income taxes		29,984		18.4	%		104,529	47.3	%
Income tax provision		5,572		3.4	%		14,890	6.7	%
Net income	$	24,412		15.0	%	$	89,639	40.6	%
Basic earnings per share	$	0.15				$	0.54
Diluted earnings per share	$	0.14				$	0.54
Weighted average shares—basic		168,320					165,107
Weighted average shares—diluted		169,444					167,307

FRIEDMAN, BILLINGS, RAMSEY GROUP, INC. Financial & Statistical Supplement—Operating Results (Dollars in thousands, except per share amounts) (Unaudited)

	Q-1 05			YTD 2004			Q-4 04			Q-3 04			Q-2 04			Q-1 04
Revenues
Investment banking:
Capital raising	$	86,813		$	398,183		$	125,488		$	130,019		$	52,883		$	89,793
Advisory		1,138			30,115			8,088			11,602			9,107			1,318
Institutional brokerage:
Principal transactions		5,627			20,444			4,758			4,241			5,426			6,019
Agency commissions		22,157			89,650			20,948			18,505			21,060			29,137
Asset management:
Base management fees		8,468			28,307			8,344			7,044			6,384			6,535
Incentive income		(375	)		10,940			7,982			1,737			(1,444	)		2,665
Principal investment:
Interest		108,388			350,691			86,550			88,035			87,111			88,995
Net investment (loss)/income		(377	)		101,973			27,442			19,090			28,832			26,609
Dividends		3,440			14,644			6,169			5,820			1,683			972
Other		2,496			7,155			2,329			1,827			1,683			1,316
Total revenues		237,775			1,052,102			298,098			287,920			212,725			253,359
Interest expense		74,822			164,156			52,968			44,265			34,276			32,647
Revenues, net of interest expense		162,953			887,946			245,130			243,655			178,449			220,712
Non-interest expenses
Compensation and benefits		75,799			323,524			95,113			95,824			57,698			74,889
Professional services		13,650			50,467			11,832			13,421			15,050			10,164
Business development		15,438			44,955			11,248			8,284			8,885			16,538
Clearing and brokerage fees		2,032			9,123			2,186			1,556			2,608			2,773
Occupancy & equipment		5,724			14,458			4,330			3,898			3,326			2,904
Communications		4,032			13,959			4,227			3,348			3,442			2,942
Other operating expenses		16,294			22,740			6,570			4,846			5,351			5,973
Total non-interest expenses		132,969			479,226			135,506			131,177			96,360			116,183
Net income before taxes		29,984			408,720			109,624			112,478			82,089			104,529
Income tax provision		5,572			59,161			23,032			20,329			910			14,890
Net income	$	24,412		$	349,559		$	86,592		$	92,149		$	81,179		$	89,639
Net income before taxes as a percentage of net revenue		18.4	%		46.0	%		44.7	%		46.2	%		46.0	%		47.4	%
ROE (annualized)		6.4	%		22.3	%		22.2	%		24.8	%		20.8	%		22.1	%
Total shareholders’ equity	$	1,458,861		$	1,578,524		$	1,578,524		$	1,543,361		$	1,431,345		$	1,685,673
Basic earnings per share	$	0.15		$	2.09		$	0.52		$	0.55		$	0.49		$	0.54
Diluted earnings per share	$	0.14		$	2.07		$	0.51		$	0.55		$	0.48		$	0.54
Ending shares outstanding (in thousands)		169,214			166,932			166,932			166,753			166,632			165,623
Book value per share	$	8.62		$	9.46		$	9.46		$	9.26		$	8.59		$	10.18
Book value per share net of AOCI(1)	$	9.63		$	9.68		$	9.68		$	9.52		$	9.30		$	9.30
Gross assets under management (in millions)
Managed accounts	$	242.4		$	196.1		$	196.1		$	168.7		$	160.3		$	78.8
Hedge & offshore funds		601.1			631.6			631.6			519.3			430.0			435.4
Mutual funds		2,213.9			2,320.4			2,320.4			1,963.7			1,612.2			1,897.4
Private equity and venture capital funds		69.5			52.5			52.5			49.7			50.7			76.5
Total	$	3,126.9		$	3,200.6		$	3,200.6		$	2,701.4		$	2,253.2		$	2,488.1
Net assets under management (in millions)
Managed accounts	$	223.0		$	196.1		$	196.1		$	168.7		$	160.3		$	78.8
Hedge & offshore funds		490.3			589.6			589.6			482.8			409.0			350.5
Mutual funds		2,204.2			2,305.5			2,305.5			1,951.7			1,606.9			1,874.0
Private equity and venture capital funds		66.3			49.7			49.7			46.4			46.5			70.4
Total	$	2,983.8		$	3,140.9		$	3,140.9		$	2,649.6		$	2,222.7		$	2,373.7
Productive assets under management (in millions)
Managed accounts	$	223.0		$	196.1		$	196.1		$	168.7		$	160.3		$	78.8
Hedge & offshore funds		425.3			488.7			488.7			393.8			329.9			263.8
Mutual funds		2,204.2			2,305.5			2,305.5			1,951.7			1,606.9			1,874.0
Private equity and venture capital funds		79.9			70.9			70.9			70.9			111.6			131.2
Total	$	2,932.4		$	3,061.2		$	3,061.2		$	2,585.1		$	2,208.7		$	2,347.8
Employee count		2,123			698			698			665			626			549

FRIEDMAN, BILLINGS, RAMSEY GROUP, INC. CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except per share amounts) (Unaudited)

	31-Mar-05			31-Dec-04
ASSETS
Cash and cash equivalents	$	164,435		$	231,527
Receivables		91,906			74,880
Investments:
Mortgage-backed securities, at fair value		11,591,405			11,726,689
Long-term investments		430,355			441,499
Reverse repurchase agreements		228,244			183,375
Trading securities, at fair value		7,761			7,744
Mortgage loans, net		827,102			—
Due from clearing broker		102,651			95,247
Goodwill		160,525			108,013
Intangible assets, net		30,199			14,404
Furniture, equipment and leasehold improvements, net		30,446			18,733
Other assets		33,138			26,177
Total assets	$	13,698,167		$	12,928,288
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Trading account securities sold short, at fair value	$	38,643		$	17,176
Commercial paper		6,913,801			7,294,949
Repurchase agreements		4,949,038			3,467,569
Securities purchased		—			144,430
Dividends payable		58,339			65,870
Interest payable		11,223			5,894
Accounts payable, accrued expenses and other liabilities		67,636			94,288
Accrued compensation and benefits		48,025			131,218
Long-term debt		152,601			128,370
Total liabilities		12,239,306			11,349,764
Shareholders’ equity:
Common stock, 171,592 and 168,897 shares		1,716			1,689
Additional paid-in capital		1,533,858			1,483,640
Employee stock loan receivable including accrued interest (711 shares)		(4,947	)		(4,890	)
Deferred compensation		(21,489	)		(16,863	)
Accumulated other comprehensive loss		(170,432	)		(38,162	)
Retained earnings		120,155			153,110
Total shareholders’ equity		1,458,861			1,578,524
Total liabilities and shareholders’ equity	$	13,698,167		$	12,928,288
Book Value per Share	$	8.62		$	9.46
Shares Outstanding		169,214			166,932

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.

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