[Logo of FBR]
Exhibit 99.1
Confidential Draft 10 - Monday, January 29 - 10:30 p.m.
For Immediate Release
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Media Contact: Michael W. Robinson (703)-312-1830 or mrobinson@fbr.com
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Investor Contact: Kurt Harrington (703)-312-9647 or kharrington@fbr.com
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Friedman, Billings, Ramsey Group Reports Annual Earnings;
Business Diversification in Focused Sectors
Drives $180.9 Million in Revenue,
$18.1 Million in Net Income, or $0.37 Per Share (basic), for 2000
Net Income of $0.03 Per Share in Fourth Quarter
ARLINGTON, Va., January 30, 2001 - Friedman, Billings, Ramsey Group, Inc. (NYSE:
FBR) today reported that its broad mix of asset management and capital markets
businesses - focused on four key industry sectors - resulted in 2000 net income
of $18.1 million, or $0.36 (diluted) per share and $0.37 (basic) per share,
versus a net loss of $7 million, or $0.14 (diluted) per share in 1999. Revenue
in 2000 was $180.9 million, compared with $139 million in 1999, an increase of
30 percent.
"Again this year, our diversified asset management, investment banking, and
institutional brokerage platform produced an even mix of revenue, with about a
third coming from each group," Chairman and Co-Chief Executive Officer Emanuel
J. Friedman said. "Our focus in financial institutions, real estate,
technology, and energy, drove our earnings in the company's asset management and
capital markets businesses," Friedman said.
Asset Management - 2000
Asset management revenue for the year was $63.8 million, more than 51 percent
ahead of last year's $42.1 million.
"The diversity of our asset management vehicles continued to be an especially
good revenue driver for FBR in 2000," Friedman said. "In addition to realizing
significant returns on our own invested capital, our sector-specific strategy
enabled us to generate steady base fee income throughout the year," he said.
Currently, FBR has 11 proprietary venture capital, private equity, hedge fund,
and other alternative asset management vehicles with investments in the
financial institutions, real estate, technology, energy, and related sectors.
In the financial sector, one of these proprietary vehicles, FBR Ashton, which
has focused on publicly-traded U.S. financial equities since 1992, generated a
gross return of 45 percent in 2000. Similarly, FBR's mutual funds - the FBR
Financial Services Fund and the FBR Small Cap. Financial Fund, launched in 1996
- - were two of the best performing financial sector mutual funds in 2000.
Additionally, FBR's three private equity funds focused on the financial sector -
FBR Private Equity Fund, FBR Financial Services Partners (FBR Financial Fund
II), and FBR Future Financial Fund - contributed significantly to the asset
management group's revenue in 2000.
In the real estate sector, FBR Asset Investment Corporation (Amex: FB) - a
publicly-traded Real Estate Investment Trust (REIT) managed by FBR - declared
dividends of $2.95 per share in 2000, representing a return of 21 percent for
the year. FBR Asset's book value also increased 24 percent, or $4.36 per share
in 2000. FBR itself has a 35 percent equity ownership interest in FBR Asset.
In the technology sector, FBR Technology Venture Partners I (FBR TVP I)
generated a gross return of more than 9 times the original investment from
inception through the end of 2000, of which more than 6.5 times was distributed
to FBR TVP I's partners during the year. By the end of 2000, FBR TVP I had
distributed $267 million to its partners - with another $43 million distributed
in January 2001. Also in 2000, FBR launched three new technology venture
capital funds, with almost $100 million targeted for investments in technology
companies in the U.K. and Europe, the Pacific Northwest, and the genomics and
biotechnology sector.
Capital Markets - 2000
Capital markets revenue for the year was $107.3 million, more than 24 percent
ahead of last year's $86.1 million. Investment banking revenue was $53.9
million, 10 percent over 1999 levels of $49 million; and institutional brokerage
revenue for the year was $53.4 million, more than 44 percent above the previous
year's $37 million.
In investment banking, FBR participated in more than $4 billion in underwritings
and advised on more than $1 billion in mergers and acquisitions.
Eric F. Billings, Vice Chairman and Co-Chief Executive Officer, said that FBR's
investment banking activity during the year demonstrated the company's diversity
with a broad mix of public underwritings, private placements, and merger and
acquisition assignments across the financial institutions, real estate,
technology, and energy sectors.
"Even in the most turbulent markets, FBR has a demonstrated ability to identify,
communicate, and execute transactions across our four focused sectors," Billings
said. Among the transactions Billings pointed to as examples of the company's
diversity were:
. Financial Institutions - Advised Prism Financial on its acquisition
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by the Royal Bank of Canada; advised City Holding Company on the sale
of the servicing rights for approximately $1.1 billion of mortgages
to Ocwen Financial Corporation; and co-managed a $67.5 million
secondary offering for American Capital Strategies, Ltd.
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. Technology - Advised Aether Systems, Inc. on its acquisition of
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Cerulean Technology, Inc.; underwrote the $165 million initial public
offering of webMethods, Inc.; and handled a $52.7 million private
placement for Strategy.com, and a $191 million private placement for
Headstrong.
. Energy - Lead managed the $19.5 million initial public offering of
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Atlas Pipeline Partners, L.P. (with total returns of 75 percent for
the year, making it the #1 best performing oil and gas industry IPO
of the year according to CommScann Equidesk); lead managed the $80.5
million initial public offering/re-capitalization of DevX Energy,
Inc.; and finished the year as the #8 energy equity underwriter in
the country (source: Bloomberg).
"In addition to maintaining our traditional strength in public underwriting in
2000, we also fulfilled our promise of increasing our merger and acquisition and
other advisory revenues," Billings said. Merger and acquisition and other
advisory revenue was $22.5 million for the year, a 54 percent increase over
1999's $14.6 million.
"And already in 2001 we've seen renewed activity, for the first time in several
years, in another key area of strength for FBR, mortgage REITs," Billings added.
Just last week, FBR lead managed a $85 million secondary offering for Annaly
Mortgage Management, Inc., the first mortgage REIT to successfully access the
public capital markets in almost three years. FBR was ranked the #1 REIT IPO
lead manager in 1998 (according to CommScann EquiDesk Data and Bloomberg).
In institutional brokerage, FBR's deep research base enabled the company to
generate significant business - and revenue. FBR has 371 companies under
coverage, having added 65 in 2000, with an increased emphasis on providing
coverage of larger companies in order to facilitate greater penetration of
larger institutional accounts.
Billings also noted that the newest division of FBR's brokerage business, the
FBR Private Client Group, continued to capture significant assets. "In 2000,
the Private Client Group continued to build a solid foundation of assets that,
over time, have the potential of driving significant revenues for us, as well as
attractive returns for our PCG clients," Billings said.
In 2000, the technology sector was the largest contributor to the company's
investment banking revenue.
"There is no question that 2000 was an extraordinary 12 months for the
technology sector," President and Co-Chief Executive Officer W. Russell Ramsey
said. "Having worked with a wide cross section of global technology leaders in
2000, our team, led by Phil Facchina, showed tremendous skill and versatility
throughout the year, first through a wave of public underwritings, and later
through major private placements and mergers and acquisitions assignments," he
said.
"With our unique footprint in one of the nation's fastest growing technology
communities and our experienced capital markets and asset management teams in
place, FBR continues to provide a high level of corporate finance and investment
banking expertise to issuers, insights to institutional investors, and
opportunities for our fund investors," Ramsey said.
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Fourth Quarter
For the quarter ended December 31, 2000, FBR reported net income of $1.4
million, or $0.03 (diluted) per share and $0.03 (basic) per share, versus net
income of $10.2 million, or $0.21 (diluted) per share $0.21 (basic) per share,
for the same quarter a year ago. Revenue for the fourth quarter was $26.4
million, compared with $67.6 million for the fourth quarter of 1999.
In asset management, FBR reported ($1.9) million in revenue during the quarter,
versus $16 million in the previous quarter and $35.8 million in the fourth
quarter of 1999. Asset management revenues, which include investment gains and
losses, were adversely affected in the fourth quarter by the downturn in the
technology sector which was partially offset by $9.2 million of revenue from the
company's non-technology asset management vehicles.
In the fourth quarter, FBR's $26 million in capital markets revenue (which
includes investment banking and institutional brokerage) was consistent with the
third quarter's $25.6 million.
FBR's $13.6 million in investment banking revenue for the quarter came from
public underwritings, private placements, and merger and acquisition and other
advisory assignments in the financial institutions, technology, and energy
sectors. With 11 deals in all investment banking revenue matched that of the
third quarter.
The quarter also saw continued strength in FBR's institutional brokerage
business, with revenue of $12.3 million, versus $12 million in the previous
quarter, and up 29 percent over fourth quarter 1999 revenue of $9.5 million.
FBR had 49.4 million common shares outstanding, shareholders' equity of $214.6
million, and basic book value per share of $4.34 as of December 31, 2000. Total
assets as of December 31, 2000 were $250 million, including cash and liquid
assets of $75 million.
A live webcast of FBR's conference call will be available at 9 a.m. (Eastern
Time) via: http://www.vcall.com/NASApp/VCall/EventPage?ID=64046. Replays of the
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webcast will be available afterward.
Friedman, Billings, Ramsey Group, Inc. (NYSE: FBR) is a holding company for
investment banking, institutional brokerage, venture capital, and other
specialized asset management products and services. FBR provides capital and
financial expertise throughout a company's lifecycle and affords investors
access to a full range of financial products and services. Headquartered in
Northern Virginia, home to an array of leading global companies, FBR has offices
in Arlington and Reston, Va., Irvine, Ca., Boston, Charlotte, Chicago, Portland,
Seattle, London, and Vienna. For more information, see www.fbr.com.
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Statements concerning future performance, developments, negotiations or
events, expectations or plans and objectives for future operations or for
growth and market forecasts, and any other guidance on present and 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 competition among venture capital
firms and the high degree of risk associated with venture capital
investments, the effect of demand for public offerings, activity in the
secondary securities markets, available technologies, competition for
business and personnel, and general economic, political and market
conditions.
Note to Editors: 2 pages of financial information follow this page.
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[LOGO OF FBR] FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
Year ended
December 31,
2000 % 1999 %
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REVENUES:
Investment banking $ 53,943 29.8% $ 49,036 35.3%
Institutional brokerage 53,403 29.5% 37,046 26.7%
Asset management 63,849 35.3% 42,116 30.3%
Interest, dividends and other 9,695 5.4% 10,768 7.7%
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Total revenues 180,890 100.0% 138,966 100.0%
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EXPENSES:
Compensation and benefits 109,768 60.7% 98,424 70.8%
Business development and professional services 19,229 10.6% 23,582 17.0%
Interest 1,665 0.9% 1,323 1.0%
Other 27,983 15.5% 22,608 16.3%
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Total expenses 158,645 87.7% 145,937 105.0%
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Net income (loss) before income taxes 22,245 12.3% (6,971) -5.0%
Provision for income taxes 2.3% 0.0%
4,163 -
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Net income (loss) $ 18,082 10.0% $ (6,971) -5.0%
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Basic earnings (loss) per share $ 0.37 $ (0.14)
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Diluted earnings (loss) per share $ 0.36 $ (0.14)
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Weighted average shares - basic 49,162 48,872
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Weighted average shares - diluted 50,683 48,872
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[LOGO OF FBR] FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
Three months ended
December 31,
2000 % 1999 %
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REVENUES:
Investment banking $ 13,656 51.7% $ 19,710 29.2%
Institutional brokerage 12,303 46.6% 9,520 14.1%
Asset management (1,886) -7.1% 35,807 53.0%
Interest, dividends and other 2,336 8.8% 2,559 3.7%
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Total revenues 26,409 100.0% 67,596 100.0%
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EXPENSES:
Compensation and benefits 13,527 51.2% 45,759 67.7%
Business development and professional services 4,247 16.1% 5,418 8.0%
Interest 700 2.7% 163 0.2%
Other 6,504 24.6% 6,060 9.0%
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Total expenses 24,978 94.6% 57,400 84.9%
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Net income before income taxes 1,431 5.4% 10,196 15.1%
Provision for income taxes 0.0% 0.0%
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Net income $ 1,431 5.4% $ 10,196 15.1%
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Basic earnings per share $ 0.03 $ 0.21
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Diluted earnings per share $ 0.03 $ 0.21
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Weighted average shares - basic 49,289 48,883
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Weighted average shares - diluted 50,082 48,988
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