[GRAPHIC OMITTED][GRAPHIC OMITTED]
Investor Contact: Kurt Harrington 703.312.9647 or kharrington@fbr.com
Media Contacts: Bob Leahy 703.312.9745 or bleahy@fbr.com or
Bill Dixon 703.469.1092 or bdixon@fbr.com
FBR Reports First Quarter 2003 Net Income of $5.7 Million, or $0.12 per Share
(Basic);
Q1 Pro Forma Earnings for the Merged Company of $31.5 Million,
or $0.24 per Share (Basic)
ARLINGTON, Va., May 7, 2003 - Friedman, Billings, Ramsey Group, Inc. (NYSE: FBR)
today reported net income after tax of $5.7 million, or $0.12 (basic and
diluted) per share on revenues of $49.5 million for the quarter ended March 31,
2003, compared to net income before extraordinary gain of $8.9 million, or $0.19
(basic and diluted) per share on revenues of $54.4 million for the first quarter
of 2002. In the first quarter of 2003, the company's results reflected a $2.8
million income tax provision while in the first quarter of 2002, the company's
results reflected no provision for income taxes due to operating loss carry
forwards that were exhausted during 2002. Pre-tax income for the first quarter
2003 was $8.6 million, compared to $8.9 million before extraordinary gain for
the first quarter 2002.
On March 31, 2003, FBR completed its merger with FBR Asset Investment
Corporation, forming a new company known as Friedman, Billings, Ramsey Group,
Inc. Accordingly, the company also is disclosing its results on a pro forma
basis, in accordance with SEC Regulation S-X, Article 11, assuming the merger
had occurred on January 1, 2002. On this basis, the company reported pro forma
net income after tax of $31.5 million, or $0.24 (basic), $0.23 (diluted) per
share on revenues of $96.8 million for the quarter ended March 31, 2003.
The merger pro forma results for the first quarter 2003 include:
o merger-related expenses of $2.8 million, or $0.02 per share (basic), and
o the negative impact of purchase accounting adjustments resulting from the
merger, of $3.0 million, or $0.02 per share (basic).
o In addition, average mortgage-backed securities (MBS) assets during the
quarter were $5.7 billion at an average net interest spread of 2.30%. As of
today, the company has contracted for additional MBS purchases that would
result in a portfolio of approximately $7.5 billion by June 30, meeting the
company's targeted asset levels.
"We clearly expect that our earnings in the coming quarters will support our
$0.34 quarterly dividend with the deployment of our excess capital at targeted
leverage levels in the mortgage-backed portfolio," said Emanuel J. Friedman,
Co-Chairman and Co-CEO.
"As a result of the merger, we are already seeing a very positive impact in the
second quarter in our capital markets business, especially in our success in
attracting investment banking business," said Co-Chairman and Co-CEO Eric F.
Billings. "As of today, we are engaged on 31 lead-managed capital raising and
M&A transactions representing more than $3.5 billion of potential transaction
value. In the first quarter of 2003 we completed two lead-managed transactions
and five M&A transactions totaling $355 million in transaction value. We are
therefore highly optimistic that our capital markets business, which was close
to break-even level in the first quarter, can provide the growth and retained
earnings that we expect over future quarters, in addition to the cash dividends
supported primarily by the MBS portfolio."
At March 31, 2003, FBR's MBS portfolio, representing the aggregate of the former
FBR Asset's portfolio and FBR Group's own MBS portfolio, totaled $5.0 billion at
fair value and the company's corresponding repurchase agreement liabilities were
$4.3 billion, resulting in leverage to allocated capital of 6.5 to 1 in the MBS
portfolio. The company targets leverage of 6 to 11 times in the MBS portfolio.
The weighted average annualized yield of FBR's MBS portfolio was 4.07% during
the first quarter and the company's weighted average cost of financing for the
mortgage-backed securities was 1.77% (including the cost of hedging) resulting
in an average net interest spread of 2.30% (combining the portfolios of FBR
Asset and FBR Group pre-merger). The spread in the first quarter was down
slightly from FBR Asset's spread of 2.47% during the fourth quarter 2002 as a
result of lower asset yields, partially offset by a lower cost of funds.
Starting in mid-July 2003, approximately $3 billion of one-year interest rate
swaps will expire with a cash basis funding cost of 2.15% which has been
substantially replaced with funding that will expire in April 2004 with a
funding cost of 1.35%.
Prior to the merger, FBR Asset's MBS portfolio premium equaled 1.7%. Purchase
accounting adjustments recorded at the date of the merger resulted in an
increase in the premium of the MBS portfolio to 2.7%. The increased premium will
be amortized against the coupon of the securities in future periods, and such
amortization is also reflected in the merger pro forma. The increased premium
amortization will have no impact on the cash equivalent earnings generated by
the portfolio.
At March 31, 2003, the company continued to maintain a low effective duration of
1.21 in its mortgage-backed securities portfolio. As of March 31, 2003 the
company owned no fixed rate mortgage pools in its portfolio, and continued to
own only adjustable rate mortgage-backed securities guaranteed by Fannie Mae,
Freddie Mac, or Ginnie Mae.
FBR's merchant banking portfolio, representing the aggregate of the former FBR
Asset's opportunity portfolio and FBR Group's own long term investments, totaled
$173.1 million, or approximately 17% of the company's equity at March 31, 2003.
Of this total, $112.7 million or 65.1% represented securities of publicly traded
companies and companies whose securities trade among Qualified Institutional
Buyers pursuant to SEC Rule 144A. Since March 31, 2003, the market value of
these merchant banking securities has increased significantly.
The results of FBR's capital markets businesses (investment banking and
institutional brokerage) during the first quarter 2003 reflected the poor
overall equity market conditions. Nonetheless, in the investment banking
business, FBR lead-managed one of only four U.S.- issuer IPOs that were executed
in the first quarter. From the offering date through May 6, 2003, the offering
is the best performing IPO of the year according to CommScan EquiDesk (excluding
conversion transactions). In the institutional brokerage business, volumes have
rebounded sharply with the improving market in the second quarter, as have
investment banking activities as previously described.
In the asset management business, gross assets under management (excluding FBR
Asset) amounted to $2.3 billion at March 31, 2003, representing a 42% increase
over the preceding 12 months.
FBR had 131.6 million common shares outstanding, shareholders' equity of $1.0
billion, and book value per share of $7.69 as of March 31, 2003, compared with
46.5 million common shares outstanding, shareholders' equity of $245.2 million
and book value per share of $5.28 as of December 31, 2002.
Friedman, Billings, Ramsey Group, Inc. provides investment banking,
institutional brokerage, 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
six industry sectors: financial services, real estate, technology, healthcare,
energy and diversified industries. FBR, headquartered in the Washington, D.C.
metropolitan area, with offices in Arlington, Va. and Bethesda, Md., also has
offices in Atlanta, Boston, Charlotte, Chicago, Cleveland, Dallas, Denver,
Irvine, London, New York, Portland, San Francisco, Seattle, and Vienna. FBR has
elected REIT status for tax purposes. For more information, see
http://www.fbr.com.
A live webcast of FBR's conference call will be available at 9 a.m. (Eastern
Time) via http://www.corporate-ir.net/ireye/ir_site.zhtml?ticker=FBR. Replays of
the webcast will be available afterward.
The company believes that the pro forma information about the merger set forth
above when read in connection with the company's GAAP financial information, can
provide useful supplemental information for investors analyzing period to period
comparisons of the company's results.
FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
Quarter ended
March 31,
2003 % 2002 %
REVENUES:
Investment banking $17,739 35.8% $23,975 44.1%
Institutional brokerage 11,288 22.8% 15,803 29.1%
Asset management
Base fees 7,691 15.5% 5,996 11.0%
Incentive and investment income 8,264 16.7% 7,805 14.3%
Technology sector investment and
incentive loss (437) -0.9% (1,099) -2.0%
Interest, dividends and other 4,994 10.1% 1,890 3.5%
Total revenues 49,539 100.0% 54,370 100.0%
EXPENSES:
Compensation and benefits 24,804 50.1% 31,319 57.6%
Business development and
professional services 5,879 11.9% 6,412 11.8%
Interest 1,646 3.3% 370 0.7%
Other 8,644 17.4% 7,380 13.6%
Total expenses 40,973 82.7% 45,481 83.7%
Net income before income taxes
and extraordinary gain 8,566 17.3% 8,889 16.3%
Income tax provision 2,843 5.7% - 0.0%
Net income before
extraordinary gain 5,723 11.6% 8,889 16.3%
Extraordinary gain - 0.0% 1,413 2.6%
Net income $5,723 11.6% $10,302 18.9%
Basic earnings per share before
extraordinary gain $0.12 $0.19
Diluted earnings per share before
extraordinary gain $0.12 $0.19
Basic earnings per share $0.12 $0.23
Diluted earnings per share $0.12 $0.22
Weighted average shares -- basic 47,047 45,663
Weighted average shares -- diluted 48,547 46,171
FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.
Financial & Statistical Supplement -- Operating Results (unaudited)
(Dollars in thousands, except per share data)
YTD 2003 Q-1 03 YTD 2002
Revenues
Investment banking:
Underwriting $8,788 $8,788 $76,556
Corporate finance 5,719 5,719 58,595
Investment gains 3,232 3,232 8,725
Institutional brokerage:
Principal transactions 3,751 3,751 27,512
Agency commissions 7,537 7,537 35,672
Asset management:
Base management fees 7,691 7,691 28,956
Incentive income 5,579 5,579 14,258
Net investment income (loss) 2,685 2,685 16,276
Technology sector investment and
incentive income (loss) (437) (437) (5,622)
Interest, dividends and other 4,994 4,994 7,275
Total revenues 49,539 49,539 268,203
Expenses
Compensation and benefits 24,804 24,804 147,072
Business development &
professional services 5,879 5,879 30,589
Clearing and brokerage fees 1,232 1,232 5,353
Occupancy & equipment 2,199 2,199 8,838
Communications 2,209 2,209 8,185
Interest expense 1,646 1,646 2,073
Other operating expenses 3,004 3,004 10,652
Total expenses 40,973 40,973 212,762
Net income before taxes and
extraordinary gain 8,566 8,566 55,441
Income tax provision 2,843 2,843 3,035
Net income before extraordinary gain $5,723 $5,723 $52,406
Extraordinary gain - - 1,413
Income tax provision on
extraordinary gain - - 536
Net income $5,723 $5,723 $53,283
Net income before taxes and
extraordinary gain as a percentage
of revenue 17.3% 17.3% 20.7%
ROE (annualized) 3.6% 3.6% 24.8%
Total shareholders' equity $1,011,647 $1,011,647 $245,165
Basic earnings per share $0.12 $0.12 $1.16
Diluted earnings per share $0.12 $0.12 $1.10
Ending shares outstanding
(in thousands) 131,576 131,576 46,456
Book value per share $7.69 $7.69 $5.28
Gross assets under management
(in millions)
Managed accounts $818.8 $818.8 $6,538.0
Hedge & offshore funds 237.5 237.5 247.0
Mutual funds 1,196.8 1,196.8 1,188.5
Private equity funds 32.7 32.7 34.7
Technology sector funds 49.7 49.7 63.8
Total $2,335.5 $2,335.5 $8,072.0
Net assets under management
(in millions)
Managed accounts $82.7 $82.7 $871.5
Hedge & offshore funds 159.4 159.4 162.4
Mutual funds 1,191.6 1,191.6 1,173.3
Private equity funds 28.6 28.6 30.9
Technology sector funds 45.4 45.4 48.2
Total $1,507.7 $1,507.7 $2,286.3
Productive assets under management
(in millions)
Managed accounts $818.8 $818.8 $6,538.0
Hedge & offshore funds 159.4 159.4 162.4
Mutual funds 1,191.6 1,191.6 1,173.3
Private equity funds 90.9 90.9 91.2
Technology sector funds 249.2 249.2 249.0
Total $2,509.9 $2,509.9 $8,213.9
Employee count 493 493 481
Q-4 02 Q-3 02 Q-2 02 Q-1 02
Revenues
Investment banking:
Underwriting $8,890 $30,108 $25,248 $12,310
Corporate finance 11,119 26,175 9,827 11,474
Investment gains 4,312 2,627 1,595 191
Institutional brokerage:
Principal transactions 6,339 5,743 8,372 7,058
Agency commissions 8,344 8,629 9,954 8,745
Asset management:
Base management fees 8,119 7,208 7,633 5,996
Incentive income 5,291 4,282 2,902 1,783
Net investment income (loss) 4,474 (2,737) 8,517 6,022
Technology sector investment and
incentive income (loss) 111 (2,202) (2,432) (1,099)
Interest, dividends and other 1,868 1,879 1,638 1,890
Total revenues 58,867 81,712 73,254 54,370
Expenses
Compensation and benefits 31,617 45,725 38,411 31,319
Business development &
professional services 7,545 8,650 7,982 6,412
Clearing and brokerage fees 1,467 1,443 1,817 626
Occupancy & equipment 2,274 2,309 2,046 2,209
Communications 1,910 2,009 2,187 2,079
Interest expense 665 608 430 370
Other operating expenses 2,608 2,976 2,602 2,466
Total expenses 48,086 63,720 55,475 45,481
Net income before taxes and
extraordinary gain 10,781 17,992 17,779 8,889
Income tax provision 692 2,343 - -
Net income before
extraordinary gain $10,089 $15,649 $17,779 $8,889
Extraordinary gain - - - 1,413
Income tax provision on
extraordinary gain - 536 - -
Net income $10,089 $15,113 $17,779 $10,302
Net income before taxes and
extraordinary gain as a
percentage of revenue 18.3% 22.0% 24.3% 16.3%
ROE (annualized) 16.8% 26.7% 34.4% 21.7%
Total shareholders' equity $245,165 $234,625 $218,368 $194,590
Basic earnings per share $0.22 $0.33 $0.39 $0.23
Diluted earnings per share $0.21 $0.31 $0.36 $0.22
Ending shares outstanding
(in thousands) 46,456 46,396 46,339 45,751
Book value per share $5.28 $5.06 $4.71 $4.25
Gross assets under management
(in millions)
Managed accounts $6,538.0 $7,356.0 $4,152.3 $2,757.7
Hedge & offshore funds 247.0 232.3 216.0 209.2
Mutual funds 1,188.5 1,071.2 1,313.4 1,270.4
Private equity funds 34.7 41.7 46.1 46.4
Technology sector funds 63.8 54.0 56.6 60.4
Total $8,072.0 $8,755.2 $5,784.4 $4,344.1
Net assets under management
(in millions)
Managed accounts $871.5 $849.7 $748.5 $394.5
Hedge & offshore funds 162.4 162.9 188.5 157.7
Mutual funds 1,173.3 1,064.4 1,297.7 1,214.1
Private equity funds 30.9 40.1 45.5 45.5
Technology sector funds 48.2 48.6 52.3 55.8
Total $2,286.3 $2,165.7 $2,332.5 $1,867.6
Productive assets under management
(in millions)
Managed accounts $6,538.0 $7,356.0 $4,152.3 $2,757.7
Hedge & offshore funds 162.4 162.9 188.5 157.7
Mutual funds 1,173.3 1,064.4 1,297.7 1,214.1
Private equity funds 91.2 92.5 94.8 95.3
Technology sector funds 249.0 248.5 248.1 249.3
Total $8,213.9 $8,924.3 $5,981.4 $4,474.1
Employee count 481 464 445 441
FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share data)
(Unaudited)
ASSETS 31-Mar-03 31-Dec-02
Cash and cash equivalents $93,966 $90,007
Receivables 51,399 28,122
Due from clearing broker - 43,146
Investments:
Mortgage-backed securities, at fair
value 5,019,077 38,505
Trading securities, at market value 9,627 8,298
Long-term investments 173,146 150,447
Bank loans, net 14,494 15,052
MMA acquired management contracts 17,300 17,629
Goodwill 105,398 -
Building, furniture, equipment and
leasehold improvements, net 9,214 9,156
Other assets 7,486 5,823
Total assets $5,501,107 $406,185
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Trading account securities sold
short, at market value $152 $19,932
Repurchase agreements 4,342,377 16,352
Interest rate swaps 10,481 -
Accounts payable and accrued expenses 40,927 16,412
Accrued compensation and benefits 15,357 41,255
Bank deposits 54,781 51,215
Short-term loans payable 20,000 10,588
Long-term secured loan 5,385 5,266
Total liabilities 4,489,460 161,020
Shareholders' equity:
Common stock, 137,120 and 51,024
shares, respectively 1,371 510
Additional paid-in capital 986,393 215,862
Treasury stock, at cost, 1,544 and
568 shares, respectively (12,326) (4,143)
Employee stock loan receivable
including accrued interest
(4,000 shares) (24,562) (24,182)
Accumulated other comprehensive
income 2,275 4,345
Retained earnings 58,496 52,773
Total shareholders' equity 1,011,647 245,165
Total liabilities and
shareholders' equity $5,501,107 $406,185
Book Value per Share $7.69 $5.28
Shares Outstanding 131,576 46,456
UNAUDITED CONDENSED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE QUARTER ENDED MARCH 31, 2003
(Dollars in thousands, except per share amounts)
Historical Pro Forma
FBR FBR Adjust- Consoli-
Group Asset ments dated
Revenues:
Investment banking:
Underwriting(Note 1a) $8,788 $- $353 $9,141
Corporate finance 5,719 - - 5,719
Investment gains 3,232 - - 3,232
Institutional brokerage:
Principal transactions 3,751 - - 3,751
Agency commissions 7,537 - - 7,537
Asset management:
Base management fees(Note 1b) 7,691 - (2,762) 4,929
Incentive allocations and fees
(Note 1b) 5,579 - (5,617) (38)
Net investment income (loss)
(Note 1c) 2,685 9,599 (2,860) 9,424
Technology sector net
investment and incentive loss (437) - - (437)
Dividends and other(Note 1a) 1,507 388 (353) 1,542
Interest(Note 1d) 3,487 51,913 (3,417) 51,983
Total revenues 49,539 61,900 (14,656) 96,783
Interest expense(Note 1e) 1,646 21,355 (429) 22,572
Net revenues 47,893 40,545 (14,227) 74,211
Expenses:
Compensation and benefits 24,804 - - 24,804
Business development and
professional services 5,879 3,335 - 9,214
Clearing and brokerage fees 1,232 - - 1,232
Occupancy and equipment 2,199 - - 2,199
Communications 2,209 - - 2,209
Other operating expenses
(Note 1f) 3,004 8,379 (8,379) 3,004
Total expenses 39,327 11,714 (8,379) 42,662
Net income (loss) before taxes
and extraordinary gain 8,566 28,831 (5,848) 31,549
Income tax provision(Note 1g) 2,843 146 (2,989) -
Net income (loss) before
extraordinary gain $5,723 $28,685 $(2,859) $31,549
Basic earnings per share before
extraordinary gain $0.12 $1.10 $0.24
Diluted earnings per share before
extraordinary gain $0.12 $1.10 $0.23
Weighted average shares
outstanding:
Basic(Note 1h) 47,047 26,154 85,972 133,019
Diluted(Note 1h) 48,547 26,179 86,063 134,610
Notes to Unaudited Condensed Pro Forma
Consolidated Financial Statements for the Quarter Ended
March 31, 2003
(Dollars in thousands)
(1) A summary of the unaudited condensed pro forma consolidated statements
of operations adjustments to effect the merger is as follows:
(a) Underwriting -- These balances in the unaudited condensed pro forma
consolidated statements of operations reflect adjustments to reclassify
to underwriting revenue amounts paid by FBR Group to FBR Asset in
connection with investment banking transactions pursuant to a fee
sharing agreement between the companies of $353 for the three months
ended March 31, 2003.
(b) Base management fees and incentive allocations and fees - These balances
in the unaudited condensed pro forma consolidated statements of
operations reflect adjustments to eliminate FBR Group's base management
and incentive fees earned pursuant to its management agreement with FBR
Asset of $2,762 and $5,617, respectively for the three months ended
March 31, 2003.
(c) Net investment income -- These balances in the unaudited condensed pro
forma consolidated statements of operations reflect adjustments to
eliminate FBR Group's income derived from its equity investment in FBR
Asset of $2,860 for the three months ended March 31, 2003.
(d) Interest -- These balances in the unaudited condensed pro forma
consolidated statements of operations reflect adjustments to record
amortization of premiums created in purchase accounting due to the new
cost basis of FBR Asset's mortgage-backed securities at the time of the
merger of $3,417 for the three months ended March 31, 2003.
The adjustments discussed above to record amortization of premiums
established on FBR Asset's mortgage-backed securities have been prepared in
accordance with SEC Regulation S-X - Article 11. These adjustments, however,
do not correspond to the mortgage-backed securities balances during the
historical periods but are reflective of amortization that would be recorded
in the future considering the March 31, 2003 value of FBR Asset's
mortgage-backed securities portfolio. In purchase accounting, the March 31,
2003 unrealized gain on these FBR Asset securities contained in other
comprehensive income was eliminated and a new cost basis established. In
this case, the unrealized gain creates a premium that will be amortized over
the remaining lives of the applicable March 31, 2003 mortgage-backed
securities. The adjustments in the pro forma financial statements reflect
the amortization of this premium created in purchase accounting calculated
based on the application of the effective interest method for recognizing
interest income and includes management's assumptions with respect to
prepayment speeds as of March 31, 2003 as required by SFAS No. 91,
"Accounting for Nonrefundable Fees and Costs Associated with Originating or
Acquiring Loans and Initial Direct Costs of Leases." The total additional
premium established based on the March 31, 2003 balance sheet is $46,850 and
based upon prepayment speeds as of March 31, 2003 substantially all would be
amortized over approximately three and a half years.
(e) Interest expense -- These balances in the unaudited condensed pro forma
consolidated statements of operations reflect interest adjustments
created in purchase accounting related to FBR Asset's interest rate
swaps as of March 31, 2003 of $429 for the three months ended March 31,
2003.
These interest rate swaps are cash flow hedges of the debt recorded on the
balance sheet used to finance the mortgage-backed securities and convert a
portion of the variable interest rate borrowings to a fixed interest rate. In
purchase accounting, the March 31, 2003 unrealized loss on these FBR Asset
derivatives of approximately $10,480 contained in other comprehensive income was
eliminated. In this case, the unrealized loss created a credit balance (i.e., a
day-one value of the derivatives) which is recorded as a liability on the
balance sheet. The day-one value of the interest rate swaps recorded as a
liability reestablishes the market rate of interest on the derivatives and
reduces the fixed rate of interest expense over the remaining lives of the
derivatives, which range from four months to sixteen months. These adjustments
are based upon the fair value of the instruments and market rates as of March
31, 2003 using the effective interest method.
(f) Other operating expenses -- These balances in the unaudited condensed
pro forma consolidated statements of operations reflect adjustments to
eliminate base management and incentive fees payable by FBR Asset to FBR
Group.
(g) Income tax provision (benefit) -- These balances in the unaudited
condensed pro forma consolidated statements of operations reflect
adjustments to present the tax provision of the combined entity's
taxable REIT subsidiaries based on the effective tax rate of these
subsidiaries during the period.
(h) Basic and diluted weighted average shares outstanding -- These balances
in the unaudited condensed pro forma consolidated statements of
operations reflect the conversion of historical FBR Asset shares not
owned by FBR Group based on the 3.65 exchange ratio.
Friedman, Billings, Ramsey Group, Inc.
Long-Term Investment Matrix (Unaudited)(1)
As of March 31, 2003
(Dollars in thousands)
The following chart shows the allocation of Friedman, Billings, Ramsey
Group, Inc.'s long-term investments, as stated on the March 31, 2003 balance
sheet, by sector and by managed fund and also shows the allocation of long-term
investments in publicly traded and private securities. Managed funds are
categorized by the value of the majority of their investments. In addition, from
time to time, FBR Group implements risk management strategies, the value of
which may not be included in the balance sheet line for long-term investments.
Financial Public Private Total
FBR Ashton, Limited Partnership $6,514 $- $6,514 3.8%
FBR Private Equity Fund, LP 543 858 1,401 0.8%
FBR Future Financial Fund, LP - 1,040 1,040 0.6%
FBR Financial Services
Partners, LP 27 507 534 0.3%
Direct investment 53,604 10,500 64,104 37.0%
60,688 12,905 73,593 42.5%
Real Estate/Mortgage
Direct investment 3,918 45,011 48,929 28.3%
Subtotal 64,606 57,916 122,522 70.8%
Technology and Biotechnology
FBR Technology Venture
Partners, LP(2) - 583 583 0.3%
FBR Technology Venture
Partners II - 1,845 1,845 1.1%
FBR CoMotion Venture Capital I,
LP(3) - 1,886 1,886 1.1%
FBR Family of Mutual Funds 743 - 743 0.4%
DDL and related direct
investments 1,107 5,541 6,648 3.8%
Direct investment 323 - 323 0.2%
Third-party partnerships - 2,677 2,677 1.6%
Other 98 797 895 0.5%
2,271 13,329 15,600 9.0%
Capital Crossover Partners
(third-party partnership) 12,855 - 12,855 7.4%
Subtotal 15,126 13,329 28,455 16.4%
Debt
Direct investment(4) - 7,500 7,500 4.3%
Other
FBR Arbitrage, LLC 6,624 - 6,624 3.8%
FBR Weston, Limited Partnership 2,560 - 2,560 1.5%
FBR Pegasus Fund, LLC(5) 2,699 - 2,699 1.6%
Third-party partnership 750 - 750 0.4%
Other 65 1,971 2,036 1.2%
12,698 1,971 14,669 8.5%
TOTALS $92,430 $80,716 $173,146 100.0%
(1) Excludes trading securities inventory.
(2) Amount includes accrued Fund Manager Compensation expense ("FMC") of
$79. Asset value net of FMC as of March 31, 2003 was $504.
(3) Amount includes loans of $344 made by FBR Group to FBR CoMotion Venture
Capital I, LP.
(4) Represents private debt of one issuer with a face amount of $7,500.
(5) Fund of private funds. Comprises public securities of component funds
according to component fund managers.
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,
interest spreads, mortgage pre-payment speeds, risks associated with merchant
banking 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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