Fibria Celulose (NYSE:FBR)
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ARLINGTON, Va., Feb. 22 /PRNewswire-FirstCall/ -- Friedman, Billings, Ramsey Group, Inc. (FBR Group; NYSE: FBR) today reported net after-tax earnings of $3.8 million, or $0.02 per share (diluted), for the quarter ended December 31, 2006 compared to a net after-tax loss of $271.6 million, or $1.60 per share (diluted) in the fourth quarter of 2005. For the year, FBR had a net after-tax loss of $67.3 million, or $0.39 per share (diluted), compared to a net after-tax loss of $170.9 million, or $1.01 per share (diluted), in 2005. Core book value net of Accumulated Other Comprehensive Income (AOCI) at year end was $6.87 compared to $7.67 at year end 2005(1).
The fourth quarter results for FBR Group included higher than historical income tax expense of $6.4 million or $0.04 per share (diluted) attributable primarily to the effects of FASB 123R (an accounting rule adopted in 2006 relating to stock compensation), deferred tax valuation allowances and other tax items. In addition, the company incurred "other than temporary impairment" charges of $17.2 million, or $0.10 per share (diluted), on merchant banking investments in the sub-prime mortgage industry.
FBR Capital Markets Corporation Results
FBR Capital Markets Corporation (FBR Capital Markets), FBR Group's 72%- owned investment banking, institutional brokerage and asset management subsidiary, reported for the fourth quarter pre-tax earnings of $17.6 million on net revenues of $120.0 million. Net after-tax earnings for the fourth quarter were $7.0 million. Excluding FASB 123R-related and other non-cash tax charges of $3 million, after-tax earnings were $10.0 million. Complete financial results for FBR Capital Markets, which is a privately held company, are included in the tabular material in this release along with those of FBR Group.
Investment Banking
In the fourth quarter, FBR Capital Markets generated investment banking revenues of $81.1 million. The firm raised a total of $4.2 billion in 17 transactions and undertook eight merger and acquisition advisory assignments. Also in the fourth quarter, the firm executed a $777 million private placement and advisory assignment for a power generation company, FBR's first capital raise in that sector. Because the transaction was subject to regulatory approval by power authorities, it did not close until the first quarter of 2007. As a result, $40 million of the revenues associated with this capital raise will be recognized in that quarter.
In 2006, FBR was ranked as:
* #1 book-running manager of all common stock offerings for U.S. companies
with a market capitalization of $1 billion or less,(2)
* #7 book-running manager for all U.S. IPOs and 144A equity placements
combined for all industries,(3)
* #1 book-running manager of all common stock offerings for domestic
mining, oil and gas, and utility and energy companies, with a market
capitalization of $1 billion or less,(4) and
* #1 book-running manager of all common stock offerings for U.S. and
Bermuda finance and insurance companies with a market capitalization of
$1 billion or less.(5)
On February 8, 2007, FBR Capital Markets announced the completion of an important step in further expanding its M&A platform. The company acquired the 26-person banking team along with certain assets from Legacy Partners Group, LLC. With offices in New York and Washington, D.C., this banking unit specializes in middle market merger and acquisition advisory services and in the raising of private capital.
Institutional Brokerage and Research
In a very competitive market environment, FBR Capital Markets grew its agency commission revenue from $82.5 million in 2005 to $100.9 million in the year just ended, a 22% increase. Overall, agency commissions and revenue from principal transactions increased 8% year to year.
Asset Management
In FBR Capital Markets' asset management/private wealth business, asset management base fees and incentive fees were $5.5 million for the fourth quarter of 2006. Assets under management increased slightly between the close of the third quarter of 2006 and year end, and continued asset growth is anticipated in the first quarter of 2007. This reverses a trend of asset outflows that began with the closing and repositioning of some of the firm's alternative investment products in 2005.
In October 2006 a new long/short hedge fund was launched, and in January 2007, the FBR Small Cap Mutual Fund, which had been closed to new investors since October 2004, was reopened to investors.
FBR Group Results
Mortgage Investment Portfolios
For the fourth quarter, FBR Group's mortgage investments generated portfolio earnings of $20.7 million on average investment balances of $11.1 billion held during the quarter. These portfolios yielded gross income of 6.40% with associated cost of funds of 5.15%, resulting in earned net interest income of 1.25%.
Merchant Banking
For the fourth quarter, earnings from the consolidated merchant banking portfolio and other long-term investments were $3.7 million. These earnings include a $17.2 million write-down in the value of certain non-prime mortgage company investment positions, the largest of which was a $13.7 million reduction in the carrying value of shares in Fieldstone Investment Corp., which has agreed to be acquired for cash. Excluding the Fieldstone Investment position, merchant banking investments in non-prime companies at year end was $19 million. The total value of FBR's merchant banking portfolio and other long-term equity securities was $150 million as of December 31, 2006.
First NLC
First NLC (FNLC), our non-conforming mortgage origination subsidiary, lost $1.8 million on a pre-tax basis in the fourth quarter. During the quarter, FNLC continued to build additional reserves related to the impact of an industry-wide increase in requests for buy-backs of loans related to early pay defaults (EPDs). Loan provisions, including EPD expense, averaged 70 basis points for the fourth quarter.
FNLC originated $2.1 billion in loans in the fourth quarter and $7.5 billion for the full year, compared to $1.5 billion in the final quarter of 2005 and $6.0 billion for all of 2005. FNLC's cost to originate loans dropped from an average of 244 basis points in 2005 to an average of 191 basis points in 2006. In 2007, FNLC management has further reduced expenses and has aggressively adapted its lending standards to a continuing difficult environment.
Looking Ahead
"The acquisition of Legacy Partners was a major step in the execution of our strategic plan, broadening our array of banking services and increasing our ability to significantly grow our advisory practice," said Eric F. Billings, FBR Group Chairman and Chief Executive Officer. "In addition, as we continue to execute our plan by selling our non-prime mortgage residuals and exiting our non-prime merchant banking investments, we believe that the stability and predictability of our earnings will become more apparent. Although 2006 was a challenging and difficult year, we closed with a solid fourth quarter in our capital markets businesses, and we are off to a strong start in 2007."
The firm will host an earnings conference call this morning, Thursday, February 22, 2007 at 9:00 A.M. U.S. EST. 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 following the call.
Friedman, Billings, Ramsey Group, Inc. (FBR) invests in mortgage-related assets and merchant banking opportunities. Through its 72% owned FBR Capital Markets Corporation (FBRCM) subsidiary, FBR provides investment banking*, merger and acquisition advisory services*, institutional brokerage*, asset management, and private wealth services. FBRCM 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 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 Deerfield Beach, Florida. For more information, see http://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.
(2) Source: Dealogic. Relates to total deal value of all common stock or
common equity, including private placements, offered for all U.S.
companies with a market capitalization of $1 billion or less.
Transactions priced between 1/1/06 and 12/31/06, with apportioned
credit to all book-runners. Includes only rank eligible transactions.
(3) Source: Dealogic. Relates to total deal value of all common stock of
U.S. issuers offered in IPOs or transactions exempt from SEC
registration pursuant to rule 144A, on a combined basis. Transactions
priced between 1/1/06 through 12/31/06 with apportioned credit to all
book-runners. Includes only rank eligible transactions.
(4) Source: Dealogic. Relates to total deal value of all common stock or
common equity, including private placements, offered for all U.S.
mining, oil and gas, and utility and energy companies with a market
capitalization of $1 billion or less. Transactions priced between
1/1/06 and 12/31/06, with apportioned credit to all book-runners.
Includes only rank eligible transactions.
(5) Source: Dealogic. Relates to total deal value of all common stock or
common equity, including private placements, offered for all U.S. and
Bermuda finance and insurance companies with a market capitalization
of $1 billion or less. Transactions priced between 1/1/06 and
12/31/06, with apportioned credit to all book-runners. Includes only
rank eligible transactions.
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.
FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
Quarter ended
December 31,
2006 % 2005 %
------------------------------------
REVENUES:
Investment banking:
Capital raising $71,883 40.9% $88,866 -77.9%
Advisory 9,172 5.2% 7,415 -6.5%
Institutional brokerage:
Principal transactions (8) 0.0% 3,788 -3.3%
Agency commissions 24,720 14.1% 21,006 -18.4%
Mortgage trading interest 2,509 1.4% 19,555 -17.1%
Mortgage trading net investment
loss (309) -0.2% (1,419) 1.2%
Asset management:
Base management fees 5,051 2.9% 6,153 -5.4%
Incentive allocations and fees 403 0.2% 742 -0.7%
Principal investment:
Interest 181,491 103.3% 189,811 -166.3%
Net investment loss (8,826) -5.0% (258,500) 226.5%
Dividends 2,043 1.2% 16,039 -14.1%
Mortgage banking:
Interest 21,806 12.4% 28,825 -25.3%
Net investment income (loss) 27,555 15.6% (21,899) 19.2%
Other 3,162 1.8% 5,164 -4.4%
------------------------------------
Total revenues 340,652 193.8% 105,546 -92.5%
Interest expense 164,891 93.8% 211,393 -185.3%
Provision for loan losses - 0.0% 8,263 -7.2%
------------------------------------
Revenues, net of interest
expense and provision for
loan losses 175,761 100.0% (114,110) 100.0%
------------------------------------
NON-INTEREST EXPENSES:
Compensation and benefits 84,431 48.0% 87,330 -76.5%
Professional services 18,224 10.4% 16,556 -14.5%
Business development 11,884 6.8% 10,433 -9.2%
Clearing and brokerage fees 3,505 2.0% 2,447 -2.1%
Occupancy and equipment 13,668 7.8% 10,151 -8.9%
Communications 6,307 3.6% 5,741 -5.0%
Other operating expenses 20,116 11.4% 24,984 -21.9%
------------------------------------
Total non-interest expenses 158,135 90.0% 157,642 -138.1%
------------------------------------
Operating income (loss) 17,626 10.0% (271,752) 238.1%
OTHER INCOME:
Gain on sale of subsidiary shares - 0.0% - 0.0%
------------------------------------
Net income (loss) before
income taxes and minority
interest 17,626 10.0% (271,752) 238.1%
Income tax provision (benefit) 11,859 6.7% (142) 0.1%
Minority interest in earnings of
consolidated subsidiary 1,957 1.1% - 0.0%
------------------------------------
Net income (loss) $3,810 2.2% $(271,610) 238.0%
====================================
Basic earnings (loss) per share $0.02 $(1.60)
======== ========
Basic earnings (loss) per share $0.02 $(1.60)
======== ========
Weighted average shares - basic 172,531 169,921
======== ========
Weighted average shares - diluted 172,600 169,921
======== ========
FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
Years Ended
December 31,
2006 % 2005 %
-----------------------------------
REVENUES:
Investment banking:
Capital raising $190,187 50.0% $356,753 82.1%
Advisory 24,148 6.3% 17,759 4.1%
Institutional brokerage:
Principal transactions 5,814 1.5% 17,950 4.1%
Agency commissions 101,009 26.6% 82,778 19.0%
Mortgage trading interest 51,147 13.4% 30,859 7.1%
Mortgage trading net investment
loss (3,301) -0.9% (3,820) -0.9%
Asset management:
Base management fees 20,093 5.3% 30,348 7.0%
Incentive allocations and fees 1,327 0.3% 1,929 0.4%
Principal investment:
Interest 594,879 156.4% 549,832 126.5%
Net investment loss (184,552) -48.5% (239,754) -55.2%
Dividends 14,551 3.8% 36,622 8.4%
Mortgage banking:
Interest 88,662 23.3% 78,007 17.9%
Net investment income 83,786 22.0% 13,741 3.2%
Other 20,154 5.3% 22,302 5.1%
------------------------------------
Total revenues 1,007,904 264.8% 995,306 228.8%
Interest expense 611,800 160.8% 546,313 125.7%
Provision for loan losses 15,740 4.0% 14,291 3.1%
------------------------------------
Revenues, net of interest
expense and provision for
loan losses 380,364 100.0% 434,702 100.0%
------------------------------------
NON-INTEREST EXPENSES:
Compensation and benefits 309,065 81.3% 331,492 76.3%
Professional services 59,722 15.7% 66,550 15.3%
Business development 42,150 11.1% 46,648 10.7%
Clearing and brokerage fees 11,820 3.1% 8,882 2.0%
Occupancy and equipment 50,051 13.2% 34,044 7.8%
Communications 24,398 6.4% 20,634 4.7%
Other operating expenses 89,377 23.5% 70,679 16.3%
------------------------------------
Total non-interest expenses 586,583 154.3% 578,929 133.1%
------------------------------------
Operating loss (206,219) -54.3% (144,227) -33.1%
OTHER INCOME:
Gain on sale of subsidiary shares 121,511 31.9% - 0.0%
------------------------------------
Net loss before income taxes
and minority interest (84,708) -22.3% (144,227) -33.2%
Income tax (benefit) provision (14,682) -3.9% 26,683 6.1%
Minority interest in loss of
consolidated subsidiary (2,751) -0.7% - 0.0%
------------------------------------
Net loss $(67,275) -17.7% $(170,910) -39.3%
====================================
Basic loss per share $(0.39) $(1.01)
========= =========
Diluted loss per share $(0.39) $(1.01)
========= =========
Weighted average shares - basic 171,667 169,333
========= =========
Weighted average shares - diluted 171,667 169,333
========= =========
FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.
Financial & Statistical Supplement - Operating Results
(Dollars in thousands, except per share data)
(Unaudited)
For the
year ended
December
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.
FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.
Financial & Statistical Supplement - Operating Results
(Dollars in thousands, except per share data)
(Unaudited)
For the
year ended
December
31, 2005 Q-4 05 Q-3 05 Q-2 05 Q-1 05
-----------------------------------------------------
Revenues
Investment banking:
Capital raising $356,753 $88,866 $86,035 $95,039 $86,813
Advisory 17,759 7,415 3,026 6,180 1,138
Institutional
brokerage:
Principal
transactions 17,950 3,788 4,348 4,187 5,627
Agency
commissions 82,778 21,006 20,445 19,170 22,157
Mortgage trading
interest 30,859 19,555 11,304 - -
Mortgage trading
net investment
loss (3,820) (1,419) (2,401) - -
Asset management:
Base management
fees 30,348 6,153 7,914 7,813 8,468
Incentive
allocations and
fees 1,929 742 832 730 (375)
Principal investment:
Interest 549,832 189,811 144,401 116,724 98,896
Net investment
(loss) income (239,754) (258,500) 4,866 17,738 (3,858)
Dividends 36,622 16,039 8,772 8,371 3,440
Mortgage banking:
Interest 78,007 28,825 27,280 15,543 6,359
Net investment
income (loss) 13,741 (21,899) 17,600 14,559 3,481
Other 22,302 5,164 5,479 6,030 5,629
-----------------------------------------------------
Total revenues 995,306 105,546 339,901 312,084 237,775
Interest expense 546,313 211,393 156,373 103,725 74,822
Provision for loan
losses 14,291 8,263 4,890 1,138 -
-----------------------------------------------------
Revenues, net
of interest
expense and
provision for
loan losses 434,702 (114,110) 178,638 207,221 162,953
-----------------------------------------------------
Non-interest expenses
Compensation and
benefits 331,492 87,330 88,348 80,015 75,799
Professional
services 66,550 16,556 16,158 20,186 13,650
Business
development 46,648 10,433 8,815 11,962 15,438
Clearing and
brokerage fees 8,882 2,447 2,363 2,040 2,032
Occupancy and
equipment 34,044 10,151 9,397 8,772 5,724
Communications 20,634 5,741 5,561 5,300 4,032
Other operating
expenses 70,679 24,984 16,861 12,540 16,294
-----------------------------------------------------
Total non-interest
expenses 578,929 157,642 147,503 140,815 132,969
-----------------------------------------------------
Net (loss) income
before income
taxes (144,227) (271,752) 31,135 66,406 29,984
Income tax
provision
(benefit) 26,683 (142) 8,090 13,163 5,572
-----------------------------------------------------
Net (loss) income $(170,910) $(271,610) $23,045 $53,243 $24,412
=====================================================
Net (loss) income
before income taxes
as a percentage
of net revenue -33.2% 238.1% 17.4% 32.0% 8.4%
ROE (annualized) -11.9% -80.5% 6.3% 14.3% 6.4%
ROE (annualized-
excluding AOCI)(1) -11.7% -74.7% 5.9% 13.8% 6.0%
Total
shareholders'
equity $1,304,170 $1,304,170 $1,394,137 $1,519,021 $1,458,861
Total
shareholders'
equity, net of
AOCI (1) $1,305,147 $1,305,147 $1,603,305 $1,631,955 $1,629,293
Basic (loss)
earnings
per share $(1.01) $(1.60) $0.14 $0.31 $0.15
Diluted (loss)
earnings per
share $(1.01) $(1.60) $0.14 $0.31 $0.14
Ending shares
outstanding (in
thousands) 170,264 170,264 169,891 169,617 169,214
Book value per
share $7.66 $7.66 $8.21 $8.96 $8.62
Book value per
share, net of
AOCI (1) $7.67 $7.67 $9.44 $9.62 $9.63
Gross assets
under
management (in
millions)
Managed accounts $463.4 $463.4 $437.2 $510.4 $242.4
Hedge & offshore
funds 154.3 154.3 239.0 463.1 601.1
Mutual funds 1,883.3 1,883.3 2,078.1 2,185.0 2,213.9
Private equity
and venture
capital funds 56.2 56.2 42.7 41.3 69.5
-----------------------------------------------------
Total $2,557.2 $2,557.2 $2,797.0 $3,199.8 $3,126.9
=====================================================
Net assets under
management (in
millions)
Managed accounts $329.5 $329.5 $255.5 $257.3 $223.0
Hedge & offshore
funds 150.5 150.5 227.8 401.1 490.3
Mutual funds 1,872.8 1,872.8 2,069.9 2,176.6 2,204.2
Private equity
and venture
capital funds 46.8 46.8 39.9 37.8 66.3
-----------------------------------------------------
Total $2,399.6 $2,399.6 $2,593.1 $2,872.8 $2,983.8
=====================================================
Employee count 2,449 2,449 2,455 2,226 2,123
=====================================================
(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.
FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share amounts)
(Unaudited)
ASSETS 31-Dec-06 31-Dec-05
----------- -----------
Cash and cash equivalents $189,956 $238,615
Restricted cash 132 6,101
Receivables 217,249 259,519
Investments:
Mortgage-backed securities, at fair
value 6,870,661 8,002,561
Loans held for investment, net - 6,841,266
Loans held for sale, net 5,367,934 963,807
Long-term investments 185,492 347,644
Reverse repurchase agreements - 283,824
Trading securities, at fair value 18,180 1,032,638
Due from clearing broker 28,999 71,065
Derivative assets, at fair value 36,875 70,636
Goodwill 162,765 162,765
Intangible assets, net 21,825 26,485
Furniture, equipment and leasehold
improvements, net 44,111 46,382
Prepaid expenses and other assets 208,339 82,482
----------- -----------
Total assets $13,352,518 $18,435,790
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Trading account securities sold short
but not yet purchased, at fair value $202 $150,547
Commercial paper 3,971,389 6,996,950
Repurchase agreements 3,059,330 2,698,619
Derivative liabilities, at fair value 44,582 31,952
Dividends payable 8,743 34,588
Interest payable 12,239 12,039
Accrued compensation and benefits 57,227 82,465
Accounts payable, accrued expenses
and other liabilities 81,819 82,576
Temporary subordinated loan payable - 75,000
Securitization financing, net 4,486,046 6,642,198
Long-term debt 324,453 324,686
----------- -----------
Total liabilities 12,046,030 17,131,620
----------- -----------
Minority Interest 135,443 -
Shareholders' equity:
Common stock, 174,712 and 172,854 shares 1,747 1,729
Additional paid-in capital 1,562,497 1,547,128
Employee stock loan receivable including
accrued interest (2 and 551 shares) (12) (4,018)
Deferred compensation, net - (15,602)
Accumulated other comprehensive loss,
net of taxes (15,136) (977)
Accumulated deficit (378,051) (224,090)
----------- -----------
Total shareholders' equity 1,171,045 1,304,170
----------- -----------
Total liabilities and
shareholders' equity $13,352,518 $18,435,790
=========== ===========
FBR CAPITAL MARKETS CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars in thousands, except per share data)
(Unaudited)
For the
year ended
December
31, 2006 Q-4 06 Q-3 06 Q-2 06 Q-1 06
----------------------------------------------------
Revenues
Investment banking:
Capital raising $190,576 $71,879 $6,852 $45,510 $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 100,855 24,683 24,359 28,447 23,366
Mortgage trading
interest 51,147 2,509 13,845 17,143 17,650
Mortgage trading net
investment loss (3,298) (309) (1,546) (209) (1,234)
Asset management:
Base management fees 19,871 5,051 4,879 5,065 4,876
Incentive allocations
and fees 1,327 403 (30) (54) 1,008
Interest 20,934 5,235 8,439 4,647 2,613
Net investment income
(loss) 3,372 3,288 (3,070) 108 3,046
Other 3,893 1,280 482 816 1,315
---------------------------------------------------
Total revenues 418,639 123,183 58,378 109,514 127,564
Interest expense 54,543 3,136 16,390 18,155 16,862
---------------------------------------------------
Revenues, net
of interest
expense 364,096 120,047 41,988 91,359 110,702
Non-interest expenses
Compensation and
benefits 225,712 61,326 46,398 54,436 63,552
Professional services 43,712 13,809 9,069 10,830 10,004
Business development 33,772 9,458 5,229 6,709 12,376
Clearing and brokerage
fees 11,715 3,504 2,892 3,053 2,266
Occupancy and
equipment 30,039 7,918 7,349 7,499 7,273
Communications 20,039 5,024 5,442 4,990 4,583
Other operating
expenses 12,219 1,434 4,561 2,960 3,264
---------------------------------------------------
Total
non-interest
expenses 377,208 102,473 80,940 90,477 103,318
---------------------------------------------------
Net (loss) income before
income taxes (13,112) 17,574 (38,952) 882 7,384
Income tax (benefit)
provision (3,271) 10,614 (16,346) (105) 2,566
---------------------------------------------------
Net (loss) income $(9,841) $6,960 $(22,606) $987 $4,818
======================================================
Basic & diluted (loss)
earnings per share $(0.18) $0.11(1) $(0.37) $0.02 $0.10
Weighted average
shares - basic &
diluted 54,136,986 64,000,000 60,282,609 46,000,000 46,000,000
(1) Non-GAAP earnings per share determined by using a 43% tax rate would
be $0.16. Management believes this information is relevant because it
expects the effective tax rate to approximate 43% after FASB 123R and
other non-cash tax charges.
DATASOURCE: Friedman, Billings, Ramsey Group, Inc.
CONTACT: Media: Lauren Burk, +1-703-469-1004, , or
Investors, Paul Beattie, +1-703-312-9673, , both of Friedman,
Billings, Ramsey Group, Inc.
Web site: http://www.fbr.com/