FBR to Consider Strategic Alternatives
By Alejandro Lazo
Friedman, Billings, Ramsey Group of Arlington said today that it would considering selling itself as losses continued to mount in the third quarter. Its core business of making mortgage investments has been hammered in the midst of the real estate downturn.
The real estate investment firm, which owns a majority of publicly traded investment bank FBR Capital Markets, said in a statement that it had hired financial advisers to evaluate its options.
"Potential strategic alternatives include the sale of the company or its assets or distribution of its assets to shareholders," the company said in its statement.
FBR Group reported a loss of $169 million ($1.12 per share) for the third quarter ended Sept. 30, compared with a loss of $210.6 million ($1.25) in the comparable period a year earlier. FBR Group's loss for the first nine months of 2008 was $149.0 million, or $0.99 per share, compared to a loss of $388.2 million, or $2.27 per share in the first nine months of 2007.
Apart from its ownership interest in FBR Capital Markets, the FBR Group had assets of $2.3 billion, including mortgage-backed securities of $1.7 billion and $82 million in cash, as well as repurchase agreements worth $1.7 billion, the company said. FBR Group said it had initiated a program to reduce its mortgage-backed securities portfolio in the third quarter to "reduce exposure to deteriorating market conditions" while at the same time raising cash to pay down its debt.
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