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TheStreet Open House

FBR Reports Fourth Quarter And Full Year 2012 Financial Results

Stock quotes in this article: FBRC

Financial data follow.

         
FBR & CO.        
CONSOLIDATED STATEMENTS OF OPERATIONS        
(Dollars and shares in thousands, except per share amounts)        
(Unaudited)        
         
         
  Quarter ended December 31, Year ended December 31,
  2012 2011 2012 2011
REVENUES:        
Investment banking:        
Capital raising  $ 44,577  $ 4,229  $ 84,144  $ 42,862
Advisory  210  2,316  6,525  15,284
Institutional brokerage:        
Principal transactions   5,002  3,542  19,353  18,081
Agency commissions   7,833  11,352  33,119  60,376
Net investment income (loss)  684  1,215  4,906  (9,664)
Interest, dividends & other   620  1,545  3,445  5,288
Total revenues  58,926  24,199  151,492  132,227
         
EXPENSES:        
Compensation and benefits  33,118  20,768  82,672  99,808
Professional services  3,545  2,391  12,839  11,629
Business development   2,746  2,229  9,394  10,753
Clearing and brokerage fees   1,460  2,385  7,490  11,928
Occupancy and equipment   4,072  4,275  15,755  19,034
Communications   2,989  4,134  12,553  16,402
Impairment of goodwill  --   5,882  --   5,882
Other operating expenses   1,785  1,897  6,861  8,119
Total expenses  49,715  43,961  147,564  183,555
         
Income (loss) from continuing operations before income taxes  9,211  (19,762)  3,928  (51,328)
Income tax provision (benefit)  162  (340)  (1,078)  (243)
         
Income (loss) from continuing operations, net of taxes  9,049  (19,422)  5,006  (51,085)
Income from discontinued operations, net of taxes  23,070  541  24,685  1,436
         
Net income (loss)  $ 32,119  $ (18,881)  $ 29,691  $ (49,649)
         
         
Basic earnings per share:        
Income (loss) from continuing operations, net of taxes  $ 0.18  $ (0.34)  $ 0.09  $ (0.84)
Income from discontinued operations, net of taxes  0.46  0.01  0.47  0.02
Net income (loss)  $ 0.64  $ (0.33)  $ 0.56  $ (0.82)
         
Diluted earnings per share:        
Income (loss) from continuing operations, net of taxes  $ 0.17  $ (0.34)  $ 0.09  $ (0.84)
Income from discontinued operations, net of taxes  0.43  0.01  0.45  0.02
Net income (loss)  $ 0.60  $ (0.33)  $ 0.54  $ (0.82)
         
         
Weighted average shares - basic  50,181  56,446  53,096  60,841
Weighted average shares - diluted  53,604  56,446  55,193  60,841
     
FBR & CO.    
CONSOLIDATED BALANCE SHEETS    
(Dollars in thousands, except per share amounts)    
(Unaudited)    
     
ASSETS December 31, 2012 December 31, 2011
     
Cash and cash equivalents  $ 174,925  $ 135,792
Receivables:    
Due from brokers, dealers and clearing organizations  4,670  6,048
Customers  2,579  3,937
Other   10,902  6,854
Financial instruments owned, at fair value  121,404  100,634
Other investments, at cost  8,388  25,744
Intangible assets, net  --  2,121
Furniture, equipment and leasehold improvements, net  3,693  6,162
Prepaid expenses and other assets  6,883  10,791
 Total assets  $ 333,444  $ 298,083
     
     
LIABILITIES AND SHAREHOLDERS' EQUITY    
     
Liabilities:    
Securities sold but not yet purchased, at fair value  $ 56,929  $ 35,496
Accrued compensation and benefits  19,075  15,760
Accounts payable, accrued expenses and other liabilities  13,878  15,280
Due to brokers, dealers and clearing organizations  3,698  6,250
 Total liabilities  93,580  72,786
     
Shareholders' equity:    
Common stock  49  55
Additional paid-in capital  402,631  413,224
Employee stock loan receivable, including accrued interest  (307)  (673)
Restricted stock units  25,235  29,013
Accumulated other comprehensive (loss) income  (1,094)  19
Accumulated deficit  (186,650)  (216,341)
Total shareholders' equity  239,864  225,297
 Total liabilities and shareholders' equity  $ 333,444  $ 298,083
     
     
Book Value per Share $4.80 $3.99
     
Shares Outstanding (in thousands) 50,022 56,490
 
 
FBR & CO.
Financial & Statistical Supplement - Operating Results 
(Dollars in thousands)
(Unaudited)
           
           
           
  Q-4 12 Q-3 12 Q-2 12 Q-1 12 Q-4 11
Revenues   $ 58,926  $ 23,889  $ 33,732  $ 34,945  $ 24,199
           
Expenses:          
Variable  24,693  5,263  8,791  8,018  5,078
Fixed  25,022  24,204  24,619  26,954  33,001
Impairment of goodwill  --   --   --   --   5,882
           
Income (loss) from continuing operations before income taxes  9,211  (5,578)  322  (27)  (19,762)
Income tax provision (benefit)  162  (1,262)  15  7  (327)
           
Income (loss) from continuing operations, net of taxes  9,049  (4,316)  307  (34)  (19,435)
Income from discontinued operations, net of taxes  23,070  959  184  472  554
Net income (loss)  $ 32,119  $ (3,357)  $ 491  $ 438  $ (18,881)
           
           
Fixed expenses from continuing operations  $ 25,022  $ 24,204  $ 24,619  $ 26,954  $ 33,001
Less: Non-cash expenses 1  2,000  1,948  1,804  1,822  1,195
 Corporate transaction costs 2  867  646  --   429  567
 Severance  --   61  --   38  3,487
           
Core fixed costs from continuing operations 3  $ 22,155  $ 21,549  $ 22,815  $ 24,665  $ 27,752
           
Statistical Data (Continuing Operations)          
Revenues per employee (annualized)  $ 921  $ 387  $ 521  $ 529  $ 348
Employee count  256  247  259  264  278
           
Non-cash expenses include compensation costs associated with stock-based awards and amortization of intangible assets.
           
2 Corporate transaction costs include costs related to reductions in physical space and restructuring costs.
           
3 Core fixed costs is a non-GAAP measurement used by management to analyze and assess the Company's fixed operating costs. Management believes that this non-GAAP measurement assists investors in understanding the impact of the items noted in footnotes 1 and 2 and severance costs on the performance of the Company.
           
A limitation of utilizing this non-GAAP measure is that the GAAP accounting effects of these items do in fact reflect the underlying financial results of the Company and these effects should not be ignored in evaluating and analyzing the Company's financial results. Therefore, management believes fixed expenses on a GAAP basis and core fixed costs on a non-GAAP basis should be considered together. 
CONTACT: Media:
         Shannon Small
         703.469.1190
         ssmall@fbr.com

         Investors:
         Bradley J. Wright
         703.312.9678
         bwright@fbr.com

FBR & Co.

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