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FBR & Co. Reports First Quarter 2016 Financial Results

Declares $0.20 per Share Quarterly Cash Dividend

Financial Highlights for the three months ended March 31, 2016:

  • Net revenues of $17.9 million
  • Net loss of $5.5 million, or $0.72 per share
  • Repurchased 545 thousand shares of common stock, through a combination of open market purchases and tax settlements on employee share vestings, at a total cost of $9.1 million
  • Shareholders' equity of $195 million and tangible book value per share of $24.60 on March 31, 2016

ARLINGTON, Va., April 27, 2016 (GLOBE NEWSWIRE) -- FBR & Co. FBRC, +0.60% ("FBR" or the "Company"), a leading investment bank serving the middle market, today reported a net loss of $5.5 million, or $0.72 per share, on revenues of $17.9 million for the first quarter of 2016, compared to a net loss of $2.5 million, or $0.29 per share, on revenues of $27.1 million for the first quarter of 2015, and a net loss of $4.4 million, or $0.59 per share, on revenues of $23.5 million for the fourth quarter of 2015.

"The initial equity market faced significant headwinds during the first quarter of 2016, with volumes down over 80 percent from the year ago period and at a level not seen since the first quarter of 2009. Despite valuations in the market having recovered from marked first quarter volatility, the IPO market continues to be challenged," said Chairman and Chief Executive Officer, Richard J. Hendrix. "We continue to focus our efforts on those aspects of our business that are most controllable - fixed expenses and capital management - along with reestablishing transaction momentum and building the pipeline of opportunities within our capital markets business."

Composition of Revenues

Investment Banking

Investment banking revenue was $4.2 million for the first quarter of 2016, compared to $12.7 million for the first quarter of 2015 and $14.0 million for the fourth quarter of 2015. During the quarter, FBR completed 11 client engagements representing $975 million in transaction value, compared to 13 transactions representing $2.5 billion in transaction value for the same period in 2015, and 16 transactions representing $1.9 billion in transaction value in the fourth quarter of 2015. Advisory revenue represented 39 percent of investment banking revenues in the first quarter of 2016 compared to 27 percent in the first quarter of 2015 and 30 percent in the fourth quarter of 2015.

Institutional Brokerage

Net revenue generated in institutional brokerage was $14.4 million for the first quarter of 2016, compared to $13.7 million for the same period in 2015, and $12.2 million for the fourth quarter of 2015. Cash equities trading and securities lending both contributed to the increase in revenues year-over-year, as the same volatility that caused difficulties in the new issue markets brought improved volumes and liquidity opportunities for our institutional clients.

Investment Income, Net Interest Income and Dividends

Net investment losses, including interest and dividends, were $0.7 million for the first quarter of 2016, compared to net income of $0.6 million for the same period in 2015, and net losses of $2.7 million for the fourth quarter of 2015.

Expenses

Non-compensation fixed expenses for the first quarter of 2016 totaled $9.7 million, compared to $10.1 million and $11.7 million for the first and fourth quarters of 2015, respectively. Compensation and benefits expense for the first quarter of 2016 was $18.0 million, compared to $18.0 million for the same period in 2015, and $17.6 million for the fourth quarter of 2015.

Employees

At March 31, 2016, the Company had 287 full-time employees, compared to 303 at December 31, 2015, and 290 at March 31, 2015.

Share Repurchase Activity

During the quarter ended March 31, 2016, the Company repurchased approximately 152 thousand shares of its common stock in the open market at an aggregate price of $2.7 million, or an average price of $17.45 per share. Also, FBR acquired an additional 393 thousand shares...


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