The Numbers Don't Lie

Here are a couple of nuggets from the FBR earnings (or, in this case "losses") statements for Q3. Does anybody out there know if this is enough to pull the Sun deal off the table? I am totally amazed that this company continues to operate, albeit with a skeleton staff. It's not like FNLC was a respected and well-known brand in the first place - why Sun would want it?

Friedman Billings posts wider Q3 loss

Friedman Billings Ramsey Group Inc's third-quarter losses tripled from a year ago, hurt by write-offs in its securitized loan portfolio and losses from sale of mortgage securities. The investment bank and brokerage posted a net after-tax loss of $214.7 million, or $1.28 a share, compared with a net after-tax loss of $67.4 million, or 39 cents a share, a year ago.

The Arlington, Virginia-based FBR also incurred a $17.2 million loss on restructuring and operating costs at its nonprime mortgage unit First NLC Financial Services. At the end of the quarter, Friedman's exposure to First NLC was $12 million.

FBR Group Announces Third Quarter 2007 Financial Results

Friedman, Billings, Ramsey Group, Inc. today announced its results for the quarter ended September 30, 2007. The company reported a net after-tax loss for the quarter of $214.7 million, or $1.28 per share, compared to a net after-tax loss of $67.4 million, or $0.39 per share, for the third quarter of 2006.

Among the principal components of the third quarter results are:

• An economic loss of $17.2 million associated with restructuring and operating costs at First NLC Financial Services (FNLC), of which $15 million was incurred prior to the agreement announced in July to sell FNLC to an affiliate of Sun Capital Partners (Sun Capital).
• A $27 million valuation loss relating to the portfolio of conforming and non-conforming loans originated by FNLC and for which FBR Group took ownership under the Sun Capital sale agreement, reducing the value of those loans to $203 million.