FBR Takes Subprime-Related Loss

Friedman, Billings, Ramsey Group Inc., Arlington, Va., has reported a net loss of $185.9 million ($1.08 per share) for the first quarter, down from after-tax earnings of $26.6 million ($0.16 per share) a year earlier, citing its nonprime mortgage businesses as the reason for the loss.First NLC, its Deerfield Beach, Fla.-based mortgage origination subsidiary, posted a $124.2 million loss on an after-tax basis. That loss includes a $36.1 million writedown of goodwill and intangible assets and a $5.2 million writedown for restructuring costs. In March, FBR said it was examining "strategic alternatives" for FNLC, including a sale or third-party recapitalization. In its earnings statement, FBR said it intends to implement one of the alternatives during the current quarter. FNLC has taken steps to reduce its risk, including modifying its guidelines and cost restructuring. Volume at FNLC has declined from $8 billion on an annualized basis to less than $2 billion now. But the company said there has been an increase in the value of loans originated. FNLC also sold $712 million of warehouse loans in the quarter.