Exhibit 99.1

Contacts

Investor Contact: Kurt R. Harrington 703-312-9647 or kharrington@fbr.com

Media Contact: Lauren M. Burk 703-469-1004 lburk@fbr.com

FBR Announces Financial Results

For Third Quarter of 2005

After-Tax Net Earnings of $23.0 Million, Diluted Earnings per Share of $0.14

Arlington, Va., Oct. 25, 2005 – Friedman, Billings, Ramsey Group, Inc. (NYSE: FBR) today announced net income after tax for the quarter ended September 30, 2005 of $23.0 million, or $0.14 per share (diluted), compared to $92.1 million, or $0.55 per share (diluted), for the third quarter of 2004. Net revenue for the quarter was $178.6 million, down 27% from net revenue of $243.7 million in the third quarter of 2004.

On September 13, 2005, FBR declared a quarterly regular dividend of $0.34 per share for the third quarter of 2005, which will be paid on October 31, 2005 to shareholders of record on September 30, 2005. As discussed further below, the company expects to later declare a reduced quarterly dividend of $0.20 per share for the fourth quarter of 2005 to be paid in early 2006.

The company’s net after-tax earnings for the first nine months of 2005 were $100.7 million, or $0.59 per share (diluted), compared to $263.0 million, or $1.56 per share (diluted), for the first three quarters of 2004. Net revenue for the first three quarters of 2005 was $548.8 million, compared to $642.8 million for the first nine months of 2004. Book value per share as of September 30, 2005 was $8.21, and book value per share net of Accumulated Other Comprehensive Income (AOCI) was $9.44.¹

“The third quarter results reflect continued pressure on our spread-based business not only from the current interest rate environment but also from accelerated mortgage prepayment speeds. These factors resulted in lower returns from our portfolio of REIT qualified mortgage-related investments. In contrast, both our investment banking and institutional brokerage groups turned in solid performances, although not at the record setting levels we achieved in the third quarter of 2004,” said Eric F. Billings, Chairman and Chief Executive Officer of FBR.

Equity Capital Markets

• Investment banking revenue for the quarter was $89.1 million, down from the record $141.6 million generated in the third quarter of last year. Revenue for the first nine months of 2005 was $278.2 compared to $294.7 million in the first three quarters of 2004.

• Revenue from institutional brokerage during the quarter was up on a year-to-year basis, increasing from $22.7 million in the third quarter of 2004 to $33.7 million in the third quarter of 2005, primarily due to revenues associated with mortgage trading. September represented our best institutional trading month since February of this year.

• For the first nine months of 2005, brokerage revenue totaled $84.8 million, up slightly from the $84.4 million generated in the first nine months of 2004.

• For the first nine months of the year, FBR was ranked as the:

• number one (#1) book-running manager of common stock offerings for U.S. companies with a market capitalization of $2 billion or less.²

• number nine (#9) book-running manager for all common stock offerings for U.S. companies.²

• number two (#2) book-running manager for domestic oil and gas common stock offerings.³

• In the third quarter, FBR completed 27 managed underwritings and corporate finance transactions with an aggregate value of $13.5 billion, including:

• Five initial public offerings with a combined value of $804.1 million

• Six secondary offerings with an aggregate value of $3.9 billion

• Four private equity placements with a value of $767.8 million

• Nine asset-backed securities (ABS) transactions with a total value of $7.6 billion

• Average common equity transaction size for the third quarter 2005 rose 46% from $249.7 million in the third quarter of 2004 to $365.4 million.

• In the third quarter of 2005, FBR’s ABS banking group’s aggregate transaction value was nearly equal to that of the combined volume for the first two quarters of the year. Year to date, the group, which continues to gain momentum, has completed 20 transactions with an aggregate value of $15.5 billion.

“Our investment banking franchise has continued to gain market share in equity underwriting throughout 2005 and is expanding its presence in each of our industry groups,” said J. Rock Tonkel, President and Head of Investment Banking. “As our reputation grows, we are adding clients across industries and winning larger and more varied assignments from an increasingly broad client base. In recent years, our strategy has been to patiently invest in industries whose business cycles complement those in which we already have a well-established, leading market presence.

“Our strategy is succeeding. Revenue from our energy practice – now ranked as the #2 book-running underwriter for domestic oil and gas equity offerings – has grown more than 600% in 2005 as capital raising activity in financial services and real estate has declined. We are seeing increased activity in other industry groups, and our robust pipeline in energy, industrials and growth companies makes us optimistic about transaction activity in coming quarters.”

Principal Investment and Mortgage Banking

FBR’s principal investing and mortgage banking revenue, net of related interest expense and the provision for loan losses, was $52.8 million during the third quarter of 2005, compared to $68.7 million during the third quarter of 2004 and $70.6 million for the second quarter of 2005. As of September 30, 2005, FBR’s mortgage portfolio totaled $17.8 billion.

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“The third quarter portfolio performance was characterized by a continuation of the spread compression we have experienced for the last seven quarters. The impact of rising short-term rates was only part of the story as prepayment speeds accelerated during the quarter, and the resulting increased premium amortization caused yields to fall at the same time that funding costs were rising for the mortgage-backed securities (MBS) portfolio. This compression was significantly offset by the continuation of our non-conforming portfolio build-out,” commented Richard J. Hendrix, President and Chief Operating Officer.

“It is important to understand the nature of the assets in the mortgage portfolio as we consider this continued compression of spreads in the third quarter,” Mr. Hendrix continued. “Approximately $6.5 billion of our MBS portfolio will prepay or re-price in the next 18 months. For every dollar reinvested, today’s expected yield for a 3/1 agency ARM is approximately 1.75% higher than the yield on the current portfolio. This rapid re-pricing will provide the company with attractive reinvestment opportunities in the coming quarters. This refinancing, or re-pricing, should also meaningfully reduce the negative mark (or AOCI) in the MBS portfolio over the next six quarters as we receive our full principal and amortize the associated premium.

Additionally, at the end of the quarter, the company had approximately $7.5 billion of its total funding hedged primarily in the form of interest rate caps ranging from 4.25% - 4.5%.”

• During the third quarter of 2005, FBR’s mortgage portfolio had a weighted average annual yield of 4.49%, and the weighted average financing rate was 3.76% (including the benefit of hedging), resulting in a net interest spread of 73 basis points for the quarter. This compares to a net interest spread of 91 basis points for the portfolio in the second quarter.

• Amortization of mortgage premiums during the third quarter of 2005 was $24.9 million, compared to $18.5 million for the second quarter of 2005. One month constant prepayment rates (CPRs) in the mortgage portfolio moved higher in the third quarter, averaging 27.61, compared to 25.15 in the second quarter.

• On September 30, 2005, the mortgage portfolio continued to maintain a low effective duration (a measure of interest rate sensitivity) of 1.29, compared to 1.12 as of June 30, 2005.

The total value of FBR’s merchant banking portfolio and other long-term investments was $361.1 million as of September 30, 2005. Of this total, $295.7 million was held in the merchant banking equity portfolio, $49.0 million was held in alternative asset funds, and $16.4 million was held in other long-term investments.

• During the third quarter of 2005, FBR recorded $8.8 million of dividend income.

• FBR realized $4.6 million in merchant banking and other long-term investment gains during the quarter, primarily due to the sale of securities in this portfolio.

• The merchant banking equities portfolio had net unrealized losses of $52.0 million as of September 30, 2005 that are included in accumulated other comprehensive income, compared to a net unrealized gain of $11.1 million as of June 30, 2005.

In the third quarter, First NLC, whose financial results are now fully consolidated into FBR’s operational performance, continued its record-setting performance, originating $1.6 billion in

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mortgages, an increase of 78% over the third quarter of 2004. At the end of the third quarter, FNLC had increased its annualized run rate for mortgage originations to approximately $7 billion, more than double the annual run rate at the beginning of the year. At the same time, FNLC has continued to steadily reduce its net loan origination costs. During the third quarter, FNLC’s contribution to revenue, including gain-on-sale of mortgage loans and net interest income on loans held for sale, was $28.1 million. Total expenses related to FNLC were $26 million during the quarter and are the primary reason total expenses for the quarter were up year over year.

Asset Management

During the quarter, FBR formed the FBR Asset Management Group, which combines all of the company’s asset management activities, including the mutual fund and alternative asset management businesses. Pursuant to this consolidation, Dave Ellison, President and Chief Investment Officer, FBR Funds, assumed management responsibility for two of our proprietary partnerships.

“We are all very pleased to have Dave take a broader role in managing FBR investment products. He has a track record over a twenty-year plus career which demonstrates that he is one of the truly gifted portfolio managers active in U.S. equities today,” Mr. Billings said.

• Base and incentive fees were $8.7 million for the quarter and $25.4 million for the first nine months of 2005. The quarterly results were essentially flat year to year, and the fees for the first nine months increased about 11%.

• Total funds under management were $2.8 billion as of September 30, 2005, compared to $3.2 billion on June 30, 2005.

• Mutual fund assets totaled $2.1 billion at the end of the third quarter compared to $2.2 billion at the close of the second quarter of 2005. Year to year, assets increased 5% over the $2.0 billion held at the close of the third quarter of 2004.

A Change in Dividend Expectations

“Based on the company’s performance year to date and our expectations for the next several quarters, we have determined that the appropriate dividend action is to reduce our quarterly payout from $0.34 a share to $0.20 a share. This decision should allow the company to return to the business model of growing core book value by retaining the earnings of our taxable businesses. Additionally, at this dividend level, we believe that we can continue to maintain steady quarterly dividends despite fluctuations in quarterly earnings,” said Mr. Billings. “FBR has an exceptionally profitable and valuable group of taxable businesses, most notably, our investment banking and institutional brokerage businesses. This business mix and business model provides, we believe, a powerful growth dynamic through the generation of capital and earnings in most environments, but also provides the ability to maintain a more sustainable dividend in challenging markets than the portfolio alone might provide.”

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The firm will host an earnings conference call tomorrow morning, Wednesday, October 26, 2005, at 9:00 a.m. U.S. EDT. Investors wishing to listen to the conference call may do so via the web at: http://phx.corporate-ir.net/phoenix.zhtml?c=71352&p=irol-irhome.

Replays of the webcast will be available after the call.

Friedman, Billings, Ramsey Group, Inc. provides investment banking⁴, institutional brokerage⁴, asset management, and private client services through its operating subsidiaries and invests in mortgage-related assets and merchant banking opportunities. FBR focuses capital and financial expertise on eight industry sectors: consumer, diversified industrials, energy and natural resources, financial institutions, healthcare, insurance, real estate, and technology, media and telecommunications. FBR, headquartered in the Washington, D.C. metropolitan area, with offices in Arlington, Va. and Bethesda, Md., also has offices in Boston, Cleveland, Dallas, Denver, Houston, Irvine, London, New York, Phoenix, San Francisco, Seattle, and Vienna. FNLC is headquartered in Deerfield Beach, FL. For more information, visit http://www.fbr.com.

¹ Accumulated Other Comprehensive Income (AOCI) includes changes in value of available-for-sale securities and cash flow hedges. We believe that such changes represent temporary market fluctuations, are not reflective of our market strategy, and therefore, exclusion of AOCI provides a reasonable basis for calculating returns.

² Source: Dealogic. Relates to total dollar amount, with over-allotment, of all U.S. IPOs, secondary offerings and private placements for U.S. issuers valued at $2 billion or less and all U.S. issuers, respectively; priced between 1/1/05 and 9/30/05, with apportioned credit to all book-runners. Excludes closed-end funds and best efforts.

³ Source: Dealogic. Relates to total dollar amount, with over-allotment, of all IPOs, secondary offerings and private placements for U.S. issuers in the oil and gas general industry group; priced between 1/1/05 and 9/30/05, with apportioned credit to all book-runners. Excludes closed-end funds and best efforts.

⁴ Friedman, Billings, Ramsey & Co., Inc.

Financial data follows.

Statements concerning future performance, developments, events, market forecasts, revenue, expenses, earnings, run rates and any other guidance on present or future periods constitute forward-looking statements that are subject to a number of factors, risks and uncertainties that might cause actual results to differ materially from stated expectations or current circumstances. These factors include, but are not limited to, the effect of demand for public offerings, activity in the secondary securities markets, interest rates, costs of borrowing, interest spreads, mortgage pre-payment speeds, risks associated with merchant banking investments, the realization of gains and losses on principal investments, available technologies, competition for business and personnel, and general economic, political and market conditions. These and other risks are described in the company’s Annual Report and Form 10-K and quarterly reports on Form 10-Q that are available from the company and from the S.E.C.

# # #

5

	FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.
	CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
	(Dollars in thousands, except per share amounts)
	(Unaudited)

	Quarter ended September 30,
	2005			%		2004		%
REVENUES:
Investment banking:
Capital raising	$	86,035		48.2	%	$	130,019	53.4	%
Advisory		3,026		1.7	%		11,602	4.8	%
Institutional brokerage:
Principal transactions		4,348		2.4	%		4,241	1.8	%
Agency commissions		20,445		11.4	%		18,505	7.6	%
Mortgage trading interest		11,304		6.3	%		—	0.0	%
Mortgage trading net investment loss		(2,401	)	-1.3	%		—	0.0	%
Asset management:
Base management fees		7,914		4.4	%		7,044	2.9	%
Incentive allocations and fees		832		0.5	%		1,737	0.7	%
Principal investment:
Interest		144,401		80.8	%		88,035	36.1	%
Net investment income		4,866		2.7	%		19,090	7.8	%
Dividends		8,772		4.9	%		5,820	2.4	%
Mortgage Banking:
Interest		29,383		16.4	%		—	0.0	%
Gain on sale of loans, net		17,600		9.9	%		—	0.0	%
Other		3,376		1.9	%		1,827	0.7	%
Total revenues		339,901		190.2	%		287,920	118.2	%
Interest expense		156,373		87.5	%		44,265	18.2	%
Provision for loan losses		4,890		2.7	%		—	0.0	%
Revenues, net of interest expense and provision for loan losses		178,638		100.0	%		243,655	100.0	%
NON-INTEREST EXPENSES:
Compensation and benefits		88,348		49.5	%		95,824	39.3	%
Professional services		16,158		9.0	%		13,421	5.5	%
Business development		8,815		4.9	%		8,284	3.4	%
Clearing and brokerage fees		2,363		1.3	%		1,556	0.6	%
Occupancy and equipment		9,397		5.4	%		3,898	1.6	%
Communications		5,561		3.1	%		3,348	1.4	%
Other operating expenses		16,861		9.4	%		4,846	2.1	%
Total non-interest expenses		147,503		82.6	%		131,177	53.9	%
Net income before income taxes		31,135		17.4	%		112,478	46.1	%
Income tax provision		8,090		4.5	%		20,329	8.3	%
Net income	$	23,045		12.9	%	$	92,149	37.8	%
Basic earnings per share	$	0.14				$	0.55
Diluted earnings per share	$	0.14				$	0.55
Weighted average shares - basic		169,745					167,593
Weighted average shares - diluted		170,490					168,800

	FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.
	CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
	(Dollars in thousands, except per share amounts)
	(Unaudited)

	Nine Months Ended September 30,
	2005			%		2004		%
REVENUES:
Investment banking:
Capital raising	$	267,887		48.8	%	$	272,695	42.4	%
Advisory		10,344		1.9	%		22,027	3.4	%
Institutional brokerage:
Principal transactions		14,162		2.5	%		15,686	2.4	%
Agency commissions		61,772		11.3	%		68,702	10.7	%
Mortgage trading interest		11,304		2.0	%		—	0.0	%
Mortgage trading net investment loss		(2,401	)	-0.4	%		—	0.0	%
Asset management:
Base management fees		24,195		4.4	%		19,963	3.1	%
Incentive allocations and fees		1,187		0.2	%		2,958	0.5	%
Principal investment:
Interest		360,021		65.6	%		264,141	41.1	%
Net investment income		18,746		3.4	%		74,531	11.6	%
Dividends		20,583		3.8	%		8,475	1.3	%
Mortgage Banking:
Interest		56,993		10.4	%		—	0.0	%
Gain on sale of loans, net		35,640		6.5	%		—	0.0	%
Other		9,327		1.7	%		4,824	0.8	%
Total revenues		889,760		162.1	%		754,002	117.3	%
Interest expense		334,920		61.0	%		111,188	17.3	%
Provision for loan losses		6,028		1.1	%		—	0.0	%
Revenues, net of interest expense and provision for loan losses		548,812		100.0	%		642,814	100.0	%
NON-INTEREST EXPENSES:
Compensation and benefits		244,162		44.5	%		228,411	35.5	%
Professional services		49,994		9.1	%		38,635	6.0	%
Business development		36,215		6.6	%		33,707	5.2	%
Clearing and brokerage fees		6,435		1.2	%		6,937	1.1	%
Occupancy and equipment		23,893		4.4	%		10,128	1.6	%
Communications		14,893		2.7	%		9,732	1.5	%
Other operating expenses		45,695		8.3	%		16,168	2.5	%
Total non-interest expenses		421,287		76.8	%		343,718	53.4	%
Net income before income taxes		127,525		23.2	%		299,096	46.6	%
Income tax provision		26,825		4.9	%		36,129	5.6	%
Net income	$	100,700		18.3	%	$	262,967	41.0	%
Basic earnings per share	$	0.60				$	1.57
Diluted earnings per share	$	0.59				$	1.56
Weighted average shares - basic		169,166					166,975
Weighted average shares - diluted		170,122					168,500

	FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.
	Financial & Statistical Supplement - Operating Results
	(Dollars in thousands, except per share data)
	(Unaudited)

	YTD 2005			Q-3 05			Q-2 05			Q-1 05
Revenues
Investment banking:
Capital raising	$	267,887		$	86,035		$	95,039		$	86,813
Advisory		10,344			3,026			6,180			1,138
Institutional brokerage:
Principal transactions		14,162			4,348			4,187			5,627
Agency commissions		61,772			20,445			19,170			22,157
Mortgage trading interest		11,304			11,304			—			—
Mortgage trading net investment loss		(2,401	)		(2,401	)		—			—
Asset management:
Base management fees		24,195			7,914			7,813			8,468
Incentive allocations and fees		1,187			832			730			(375	)
Principal investment:
Interest		360,021			144,401			116,724			98,896
Net investment income		18,746			4,866			17,738			(3,858	)
Dividends		20,583			8,772			8,371			3,440
Mortgage Banking:
Interest		56,993			29,383			18,118			9,492
Gain on sale of loans, net		35,640			17,600			14,559			3,481
Other		9,327			3,376			3,455			2,496
Total revenues		889,760			339,901			312,084			237,775
Interest expense		334,920			156,373			103,725			74,822
Provision for loan losses		6,028			4,890			1,138			—
Revenues, net of interest expense and provision for loan losses		548,812			178,638			207,221			162,953
Non-interest expenses
Compensation and benefits		244,162			88,348			80,015			75,799
Professional services		49,994			16,158			20,186			13,650
Business development		36,215			8,815			11,962			15,438
Clearing and brokerage fees		6,435			2,363			2,040			2,032
Occupancy and equipment		23,893			9,397			8,772			5,724
Communications		14,893			5,561			5,300			4,032
Other operating expenses		45,695			16,861			12,540			16,294
Total expenses		421,287			147,503			140,815			132,969
Net income before income taxes		127,525			31,135			66,406			29,984
Income tax provision		26,825			8,090			13,163			5,572
Net income	$	100,700		$	23,045		$	53,243		$	24,412
Net income before income taxes as a percentage of net revenue		23.2	%		17.4	%		32.0	%		18.4	%
ROE (annualized)		9.0	%		6.3	%		14.3	%		6.4	%
ROE (annualized-excluding AOCI)		8.3	%		5.9	%		13.8	%		6.0	%
Total shareholders’ equity	$	1,394,137		$	1,394,137		$	1,519,021		$	1,458,861
Total shareholders’ equity, net of AOCI (1)	$	1,603,305		$	1,603,305		$	1,631,955		$	1,636,371
Basic earnings per share	$	0.60		$	0.14		$	0.31		$	0.15
Diluted earnings per share	$	0.59		$	0.14		$	0.31		$	0.14
Ending shares outstanding (in thousands)		169,891			169,891			169,617			169,214
Book value per share	$	8.21		$	8.21		$	8.96		$	8.62
Book value per share, net of AOCI (1)	$	9.44		$	9.44		$	9.62		$	9.67
Gross assets under management (in millions)
Managed accounts	$	437.2		$	437.2		$	510.4		$	242.4
Hedge & offshore funds		239.0			239.0			463.1			601.1
Mutual funds		2,078.1			2,078.1			2,185.0			2,213.9
Private equity and venture capital funds		42.7			42.7			41.3			69.5
Total	$	2,797.0		$	2,797.0		$	3,199.8		$	3,126.9
Net assets under management (in millions)
Managed accounts	$	255.5		$	255.5		$	257.3		$	223.0
Hedge & offshore funds		227.8			227.8			401.1			490.3
Mutual funds		2,069.9			2,069.9			2,176.6			2,204.2
Private equity and venture capital funds		39.9			39.9			37.8			66.3
Total	$	2,593.1		$	2,593.1		$	2,872.8		$	2,983.8
Productive assets under management (in millions)
Managed accounts	$	255.5		$	255.5		$	257.3		$	223.0
Hedge & offshore funds		183.3			183.3			332.8			425.3
Mutual funds		2,069.9			2,069.9			2,176.6			2,204.2
Private equity and venture capital funds		51.4			51.4			51.2			79.9
Total	$	2,560.1		$	2,560.1		$	2,817.9		$	2,932.4
Employee count		2,455			2,455			2,226			2,123

(1) Accumulated Other Comprehensive Income (AOCI) includes changes in value of available-for-sale securities and cash flow hedges. We believe that such changes represent temporary market fluctuations, are not reflective of our market strategy, and therefore, exclusion of AOCI provides a reasonable basis for calculating returns.

	FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.
	Financial & Statistical Supplement - Operating Results
	(Dollars in thousands, except per share data)
	(Unaudited)

	As of and for the year ending December 31, 2004			Q-4 04			Q-3 04			Q-2 04			Q-1 04
Revenues
Investment banking:
Capital raising	$	398,183		$	125,488		$	130,019		$	52,883		$	89,793
Advisory		30,115			8,088			11,602			9,107			1,318
Institutional brokerage:
Principal transactions		20,444			4,758			4,241			5,426			6,019
Agency commissions		89,650			20,948			18,505			21,060			29,137
Mortgage trading interest		—			—			—			—			—
Mortgage trading net investment loss		—			—			—			—			—
Asset management:
Base management fees		28,307			8,344			7,044			6,384			6,535
Incentive allocations and fees		10,940			7,982			1,737			(1,444	)		2,665
Principal investment:
Interest		350,691			86,550			88,035			87,111			88,995
Net investment income		101,973			27,442			19,090			28,832			26,609
Dividends		14,644			6,169			5,820			1,683			972
Mortgage Banking:
Interest		—			—			—			—			—
Gain on sale of loans, net		—			—			—			—			—
Other		7,155			2,329			1,827			1,683			1,316
Total revenues		1,052,102			298,098			287,920			212,725			253,359
Interest expense		164,156			52,968			44,265			34,276			32,647
Provision for loan losses		—			—			—			—			—
Revenues, net of interest expense and provision for loan losses		887,946			245,130			243,655			178,449			220,712
Non-interest expenses
Compensation and benefits		323,524			95,113			95,824			57,698			74,889
Professional services		50,467			11,832			13,421			15,050			10,164
Business development		44,955			11,248			8,284			8,885			16,538
Clearing and brokerage fees		9,123			2,186			1,556			2,608			2,773
Occupancy and equipment		14,458			4,330			3,898			3,326			2,904
Communications		13,959			4,227			3,348			3,442			2,942
Other operating expenses		22,740			6,570			4,846			5,351			5,973
Total expenses		479,226			135,506			131,177			96,360			116,183
Net income before income taxes		408,720			109,624			112,478			82,089			104,529
Income tax provision		59,161			23,032			20,329			910			14,890
Net income	$	349,559		$	86,592		$	92,149		$	81,179		$	89,639
Net income before income taxes as a percentage of net revenue		46.0	%		44.7	%		46.2	%		46.0	%		47.4	%
ROE (annualized)		22.3	%		22.2	%		24.8	%		20.8	%		22.1	%
ROE (annualized-excluding AOCI)		45.0	%		11.1	%		12.0	%		10.7	%		11.8	%
Total shareholders’ equity	$	1,578,524		$	1,578,524		$	1,543,361		$	1,431,345		$	1,685,673
Total shareholders’ equity, net of AOCI (1)	$	1,616,686		$	1,616,686		$	1,588,310		$	1,549,918		$	1,540,739
Basic earnings per share	$	2.09		$	0.52		$	0.55		$	0.49		$	0.54
Diluted earnings per share	$	2.07		$	0.51		$	0.55		$	0.48		$	0.54
Ending shares outstanding (in thousands)		166,932			166,932			166,753			166,632			165,623
Book value per share	$	9.46		$	9.46		$	9.26		$	8.59		$	10.18
Book value per share, net of AOCI (1)	$	9.68		$	9.68		$	9.52		$	9.30		$	9.30
Gross assets under management (in millions)
Managed accounts	$	196.1		$	196.1		$	168.7		$	160.3		$	78.8
Hedge & offshore funds		631.6			631.6			519.3			430.0			435.4
Mutual funds		2,320.4			2,320.4			1,963.7			1,612.2			1,897.4
Private equity and venture capital funds		52.5			52.5			49.7			50.7			76.5
Total	$	3,200.6		$	3,200.6		$	2,701.4		$	2,253.2		$	2,488.1
Net assets under management (in millions)
Managed accounts	$	196.1		$	196.1		$	168.7		$	160.3		$	78.8
Hedge & offshore funds		589.6			589.6			482.8			409.0			350.5
Mutual funds		2,305.5			2,305.5			1,951.7			1,606.9			1,874.0
Private equity and venture capital funds		49.7			49.7			46.4			46.5			70.4
Total	$	3,140.9		$	3,140.9		$	2,649.6		$	2,222.7		$	2,373.7
Productive assets under management (in millions)
Managed accounts	$	196.1		$	196.1		$	168.7		$	160.3		$	78.8
Hedge & offshore funds		488.7			488.7			393.8			329.9			263.8
Mutual funds		2,305.5			2,305.5			1,951.7			1,606.9			1,874.0
Private equity and venture capital funds		70.9			70.9			70.9			111.6			131.2
Total	$	3,061.2		$	3,061.2		$	2,585.1		$	2,208.7		$	2,347.8
Employee count		698			698			665			626			549

(1) Accumulated Other Comprehensive Income (AOCI) includes changes in value of available-for-sale securities and cash flow hedges. We believe that such changes represent temporary market fluctuations, are not reflective of our market strategy, and therefore, exclusion of AOCI provides a reasonable basis for calculating returns.

	FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.
	CONSOLIDATED BALANCE SHEETS
	(Dollars in thousands, except per share amounts)
	(Unaudited)

	30-Sep-05			31-Dec-04
ASSETS
Cash and cash equivalents	$	181,534		$	231,527
Restricted cash		21,576			—
Receivables		287,188			74,880
Investments:
Mortgage-backed securities, at fair value		9,268,662			11,726,689
Loans held for investment, net		6,999,409			—
Loans held for sale, net		1,541,283			—
Long-term investments		361,131			441,499
Reverse repurchase agreements		488,113			183,375
Trading securities, at fair value		1,429,547			7,744
Due from clearing broker		162,759			95,247
Goodwill		160,525			108,013
Intangible assets, net		27,880			14,404
Furniture, equipment and leasehold improvements, net		40,602			18,733
Prepaid expenses and other assets		70,617			26,177
Total assets	$	21,040,826		$	12,928,288
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Trading account securities sold short, at fair value	$	156,428		$	17,176
Commercial paper		8,214,835			7,294,949
Repurchase agreements		6,853,306			3,467,569
Securitization financing for loans held for investment		3,809,901			—
Securities purchased		—			144,430
Dividends payable		58,616			65,870
Interest payable		19,943			5,894
Accrued compensation and benefits		56,374			131,218
Accounts payable, accrued expenses and other liabilities		93,358			94,288
Temporary subordinated loan payable		100,000			—
Long-term debt		283,928			128,370
Total liabilities		19,646,689			11,349,764
Shareholders’ equity:
Common stock, 172,530 and 168,897 shares		1,725			1,689
Additional paid-in capital		1,544,661			1,483,640
Employee stock loan receivable including accrued interest (591 and 711 shares)		(4,242	)		(4,890	)
Deferred compensation		(20,295	)		(16,863	)
Accumulated other comprehensive loss, net		(209,168	)		(38,162	)
Retained earnings		81,456			153,110
Total shareholders’ equity		1,394,137			1,578,524
Total liabilities and shareholders’ equity	$	21,040,826		$	12,928,288
Book Value per Share	$	8.21		$	9.46
Core Book Value per Share (1)	$	9.44		$	9.68
Shares Outstanding		169,891			166,932

(1) Core Book Value excludes Accumulated Other Comprehensive Income (AOCI). AOCI includes changes in value of available-for-sale securities and cash flow hedges. We believe that such changes represent temporary market fluctuations, are not reflective of our market strategy, and therefore, exclusion of AOCI provides a reasonable basis for calculating returns.