8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (date of earliest event reported): April 26, 2006

FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.

(Exact name of Registrant as specified in its charter)

Virginia	54-1873198	000-50230
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)	(Commission File Number)

1001 Nineteenth Street North

Arlington, VA 22209

(Address of principal executive offices) (Zip code)

(703) 312-9500

(Registrant’s telephone number including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On April 26, 2006, Friedman, Billings, Ramsey Group, Inc. issued a press release announcing its earnings for the quarter ended March 31, 2006. A copy of the press release is furnished herewith as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits.

EXHIBIT

99.1 Friedman, Billings, Ramsey Group, Inc. Press Release dated April 26, 2006.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

	FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.
April 27, 2006	By:	/s/ Kurt R. Harrington
		Kurt R. Harrington
		Senior Vice President, Chief Financial Officer and Treasurer

EX-99.1

Exhibit 99.1

Contacts:

Media: Lauren Burk at 703-469-1004 or lburk@fbr.com

Investors: Kurt Harrington at 703-312-9647 or kharrington@fbr.com

FBR Announces First Quarter 2006 Financial Results

Net After-Tax Income of $26.6 Million or $0.16 per Share

ARLINGTON, Va., April 26, 2006 – Friedman, Billings, Ramsey Group, Inc. (NYSE: FBR) today announced its results for the quarter ended March 31, 2006. Net income after tax for the quarter was $26.6 million, or $0.16 per share (diluted), compared to after-tax earnings of $24.4 million, or $0.14 per share (diluted) for the first quarter of 2005.

Net revenues for the quarter were $176.8 million, an increase of 8.5% from the $163.0 million in net revenues in the first quarter of 2005. Book value per share as of March 31, 2006 was $7.60, and book value per share net of Accumulated Other Comprehensive Income (AOCI)¹ was $7.63.

These results reflect continued solid performance by FBR’s capital markets group, a substantial improvement in the results of the Company’s non-conforming mortgage subsidiaries, and better returns on FBR’s principal investment portfolios.

Capital Markets

In the first quarter of 2006, FBR helped raise $8.3 billion for its clients in 21 transactions, 14 of which it lead managed. In addition, FBR advised on four merger and acquisition assignments. Investment banking revenues for the quarter totaled $69.2 million, down from $88.0 million in the first quarter of 2005.

Trends in the first quarter of 2006 were in many respects similar to those seen in 2005 – a broadening capital markets franchise with leading equity underwriting positions in a growing number of key industries. In particular, the insurance and energy groups performed well. Following 2005, when FBR was the #1 book-running manager for the year for initial public offerings and 144A common stock private placements combined, FBR maintained a market leading position with a #2 ranking in these offerings for the first quarter of 2006.²

Institutional brokerage revenues, net of related interest expense, rose 14% from $27.8 million in the first quarter of 2005 to $31.7 million in the quarter just ended. FBR continues to be successful at minimizing the impact of industry cost pressures by maintaining and strengthening relationships with mid-sized buy-side firms that value both quality research and trading expertise.

Principal Investment and Mortgage Finance

The steps FBR took to reposition its principal investment portfolios in the fourth quarter of 2005 have given the firm greater liquidity and a broader range of investment options going forward. FBR expects to see gradual improvement in returns on its investments in mortgage securities as it continues to redeploy the $450 million of capital invested in this portfolio.

Mortgage Portfolios

The repositioning of FBR’s principal investment portfolio was substantially completed by the end of February 2006. At the close of the first quarter of 2006, FBR had sold mortgage-backed securities valued at $7.0 billion, effectively completing the liquidation phase of the repositioning. For the quarter, the mortgage securities portfolio yield was 4.54% with a corresponding cost of funds of 4.45%. At the end of the quarter, the balance of the mortgage securities portfolio was approximately $900 million. As a result of the portfolio repositioning, the Company recorded net realized gains of $4.5 million from the sale of mortgage securities and loans.

The Company’s investments in non-conforming mortgage loans averaged $6.6 billion with an average coupon of 7.26%, a one-month CPR of 33.5, and an ending net premium of $137.4 million, including deferred net origination costs. The net yield for the quarter was 6.78% with a corresponding cost of funds of 5.15%. Pre-provision net interest margin totaled 98 basis points, net of 24 basis points of mortgage insurance costs.

In the first quarter of 2006, First NLC (FNLC) narrowed its loss margin substantially, generating a pre-tax loss from its operating activities of $4.8 million compared to a pre-tax loss of $23.5 million in the fourth quarter of 2005. Importantly, FNLC achieved a cost to originate of 174 basis points during the month of March. The cost to originate for the full quarter was 210 basis points. As a result of cost cutting and other initiatives undertaken by FNLC during the quarter, FBR now expects FNLC to return to profitability in the second quarter of 2006.

Merchant Banking

During the first quarter, the merchant banking and long-term investments portfolio generated total income of $17.4 million – comprising $3.7 million in dividends and $13.7 million in net realized gains. During the quarter, FBR made four new merchant banking investments totaling $37.5 million.

The total value of FBR’s merchant banking portfolio and other long-term investments at the end of the quarter was $306.0 million compared to $347.6 million as of December 31, 2005. Of this total, $263.9 million was held in the merchant banking and long-term investments portfolio and $42.1 million was held in alternative asset investments.

Asset Management

Base management fees for the first quarter were $5.1 million compared to base fees of $8.5 million in the first quarter of 2005. Incentive allocations and fees rose to $1.0 million from a negative $0.4

million in the comparable quarter of 2005. Total funds under management were $2.4 billion as of March 31, 2006, down from $3.1 billion on March 31, 2005. Mutual fund assets currently managed by FBR Investment Management totaled $1.8 billion at March 31, 2006, compared to $2.2 billion at the close of the first quarter of 2005. In the first quarter, mutual fund assets rose 1.5% over year-end 2005 levels.³

The firm will host an earnings conference call tomorrow morning, Thursday, April 27, 2006 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 following the call.

Friedman, Billings, Ramsey Group, Inc. provides investment banking^*, institutional brokerage^*, asset management, and private wealth 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 is headquartered in the Washington, D.C. metropolitan area with offices in Arlington, Va., Boston, Dallas, Denver, Houston, Irvine, London, New York, Phoenix and San Francisco. Friedman, Billings, Ramsey Group, Inc. is the parent company of First NLC Financial Services, Inc., a non-conforming residential mortgage originator headquartered in Deerfield Beach, Florida. For more information, visit http://www.fbr.com.

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

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

² Source: Dealogic. Relates to total deal value of all common stock of U.S. issuers offered in IPOs or transactions exempt from SEC registration pursuant to Rule 144A; priced between 1/1/05 and 12/31/05 and 1/1/06 and 3/31/06, respectively, with apportioned credit to all book-runners. Includes only rank-eligible transactions.

³ Excluding two mutual funds sold in the first quarter of 2006 that had assets of $61.2 million as of year-end 2005.

Statements concerning future performance, developments, events, market forecasts, revenues, 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 SEC.

Financial data follows.

# # #

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

	Quarter ended March 31,
	2006			%		2005			%
REVENUES:
Investment banking:
Capital raising	$	66,335		37.5	%	$	86,813		53.3	%
Advisory		2,869		1.6	%		1,138		0.7	%
Institutional brokerage:
Principal transactions		6,625		3.7	%		5,627		3.5	%
Agency commissions		23,408		13.2	%		22,157		13.6	%
Mortgage trading interest		17,650		10.0	%		—		0.0	%
Mortgage trading net investment loss		(1,237	)	-0.7	%		—		0.0	%
Asset management:
Base management fees		5,097		2.9	%		8,468		5.2	%
Incentive allocations and fees		1,008		0.6	%		(375	)	-0.2	%
Principal investment:
Interest		149,126		84.3	%		98,896		60.7	%
Net investment income (loss)		25,281		14.3	%		(3,858	)	-2.4	%
Dividends		3,699		2.1	%		3,440		2.1	%
Mortgage Banking:
Interest		25,059		14.2	%		9,492		5.8	%
Net investment income		10,738		6.1	%		3,481		2.1	%
Other		3,041		1.7	%		2,496		1.5	%
Total revenues		338,699		191.5	%		237,775		145.9	%
Interest expense		153,483		86.8	%		74,822		45.9	%
Provision for loan losses		8,392		4.7	%		—		0.0	%
Revenues, net of interest expense and provision for loan losses		176,824		100.0	%		162,953		100.0	%
NON-INTEREST EXPENSES:
Compensation and benefits		83,497		47.2	%		75,799		46.5	%
Professional services		14,265		8.1	%		13,650		8.4	%
Business development		14,085		8.0	%		15,438		9.5	%
Clearing and brokerage fees		2,316		1.3	%		2,032		1.2	%
Occupancy and equipment		11,242		6.3	%		5,724		3.5	%
Communications		5,607		3.2	%		4,032		2.5	%
Other operating expenses		20,977		11.9	%		16,294		10.0	%
Total non-interest expenses		151,989		86.0	%		132,969		81.6	%
Net income before income taxes		24,835		14.0	%		29,984		18.4	%
Income tax (benefit) provision		(1,719	)	-1.0	%		5,572		3.4	%
Net income	$	26,554		15.0	%	$	24,412		15.0	%
Basic earnings per share	$	0.16				$	0.15
Diluted earnings per share	$	0.16				$	0.14
Weighted average shares - basic		170,728					168,334
Weighted average shares - diluted		171,031					169,458

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

	Q-1 06			For the year ended 31-Dec-05			Q-4 05			Q-3 05			Q-2 05			Q-1 05
Revenues
Investment banking:
Capital raising	$	66,335		$	356,753		$	88,866		$	86,035		$	95,039		$	86,813
Advisory		2,869			17,759			7,415			3,026			6,180			1,138
Institutional brokerage:
Principal transactions		6,625			17,950			3,788			4,348			4,680			5,627
Agency commissions		23,408			82,778			21,006			20,445			18,677			22,157
Mortgage trading interest		17,650			30,859			19,555			11,304			—			—
Mortgage trading net investment loss		(1,237	)		(3,820	)		(1,419	)		(2,401	)		—			—
Asset management:
Base management fees		5,097			30,348			6,153			7,914			7,813			8,468
Incentive allocations and fees		1,008			1,929			742			832			730			(375	)
Principal investment:
Interest		149,126			549,832			189,811			144,401			116,724			98,896
Net investment income (loss)		25,281			(239,754	)		(258,500	)		4,866			17,738			(3,858	)
Dividends		3,699			36,622			16,039			8,772			8,371			3,440
Mortgage Banking:
Interest		25,059			87,958			30,965			29,383			18,118			9,492
Net investment income (loss)		10,738			13,741			(21,899	)		17,600			14,559			3,481
Other		3,041			12,351			3,024			3,376			3,455			2,496
Total revenues		338,699			995,306			105,546			339,901			312,084			237,775
Interest expense		153,483			546,313			211,393			156,373			103,725			74,822
Provision for loan losses		8,392			14,291			8,263			4,890			1,138			—
Revenues, net of interest expense and provision for loan losses		176,824			434,702			(114,110	)		178,638			207,221			162,953
Non-interest expenses
Compensation and benefits		83,497			331,492			87,330			88,348			80,015			75,799
Professional services		14,265			66,550			16,556			16,158			20,186			13,650
Business development		14,085			46,648			10,433			8,815			11,962			15,438
Clearing and brokerage fees		2,316			8,882			2,447			2,363			2,040			2,032
Occupancy and equipment		11,242			34,044			10,151			9,397			8,772			5,724
Communications		5,607			20,634			5,741			5,561			5,300			4,032
Other operating expenses		20,977			70,679			24,984			16,861			12,540			16,294
Total non-interest expenses		151,989			578,929			157,642			147,503			140,815			132,969
Net income (loss) before income taxes		24,835			(144,227	)		(271,752	)		31,135			66,406			29,984
Income tax (benefit) provision		(1,719	)		26,683			(142	)		8,090			13,163			5,572
Net income (loss)	$	26,554		$	(170,910	)	$	(271,610	)	$	23,045		$	53,243		$	24,412
Net income (loss) before income taxes as a percentage of net revenue		14.0	%		-33.2	%		238.1	%		17.4	%		32.0	%		18.4	%
ROE (annualized)		8.2	%		-11.9	%		-80.5	%		6.3	%		14.3	%		6.4	%
ROE (annualized-excluding AOCI) (1)		8.1	%		-11.7	%		-74.7	%		5.9	%		13.8	%		6.0	%
Total shareholders’ equity	$	1,301,949		$	1,304,170		$	1,304,170		$	1,394,137		$	1,519,021		$	1,458,861
Total shareholders’ equity, net of AOCI (1)	$	1,306,450		$	1,305,147		$	1,305,147		$	1,603,305		$	1,631,955		$	1,629,293
Basic earnings (loss) per share	$	0.16		$	(1.01	)	$	(1.60	)	$	0.14		$	0.31		$	0.15
Diluted earnings (loss) per share	$	0.16		$	(1.01	)	$	(1.60	)	$	0.14		$	0.31		$	0.14
Ending shares outstanding (in thousands)		171,236			170,264			170,264			169,891			169,617			169,214
Book value per share	$	7.60		$	7.66		$	7.66		$	8.21		$	8.96		$	8.62
Book value per share, net of AOCI (1)	$	7.63		$	7.67		$	7.67		$	9.44		$	9.62		$	9.63

	Q-1 06		For the year ended 31-Dec-05		Q-4 05		Q-3 05		Q-2 05		Q-1 05
Gross assets under management (in millions)
Managed accounts	$	383.9	$	463.4	$	463.4	$	437.2	$	510.4	$	242.4
Hedge & offshore funds		136.6		154.3		154.3		239.0		463.1		601.1
Mutual funds		1,849.5		1,883.3		1,883.3		2,078.1		2,185.0		2,213.9
Private equity and venture capital funds		50.5		56.2		56.2		42.7		41.3		69.5
Total	$	2,420.5	$	2,557.2	$	2,557.2	$	2,797.0	$	3,199.8	$	3,126.9
Net assets under management (in millions)
Managed accounts	$	380.9	$	329.5	$	329.5	$	255.5	$	257.3	$	223.0
Hedge & offshore funds		125.4		150.5		150.5		227.8		401.1		490.3
Mutual funds		1,843.4		1,872.8		1,872.8		2,069.9		2,176.6		2,204.2
Private equity and venture capital funds		49.1		46.8		46.8		39.9		37.8		66.3
Total	$	2,398.8	$	2,399.6	$	2,399.6	$	2,593.1	$	2,872.8	$	2,983.8
Employee count		2,531		2,449		2,449		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.

3

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

	31-Mar-06			31-Dec-05
ASSETS
Cash and cash equivalents	$	188,714		$	238,615
Restricted cash		5,020			6,101
Receivables		278,697			259,519
Investments:
Mortgage-backed securities, at fair value		892,159			8,002,561
Loans held for investment, net		6,254,819			6,841,266
Loans held for sale, net		914,442			963,807
Long-term investments		305,992			347,644
Reverse repurchase agreements		179,983			283,824
Trading securities, at fair value		1,252,485			1,032,638
Due from clearing broker		81,350			71,065
Derivative assets, at fair value		92,723			70,636
Goodwill		162,765			162,765
Intangible assets, net		24,771			26,485
Furniture, equipment and leasehold improvements, net		44,328			46,382
Prepaid expenses and other assets		81,345			82,482
Total assets	$	10,759,593		$	18,435,790
LIABILITIES AND SHAREHOLDERS ’ EQUITY
Liabilities:
Trading account securities sold short but not yet purchased, at fair value	$	153,058		$	150,547
Commercial paper		423,020			6,996,950
Repurchase agreements		2,200,739			2,698,619
Securities purchased		23,786			—
Derivative liabilities, at fair value		36,855			31,952
Dividends payable		34,747			34,588
Interest payable		11,310			12,039
Accrued compensation and benefits		43,301			82,465
Accounts payable, accrued expenses and other liabilities		80,593			82,576
Temporary subordinated loan payable		—			75,000
Securitization financing for loans held for investment, net		6,126,317			6,642,198
Long-term debt		323,918			324,686
Total liabilities		9,457,644			17,131,620
Shareholders’ equity:
Common stock, 173,848 and 172,854 shares		1,738			1,729
Additional paid-in capital		1,557,713			1,547,128
Employee stock loan receivable including accrued interest (551 shares)		(4,081	)		(4,018	)
Deferred compensation		(17,467	)		(15,602	)
Accumulated other comprehensive loss		(4,501	)		(977	)
Accumulated deficit		(231,453	)		(224,090	)
Total shareholders’ equity		1,301,949			1,304,170
Total liabilities and shareholders’ equity	$	10,759,593		$	18,435,790