FBR Completes Acquisition of First NLC Financial Services

ARLINGTON, VA – Friedman, Billings, Ramsey Group, Inc. today announced that it has completed the acquisition of 100% of the equity interests of First NLC Financial Services, LLC, an affiliate of Sun Capital Partners and a leading non-conforming mortgage originator. FBR purchased First NLC for $101 million in a combination of cash and stock.

FBR had previously announced that it would pay $88 million in cash and stock for 100% of the equity interests of First NLC. The adjustment in purchase price is the result of an $11 million increase in the tangible net worth of the seller at closing and more than $100 million of additional loans on the seller’s balance sheet at closing. The net purchase price in excess of tangible equity acquired was $74 million. At closing, FBR acquired a mortgage portfolio of approximately $475 million.

Headquartered in Deerfield Beach, Florida, First NLC is a rapidly growing non-conforming mortgage originator currently operating in 38 states. First NLC originates mortgages through both wholesale and retail channels, with a current origination run rate exceeding $4 billion annually. First NLC will become a part of FBR’s principal investment group but will be operated as a wholly owned subsidiary and will continue to be managed by its current executive team.

The acquisition of First NLC is part of a broader strategy by FBR to expand the types of mortgage assets FBR owns in its REIT portfolio, thereby increasing its investment flexibility and ability to achieve high risk- adjusted returns in differing interest rate and market environments. FBR’s strategy will be to portfolio a significant portion of First NLC’s originated loans and finance those loans through the issuance of asset-backed securities.