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FBR's Q1 results show 'unhinged' financial strategy, says Voce Capital

Voce CapitalManagement LLC has filed its preliminary proxy statement and saidthat it plans to proceed with its nomination of three independent directors forelection to FBR &Co. board at the annual meeting of shareholders.

The activist shareholder has J. Daniel Plants, JarlBerntzen and Michael McConnell.

Voce Capital said in a statement that FBR's first-quarterresults show how"unhinged from financial reality its strategy has become."

FBR reported a year-over-year decline in bottom line andblamed "significant" equity market headwinds, which sent volumes downto levels not seen since the first quarter of 2009.

Voce Capital noted that FBR's compensation expense for thequarter exceeded total net revenue for the quarter. The shareholder also notedthat FBR continues to pay its former chief investment officer even though hehas been removed from the position and that the company continued to awarddiscretionary year-end cash bonuses despite a drop in share price and revenue.

Voce Capital along with its nominees owns 5.3% of FBR.