FORM 10-Q/A
                                 AMENDMENT NO. 1

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


(Mark One)

     |X|  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) 
          OF THE SECURITIES EXCHANGE ACT OF 1934

     For the quarterly period ended June 30, 1998

                                       OR

     |_|  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) 
          OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ___________

Commission file number: 001-13731


                     Friedman, Billings, Ramsey Group, Inc.
             (Exact name of Registrant as specified in its charter)

Virginia                                                     54-1837743
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                               Identification No.)

1001 Nineteenth Street North
Arlington, VA                                                 22209
(Address of principal executive offices)                      (Zip code)

                                 (703) 312-9500
               (Registrant's telephone number including area code)

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes X No ____

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date:

Title                                         Outstanding
Class A Common Stock                          13,416,421 as of July 31, 1998
Class B Common Stock                          36,577,579 as of July 31, 1998



<PAGE>

This  Amendment No. 1 to Quarterly  Report on Form 10-Q/A (the  "Amendment")  of
Friedman,  Billings,  Ramsey Group,  Inc. (the "Company") is being filed for the
sole purpose of correcting Part I, Item 1 - "Financial Statements of Operations-
Six Months  Ended June 30,  1998" in which  amounts in the 1997 and 1998 columns
(specifically,   "gains  and  losses,  net  -trading"),   had  been  erroneously
transposed during Edgar formatting, as well as correcting rounding errors.


                     FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.

                                    FORM 10-Q/A

                      FOR THE QUARTER ENDED JUNE 30, 1998

                                      INDEX

                                                                   Page Number
Part I.  FINANCIAL INFORMATION

Item 1.  Financial Statements - (unaudited)

         Consolidated Balance Sheets-
           December 31, 1997 and June 30, 1998                         3

         Consolidated Statements of Operations-
           Three Months Ended June 30, 1997 and 1998                   5
           Six Months Ended June 30, 1997 and 1998                     6

         Consolidated Statement of Cash Flows-
           Six Months Ended June 30, 1997 and 1998                     7

         Notes to Consolidated Financial Statements                    8


SIGNATURES                                                             14

EXHIBIT INDEX                                                          14



<PAGE>



                     FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.

                           CONSOLIDATED BALANCE SHEETS
                             (Amounts in thousands)

<TABLE>
<CAPTION>
                                                                                    (Audited)        (Unaudited)
                                                                                   December 31,        June 30,
                                                                                      1997               1998
                                                                                   -----------       ----------
                                                                                   <C>               <C>
<S>
Assets
    Cash and cash equivalents................................................      $   205,709       $   71,246
    Short-term investments, at market value..................................            1,982               --
    Receivables:
     Investment banking......................................................            7,232            9,565
     Asset management fees...................................................            4,426            5,898
     Other...................................................................            2,465           10,654
    Due from clearing organization...........................................           15,650           51,621

    Marketable trading securities, at market value:
     Corporate equities......................................................           60,299          118,092
     Corporate bonds.........................................................           18,485           19,899

    Deferred tax asset.......................................................            2,402              390
    Long-term investments, at fair value.....................................           36,352           57,008
    Furniture, equipment and leasehold improvements, net of accumulated
       depreciation and amortization of $2,198, and $2,681, respectively.....            3,471            6,193
    Prepaid expenses and other assets........................................              854            2,878
                                                                                   -----------       ----------
             Total assets....................................................      $   359,327       $  353,444
                                                                                   ===========       ==========














</TABLE>



  The accompanying notes are an integral part of these consolidated statements.

<PAGE>
<TABLE>


                     FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.

                           CONSOLIDATED BALANCE SHEETS
                             (Amounts in thousands)


<CAPTION>
                                                                                         (Audited)      (Unaudited)
                                                                                        December 31,      June 30,
                                                                                           1997             1998
                                                                                      --------------    -----------
                                                                                      <C>               <C>
<S>
Liabilities and Shareholders' Equity

Liabilities:
     Trading account securities sold but not yet purchased, at market value:
        Corporate equities........................................................    $      10,726     $    13,656
        Corporate and U.S. government bonds.......................................            5,947           5,508

     Due to issuer- underwriting.................................................                --          23,183
     Accounts payable and accrued expenses.......................................            30,423          23,621
     Accrued compensation and benefits...........................................            19,023          30,222
     Dividends payable...........................................................            24,000              --
     Income taxes payable........................................................                --           4,509
     Short-term subordinated revolving loan......................................            40,000              --
     Long-term secured loans.....................................................             2,416           2,169
     Other   ....................................................................
                                                                                                146             917
                                                                                      -------------     ----------- 
          Total liabilities......................................................           132,681         103,785
                                                                                      -------------     -----------

Commitments and contingencies (Note 8)...........................................                --              --

Shareholders' equity:
        Preferred Stock, $0.01 par value, 15,000,000 shares authorized, none
        issued and outstanding...................................................                --              --
     Class A Common Stock, $0.01 par value, 150,000,000 shares authorized,.......
    13,451,421 issued and outstanding............................................               135             135
     Class B Common Stock $0.01 par value, 100,000,000 shares authorized,........
    36,577,579 shares issued and outstanding.....................................               366             366
     Additional paid-in capital..................................................           208,843         208,843
     Retained earnings...........................................................            17,302          40,315
                                                                                      -------------     ----------- 
          Total shareholders' equity.............................................           226,646         249,659
                                                                                      -------------     -----------
          Total liabilities and shareholders' equity.............................     $     359,327     $   353,444
                                                                                      =============     ===========


</TABLE>









  The accompanying notes are an integral part of these consolidated statements.

<PAGE>

<TABLE>

                                   FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.

                                    CONSOLIDATED STATEMENTS OF OPERATIONS
                               (Amounts in thousands, except per share data)
                                                (Unaudited)
<CAPTION>

                                                                          For the Three Months
                                                                             Ending June 30,

                                                                          1997              1998
                                                                        ---------         --------
                                                                        <C>               <C>
<S>
Revenues:
   Investment banking-
     Underwriting................................................       $  29,424         $ 16,314
     Corporate finance...........................................             769           28,935
   Institutional brokerage-
     Principal sales credits.....................................           5,954            7,639
     Agency commissions..........................................           1,740            4,335
   Gains and losses, net-
     Trading                                                               (3,040)          (7,490)
     Investment..................................................             805             (274)
   Asset management..............................................           1,072            2,283
   Interest, dividends, and other................................             917            5,592
                                                                        ---------         --------
          Total revenues.........................................          37,641           57,334
                                                                        ---------         --------
Expenses:
     Compensation and benefits...................................          24,848           28,898
     Business development and sales support......................           2,823            5,260
     Professional services.......................................           1,546            2,984
     Clearing and brokerage fees.................................             897            1,649
     Occupancy and equipment.....................................             679              899
     Communications..............................................             559              877
     Interest expense............................................           1,006            1,468
     Other operating expenses....................................           1,263            2,705
                                                                        ---------         --------
          Total expenses.........................................          33,621           44,740
                                                                        ---------         --------
     Net income before taxes ....................................           4,020           12,594

     Income tax provision........................................              --            5,161
                                                                        ---------         --------
     Net income..................................................       $   4,020         $  7,433
                                                                        =========         ========

     Basic and diluted net income per share......................       $    0.10         $   0.15
                                                                        =========         ========
     Weighted average shares outstanding.........................          40,029           50,029
                                                                        =========         ========

Pro forma statements of operations data (Note 3):
     Net income before tax.......................................       $   4,020
     Pro forma income tax provision..............................           1,608
                                                                        ---------
     Pro forma net income........................................       $   2,412
                                                                        =========
     Pro forma basic and diluted net income per share............       $    0.06
                                                                        =========
     Weighted average shares outstanding.........................          40,029
                                                                        =========

</TABLE>


 The accompanying notes are an integral part of these consolidated statements.

<PAGE>
<TABLE>

                                   FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.

                                    CONSOLIDATED STATEMENTS OF OPERATIONS
                               (Amounts in thousands, except per share data)
                                                (Unaudited)
                                                                             For the Six Months
                                                                              Ending June 30,

                                                                            1997              1998
                                                                         --------          --------
                                                                         <C>               <C>
<S>
Revenues:
   Investment banking-
     Underwriting................................................        $ 42,603          $ 64,024
     Corporate finance...........................................           9,552            32,596
   Institutional brokerage-
     Principal sales credits.....................................          12,867            16,673
     Agency commissions..........................................           4,543             8,043
   Gains and losses, net-
     Trading ....................................................          (7,393)          (13,411)
     Investment..................................................             935             2,730
   Asset management..............................................           1,885             5,452
   Interest, dividends and other.................................           1,693             9,211
                                                                         --------          -------- 
          Total revenues.........................................          66,685           125,318
                                                                         --------          --------
Expenses:
     Compensation and benefits...................................          44,543            57,241
     Business development and sales support......................           4,923             9,534
     Professional services.......................................           2,831             5,516
     Clearing and brokerage fees.................................           1,914             2,992
     Occupancy and equipment.....................................           1,187             1,663
     Communications..............................................             995             1,703
     Interest expense............................................           1,730             3,127
     Other operating expenses....................................           2,280             5,212
                                                                         --------          --------  
          Total expenses.........................................          60,403            86,988
                                                                         --------          --------
     Net income before taxes ....................................           6,282            38,330
                                                                                                            
     Income tax provision........................................              --            15,318
                                                                         --------          --------
     Net income..................................................        $  6,282          $ 23,012
                                                                         ========          ========
     Basic and diluted net income per share......................        $   0.16          $   0.46
                                                                         ========          ========
     Weighted average shares outstanding.........................          40,029            50,029
                                                                         ========          ========

Pro forma statements of operations data (Note 3):
     Net income before tax.......................................        $  6,282
     Pro forma income tax provision..............................           2,513
                                                                         --------
     Pro forma net income........................................        $  3,769
                                                                         ========
     Pro forma basic and diluted net income per share............        $   0.09
                                                                         ========
     Weighted average shares outstanding.........................          40,029
                                                                         ========

</TABLE>



  The accompanying notes are an integral part of these consolidated statements.


<PAGE>
<TABLE>


                                   FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.

                                    CONSOLIDATED STATEMENT OF CASH FLOWS
                                           (Amounts in thousands)
                                                (Unaudited)
<CAPTION>

                                                                                For the Six Months
                                                                                 Ending June 30,

                                                                                 1997         1998
                                                                               -------     --------
                                                                               <C>         <C>
  <S>
  Cash flows from operating activities:
    Net income .............................................................   $ 6,282     $ 23,012
    Adjustments to reconcile net income to net cash used in operating
  activities--
      Income and special allocations on investments in limited partnerships.    (1,688)      (4,751)
      Depreciation and amortization.........................................       394          484
      Changes in operating assets:
        Receivables--
          Due to/from clearing organization.................................   (10,944)     (35,971)
          Investment banking................................................     5,709       (2,333)
          Asset management fees.............................................       (55)      (1,472)
          Other.............................................................       167       (8,189)
        Marketable trading account securities...............................    (5,415)     (59,207)
        Prepaid expenses and other assets...................................       436       (2,024)
        Deferred tax asset..................................................        --        2,012
      Changes in operating liabilities:
        Due to issuer- underwriting.........................................        --       23,183
        Trading account securities sold but not yet purchased...............   (33,604)       2,491
        Borrowings (repayments) on short-term subordinated loans............    20,000      (40,000)
        Repayments on short-term revolving loan and line of credit..........    (1,000)          --
        Accounts payable and accrued expenses...............................       (85)      (6,802)
        Income taxes payable................................................        --        4,509
        Accrued compensation and benefits...................................    10,969       11,199
        Other...............................................................       (12)         771
                                                                               -------      -------
          Net cash used in operating activities.............................    (8,846)     (93,088)
                                                                               -------      -------
  Cash flows from investment activities:
    Purchases of fixed assets...............................................      (892)      (3,205)
    Long-term investments...................................................      (225)     (15,905)
    Sale (purchase) of short-term investments............................          (12)       1,982
                                                                               -------      -------
          Net cash used in investing activities.............................    (1,129)     (17,128)
                                                                               -------      -------
  Cash flows from financing activities:
    Repayments of long-term secured loans...................................      (162)        (247)
    Distributions...........................................................   (10,146)          --
    Capital contributions...................................................       272           --
    Dividend payments.......................................................        --      (24,000)
                                                                               -------      -------
          Net cash used in financing activities.............................   (10,036)     (24,247)
                                                                               -------      -------
  Net decrease in cash and cash equivalents.................................   (20,011)    (134,463)

  Cash and cash equivalents, beginning of period............................    20,681      205,709
                                                                               -------      -------
  Cash and cash equivalents, end of period.................................    $   670      $71,246
                                                                               =======      =======
  Supplemental Cash Flow Information:
     Income taxes paid......................................................   $    --      $ 8,795
                                                                               =======      =======

</TABLE>



   The accompanying notes are an integral part of these consolidated statements.


<PAGE>



                     FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.    Organization and Nature of Operations:

   Organization

     Friedman,  Billings,  Ramsey  Group,  Inc.,  a  Virginia  corporation  (the
"Company"),  is the sole parent  holding  company for three  subsidiary  holding
companies,  Friedman,  Billings,  Ramsey Capital Markets,  Inc.  ("FBRCM"),  FBR
Capital Management,  Inc. ("FBRAM",  formerly Friedman,  Billings,  Ramsey Asset
Management,  Inc.) and FBR Holdings,  Inc. The principal  subsidiary of FBRCM is
Friedman, Billings, Ramsey & Co., Inc. ("FBRC"), a registered broker-dealer. The
principal  subsidiary  of  FBRAM  is  Friedman,   Billings,   Ramsey  Investment
Management,  Inc. ("FBRIM"), a registered investment advisor. FBR Holdings, Inc.
is an investment holding company formed to make and hold long-term  investments.
All of the subsidiaries of FBRCM and FBRAM are hereafter  collectively  referred
to as the "Operating Entities".

     FBRC is a member of the National  Association of Securities  Dealers,  Inc.
FBRC  acts  as  an  introducing  broker  executing  transactions  primarily  for
institutional  customers and forwards all such  transactions to clearing brokers
on a fully disclosed  basis.  FBRC does not hold funds or securities for, or owe
funds or securities to, customers.

     FBRC receives  underwriting  revenues from underwriting public offerings of
debt and equity securities.  These revenues are comprised of selling concessions
and management and underwriting  fees. FBRC also receives corporate finance fees
from private  placement  offerings and from  providing  merger and  acquisition,
financial  restructuring,  and other advisory  services.  FBRC  concentrates its
underwriting  and corporate  finance  activities  primarily on bank,  thrift and
specialty finance institutions,  technology companies and real estate investment
trusts ("REITS").

       FBRIM acts as general partner of investment limited partnerships and also
manages  investment  accounts  and a REIT,  and is the  principal  owner  in two
investment holding companies organized as limited liability companies.

Reincorporation Merger

      In December  1997,  Friedman,  Billings,  Ramsey  Group,  Inc., a Delaware
corporation (the "Old Holding  Company") and its operating  entities  terminated
their  status as  subchapter  S  corporations  and  converted  to  subchapter  C
corporations  as defined  under the Internal  Revenue  Code (the  "Conversion").
Prior to the Conversion,  the Old Holding Company declared a distribution to its
shareholders of $54 million representing previously  undistributed  subchapter S
corporation  earnings.  As of December 31, 1997, $30 million of the distribution
had  been  paid.  The Old  Holding  Company  was then  merged  with and into the
Company,  with the  Company  as the  surviving  corporation.  As a result of the
merger,  shareholders of the Company received 330 shares of Class B Common Stock
of the Company for each share in the Old Holding Company.

     The  effects of the  reincorporation  merger  have been  given  retroactive
application in the consolidated financial statements for all periods presented.


<PAGE>


                     FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Initial Public Offering

     Subsequent to the reincorporation merger, the Company issued 10,000,000 new
Class A common shares and certain  selling  shareholders  sold 1,000,000 Class A
common shares in an initial public offering (the  "Offering").  The net proceeds
to the Company from the Offering approximated $185,000,000.  Simultaneously with
the Offering,  certain  selling  shareholders  sold 2,451,421  shares of Class B
common  stock to PNC Bank Corp.  These  shares were  automatically  converted to
Class A common shares upon the sale.

Nature of Operations

     The  Company  is  primarily  engaged  in a  single  line of  business  as a
securities   firm,   which  comprises   several  types  of  services,   such  as
underwriting,  principal  and  agency  securities  trading  transactions,  asset
management and long-term equity investing,  primarily in the United States.  The
operations  related to the Company's  foreign entities are not material to these
consolidated financial statements.

     The securities industry generally, and specifically in volatile or illiquid
markets,  is subject to numerous risks,  including the risk of losses associated
with the  underwriting,  ownership,  and trading of securities  and the risks of
reduced  revenues  in periods  of reduced  demand  for  security  offerings  and
activity in secondary  trading  markets.  Changing or negative  economic trends,
such as  inflation  or  interest  rate  volatility,  political  trends,  such as
regulatory and  legislative  changes,  and overall or specific market trends can
influence the liquidity and value of the Company's  investments,  and impact the
level of security  offerings  underwritten  by the  Company,  all of which could
adversely affect the Company's revenues and profitability.

     Many  aspects  of the  Company's  business  involve  substantial  risks  of
liability.  An underwriter is exposed to substantial liability under Federal and
state  securities  laws,  other  Federal  and state  laws and  court  decisions,
including  decisions with respect to underwriters'  liability and limitations on
indemnification of underwriters by issuers.  Underwriters may be held liable for
material  misstatements  or omissions of fact in a prospectus used in connection
with the  securities  being  offered or for  statements  made by its  securities
analysts or other  personnel.  While the Company has never been  subject to such
litigation, in recent years there has been an increasing incidence of litigation
involving the securities industry, including class actions that seek substantial
damages.  The  Company  is also  subject  to the risk of  litigation,  including
litigation that may be without merit. As the Company intends  actively to defend
such  litigation,  significant  legal  expenses  could be  incurred.  An adverse
resolution of any future lawsuits  against the Company could  materially  affect
the Company's operating results and financial condition.

Concentrations of Risk

     The  Company's   historical  revenues  have  been  derived  primarily  from
investment  banking  transactions  in the  financial  services  and real  estate
industries and the industry  consolidation  sector. As a result of the Company's
dependence on specific industries and the consolidation  sector, any downturn in
the market for  securities in these areas could  adversely  impact the Company's
results of operations and financial condition.

     A substantial  portion of the  Company's  revenues in a year may be derived
from a small number of  underwriting  transactions  or may be  concentrated in a
particular  industry.  Revenues  derived from two unrelated  investment  banking
transactions  accounted for  approximately 38 percent of the Company's  revenues
for the six  months  ended  June 30,  1997.  Two  unrelated  investment  banking
transactions  accounted  for 32 percent  of the  Company's  revenues  in the six
months ended June 30, 1998.

     Trading positions in two marketable securities,  both corporate equities of
issuers classified as REITs,  accounted for $57.6 million or 48.7 percent of the
Company's equity trading securities positions as of June 30, 1998.


<PAGE>




                     FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


2. Summary of Significant Accounting Policies:

Basis of Presentation

     The Company's  financial  statements  have been prepared in accordance with
the rules and regulations of the Securities and Exchange Commission ("SEC") with
respect to Form 10-Q and reflect all normal recurring  adjustments which are, in
the opinion of management,  necessary for a fair presentation of the results for
the interim periods presented.  Pursuant to such rules and regulations,  certain
footnote  disclosures which are contained in the Company's Annual Report on 10-K
for the year ended  December 31, 1997 ("1997 Annual  Report") have been omitted.
It is  recommended  that  these  consolidated  financial  statements  be read in
conjunction with the audited  consolidated  financial statements included in the
1997 Annual Report.  The Consolidated  Balance Sheet as of December 31, 1997 was
derived from the audited  financial  statements.  All  significant  intercompany
accounts and transactions have been eliminated in consolidation.

     Certain  prior year amounts have been  reclassified  to conform to the 1998
presentation.

 Net Income Per Share

     In March 1997,  the Financial  Accounting  Standards  Board issued SFAS No.
128,  "Earnings per Share." SFAS No. 128 is effective  for financial  statements
issued after December 15, 1997. SFAS No. 128 requires dual presentation of basic
and diluted income per share. Basic income per share includes no dilution and is
computed by dividing net income or loss available to common  stockholders by the
weighted-average  number of common shares  outstanding  for the period.  Diluted
income per share includes the impact of potentially dilutive options,  warrants,
or convertible  debt and convertible  preferred  equity  securities.  Options to
purchase  4,269,900  shares of common stock at $20 per share were outstanding as
of June 30, 1998,  but were not included in  calculating  diluted net income per
share as their  effect  would have been  anti-dilutive.  Therefore,  there is no
difference  between  the  amounts of basic and  diluted  net income per share in
these statements.

     In February 1998, the SEC issued Staff Accounting  Bulletin ("SAB") No. 98,
concerning  the  computation  of  earnings  per  share.  SAB 98 amends  previous
guidance  concerning  the impact of equity  interests  issued in proximity to an
initial  public  offering  on  the   computation  of  weighted   average  shares
outstanding.  SAB 98 also amends the requirements to present historical earnings
per share  information when a company converts from a non-taxable,  to a taxable
entity.  SAB 98 has been  applied  in the  accompanying  consolidated  financial
statements.

Use of Estimates

     The  preparation  of financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.




<PAGE>



                     FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


Compensation

      A  significant  component  of  compensation  expense  relates to incentive
bonuses. Incentive bonuses are accrued based on the contribution of key business
units using certain  pre-defined  formulas.  Since the bonus  determinations are
also  based on  aftermarket  security  performance  and other  factors,  amounts
originally accrued may not ultimately be paid. All of the Company's compensation
plans are reviewed and evaluated on a quarterly basis.  Pursuant to this policy,
the Company reduced $9.5 million of previously  accrued bonuses in the six month
period ending June 30, 1998.

3.   Income Taxes:

     Through  December 20, 1997,  the Company and its U.S.  Operating  Entities,
with the exception of its subsidiaries which are limited liability  corporations
("LLC"s),  had  elected  to be taxed as  subchapter  S  corporations  under  the
Internal Revenue Code. Subchapter S corporations and LLCs are not taxed on their
income;  rather their income or loss pass directly through to their shareholders
(or members in the case of LLCs). As a result,  there is no provision for income
taxes in these financial statements for the periods prior to December 20, 1997.

     The accompanying  consolidated  statements of operations  include pro forma
adjustments  for income tax  expense,  which  would have been  recorded  had the
Company  been  subject to federal  and state  corporate  income  taxes,  for all
periods presented.

4.   Long-Term Investments:

     Long-term investments primarily include non-readily  marketable investments
in limited  investment  partnerships  and other  equity  investments,  including
privately held companies.  Long-term  investments also include illiquid warrants
for stock of corporations to which the Company has provided  investment  banking
services, carried at nominal values. Long-term investments are reported at their
estimated fair values.

     The  principal  private  company  investment  consists  of  a  $25  million
investment in FBR Asset Investment Corporation  ("FBR-Asset"),  a privately held
real estate investment trust formed in 1997. FBR-Asset's  investments as of June
30, 1998 consist of corporate  equities-  21% (79% of these are publicly  traded
REITs),  mortgage-backed  securities-59%,   corporate  bonds-5%,  and  cash  and
equivalents-15%.

 5.   Asset Management Revenue:

     Certain of the  Company's  subsidiaries,  as investment  advisers,  receive
management  fees for the  management  of the  business  and  affairs  of limited
partnerships  or  investment  companies,  based upon the amount of assets  under
management,  as well as incentive performance fees or special allocations of net
income based upon the operating results.

     Incentive  performance  fees and special  allocations  are calculated on at
least an annual period,  which generally coincides with the calendar year. As of
December  31,  1997,  and June 30, 1997 and June 30,  1998,  unrecorded  special
allocations were $1.5 million, $3.4 million, and $4.2 million,  respectively. As
the  ultimate  amount  of  such  fees  and  allocations  may  vary  with  future
performance,  these fees and  allocations are not recorded as revenue until such
time as they become due and payable.


<PAGE>



                     FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


6.   Borrowings:

Subordinated Revolving Loans

     As of June 30, 1998, the Company had two unsecured  revolving  subordinated
loan  agreements  with its  clearing  broker and an  affiliate  of its  clearing
broker.  Available  credit lines under these agreements were $15 million and $10
million.  As of June 30,  1998  there were no amounts  outstanding  under  these
lines.  Borrowing capacity under the credit lines expire as follows: $15 million
in July 1998,  and $10  million in October  1998.  The Company did not renew the
line that expired in July, 1998.

7.   Net Capital Computation:

     FBRC is subject to the Net Capital Rule,  which requires the maintenance of
minimum net capital and requires that the ratio of aggregate indebtedness to net
capital,  both as defined,  shall not exceed 15 to 1. At June 30, 1998, FBRC had
net capital of $65.4 million,  which was $61.4 million in excess of its required
net capital of $4.0 million.  FBRC's aggregate indebtedness to net capital ratio
was .92 to 1 at June 30, 1998.

8.   Commitments and Contingencies:

Leases

     The Company leases  premises under  long-term  lease  agreements  requiring
minimum annual rental payments with annual  adjustments  based upon increases in
the consumer price index,  plus the pass-through of certain  operating and other
costs above a base amount.

     Future minimum aggregate annual rentals payable under these  non-cancelable
leases and rentals for certain  equipment  leases for the years ending  December
31, 1999 through 2003 and the aggregate amount thereafter, are as follows:

            Year Ending December 31,                           (in Thousands)
            1999................................................    2,546
            2000................................................    2,609
            2001................................................    2,789
            2002................................................    2,766
            2003................................................    2,696
            Thereafter..........................................      225
                                                                  -------
                                                                  $13,631
                                                                  =======

FBR Business Development Capital ("FBR-BDC")

     In May 1998, the Company  organized an interim loan fund designed to extend
financing  to  "middle-market"  businesses  in  need  of  subordinated  debt  or
mezzanine  financing that is not readily  available from traditional banks or in
the capital markets. In connection therewith,  the Company provided FBR-BDC with
a loan for its operations  and  commitments of $6.6 million as of June 30, 1998.
Subsequent to June 30, 1998, the Company made three  additional loans to FBR-BDC
totaling  $17.9  million,  and expects to provide loans up to $15 million in the
aggregate during the remainder of 1998, to be used by the fund.


<PAGE>



                     FRIEDMAN, BILLINGS, RAMSEY GROUP, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


9. Distributions:

     In  1997,  prior to its  initial  public  offering,  the  Company  declared
distributions to its shareholders totaling $72,570,582.  There were no dividends
declared  during the six months  ended June 30,  1998.  However,  $24 million of
distributions  declared  in 1997  were paid in the  first  quarter  of 1998 to S
corporation shareholders.


10.   Shareholders' Equity

     At June 30,  1998,  the  Company  has three  stock-based  compensation  and
benefit plans  discussed  below.  In July 1998, the Company's Board of Directors
approved a plan to  repurchase up to 2.5 million  shares of the Company's  Class
"A" Common Stock from time to time. In accordance  with the  repurchase  plan, a
portion of the stock acquired in the  repurchase  plan will be used in the three
stock-based compensation and benefit plans. As of July 31, 1998, the Company had
repurchased 35,000 shares of its class A common stock pursuant to this plan.

1997 Stock and Annual Incentive Plan

     Under the 1997  Stock  and  Annual  Incentive  Plan the  Company  may grant
options,  stock  appreciation  rights,  "performance"  awards and restricted and
unrestricted  stock  (collectively,  the "Awards") to purchase up to 9.9 million
shares of Class A Common Stock to  participants in the 1997 Plan. As of December
31, 1997,  4,384,400  stock options were granted to employees.  The options were
granted  at the  initial  public  offering  price of $20 per  share  and  become
exercisable  as follows:  10 percent,  40 percent,  and 50 percent at the end of
three,  four, and five years,  respectively.  As of June 30, 1998 no options had
been  exercised or had expired.  As of June 30, 1998,  114,500  options had been
cancelled upon the departure of employees,  and 75,000  additional  options have
been committed to new employees.

Non-Employee Director Stock Compensation Plan

     Under the  Non-Employee  Director  Stock  Compensation  Plan (the "Director
Plan"), the Company may grant options or stock (in lieu of annual director fees)
up to 100,000  shares of Class A Common  Stock.  There were no awards made under
this plan during the six months ending June 30, 1998.

Employee Stock Purchase Plan

     Under the 1997 Employee Stock Purchase Plan (the "Purchase Plan") 1,000,000
shares of Class A Common Stock were reserved for future  issuance of stock.  The
Purchase Plan will permit  eligible  employees to purchase  common stock through
payroll  deductions  at a price equal to 85 percent of the fair market  value as
determined  by the plan.  The plan will not  result in  compensation  expense in
future periods.  As of June 30, 1998, the Purchase Plan had not yet been offered
to employees; therefore, no stock had been purchased under the Purchase Plan.


<PAGE>




                                   SIGNATURES

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                     Friedman, Billings, Ramsey Group, Inc.


   08/14/98                          By:    /s/ Kurt R. Harrington
  ----------                             ---------------------------------------
     Date                              Kurt R. Harrington, Treasurer (Principal
                                       Accounting Officer)


                                  EXHIBIT INDEX

EXHIBIT 27.01         Financial Data Schedule.

<PAGE>