"From FBR Group's perspective, this transaction will add more than $700 million of new capital, and create new business flexibility and earnings stability, while providing substantial dividends to our shareholders in a tax efficient manner," FBR Group chairman and co-CEO Emanuel Friedman says in a written statement. "The resulting company's book equity will make it one of the largest public investment banks in the United States."

The FBR Group came into being nearly 15 years ago and is the brainchild of a group of securities analysts, traders and brokers who built up the company's name by approaching its endeavors purely from a research perspective. Now, company officials say, the FBR Group is among the top 10 equity capital market companies in the country. FBR Asset was created five years ago as a separate entity. Among other advantages, the merger--which will likely close in the first quarter of next year--will allow the two organizations to decrease overall leverage and internalize management.