Fog Cutter Capital Group Inc. Reports Investment in George Elkins Mortgage Banking Operation

Business Wire, May 16, 2002

Business Editors

PORTLAND, Ore.--(BUSINESS WIRE)--May 16, 2002

Fog Cutter Capital Group Inc. (Nasdaq:FCCG), an opportunistic investment group specializing in mortgage and real estate related assets, reports that it has acquired a 51% interest in the mortgage banking operation of George Elkins Mortgage Banking Company ("Elkins").

Headquartered in Los Angeles, with offices in Santa Barbara, San Diego and Newport Beach, Elkins originates commercial mortgages, primarily for their life insurance correspondents. Elkins specializes in commercial real estate loans in a variety of property types and loan amounts. Elkins' senior executives, including Chief Executive Officer Jeffrey Hudson and President Steven Hinds, will continue their active involvement in the operation. Details of the investment were not disclosed.

Elkins originated more than $500 million in commercial mortgages in 2001, primarily for life insurance companies, Wall Street conduits, and savings institutions. The mortgage banking operation also services in excess of $700 million of commercial mortgages for various investors. Fog Cutter Capital Group Inc.'s investment, through its wholly owned subsidiary, Fog Cap Commercial Lending Inc., is expected to provide significant growth opportunities in the institutional lending market, expansion of additional offices in the western United States, and the introduction of a special situation lending group, offering loans on non-conforming properties.

Founded in 1997, Fog Cutter Capital Group Inc. focuses on investing, structuring and managing real estate-related assets, including the acquisition of companies engaged in real estate investment activities, mortgage-backed securities, mezzanine real estate loans and other real estate related assets. The Company invests where its expertise in intensive asset management, mortgage and real estate credit analysis and financial structuring can create value. Many of these investments, particularly in corporate acquisitions, are acquired in conjunction with partners.

The Company seeks to invest directly or indirectly in real estate-related assets that provide an appropriate risk-adjusted rate of return and the opportunity for capital gains. The Company maintains a flexible approach with respect to the nature of its investments, seeking to take advantage of opportunities as they arise or are developed.

Forward Looking Statements

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements so long as those statements are identified as forward-looking and are accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those projected in such statements. All of the statements contained in this release, which are not identified as historical, should be considered forward-looking. In connection with certain forward-looking statements contained in this release and those that may be made in the future by or on behalf of the company which are identified as forward-looking, the company notes that there are various factors that could cause actual results to differ materially from those set forth in any such forward-looking statements. Such factors include but are not limited to, the real estate market, the availability of real estate assets at acceptable prices, the availability of financing, interest rates, and European markets. Accordingly, there can be no assurance that the forward-looking statements contained in this release will be realized or that actual results will not be significantly higher or lower. The forward-looking statements have not been audited by, examined by, or subjected to agreed-upon procedures by independent accountants, and no third party has independently verified or reviewed such statements. Readers of this release should consider these facts in evaluating the information contained herein. The inclusion of the forward-looking statements contained in this release should not be regarded as a representation by the company or any other person that the forward-looking statements contained in this release will be achieved. In light of the foregoing, readers of this release are cautioned not to place undue reliance on the forward-looking statements contained herein.