Sanders Morris Harris Group Reports First Quarter Loss From Continuing Operations...

Sanders Morris Harris Group Reports First Quarter Loss From Continuing
Operations of $11.6 Million; Records After-Tax Non-Cash Impairment Charges of
$9.5 Million

HOUSTON, May 11 /PRNewswire-FirstCall/ -- Sanders Morris Harris Group Inc.
(Nasdaq: SMHG) today reported a first quarter net loss from continuing
operations of $11.6 million, or $0.42 per share. The results compared to a
first quarter of 2008 net loss from continuing operations of $1.7 million, or
$0.07 per share.

The Company's Wealth/Asset Management division earned $3.7 million pretax in
the period. Client assets fell marginally from $8.6 billion on December 31,
2008 to $8.5 billion at the end of the first quarter. On a non-GAAP basis,
excluding the $9.5 million goodwill (and other intangible assets) impairment
charges, losses of $1.3 million from portfolio declines, and a $1.1 million
loss associated with the Capital Markets business to be sold, the Company
would have earned $361,000, or $0.01 per share, from continuing operations
during the first quarter of 2009.

"In the context of a very difficult market, our operating businesses fared
well. We had net client asset inflows of $166 million and ended the quarter
with only a small loss in total assets under management," said George L. Ball,
Chairman of Sanders Morris Harris Group. "We believe we are well positioned to
benefit when the markets recover. Additionally, we have completed the bulk of
our cost reduction program which is projected to save $4.5 million annually.
The benefits of this program will accrue partially in the second quarter and
fully in the third."

The after-tax goodwill and other intangible assets impairment charges of $9.5
million reduce the book value of the Company's goodwill to reflect the decline
in the price of the Company's stock during the quarter. The charges were
non-cash in nature and do not impact the Company's cash balances, liquidity,
or tangible net worth.

Included in the 2009 loss from continuing operations is $1.3 million of
after-tax losses related to the decline in the value of the Company's
portfolio of equities and partnership interests, reflecting the difficult
equity and fixed income markets.

The 2009 continuing operations contain an after-tax loss of $1.1 million
related to the Company's Capital Markets business. That business is to be sold
to a new broker-dealer to be formed by Siwanoy Capital, LLC in a transaction
expected to be completed in the second quarter. Upon the closing of the
transaction, Sanders Morris Harris Group will be reimbursed by Siwanoy
Capital, LLC for this loss.

Conference Call
The Company will host a conference call on Monday, May 11th to discuss first
quarter 2009 financial and operational results. The call will begin at 9:00
a.m. Central Time, and is open to the public. To listen to the conference
call, use U.S. dial-in number (877) 261-8990 or International dial-in number
(847) 619-6441 and enter pass code 24472155. It is recommended that listeners
phone in at least 10 minutes before the call is scheduled to begin to avoid
delay. For those unable to listen to the live call, a replay of the conference
call in its entirety will be available approximately two hours after its
completion for 10 days by dialing (888) 843-8996 (U.S.), (630) 652-3044
(International) and entering the pass code 24472155.

About Sanders Morris Harris Group
Sanders Morris Harris Group is a wealth/asset management company that manages
approximately $8.5 billion in client assets. Client assets include the gross
value of assets under management directly or via outside managers and assets
held in brokerage accounts for clients by outside clearing firms. Its
corporate philosophy of investment in common aligns its interests with those
of its clients. Sanders Morris Harris has more than 600 employees in 21
states. Additional information is available at www.smhgroup.com.

In addition to the historical information, this press release contains certain
forward-looking statements under federal securities laws, including statements
regarding Sanders Morris Harris Group's expected future business prospects,
revenue and income. These forward-looking statements are based upon current
expectations and involve certain risks and uncertainties that could cause
actual results to differ materially from any such statement. These risks and
uncertainties, many of which are beyond the Company's control, include but are
not limited to (1) trading volume in the securities markets; (2) volatility of
the securities markets and interest rates; (3) changes in regulatory
requirements that could affect the demand for the Company's services or the
cost of doing business; (4) general economic conditions, both domestic and
foreign, especially in the regions where the Company does business; (5)
changes in the rate of inflation and related impact on securities markets; (6)
competition from existing financial institutions and other new participants in
the securities markets; (7) legal developments affecting the litigation
experience of the securities industry; (8) successful implementation of
technology solutions; (9) changes in valuations of the Company's trading and
warrant portfolios resulting from mark-to-market adjustments; (10) dependence
on key personnel; (11) demand for the Company's services; and (12) litigation
and securities law liabilities. The Company does not undertake any obligation
to publicly update or revise any forward-looking statements.

Sanders Morris Harris
Selected Condensed Operating Information
(in thousands, except per share amounts)
(unaudited)

Three Months Ended
March 31,
2009 2008
Revenue $41,199 $40,652
Expenses 57,738 38,940
Net (16,539) 1,712
Equity in loss of limited partnerships (498) (1,560)
Income (loss) from continuing
operations before income taxes (17,037) 152
Benefit for income taxes 6,473 1,022
Income (loss) from continuing operations,
net of income taxes (10,564) 1,174
Loss from discontinued operations, net
of tax of $831 and $232, respectively (1,228) (393)
Net income (loss) (11,792) 781
Less: Net income attributable to the
noncontrolling interest (1,052) (2,888)
Net loss attributable to Sanders Morris
Harris Group Inc. $(12,844) $(2,107)

Basic loss per common share:
Continuing operations $(0.42) $(0.07)
Discontinued operations (0.05) (0.01)
Net loss $(0.47) $(0.08)

Diluted loss per common share:
Continuing operations $(0.42) $(0.07)
Discontinued operations (0.05) (0.01)
Net loss $(0.47) $(0.08)

Weighted average shares outstanding:
Basic 27,567 24,940
Diluted 27,567 24,940

Amounts attributable to Sanders Morris
Harris Group Inc. common shareholders:
Loss from continuing operations, net of tax $(11,616) $(1,714)
Discontinued operations, net of tax (1,228) (393)
Net loss $(12,844) $(2,107)

GAAP to Non-GAAP reconciliation
(in thousands, except per share amounts)
(unaudited)
Three Months Ended
March 31, 2009
Amount Diluted EPS
Loss from continuing operations, net of
tax, attributable to Sanders Morris
Harris Group Inc. $(11,616) $(0.42)
Addback:
Goodwill and other intangible assets
impairment charges, net of tax 9,516 0.34
Investment portfolio losses, net of tax 1,348 0.05
Loss attributed to the Capital Markets
business, net of tax 1,113 0.04
Net operating income of business to be retained $361 $0.01

Balance sheet data:
Cash and cash equivalents $17,924
Other tangible net assets 130,162
Tangible net assets $148,086
Shareholders' equity $208,626

Sanders Morris Harris
Selected Condensed Operating Information
(in thousands)
(unaudited)

Three Months Ended
March 31,
2009 2008
Revenue:
Asset/Wealth Management $19,288 $26,455
Capital Markets:
Investment banking 1,503 656
Institutional brokerage 5,146 3,757
Prime brokerage services 14,440 10,520
Capital Markets Total 21,089 14,933
Corporate Support 822 (736)
Total $41,199 $40,652

Income (loss) from continuing operations
before equity in income (loss) of
limited partnerships and income taxes:
Asset/Wealth Management $3,725 $9,407
Capital Markets:
Investment banking (1,577) (3,172)
Institutional brokerage 346 (9)
Prime brokerage services 327 507
Capital Markets Total (904) (2,674)
Corporate Support (19,360) (5,021)
Total $(16,539) $1,712

Equity in income (loss) of limited partnerships:
Asset/Wealth Management $(74) $652
Capital Markets: - -
Investment banking - -
Institutional brokerage - -
Prime brokerage services - -
Capital Markets Total - -
Corporate Support (424) (2,212)
Total $(498) $(1,560)

Income (loss) from continuing operations before
income taxes:
Asset/Wealth Management $3,651 $10,059
Capital Markets:
Investment banking (1,577) (3,172)
Institutional brokerage 346 (9)
Prime brokerage services 327 507
Capital Markets Total (904) (2,674)
Corporate Support (19,784) (7,233)
Total $(17,037) $152

Net income attributable to the noncontrolling
interest in consolidated companies:
Asset/Wealth Management $(1,052) $(2,888)
Capital Markets:
Investment banking - -
Institutional brokerage - -
Prime brokerage services - -
Capital Markets Total - -
Corporate Support - -
Total $(1,052) $(2,888)

SOURCE Sanders Morris Harris Group Inc.

Rick Berry, Chief Financial Officer of Sanders Morris Harris Group Inc.,
+1-713-993-4614