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DESERT CAPITAL REIT, INC.
ANNOUNCES FIRST QUARTER 2006 RESULTS
Henderson, Nev., (May 26, 2006)—Desert Capital REIT, Inc. today announced that its net income for the first quarter of 2006 totaled $2.9 million or $0.27 per share, as compared to a net income of $697,975 or $0.27 per share reported for the first quarter of 2005.
Total revenues for the quarter ended March 31, 2006 totaled $6.0 million, as compared to $1.3 million in the same period in 2005. Interest income for the first quarter was $3.0 million, as compared to $593,470 reported for the same period in 2005. The company also generated non-interest income of $3.0 million for the quarter ended March 31, 2006 primarily from origination fees on approximately $55 million of loans brokered to third parties
Todd B. Parriott, CEO and Chairman of the Board of Directors of Desert Capital REIT, Inc., said, “The strong growth in this quarter is attributed to several factors, most notably the ongoing benefit of now having full ownership of Consolidated Mortgage, a trust deed investment firm we began to acquire just over a year ago, and the substantial growth of our portfolio of more than 300 percent. These initiatives have contributed to the ongoing sound, robust gains in our business.”
Portfolio Activity
During the first quarter of 2006, DCR funded all or a portion of 71 loans totaling $48.0 million. Of the new loans, 51 were acquisition and development loans totaling $43.8 million, 19 were single family construction loans totaling $3.9 million, and one was a residential acquisition loan totaling $340,000.
At March 31, 2006, DCR's loan portfolio contained 129 loans with a net outstanding principal balance of $100.6 million, and an average interest rate of 13.4%.
Dividend
Desert Capital REIT declared dividends of $0.30 per share for the first quarter of 2006.
About Desert Capital REIT, Inc.
Desert Capital REIT, Inc., is a Henderson, Nev.-based real estate investment trust that invests in loans to owners and developers of real estate properties. Formed in December 2003, Desert Capital’s portfolio of mortgage loans consists of acquisition and development, construction, commercial property and residential loans. For more information, please call (800) 419-2855 or visit www.desertcapitalreit.com.
About Consolidated Mortgage, LLC
With more than 27 years of continuous real estate investment success, Consolidated Mortgage, LLC is one of the largest private trust deed investment firms in Nevada, with over $380 million currently outstanding in brokered loans. The company is located at 1291 Galleria Drive, Suite 220, Henderson, NV 89104. For information, please call (702) 739-9090.
Safe Harbor Statement
Statements included herein that state the company’s or management’s intentions, hopes, beliefs, expectations or predictions of the future are “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995 which by their nature, involve known and unknown risks and uncertainties. The company’s actual results, performance or achievements could differ materially from those expressed or implied by such statements.
DESERT CAPITAL REIT, INC. |
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Consolidated Balance Sheets |
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March 31, |
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December 31, |
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2006 |
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2005 |
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(Unaudited) |
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ASSETS |
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Mortgage investments - net |
$ |
100,640,824 |
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$ |
67,649,251 |
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Loans held-for-sale |
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5,357,547 |
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1,461,147 |
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Goodwill |
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13,388,555 |
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13,388,555 |
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Building and equipment - net |
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7,951,410 |
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8,029,250 |
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Land |
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1,820,000 |
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1,820,000 |
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Cash |
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10,381,954 |
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4,459,289 |
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Other |
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1,226,711 |
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718,300 |
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Total assets |
$ |
140,767,001 |
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$ |
97,525,792 |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Notes payable |
$ |
14,371,600 |
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$ |
12,112,386 |
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Dividends payable |
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1,246,820 |
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880,633 |
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Accounts payable and accrued expenses |
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1,172,683 |
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1,708,444 |
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Total liabilities |
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16,791,103 |
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14,701,463 |
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Preferred stock, $0.01 par value: 15,000,000 shares |
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authorized, none outstanding |
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- |
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Common stock, $0.01 par value: 100,000,000 shares authorized; 13,936,353, and 9,388,994 |
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shares issued and outstanding on March 31, 2006, and December 31, 2005, respectfully |
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139,364 |
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93,890 |
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Additional paid-in capital |
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124,436,601 |
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83,005,684 |
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Retained earnings |
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(600,067 |
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(275,245 |
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Total stockholders' equity |
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123,975,898 |
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82,824,329 |
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Total liabilities and stockholders' equity |
$ |
140,767,001 |
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$ |
97,525,792 |
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DESERT CAPITAL REIT, INC. |
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Consolidated Statements of Operations |
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Three Months |
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Ended March 31, |
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2006 |
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2005 |
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INTEREST INCOME: |
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Mortgage investments |
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$ |
2,853,948 |
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$ |
592,473 |
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Other interest |
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156,343 |
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997 |
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Total interest income |
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3,010,291 |
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593,470 |
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INTEREST EXPENSE: |
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Interest expense |
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297,894 |
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99,164 |
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Total interest expense |
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297,894 |
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99,164 |
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Net interest income |
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2,712,397 |
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494,306 |
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Provision for loan losses |
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47,603 |
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19,016 |
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Net interest income after provision for loan loss |
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2,664,794 |
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475,290 |
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NON-INTEREST INCOME: |
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Loan brokerage fees |
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2,265,087 |
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Service and other loan fees |
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570,335 |
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Income from investment in subsidiary |
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- |
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748,519 |
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Other |
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192,856 |
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2,584 |
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Total non-interest income |
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3,028,278 |
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751,103 |
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NON-INTEREST EXPENSE: |
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Compensation |
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466,457 |
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63,167 |
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Management fees |
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1,104,804 |
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77,259 |
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Professional fees |
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425,074 |
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116,934 |
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Insurance |
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107,248 |
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76,500 |
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Other |
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652,707 |
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25,822 |
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Total non-interest expense |
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2,756,290 |
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359,682 |
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Net income before taxes |
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2,936,782 |
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866,711 |
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Income tax expense |
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- |
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168,736 |
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Net income |
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$ |
2,936,782 |
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$ |
697,975 |
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Net earnings (loss) per share - basic and diluted |
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0.27 |
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0.27 |
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Funds From Operations |
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0.28 |
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0.27 |
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Weighted average outstanding shares |
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10,883,888 |
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2,547,197 |
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