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DESERT CAPITAL REIT, INC.
ANNOUNCES FIRST QUARTER 2007 RESULTS
HENDERSON, Nev., (May 23, 2007) --- Desert Capital REIT, Inc. today announced that its net income for the first quarter of 2007 totaled $3.9 million or $0.26 per share, as compared to net income of $2.9 million or $0.27 per share reported for the first quarter of 2006.
Total revenues for the quarter ended March 31, 2007, totaled $7.9 million, as compared to $6.0 million for the same period in 2006. Total revenues were comprised of $5.7 million of interest income for the first quarter, as compared to $3.0 million reported for the same period in 2006. Also included in total revenues was non-interest income, primarily from fees on loans brokered to third parties, of $2.2 million for the quarter ended March 31, 2007, as compared to $3.0 million for the same period in 2006.
At March 31, 2007, the net balance in the mortgage investment portfolio was $159 million, as compared to $101 million at March 31, 2006. The average balance of the mortgage portfolio during the first quarter was $151 million and the average yield on these assets for the quarter was 13.1% compared to an average yield of 13.5% for the fourth quarter of 2006.
“Desert Capital continues to raise equity capital at a record pace, capitalizing on more than a 350 percent gain achieved in 2006,” commented Todd B. Parriott, CEO and Chairman of the Board of Directors of Desert Capital REIT, Inc. “This quarter alone has seen an additional six broker dealers come aboard to sell our product. Continued growth in this area will provide Desert Capital the means to expand throughout the United States and achieve its 2007 goals.”
Portfolio Activity
During the first quarter of 2007, DCR funded 22 loans totaling $25.8 million. Of the new loans, 16 were acquisition and development loans totaling $13.5 million, 4 were construction loans totaling $0.5 million, and 2 were commercial property loans totaling $11.8 million.
At March 31, 2007, DCR's loan portfolio contained 125 loans with a net outstanding principal balance of $159 million, and a weighted average yield of 13.3%.
Dividend
Desert Capital REIT declared dividends of $0.30 per share for the first quarter of 2007.
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 nearly 30 years of continuous real estate investment success, Consolidated Mortgage, LLC is one of the largest private trust deed investment firms in Nevada, with over $450 million currently under management. The company is located at 1291 Galleria Drive, Suite 220, Henderson, NV 89104. For information, please call (702) 739-9090 or visit www.consolidatedmortgage.com.
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.
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March 31, |
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December 31, |
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2007 |
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2006 |
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ASSETS |
|
|
|
|
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Mortgage investments - net |
$ |
158,980,121 |
|
$ |
149,588,926 |
Loans held-for-sale |
|
7,474,700 |
|
|
7,430,000 |
Goodwill |
|
13,388,555 |
|
|
13,388,555 |
Building and equipment - net |
|
8,386,515 |
|
|
8,549,506 |
Land |
|
1,820,000 |
|
|
1,820,000 |
Cash |
|
1,398,872 |
|
|
2,434,948 |
Interest receivable |
|
1,227,918 |
|
|
1,661,370 |
Deferred financing costs |
|
1,000,736 |
|
|
1,009,301 |
Investment in equity affiliates |
|
1,928,000 |
|
|
928,000 |
Other |
|
246,626 |
|
|
220,028 |
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|
|
|
|
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Total assets |
$ |
195,852,043 |
|
$ |
187,030,634 |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Notes payable |
$ |
14,000,609 |
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$ |
13,971,112 |
Junior subordinated notes |
|
30,928,000 |
|
|
30,928,000 |
Dividends payable |
|
1,559,681 |
|
|
1,498,633 |
Accounts payable and accrued expenses |
|
1,736,208 |
|
|
2,184,237 |
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|
|
|
|
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Total liabilities |
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48,224,498 |
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48,581,982 |
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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; 15,768,538 and 15,061,896 |
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|
|
|
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shares issued and outstanding on March 31, 2007, and December 31, 2006, respectfully |
|
157,685 |
|
|
150,619 |
Additional paid-in capital |
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150,270,266 |
|
|
140,441,542 |
Accumulated deficit |
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(2,800,406) |
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(2,143,509) |
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|
|
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Total stockholders' equity |
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147,627,545 |
|
|
138,448,652 |
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|
|
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Total liabilities and stockholders' equity |
$ |
195,852,043 |
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$ |
187,030,634 |
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Consolidated Statement of Operations
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Three Months |
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Ended March 31, |
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|
2007 |
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2006 |
INTEREST INCOME: |
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Mortgage notes receivable |
$ |
5,570,878 |
$ |
2,853,948 |
Other interest |
|
139,405 |
|
156,343 |
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|
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Total interest income |
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5,710,283 |
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3,010,291 |
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INTEREST EXPENSE: |
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|
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Interest expense |
|
992,982 |
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297,894 |
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|
|
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Total interest expense |
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992,982 |
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297,894 |
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|
|
|
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Net interest income |
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4,717,301 |
|
2,712,397 |
Provision for loan losses |
|
104,402 |
|
47,603 |
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|
|
|
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Net interest income after provision for loan loss |
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4,612,899 |
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2,664,794 |
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NON-INTEREST INCOME: |
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|
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Loan brokerage fees |
|
1,574,713 |
|
2,265,087 |
Service and other loan fees |
|
446,836 |
|
570,335 |
Income from investment in subsidiary |
|
- |
|
- |
Other |
|
185,823 |
|
192,856 |
|
|
|
|
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Total non-interest income |
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2,207,372 |
|
3,028,278 |
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NON-INTEREST EXPENSE: |
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Compensation |
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600,709 |
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466,457 |
Management fees |
|
1,278,542 |
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1,104,804 |
Professional fees |
|
280,137 |
|
425,074 |
Insurance |
|
107,339 |
|
107,248 |
Depreciation |
|
195,641 |
|
107,028 |
Advertising |
|
147,627 |
|
245,672 |
Other |
|
193,747 |
|
300,007 |
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Total non-interest expense |
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2,803,742 |
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2,756,290 |
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Net income before taxes |
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4,016,529 |
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2,936,782 |
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Income tax expense |
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70,177 |
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- |
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Net income |
$ |
3,946,352 |
$ |
2,936,782 |
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Earnings per share - basic |
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0.26 |
|
0.27 |
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Earnings per share - diluted |
|
0.26 |
|
0.27 |
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Weighted average outstanding shares - basic |
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15,311,504 |
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10,853,888 |
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Weighted average outstanding shares - diluted |
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15,344,856 |
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10,883,888 |
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