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DESERT CAPITAL REIT, INC.
ANNOUNCES FOURTH QUARTER AND FULL YEAR 2006 RESULTS
HENDERSON, Nev., (April 2, 2007) --- Desert Capital REIT, Inc. today announced that its net income for the fourth quarter of 2006 totaled $4.1 million or $0.28 per share, as compared to net income of $2.4 million or $0.31 per share reported for the fourth quarter of 2005. For the twelve months ended December 31, 2006, net income totaled $14.2 million or $1.06 per share, as compared to $5.3 million or $1.09 per share for the same period in 2005.
Total revenues for the quarter ended December 31, 2006, totaled $9.2 million, as compared to $5.7 million for the same period in 2005. Total revenues were comprised of $5.7 million of interest income for the fourth quarter, as compared to $1.9 million reported for the same period in 2005. Also included in total revenues were non-interest income, primarily from fees on loans brokered to third parties, of $3.5 million for the quarter ended December 31, 2006, as compared to $3.8 million for the same period in 2005.
For the twelve months ended December 31, 2006, total revenues amounted to $29.7 million, compared to $15.4 million for the same period on 2005. Total revenues for the twelve months ended December 31, 2006, were made up of interest income of $18.3 million and non-interest income of $11.4 million, compared to interest income of $4.7 million and non-interest income of $10.8 million for the same period in 2005.
At December 31, 2006, the net balance in the mortgage investment portfolio was $150 million, as compared to $68 million at December 31, 2005. The average balance of the mortgage portfolio during the fourth quarter was $142 million and the average yield on these assets for the quarter was 13.5% compared to an average yield of 13.5% for the third quarter of 2006.
“Desert Capital enjoyed an overall solid 4th quarter performance, which was supported by several milestones that were achieved by the company throughout 2006,” commented Todd B. Parriott, CEO and Chairman of the Board of Directors of Desert Capital REIT, Inc. “An all-time record month was set with $28.8 million of equity raised for Desert Capital and through its subsidiary, Consolidated Mortgage, record funds of approximately $466 million were under management.”
Portfolio Activity
During the fourth quarter of 2006, DCR funded all or a portion of 38 loans totaling $39.8 million. Of the new loans, 28 were acquisition and development loans totaling $35.6 million and 10 were construction loans totaling $4.2 million.
At December 31, 2006, DCR's loan portfolio contained 132 loans with a net outstanding principal balance of $150 million, and a weighted average yield of 13.5%.
Dividend
Desert Capital REIT declared dividends of $0.30 per share for the fourth 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 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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December 31, |
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December 31, |
|
2006 |
|
2005 |
|
|
|
|
|
ASSETS |
|
|
|
|
|
Mortgage investments - net |
$ |
149,588,926 |
|
$ |
67,649,251 |
Loans held-for-sale |
|
7,430,000 |
|
|
1,461,147 |
Goodwill |
|
13,388,555 |
|
|
13,388,555 |
Building and equipment - net |
|
8,549,506 |
|
|
8,029,250 |
Land |
|
1,820,000 |
|
|
1,820,000 |
Cash |
|
2,434,948 |
|
|
4,459,289 |
Interest receivable |
|
1,661,370 |
|
|
572,944 |
Deferred financing costs |
|
1,009,301 |
|
|
- |
Investment in equity affiliates |
|
928,000 |
|
|
- |
Other |
|
220,028 |
|
|
145,356 |
|
|
|
|
|
|
Total assets |
$ |
187,030,634 |
|
$ |
97,525,792 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
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Notes payable |
$ |
13,971,112 |
|
$ |
12,112,386 |
Junior subordinated notes |
|
30,928,000 |
|
|
- |
Dividends payable |
|
1,498,633 |
|
|
880,633 |
Accounts payable and accrued expenses |
|
2,184,237 |
|
|
1,708,443 |
|
|
|
|
|
|
Total liabilities |
|
48,581,982 |
|
|
14,701,463 |
|
|
|
|
|
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Preferred stock, $0.01 par value: 15,000,000 shares |
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|
|
|
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authorized, none outstanding |
|
- |
|
|
- |
Common stock, $0.01 par value: 100,000,000 shares authorized; 15,061,896 and 9,388,994 |
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|
|
|
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shares issued and outstanding on December 31, 2006, and December 31, 2005, respectfully |
|
150,619 |
|
|
93,890 |
Additional paid-in capital |
|
140,441,542 |
|
|
83,005,684 |
Accumulated deficit |
|
(2,143,509) |
|
|
(275,245) |
|
|
|
|
|
|
Total stockholders' equity |
|
138,448,652 |
|
|
82,824,329 |
|
|
|
|
|
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Total liabilities and stockholders' equity |
$ |
187,030,634 |
|
$ |
97,525,792 |
Consolidated Statement of Operations
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Three Months |
|
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Twelve Months |
|
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Ended December 31, |
|
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Ended December 31, |
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|
2006 |
|
2005 |
|
|
2006 |
|
2005 |
|
|
(unaudited) |
|
(unaudited) |
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|
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|
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INTEREST INCOME: |
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|
|
|
|
|
|
|
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Mortgage notes receivable |
$ |
5,483,549 |
$ |
1,824,611 |
|
$ |
17,496,023 |
$ |
4,482,562 |
Other interest |
|
222,869 |
|
77,119 |
|
|
775,385 |
|
177,864 |
|
|
|
|
|
|
|
|
|
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Total interest income |
|
5,706,418 |
|
1,901,730 |
|
|
18,271,408 |
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4,660,426 |
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|
|
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INTEREST EXPENSE: |
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|
|
|
|
|
|
|
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Interest expense |
|
1,018,961 |
|
290,699 |
|
|
2,669,710 |
|
941,709 |
|
|
|
|
|
|
|
|
|
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Total interest expense |
|
1,018,961 |
|
290,699 |
|
|
2,669,710 |
|
941,709 |
|
|
|
|
|
|
|
|
|
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Net interest income |
|
4,687,457 |
|
1,611,031 |
|
|
15,601,698 |
|
3,718,717 |
Provision for loan losses |
|
168,036 |
|
14,480 |
|
|
369,236 |
|
55,825 |
|
|
|
|
|
|
|
|
|
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Net interest income after provision for loan loss |
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4,519,421 |
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1,596,551 |
|
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15,232,462 |
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3,662,892 |
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|
|
|
|
|
|
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NON-INTEREST INCOME: |
|
|
|
|
|
|
|
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Loan brokerage fees |
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2,560,726 |
|
3,192,022 |
|
|
8,623,357 |
|
8,096,602 |
Service and other loan fees |
|
290,858 |
|
447,205 |
|
|
1,643,494 |
|
1,644,822 |
Income from investment in subsidiary |
|
- |
|
- |
|
|
- |
|
748,519 |
Other |
|
662,637 |
|
151,164 |
|
|
1,121,299 |
|
285,561 |
|
|
|
|
|
|
|
|
|
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Total non-interest income |
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3,514,221 |
|
3,790,391 |
|
|
11,388,150 |
|
10,775,504 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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NON-INTEREST EXPENSE: |
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|
|
|
|
|
|
|
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Compensation |
|
692,955 |
|
635,105 |
|
|
2,271,215 |
|
1,703,837 |
Management fees |
|
1,731,191 |
|
1,046,294 |
|
|
5,240,417 |
|
2,829,059 |
Professional fees |
|
538,809 |
|
503,391 |
|
|
1,786,907 |
|
1,510,816 |
Insurance |
|
100,407 |
|
93,863 |
|
|
419,314 |
|
386,290 |
Depreciation |
|
111,544 |
|
32,776 |
|
|
434,668 |
|
143,668 |
Advertising |
|
199,815 |
|
1,520 |
|
|
722,083 |
|
31,620 |
Other |
|
275,472 |
|
477,913 |
|
|
1,091,957 |
|
967,736 |
|
|
|
|
|
|
|
|
|
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Total non-interest expense |
|
3,650,193 |
|
2,790,862 |
|
|
11,966,561 |
|
7,573,026 |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Net income before taxes |
|
4,383,449 |
|
2,596,080 |
|
|
14,654,051 |
|
6,865,370 |
|
|
|
|
|
|
|
|
|
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Income tax expense |
|
250,815 |
|
218,211 |
|
|
406,339 |
|
669,889 |
|
|
|
|
|
|
|
|
|
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Income before minority interest |
|
4,132,634 |
|
2,377,869 |
|
|
14,247,712 |
|
6,195,481 |
Income allocated to minority interest |
|
- |
|
|
|
|
- |
|
884,204 |
|
|
|
|
|
|
|
|
|
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Net income |
$ |
4,132,634 |
$ |
2,377,869 |
|
$ |
14,247,712 |
$ |
5,311,277 |
|
|
|
|
|
|
|
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Earnings per share - basic |
|
0.28 |
|
0.31 |
|
|
1.06 |
|
1.09 |
|
|
|
|
|
|
|
|
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Earnings per share - diluted |
|
0.28 |
|
0.31 |
|
|
1.06 |
|
1.09 |
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|
|
|
|
|
|
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Weighted average outstanding shares - basic |
|
14,712,840 |
|
7,739,338 |
|
|
13,413,055 |
|
4,859,363 |
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|
|
|
|
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Weighted average outstanding shares - diluted |
|
14,752,840 |
|
7,752,671 |
|
|
13,445,110 |
|
4,877,055 |
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