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May 17, 2008
FOR IMMEDIATE RELEASE
CONTACT:
Stockholder Relations Department
800-419-2855 |
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DESERT CAPITAL REIT, INC.
ANNOUNCES FIRST QUARTER 2008 RESULTS
HENDERSON, Nev., (May 17, 2008) --- Desert Capital REIT, Inc. today announced that its net income for the first quarter of 2008 totaled $806,000 or $.05 per share, as compared to net income of $3.9 million or $.26 per share reported for the first quarter of 2007.
Total revenues for the quarter ended March 31, 2008, totaled $3.1 million, as compared to $7.9 million for the same period in 2007. Total revenues were comprised of $2.8 million of interest income for the first quarter, as compared to $5.7 million reported for the same period in 2007. Also included in total revenues was non-interest income, primarily from fees on loans brokered to third parties, of $376,000 for the quarter ended March 31, 2008, as compared to $2.2 million for the same period in 2007.
As of March 31, 2008, the net balance in the mortgage investment portfolio was $102.1 million, as compared to $159 million on March 31, 2007. The average balance of the mortgage portfolio during the first quarter was $137.1 million and the average yield on these assets for the quarter was 6.47% compared to an average yield of 13.1% for the first quarter of 2007.
“Desert Capital REIT is committed to protecting the assets in its portfolio, commented Todd B. Parriott, CEO and Chairman of the Board of Directors of Desert Capital REIT, Inc. “If we determine a borrower is not willing or is unable to meet their loan obligations, we will take the necessary steps to foreclose on the property. If market conditions continue to deteriorate, we are prepared to transition our portfolio strategy from the standpoint of a lender to that of a property owner.”
Portfolio Activity
During the first quarter of 2008, DCR funded 13 loans totaling $7.59 million. Of the new loans, 11 were acquisition and development loans totaling $7.54 million, and 2 were construction loans totaling $52,500.
As of March 31, 2008, DCR's loan portfolio contained 80 loans with a net outstanding principal balance of $102 million, and a weighted average yield of 12.95%.
Dividend
Desert Capital REIT declared dividends of $.15 per share for the first quarter of 2008.
About Desert Capital REIT, Inc.
Desert Capital REIT, Inc., is a Henderson, NV-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.
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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Dec 31, |
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2008 |
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2007 |
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(Unaudited) |
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ASSETS |
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Mortgage investments - net of allowance for loan losses of $24,854,202 at March 31, 2008 and $25,444,130 at December 31, 2007 |
$ |
102,078,236 |
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$ |
118,017,926 |
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Loans held-for-sale |
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4,706,800 |
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2,139,200 |
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Real estate owned |
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27,052,552 |
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15,652,282 |
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Equity investments in real estate |
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2,462,895 |
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0 |
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Note receivable from related party |
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15,500,000 |
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15,500,000 |
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Building and equipment - net |
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7,181,172 |
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7,235,939 |
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Land |
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1,820,000 |
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1,820,000 |
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Cash and cash equivalents |
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655,786 |
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162,753 |
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Interest receivable |
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1,416,836 |
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1,464,261 |
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Deferred financing costs |
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966,479 |
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975,043 |
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Other investments |
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1,928,000 |
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1,928,000 |
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Other assets |
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840,298 |
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818,715 |
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Total assets |
$ |
166,609,054 |
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$ |
165,714,119 |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Credit facility |
$ |
4,706,800 |
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$ |
2,139,200 |
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Mortgage payable |
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8,095,127 |
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8,132,769 |
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Junior subordinated notes payable |
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30,928,000 |
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30,928,000 |
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Dividends payable |
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428,285 |
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1,675,814 |
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Deferred income taxes |
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722,749 |
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738,423 |
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Accounts payable and accrued expenses |
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1,197,529 |
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1,052,637 |
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Total liabilities |
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46,078,490 |
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44,666,843 |
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Preferred stock, $0.01 par value:
15,000,000 shares authorized, none outstanding |
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0 |
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0 |
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Common stock, $0.01 par value: 100,000,000 shares authorized; 16,807,867, and 16,724,549 shares issued and outstanding on March 31, 2008, and December 31, 2007, respectfully |
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168,079 |
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167,246 |
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Additional paid-in capital |
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165,561,654 |
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164,370,179 |
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Accumulated deficit |
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(45,199,169) |
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(43,490,149) |
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Total stockholders' equity |
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120,530,564 |
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121,047,276 |
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Total liabilities and stockholders' equity |
$ |
166,609,054 |
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$ |
165,714,119 |
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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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2008 |
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2007 |
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INTEREST INCOME: |
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Mortgage investments |
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$ |
2,216,087 |
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$ |
5,570,878 |
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Other interest |
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548,147 |
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139,405 |
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Total interest income |
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2,764,234 |
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5,710,283 |
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Interest expense |
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834,481 |
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992,982 |
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Net interest income |
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1,929,753 |
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4,717,301 |
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Provision for loan losses |
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310,988 |
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104,402 |
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Net interest income after provision for loan losses |
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1,618,765 |
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4,612,899 |
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NON-INTEREST INCOME: |
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Loan brokerage fees |
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0 |
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1,574,713 |
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Service and other loan fees |
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0 |
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446,836 |
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Other |
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375,847 |
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185,823 |
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Total non-interest income |
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375,847 |
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2,207,372 |
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NON-INTEREST EXPENSE: |
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Impairment of real estate owned |
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1,057 |
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0 |
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Compensation |
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0 |
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503,626 |
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Management fees |
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422,260 |
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1,278,542 |
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Professional fees |
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288,071 |
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280,137 |
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Insurance |
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113,007 |
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107,339 |
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Depreciation |
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119,723 |
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195,641 |
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Advertising |
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148 |
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147,627 |
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Other |
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287,554 |
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290,830 |
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Total non-interest expense |
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1,231,820 |
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2,803,742 |
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Net income before taxes |
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762,792 |
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4,016,529 |
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Income tax expense (benefit) |
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(43,104) |
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70,177 |
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Net income |
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$ |
805,896 |
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$ |
3,946,352 |
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Earnings per share - basic |
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0.05 |
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0.26 |
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| Earnings per share - diluted |
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0.05 |
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0.05 |
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Weighted average outstanding shares - basic |
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16,782,728 |
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15,311,504 |
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Weighted average outstanding shares - diluted |
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16,782,728 |
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15,344,856 |
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