Exhibit 99.1
Vestin Realty Mortgage II, Inc. Reports Results
For The Year Ended December 31, 2009
Las Vegas – March 23, 2010 – Vestin Realty Mortgage II, Inc. (Nasdaq:VRTB), a real estate investment trust (“REIT”), announced results of operations for the year ended December 31, 2009.
The Company reported a net loss of approximately $55.0 million or ($4.00) per share for the year ended December 31, 2009 compared with a net loss of approximately $130.2 million or ($8.86) per share for the year ended December 31, 2008. Interest income from investment in real estate loans was approximately $6.3 million as compared with approximately $18.6 million in the year ended December 31, 2008. The decline in interest income was largely due to an increase in non-performing assets, a decrease in the size of the loan portfolio and a reduction in new lending as a result of current market conditions.
The Company noted that the losses for the year ended December 31, 2009 were in large part due to non-performing loans and the continued deterioration in real estate values. The Company recorded loan loss provisions of approximately $47.0 million and incurred write-downs for real estate held for sale of approximately $23.2 million for the year ended December 31, 2009. The loan loss provisions and write-downs for real estate held for sale are non-cash items. Net cash flow used in operating activities was approximately $7.7 million.
As of December 31, 2009, the Company had 26 loans outstanding with an aggregate principal amount approximating $112.1 million, of which 12 loans with an aggregate principal amount approximating $68.3 million were considered non-performing. Loans are considered non-performing when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement or when the payment of interest is 90 days past due. The Company has commenced foreclosure proceedings with respect to seven of the non-performing loans. In addition, the Company is conducting workout discussions with certain non-performing borrowers; however, no assurance can be given as to whether these discussions will be successful. As of Dece mber 31, 2009, we owned 17 properties that we acquired through foreclosure, compared with 11 properties owned as of December 31, 2008.
As of December 31, 2009, shareholder equity was $5.52 per common share. The Company had on its balance sheet approximately $1.4 million of cash, $53.2 million of investment in real estate loans, net of allowance of $58.9 million, $22.1 million in real estate held for sale and approximately $12.2 million in total liabilities as of December 31, 2009.
About Vestin Realty Mortgage II, Inc.
Vestin Realty Mortgage II, Inc. is a real estate investment trust (“REIT”) that invests in commercial real estate loans. As of December 31, 2009, Vestin Realty Mortgage II, Inc. had assets of approximately $87.5 million. Vestin Realty Mortgage II, Inc. is managed by Vestin Mortgage, Inc., which is a subsidiary of Vestin Group, Inc., which is engaged in asset management, real estate lending and other financial services through its subsidiaries. Since 1995, Vestin Mortgage Inc. has facilitated more than $2.0 billion in lending transactions.
Forward-Looking Statements
Certain information discussed in this press release may constitute forward-looking statements within the Private Securities Litigation Reform Act of 1995 and the federal securities laws. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions at the time made, it can give no assurance that its expectations will be achieved. Readers are cautioned not to place undue reliance on these forward-looking statements. Forward-looking statements are inherently subject to unpredictable and unanticipated risks, trends and uncertainties, such as the Company’s potential inability to accurately forecast its operating results; the Company’s potential inability to regain profitability or to generate positive cash flow from operati ons; constraints in the credit markets, the availability of take-out financing for our borrowers; defaults on outstanding loans; unexpected difficulties encountered in pursuing our remedies if a loan is in default; a decline in the value of collateral securing our loans, declining real estate values in the markets we serve and other risks associated with the Company’s business. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.
Contact:
Steve Stern
Stern And Company
702-240-9533
steve@sdsternpr.com
FINANCIAL STATEMENTS
VESTIN REALTY MORTGAGE II, INC. | |
| | |
| CONSOLIDATED BALANCE SHEETS | |
| | |
| ASSETS | |
| | |
| | | December 31, 2009 | | | December 31, 2008 | |
| | | | | | | |
| Assets | | | | | | |
| Cash | | $ | 1,444,000 | | | $ | 8,026,000 | |
| Cash - restricted | | | -- | | | | 5,000,000 | |
| Investment in marketable securities - related party | | | 651,000 | | | | 496,000 | |
| Interest and other receivables, net of allowance of $124,000 at December 31, 2009 and $593,000 at December 31, 2008 | | | 1,100,000 | | | | 1,345,000 | |
| Notes receivable, net of allowance of $10,334,000 at December 31, 2009 and $2,340,000 at December 31, 2008 | | | -- | | | | -- | |
| Real estate held for sale | | | 22,094,000 | | | | 24,433,000 | |
| Investment in real estate loans, net of allowance for loan losses of $58,916,000 at December 31, 2009 and $78,208,000 at December 31, 2008 | | | 53,209,000 | | | | 146,834,000 | |
| Due from related parties | | | 317,000 | | | | -- | |
| Investment in equity affiliate | | | -- | | | | 100,000 | |
| Assets under secured borrowings | | | 8,370,000 | | | | 10,600,000 | |
| Deferred financing costs | | | 175,000 | | | | 2,504,000 | |
| Other assets | | | 99,000 | | | | 144,000 | |
| | | | | | | | | |
| Total assets | | $ | 87,459,000 | | | $ | 199,482,000 | |
| | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | |
| | | | | | | | | |
| Liabilities | | | | | | | | |
| Accounts payable and accrued liabilities | | $ | 4,311,000 | | | $ | 2,154,000 | |
| Due to related parties | | | -- | | | | 522,000 | |
| Secured borrowings | | | 7,910,000 | | | | 9,907,000 | |
| Junior subordinated notes payable | | | -- | | | | 56,350,000 | |
| Note payable | | | 28,000 | | | | 24,000 | |
| | | | | | | | | |
| Total liabilities | | | 12,249,000 | | | | 68,957,000 | |
| | | | | | | | | |
| Commitments and contingencies | | | | | | | | |
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| Stockholders' equity | | | | | | | | |
| Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued | | | -- | | | | -- | |
| Treasury stock, at cost, 1,381,137 shares at December 31, 2009 and 1,198,573 at December 31, 2008 | | | (6,152,000 | ) | | | (5,692,000 | ) |
| Common stock, $0.0001 par value; 100,000,000 shares authorized; 14,997,363 shares issued and 13,616,226 outstanding at December 31, 2009, and 14,997,363 shares issued and 13,798,790 outstanding at December 31, 2008 | | | 1,000 | | | | 1,000 | |
| Additional paid-in capital | | | 278,550,000 | | | | 278,550,000 | |
| Accumulated deficit | | | (196,637,000 | ) | | | (141,627,000 | ) |
| Accumulated other comprehensive loss | | | (552,000 | ) | | | (707,000 | ) |
| | | | | | | | | |
| Total stockholders' equity | | | 75,210,000 | | | | 130,525,000 | |
| | | | | | | | | |
| Total liabilities and stockholders' equity | | $ | 87,459,000 | | | $ | 199,482,000 | |
| VESTIN REALTY MORTGAGE II, INC. | |
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| CONSOLIDATED STATEMENTS OF OPERATIONS | |
| | |
| | | For the Year Ended | |
| | | 12/31/2009 | | | 12/31/2008 | | | 12/31/2007 | |
| | | | | | | | | | |
| Revenues | | | | | | | | | |
| Interest income from investment in real estate loans | | $ | 6,341,000 | | | $ | 18,604,000 | | | $ | 26,982,000 | |
| Gain related to pay off of real estate loan, including recovery of allowance for loan loss | | | 110,000 | | | | -- | | | | 1,044,000 | |
| Other income | | | 127,000 | | | | 703,000 | | | | 984,000 | |
| Total revenues | | | 6,578,000 | | | | 19,307,000 | | | | 29,010,000 | |
| | | | | | | | | | | | | |
| Operating expenses | | | | | | | | | | | | |
| Management fees - related party | | | 1,098,000 | | | | 1,098,000 | | | | 1,097,000 | |
| Provision for loan loss | | | 46,989,000 | | | | 83,712,000 | | | | 3,116,000 | |
| Interest expense | | | 5,871,000 | | | | 6,421,000 | | | | 3,367,000 | |
| Professional fees | | | 6,086,000 | | | | 3,714,000 | | | | 3,004,000 | |
| Professional fees - related party | | | 571,000 | | | | 236,000 | | | | 138,000 | |
| Provision for doubtful accounts related to receivable | | | 184,000 | | | | 754,000 | | | | 235,000 | |
| Loan fees | | | 1,508,000 | | | | 594,000 | | | | -- | |
| Other | | | 1,010,000 | | | | 1,123,000 | | | | 922,000 | |
| Total operating expenses | | | 63,317,000 | | | | 97,652,000 | | | | 11,879,000 | |
| | | | | | | | | | | | | |
| Income (loss) from operations | | | (56,739,000 | ) | | | (78,345,000 | ) | | | 17,131,000 | |
| | | | | | | | | | | | | |
| Non-operating income (loss) | | | | | | | | | | | | |
| Gain on purchase of debt | | | 27,233,000 | | | | 1,556,000 | | | | -- | |
| Dividend income - related party | | | -- | | | | 86,000 | | | | 308,000 | |
| Interest income from banking institutions | | | 22,000 | | | | 376,000 | | | | 1,535,000 | |
| Loss on sale of investment in real estate loan | | | -- | | | | (2,760,000 | ) | | | -- | |
| Impairment of marketable securities - related party | | | -- | | | | (2,228,000 | ) | | | -- | |
| Settlement expense | | | (103,000 | ) | | | -- | | | | -- | |
| Total other non-operating income (loss), net | | | 27,152,000 | | | | (2,970,000 | ) | | | 1,843,000 | |
| | | | | | | | | | | | | |
| Income (loss) from real estate held for sale | | | | | | | | | | | | |
| Income related to real estate held for sale | | | 55,000 | | | | -- | | | | 86,000 | |
| Net loss on sale of real estate held for sale | | | (905,000 | ) | | | (259,000 | ) | | | -- | |
| Gain on sale of real estate held for sale - seller financed | | | -- | | | | -- | | | | 2,003,000 | |
| Expenses related to real estate held for sale | | | (1,387,000 | ) | | | (1,370,000 | ) | | | (2,869,000 | ) |
| Write-downs on real estate held for sale | | | (23,186,000 | ) | | | (47,225,000 | ) | | | (1,266,000 | ) |
| Total loss from real estate held for sale | | | (25,423,000 | ) | | | (48,854,000 | ) | | | (2,046,000 | ) |
| | | | | | | | | | | | | |
| Income (loss) before provision for income taxes | | | (55,010,000 | ) | | | (130,169,000 | ) | | | 16,928,000 | |
| | | | | | | | | | | | | |
| Provision for income taxes | | | -- | | | | -- | | | | -- | |
| | | | | | | | | | | | | |
| NET INCOME (LOSS) | | $ | (55,010,000 | ) | | $ | (130,169,000 | ) | | $ | 16,928,000 | |
| | | | | | | | | | | | | |
| Basic and diluted earnings (loss) per weighted average common share | | $ | (4.00 | ) | | $ | (8.86 | ) | | $ | 1.14 | |
| | | | | | | | | | | | | |
| Dividends declared per common share | | $ | -- | | | $ | 0.49 | | | $ | 1.50 | |
| | | | | | | | | | | | | |
| Weighted average common shares | | | 13,760,150 | | | | 14,695,756 | | | | 14,909,651 | |
