Vestin Realty Mortgage I, Inc. (Nasdaq:VRTA) reported a net loss for the third quarter ended September 30, 2009 of approximately $4.7 million, or ($0.71) per share, on revenues of approximately $0.3 million, compared with a net loss of approximately $6.4 million or ($0.93) per share on revenues of approximately $0.4 million in the comparable period in 2008. In addition, VRTA reported a net loss for the nine months ended September 30, 2009 of approximately $9.4 million, or ($1.43) per share, on revenues of approximately $1.2 million, compared with a net loss of approximately $11.8 million or ($1.71) per share on revenues of approximately $2.8 million in the comparable period in 2008.
The Company noted that the losses for the three and nine months ended September 30, 2009, were in significant part due to the level of non-performing loans and increase in properties acquired through foreclosure. As of September 30, 2009, the Company had 21 loans outstanding with an aggregate principal amount approximating $36.1 million, of which 10 loans with an aggregate principal amount approximating $24.5 million were considered non-performing. As of September 30, 2008, the Company had 28 loans outstanding with an aggregate principal amount approximating $42.3 million, of which 14 loans with an aggregate principal amount approximating $30.7 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. In addition, as of September 30, 2009, we owned 10 properties, with an aggregate book value of approximately $4.1 million that we have acquired through foreclosure, compared with seven properties owned with an aggregate book value of approximately $6.0 million, as of September 30, 2008.
The Company recorded loan loss provisions and write downs on real estate held for sale of approximately $4.3 million and $3.7 million, respectively, for the nine months ended September 30, 2009. In addition, the Company incurred professional fees of approximately $1.8 million, primarily due to the legal fees relating to the legal actions that have been filed against us in connection with the REIT conversion. The loan loss provisions and write downs on real estate held for sale are non-cash items. Net cash flow used in operating activities was approximately $1.1 million.
As of September 30, 2009, shareholder equity was $4.30 per common share. The Company had on its balance sheet as of September 30, 2009, $0.8 million of cash, $22.6 million of investment in real estate loans, net of allowance of $13.5 million, $4.1 million in real estate held for sale and $0.8 million in total liabilities.
About Vestin Realty Mortgage I, Inc.
Vestin Realty Mortgage I, Inc. is a real estate investment trust (“REIT”) that invests in commercial real estate loans. As of September 30, 2009, Vestin Realty Mortgage I, Inc. had assets of approximately $28.8 million. Vestin Realty Mortgage I, 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 generate positive cash flow from operations; 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.
| VESTIN REALTY MORTGAGE I, INC. | ||||||
| CONSOLIDATED BALANCE SHEETS | ||||||
| ASSETS | ||||||
| September 30, 2009 | December 31, 2008 | |||||
| (Unaudited) | ||||||
| Assets | ||||||
| Cash | $ | 795,000 | $ | 3,546,000 | ||
| Investment in marketable securities - related party | 651,000 | 709,000 | ||||
| Interest and other receivables, net of allowance of $38,000 at September 30, 2009 and $58,000 at December 31, 2008 | 543,000 | 531,000 | ||||
| Notes receivable, net of allowance of $665,000 at September 30, 2009 and $605,000 at December 31, 2008 | -- | -- | ||||
| Real estate held for sale | 4,060,000 | 3,586,000 | ||||
| Investment in real estate loans, net of allowance for loan losses of $13,543,000 at September 30, 2009 and $16,391,000 at December 31, 2008 | 22,568,000 | 29,729,000 | ||||
| Other assets | 142,000 | 67,000 | ||||
| Total assets | $ | 28,759,000 | $ | 38,168,000 | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
| Liabilities | ||||||
| Accounts payable and accrued liabilities | $ | 374,000 | $ | 313,000 | ||
| Due to related parties | 319,000 | 214,000 | ||||
| Notes payable | 86,000 | 19,000 | ||||
| Total liabilities | 779,000 | 546,000 | ||||
| Commitments and contingencies | ||||||
| Stockholders' equity | ||||||
| Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued | -- | -- | ||||
| Treasury stock, at cost 375,375 shares at September 30, 2009 and 243,613 at December 31, 2008 | (849,000) | (655,000) | ||||
| Common stock, $0.0001 par value; 25,000,000 shares authorized; 6,875,066 shares issued and 6,499,691 outstanding at September 30, 2009 and 6,875,066 shares issued and 6,631,453 outstanding at December 31, 2008 | 1,000 | 1,000 | ||||
| Additional paid in capital | 62,262,000 | 62,262,000 | ||||
| Accumulated deficit | (33,209,000) | (23,819,000) | ||||
| Accumulated other comprehensive loss | (225,000) | (167,000) | ||||
| Total stockholders' equity | 27,980,000 | 37,622,000 | ||||
| Total liabilities and stockholders' equity | $ | 28,759,000 | $ | 38,168,000 | ||
| VESTIN REALTY MORTGAGE I, INC. | ||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
| (UNAUDITED) | ||||||||||||
| For The Three Months Ended | For The Nine Months Ended | |||||||||||
| 9/30/2009 | 9/30/2008 | 9/30/2009 | 9/30/2008 | |||||||||
| Revenues | ||||||||||||
| Interest income from investment in real estate loans | $ | 314,000 | $ | 394,000 | $ | 1,080,000 | $ | 2,350,000 | ||||
| Recovery of allowance for doubtful notes receivable | -- | 41,000 | 10,000 | 43,000 | ||||||||
| Gain related to pay off of real estate loan, including recovery of allowance for loan loss | -- | -- | 63,000 | -- | ||||||||
| Other income | 6,000 | 1,000 | 12,000 | 405,000 | ||||||||
| Total revenues | 320,000 | 436,000 | 1,165,000 | 2,798,000 | ||||||||
| Operating expenses | ||||||||||||
| Management fees - related party | 69,000 | 69,000 | 207,000 | 207,000 | ||||||||
| Provision for loan loss | 2,172,000 | 2,014,000 | 4,251,000 | 5,644,000 | ||||||||
| Interest expense | 2,000 | 2,000 | 8,000 | 3,000 | ||||||||
| Professional fees | 683,000 | 332,000 | 1,692,000 | 623,000 | ||||||||
| Professional fees - related party | 29,000 | 7,000 | 73,000 | 33,000 | ||||||||
| Loan fees | -- | -- | 26,000 | -- | ||||||||
| Other | 90,000 | 137,000 | 309,000 | 385,000 | ||||||||
| Total operating expenses | 3,045,000 | 2,561,000 | 6,566,000 | 6,895,000 | ||||||||
| Loss from operations | (2,725,000) | (2,125,000) | (5,401,000) | (4,097,000) | ||||||||
| Non-operating loss | ||||||||||||
| Dividend income - related party | -- | -- | -- | 110,000 | ||||||||
| Interest income from banking institutions | -- | 35,000 | 1,000 | 85,000 | ||||||||
| Impairment of marketable securities - related party | -- | (2,181,000) | -- | (2,181,000) | ||||||||
| Settlement expense | -- | -- | (107,000) | -- | ||||||||
| Total other non-operating loss | -- | (2,146,000) | (106,000) | (1,986,000) | ||||||||
| Loss from real estate held for sale | ||||||||||||
| Revenue related to real estate held for sale | -- | -- | 11,000 | -- | ||||||||
| Net gain (loss) on sale of real estate held for sale | 2,000 | (97,000) | (76,000) | (97,000) | ||||||||
| Expenses related to real estate held for sale | (68,000) | (38,000) | (161,000) | (155,000) | ||||||||
| Write-downs on real estate held for sale | (1,859,000) | (2,020,000) | (3,657,000) | (5,427,000) | ||||||||
| Total loss from real estate held for sale | (1,925,000) | (2,155,000) | (3,883,000) | (5,679,000) | ||||||||
| Loss before provision for income taxes | (4,650,000) | (6,426,000) | (9,390,000) | (11,762,000) | ||||||||
| Provision for income taxes | -- | -- | -- | -- | ||||||||
| NET LOSS | $ | (4,650,000) | $ | (6,426,000) | $ | (9,390,000) | $ | (11,762,000) | ||||
| Basic and diluted loss per weighted average common share | $ | (0.71) | $ | (0.93) | $ | (1.43) | $ | (1.71) | ||||
| Dividends declared per common share | $ | -- | $ | -- | $ | -- | $ | 0.16 | ||||
| Weighted average common shares | 6,561,319 | 6,875,066 | 6,585,818 | 6,874,524 | ||||||||
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