CRIIMI MAE reports first quarter results.

ROCKVILLE, Md.--(BUSINESS WIRE)--May 16, 1995--CRIIMI MAE Inc. (NYSE:CMM), the largest multifamily mortgage REIT, reported tax basis income for the three months ended March 31, 1995 of approximately $9.0 million, or 34 cents per share. This compares with tax basis income for the prior year's first quarter of approximately $12.7 million, or 50 cents per share.

Chairman William B. Dockser said, "The quarter-to-quarter decrease resulted primarily from two factors. The first factor was lower net capital gains from the sale of mortgage investments by CRIIMI MAE's primary subsidiary, CRI Liquidating REIT, Inc. Net capital gains decreased primarily because higher long-term interest rates reduced the value of the Liquidating REIT's mortgage investments. The second factor was higher interest expense associated with CRIIMI MAE's borrowings. This resulted primarily from higher short term interest rates."

Tax basis income, rather than financial statement net income, is the primary basis for paying quarterly dividends to shareholders. When announcing the first quarter's dividend in March 1995, Mr. Dockser said management expected the first quarter's 22.5 cents per share dividend to be "sustainable for each quarter of 1995, resulting in an annualized 1995 dividend of 90 cents per share." Mr. Dockser noted that each quarterly dividend is subject to approval by the board of directors based upon conditions during the quarter.

Mr. Dockser said, "The anticipated dividend level for 1995 of 90 cents per share includes assumptions regarding interest rates, the amount of investments we make in subordinated securities as well as the timing of those investments, and other factors. It does not include the anticipated effect of CRIIMI MAE's proposed merger plan to combine its business with the mortgage businesses of CRI, Inc.

This merger is described in a proxy statement mailed to shareholders on May 1, 1995. That proxy statement details plans for CRICO Mortgage Company and two other CRI affiliates to be merged into CRIIMI MAE Management, Inc., a newly-formed, wholly owned subsidiary of CRIIMI MAE. Under the proposed merger, CRIIMI MAE would become a fully-integrated, self-administered, self-managed real estate investment trust specializing in mortgage investment, advisory services, loan origination, and mortgage servicing. The proxy statement is subject to, among other things, approval by CRIIMI MAE's shareholders at a special meeting scheduled to be held on June 21, 1995.

Anticipated Financial Impact of Proposed Merger

If shareholders approve the proposed merger, management believes it will be accretive on a tax basis, generating additional tax basis income per share. The source of the accretion would be increased revenues from the CRI mortgage businesses and reduced expenses resulting from the termination of CRIIMI MAE's advisory agreement with an affiliate of CRI, Inc. The proxy statement presents the merger's estimated pro forma impact on 1994 tax basis income, adjusted for pro forma demonstration purposes, and based on assumptions as set forth in the proxy statement. The pro forma calculation as set forth in the proxy statement estimates accretion to 1994 tax basis income of six cents per share.

Management believes the merger will be dilutive on a 1994 pro forma financial statement basis. This is primarily due to non-cash expenses arising from the amortization of assets acquired in the proposed merger. The proxy statement estimates that, on a pro forma basis, the merger would reduce 1994's financial statement net income by seven cents per share. For income statement purposes, the pro forma calculation assumes that the transaction occurred on Jan. 1, 1994.

Assets would increase as a result of the merger by approximately $35.2 million, reflecting the estimated value of the management contracts, the work force, the intellectual property and other assets of the CRI mortgage businesses. Liabilities and shareholders' equity would increase by an identical amount, reflecting the issuance of up to 2,761,290 common shares and options to purchase three million shares, the assumption of $9.1 million in debt and $5.0 million in deferred compensation.

Financial Statement Net Income

CRIIMI MAE reports both tax basis income and net income for financial statement purposes, but CRIIMI MAE's dividends are primarily based on tax basis income.

Net income for financial statement purposes was approximately $4.9 million, or 19 cents per share for the first quarter of 1995. This compares with net income for last year's first quarter of approximately $10.0 million, or 47 cents per share.

Net income decreased for the same reasons as tax basis income -- primarily lower net financial statement gains from mortgage dispositions by CRIIMI MAE's subsidiary, CRI Liquidating REIT, Inc., and increased interest expense associated with CRIIMI MAE's borrowings.

Portfolio

Assets totaled approximately $925 million at March 31, 1995, up approximately 11 percent from approximately $835 million at the end of 1994's first quarter.

As of March 31, 1995, CRIIMI MAE owned 196 government insured mortgages -- 173 were directly owned by CRIIMI MAE and 23 were held by CRIIMI MAE's primary subsidiary, CRI Liquidating REIT, Inc. CRIIMI MAE owns approximately 57 percent of the outstanding shares of CRI Liquidating REIT. In addition, a wholly owned subsidiary of CRIIMI MAE owned the general partnership interests in four American Insured Mortgage Investment Funds, which own substantially the same type of mortgage investments as CRIIMI MAE and CRI Liquidating REIT. CRIIMI MAE also owned five tranches of uninsured subordinated securities backed by two portfolios of multifamily and commercial mortgages. On April 6, 1995, CRIIMI MAE invested an additional $18.3 million in uninsured subordinated securities which had a face value of approximately $21.2 million.

                       CRIIMI MAE INC.
                         (Unaudited)

                                         For the three months ended
                                                  March 31,
                                            1995            1994
Tax basis income:
  Ordinary income:
    Interest and other operating
      revenues                         $ 18,235,827    $ 14,030,426
    Interest expense                    (12,744,322)     (7,616,242)
    Other expenses                       (1,889,530)     (1,909,816)

      Total ordinary income               3,601,975       4,504,368

  Net capital gains                       5,345,960       8,204,831

      Total tax basis income           $  8,947,935    $ 12,709,199

Tax basis income per share:

  Ordinary income                      $       0.14    $       0.18
  Net capital gains                            0.20            0.32
      Total tax basis income per share $       0.34    $       0.50

Weighted average shares outstanding
  (for tax purposes)                     26,350,979      25,183,533

Dividends paid per share:              $      0.225     $      0.29

Financial statement net income:
  Gross income, including net gains
    on mortgage dispositions           $ 21,068,792    $ 27,546,168

  Interest expense                      (12,149,403)     (8,519,451)

  Other expenses                         (2,031,412)     (2,182,409)

  Minority interests in net income
   of consolidated subsidiary(a)         (1,972,580)     (6,862,258)

  Net financial statement income       $  4,915,397    $  9,982,050

  Weighted average shares outstanding    26,267,646      21,117,599

  Net financial statement income
    per weighted average share
    outstanding                        $       0.19    $       0.47

                                               As of March 31,
                                            1995            1994

BALANCE SHEET DATA:
  Investment in mortgages             $815,166,953(b) $734,505,372(b)

  Investment in subordinated
    securities                         $ 39,039,043    $         --

  Total assets                         $925,003,144    $834,798,870

  Total shareholders' equity           $255,377,890    $256,756,840

(a) Represents the ownership interests of the minority shareholders in the net income of a subsidiary -- CRI Liquidating REIT, Inc. -- which is approximately 57% owned by CRIIMI MAE Inc. (b) Includes net unrealized gains on a consolidated basis of approximately $12.2 million and $15.6 million as of March 31, 1995 and 1994, respectively, on mortgage investments of CRI Liquidating REIT, Inc.

CONTACT: CRIIMI MAE Inc.

James T. Pastore, 202/546-6451

Susan B. Railey, 301/468-3120