Desert Capital REIT, Inc. Announces First Quarter 2006 Results.HENDERSON Henderson. 1 City (1990 pop. 25,945), seat of Henderson co., NW Ky., on the Ohio River, in an oil, coal, tobacco, corn, and livestock area; founded 1797, inc. as a city 1867. , Nev. -- Desert Capital REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). , Inc. today announced that its net income for the first quarter of 2006 totaled $2.9 million or $0.27 per share, as compared to a net income of $697,975 or $0.27 per share reported for the first quarter of 2005. Total revenues for the quarter ended March 31, 2006 totaled $6.0 million, as compared to $1.3 million in the same period in 2005. Interest income for the first quarter was $3.0 million, as compared to $593,470 reported for the same period in 2005. The company also generated non-interest income of $3.0 million for the quarter ended March 31, 2006 primarily from origination fees A charge imposed by a lending institution or a bank for the service of processing a loan. For example, a bank might charge an individual who has applied for a student loan an origination fee of one percent for processing the application and granting the loan. on approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $55 million of loans brokered to third parties. Todd Todd , Sir Alexander Robertus 1907-1997. British chemist. He won a 1957 Nobel Prize for his study of nucleic acids and nucleotide structures. B. Parriott, CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. and Chairman of the Board of Directors of Desert Capital REIT, Inc., said, "The strong growth in this quarter is attributed to several factors, most notably the ongoing benefit of now having full ownership of Consolidated Mortgage consolidated mortgage A mortgage made to replace two or more outstanding mortgages. , a trust deed A legal document that evidences an agreement of a borrower to transfer legal title to real property to an impartial third party, a trustee, for the benefit of a lender, as security for the borrower's debt. investment firm we began to acquire just over a year ago, and the substantial growth of our portfolio of more than 300 percent. These initiatives have contributed to the ongoing sound, robust gains in our business." Portfolio Activity During the first quarter of 2006, DCR DCR Department of Conservation and Recreation DCR Decrease DCR Digital Cable Ready (television) DCR Dark Crisis (Yu-Gi-Oh! cards) DCR Debt Coverage Ratio DCR Dacryocystorhinostomy funded all or a portion of 71 loans totaling $48.0 million. Of the new loans, 51 were acquisition and development loans totaling $43.8 million, 19 were single family construction loans totaling $3.9 million, and one was a residential acquisition loan totaling $340,000. At March 31, 2006, DCR's loan portfolio contained 129 loans with a net outstanding principal balance of $100.6 million, and an average interest rate of 13.4%. Dividend Desert Capital REIT declared dividends declared dividend A dividend authorized by a firm's board of directors. At the time a dividend is declared, the firm creates a liability for the dividend's payment. of $0.30 per share for the first 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 December: see month. 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 (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control With more than 27 years of continuous real estate investment success, Consolidated Mortgage, LLC is one of the largest private trust deed investment firms in Nevada Nevada (nəvăd`ə, –vä–), far western state of the United States. It is bordered by Utah (E), Arizona (SE), California (SW, W), and Oregon and Idaho (N). , with over $380 million currently outstanding in brokered loans. The company is located at 1291 Galleria Drive, Suite 220, Henderson, NV 89104. For information, please call (702) 739-9090. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement Statements included herein that state the company's or management's intentions, hopes, beliefs, expectations or predictions of the future are "forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. " statements within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by such statements.
DESERT CAPITAL REIT, INC.
Consolidated Balance Sheets
March 31, December 31,
2006 2005
------------- -------------
(Unaudited)
ASSETS
Mortgage investments - net $100,640,824 $ 67,649,251
Loans held-for-sale 5,357,547 1,461,147
Goodwill 13,388,555 13,388,555
Building and equipment - net 7,951,410 8,029,250
Land 1,820,000 1,820,000
Cash 10,381,954 4,459,289
Other 1,226,711 718,300
------------- -------------
Total assets $140,767,001 $ 97,525,792
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable $ 14,371,600 $ 12,112,386
Dividends payable 1,246,820 880,633
Accounts payable and accrued
expenses 1,172,683 1,708,444
------------- -------------
Total liabilities 16,791,103 14,701,463
------------- -------------
Preferred stock, $0.01 par value:
15,000,000 shares authorized, none
outstanding - -
Common stock, $0.01 par value:
100,000,000 shares authorized;
13,936,353, and 9,388,994 shares
issued and outstanding on March 31,
2006, and December 31, 2005,
respectfully 139,364 93,890
Additional paid-in capital 124,436,601 83,005,684
Retained earnings (600,067) (275,245)
------------- -------------
Total stockholders' equity 123,975,898 82,824,329
------------- -------------
Total liabilities and stockholders'
equity $140,767,001 $ 97,525,792
============= =============
DESERT CAPITAL REIT, INC.
Consolidated Statements of Operations
Three Months
Ended March 31,
----------------------------
2006 2005
------------ ------------
INTEREST INCOME:
Mortgage investments $ 2,853,948 $ 592,473
Other interest 156,343 997
------------ ------------
Total interest income 3,010,291 593,470
INTEREST EXPENSE:
Interest expense 297,894 99,164
------------ ------------
Total interest expense 297,894 99,164
Net interest income 2,712,397 494,306
Provision for loan losses 47,603 19,016
------------ ------------
Net interest income after provision
for loan loss 2,664,794 475,290
NON-INTEREST INCOME:
Loan brokerage fees 2,265,087 -
Service and other loan fees 570,335 -
Income from investment in subsidiary - 748,519
Other 192,856 2,584
------------ ------------
Total non-interest income 3,028,278 751,103
NON-INTEREST EXPENSE:
Compensation 466,457 63,167
Management fees 1,104,804 77,259
Professional fees 425,074 116,934
Insurance 107,248 76,500
Other 652,707 25,822
------------ ------------
Total non-interest expense 2,756,290 359,682
------------ ------------
Net income before taxes 2,936,782 866,711
Income tax expense - 168,736
------------ ------------
Net income $ 2,936,782 $ 697,975
============ ============
Net earnings (loss) per share - basic
and diluted 0.27 0.27
Funds From Operations 0.28 0.27
Weighted average outstanding shares 10,883,888 2,547,197
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