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CRIIMI MAE'S TAX BASIS INCOME INCREASES APPROXIMATELY 81 PERCENT

 ROCKVILLE, Md., Aug. 19 /PRNewswire/ -- CRIIMI MAE Inc. (NYSE: CMM), the largest multifamily mortgage REIT, today said tax basis income for the second quarter of 1993 increased approximately 81 percent compared to the same period last year.
 Tax basis income was approximately $7.2 million (35 cents per share) for 1993's second quarter, up approximately 81 percent from nearly $4.0 million (20 cents per share) for the corresponding quarter in 1992. This growth resulted from higher income from ordinary operations and increased net capital gains.
 The portion of tax basis income from ordinary operations increased more than 20 percent, from 16 cents per share for last year's second quarter to 20 cents per share for the same period this year. This increase is primarily due to lower interest rates on CRIIMI MAE's borrowings.
 The portion of tax basis income from net capital gains increased from approximately 4 cents per share to approximately 15 cents per share. This increase results primarily from the sale of two mortgages by CRIIMI MAE's principal subsidiary, CRI Liquidating REIT, Inc.
 Chairman William B. Dockser said CRIIMI MAE's portfolio has a built- in stream of capital gains totaling approximately $2 per share, which during the next several years is expected to continue to supplement income from ordinary operations and be paid as part of CRIIMI MAE's dividend.
 Dockser said, "We are pleased that results from ordinary operations continue to benefit from recent interest rates, and we continue to take steps to capitalize on the current interest rate environment."
 He added that during the second quarter CRIIMI MAE bought out the floor on $25 million of its interest rate hedging arrangements. In today's interest rate environment, this transaction is expected to reduce interest expense on this tranche of borrowing through the May 1996 term of the hedge.
 Dockser said he expects continued growth in income from ordinary operations now that CRIIMI MAE has invested a portion of the funds from a $350 million financing facility established in April.
 At quarter-end, CRIIMI MAE had used a portion of those funds to replace $50 million of its corporate debt and to invest approximately $68 million in federally insured and guaranteed multifamily mortgages. In addition, the company was committed to invest another approximately $79.6 million in insured and guaranteed multifamily mortgages.
 On the funds invested and committed through June 30 under this new financing, CRIIMI MAE had an average interest rate spread over its financing costs of approximately 288 basis points.
 Since June 30, CRIIMI MAE has committed to invest another $100 million under its current investment program. Because multifamily mortgage interest rates have been decreasing, these third quarter commitments have reduced the weighted average interest rate spread CRIIMI MAE is earning under its current investment program to approximately 265 basis points.
 "These interest rate spreads are generating sizable tax basis income for CRIIMI MAE," said Dockser.
 The federal tax code requires CRIIMI MAE to pay shareholders at least 95 percent of tax basis income as dividends to preserve CRIIMI MAE's status as a corporate REIT.
 CRIIMI MAE reports both tax basis income and net income in its financial statements, but only tax basis income has a direct bearing on the level of dividends paid to shareholders.
 For financial reporting purposes, CRIIMI MAE reported an approximate 21 percent increase in net income, from approximately $2.9 million (14 cents per share) for last year's second quarter to approximately $3.5 million (17 cents per share) for the same period this year.
 As with tax basis income, net income increased for the second quarter due to higher income from ordinary operations and net gains on mortgage dispositions.
 As of June 30, 1993, CRIIMI MAE was invested in 148 mortgage investments -- 79 were directly owned by CRIIMI MAE, and 69 were held through a subsidiary. All of these investments are either insured or guaranteed by federal agencies. Assets totaled approximately $637.2 million at quarter-end.
 CRIIMI MAE's adviser is an affiliate of CRI, Inc., the real estate investment management firm based in the Washington area.
 CRI INSURED MORTGAGE ASSOCIATION, INC.
 (CRIIMI MAE)
 (Unaudited)
 For three months ended For six months ended
 June 30, June 30,
 1993 1992 1993 1992
 Tax Basis Income
 Ordinary income:
 Interest and
 other operating
 revenues $11,631,210 $10,404,731 $23,011,702 $20,791,900
 Interest
 expense (6,272,394) (6,067,994) (12,342,729)(11,843,198)
 Other expenses (1,378,621) (1,082,924) (2,625,987) (2,286,714)
 Total ordinary
 income 3,980,195 3,253,813 8,042,986 6,661,988
 Net capital gains 3,180,385 699,473 4,689,051 6,703,671(A)
 Total tax basis
 income $7,160,580 $3,953,286 $12,732,037 $13,365,659
 Tax basis income
 per share:
 Ordinary income $0.20 $0.16 $0.40 $0.33
 Net capital gains 0.15 0.04 0.23 0.33
 Total tax basis
 income per share $0.35 $0.20 $0.63 $0.66
 Dividends paid per
 share: $0.28 $0.27 $0.56 $0.54
 (A) Includes the capital gain of $6,004,198 (30 cents per share) recognized upon receipt of approximately 90 percent of the assignment proceeds from one large mortgage.
 Financial Statement Net Income
 Gross income
 including net
 gains on
 mortgage
 dispositions $13,196,535 $12,158,949 $27,612,005 $30,072,250(B)
 Interest expense (6,249,596) (6,037,073) (12,247,863)(11,773,837)
 Other expenses (1,610,094) (1,438,143) (3,169,067) (2,965,757)
 Minority interests
 in net income of
 consolidated
 subsidiary(C) (1,846,633) (1,796,823) (4,273,475) (5,648,608)
 Net financial
 statement
 income $ 3,490,212 $ 2,886,910 $ 7,921,600 $ 9,684,048
 Net financial
 statement income
 per weighted
 average share
 outstanding $0.17 $0.14 $0.39 $0.48
 As of June 30,
 1993 1992
 Total assets $637,220,050 $551,794,370
 (B) Includes capital gain recognized upon receipt of assignment proceeds from one large mortgage.
 (C) Represents the ownership interests of the minority shareholders in the net income of a subsidiary -- CRI Liquidating REIT, Inc. -- which is approximately 67 percent owned by CRIIMI MAE.
 -0- 8/19/93
 /CONTACT: James T. Pastore, 301-231-0323, or Susan B. Railey, 301-468-3120, both for CRIIMI MAE/
 (CMM)


CO: CRIIMI MAE, Inc. ST: Maryland IN: FIN SU: ERN

DC-IH -- DC001 -- 4183 08/19/93 08:34 EDT
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Publication:PR Newswire
Date:Aug 19, 1993
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