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Vestin Realty Mortgage Results for 2006


LAS VEGAS - Vestin Realty Mortgage II, Inc., a real estate investment trust has announced results of operations in a 10-K filing for 2006. Vestin Realty Mortgage II, Inc. was organized in January 2006 as a Maryland corporation for the sole purpose of effecting a merger with Vestin Fund II, LLC. On March 31, 2006, Vestin Fund II, LLC merged into Vestin Realty Mortgage II, Inc. and the members of Fund II received one share of Vestin Realty Mortgage II, Inc.’s common stock for each membership unit they owned in Fund II. On December 17, 2006, each shareholder received an additional 0.3 shares of common stock for each share they owned at the time. The Company commenced trading on May 1, 2006 on the Nasdaq National Market under the symbol VRTB.

For the twelve months ended December 31, 2006, revenues were $23.5 million. Net income for the twelve months ended December 31, 2006 was $15.9 million or $0.41 per weighted average common share, which has been adjusted for the 30% stock dividend to shareholders on December 17, 2006. Net income for the 12 months included a net gain on the sale of “real estate held for sale” of $1.5 million, a $2.3 million gain on sale of “real estate held for sale-seller financed” and a non-cash loan loss provision of $5.5 million that was recorded in the quarter ended March 31, 2006, prior to the merger. The loan loss provision was entirely related to the Rightstar, Inc. loan, which is currently the subject of legal action, whereby, Vestin Realty Mortgage II, Inc. along with Vestin Realty Mortgage I, Inc. is attempting to foreclose on the Rightstar collateral. In January 2007, we filed a petition, which is still pending, with the Supreme Court of Hawaii seeking relief from restrictions placed by the District Court on our right to foreclose.

In commenting on the results of operations for the year ended December 31, 2006, Michael V. Shustek, Chairman of the Board and CEO said, “We are extremely proud of our performance during 2006. From April 1, 2006 through December 31, 2006, the Company declared cash dividends to its shareholders of $16.3 million, which is equal to $0.42 per share based on the weighted average number of shares.

As of December 31, 2006 the shareholder’s equity was $7.17 per common share, which reflects the 30% stock dividend paid to shareholders on December 17, 2006. We had $17.1 million of cash and cash equivalents on our balance sheet with only $13.8 million of borrowings.”

Mr. Shustek also stated, “During 2006, the Company sold six real estate properties that it acquired through foreclosure for a net gain of $1.5 million. At December 31, 2006 the Company owned two foreclosed real estate properties, one of which was acquired in December 2006. Both of these properties are under contract to be sold in 2007. In addition, during 2006, the Company recorded the sale of one of its “real estate held for sale-seller financing” properties when the financing was paid in full, and realized a gain of $2.3 million.”


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