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The Company reported a net loss of approximately $21.5 million or ($3.14) per share for the year ended December 31, 2008 compared with net income of approximately $2.8 million, or $0.41 per share for the year ended December 31, 2007.
The Company noted that the losses for the year ended December 31, 2008 were in large part due to non-performing loans, and the Company's recording of loan loss provisions of approximately $12.3 million. In addition, the Company incurred write downs for real estate held for sale of approximately $7.8 million for the year ended December 31, 2008. The loan loss provisions and write downs of real estate held for sale are non-cash items. Net cash flow from operating activities was approximately $1.7 million.
As of December 31, 2008, the Company had 27 loans outstanding with an aggregate principal amount approximating $46.1 million, of which 16 loans with an aggregate principal amount approximating $35.4 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. Non-performing loans increased from December 31, 2007, when the Company reported eight loans representing approximately $16.9 million as non-performing loans. The Company has commenced foreclosure proceedings with respect to 15 of the non-performing loans. In addition, the Company is conducting workout discussions with certain non-performing borrowers; however, no assurance can be made as to whether these discussions will be successful. As of December 31, 2008, we owned seven properties that we acquired through foreclosure, compared with one property owned as of December 31, 2007.
As of December 31, 2008, shareholder equity was $5.67 per common share. The Company had on its balance sheet as of December 31, 2008 approximately $3.5 million of cash, $29.7 million of investment in real estate loans, net of allowance of $16.4 million, $3.6 million in real estate held for sale and $546,000 in total liabilities.
Michael V. Shustek, Chairman and Chief Executive Officer, said, "Our disappointing results are largely attributable to the economic environment the country is experiencing. The severe downturn in the real estate market and the increased difficulties faced by our borrowers in obtaining take-out financing as a result of the disruptions in the credit markets, has caused a number of our loans to become non-performing or delinquent and has caused a decline in the appraised value of the collateral securing the Company's loan portfolio. We are working aggressively to resolve our problem loans; however, this process will take time and our near term operating results are likely to suffer from the level of non-performing assets."
The Company's Annual Earnings conference call will be held April 3, 2009 at 9:30 a.m. PDT. You can access this call by dialing 888-422-7128, code number 370808.
Vestin Realty Mortgage I, Inc. is a real estate investment trust (REIT) that invests in commercial real estate loans.
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