Vestin revenue grows, lender earns a profit

Chris Jones

Friday, May 17, 2002 | 10:53 a.m.

Aided by its expansion outside the Nevada market and tighter credit restrictions imposed by many of its competitors, Vestin Group Inc. of Las Vegas reported improved first quarter earnings.

The parent company of commercial mortgage lender Vestin Mortgage this week reported net income of $556,000, or 4 cents per share, during the three-month period ending March 31. During the same period one year ago, the company lost $456,000, or 7 cents per share.

Vestin's quarterly revenue of $5 million was also up from last year, when it reported revenue of about $4 million.

"Our success this quarter came in large part as a result of our expanded geographic scope of operations as we originated loans in several states," said Michael Shustek, Vestin Group chairman and chief executive officer. "We are also benefiting from the economy as traditional lenders tighten (their) lending standards."

Shustek said Vestin Mortgage originated 23 loans in the first quarter. It also reported it is foreclosing on approximately $3.6 million in loans that were past 90 days due.

Company spokeswoman Paula Yakubik said the small dollar volume in foreclosure proceedings is an indication of the company's financial well-being.

"We might have close to $4 million in delinquencies, but Vestin has a total loan portfolio of $400 million so the amount of delinquent loans is only around 1 percent," Yakubik said. "That's better than a lot of banks at this time, and these loans are all backed by real estate."

Vestin reitterated its statement in its annual report that it is a defendant in various lawsuits incurred in the normal course of business and that its liabilities, if any, from litigation won't have a material effect on its financial condition.

Vestin is in one high-profile suit in Las Vegas, with borrower Howard Bulloch, who alleges Shustek companies interfered with and derailed his land development plans. A federal judge last week rejected a motion for summary judgment in the case and ordered a trial. "The company has denied the allegations and intends to vigorously defend its position," Vestin said in its quarterly report this week.