12-31-01

   The year 2001 will go down as one that many will want to forget. From an economic standpoint, we have proven once again that the US can withstand a blow and keep going. We may end up in hindsight to have been in a recession for the last two quarters of the year. In 2002, the outlook is for a stronger year. Uncle Al has lowered interest rates a record amount this year; the housing market has been solid through 2001 and will help lead the recover in the New Year.

   DenSco will close out 2001 a little short of my initial goals. But like most, I hadn't planned on the fall we had. We are fully invested, and have maintained that position quite easily throughout the quarter. We have a little under 2.0 million in our portfolio, which is financing 3.5 million of real estate secured by deeds of trust. With the holidays over, the demand is picking up; we have no shortage of loans to finance.

   At year-end, we have financed 37 loans, 15 loans have closed, which means in dollar terms we have turned over our portfolio 100%. We have four deals in escrow; all will close before the end of January. The loan life has continued to lengthen as planned to 75 days, and will continue to grow longer. Our average loan is $72,000. We have expanded the diversity of properties to include two land deals. Both of them are at sub 15% loan to value. I plan to have land represent no more than 10% of total portfolio. With two land loans, two construction loans, and the balance being foreclosure loans, we continue to achieve good diversity with an over all loan to value for the portfolio at 56%.

   My goal this quarter is to have 3.0 million or more in our portfolio. We continue to see a good supply of loans. I continue to add different borrowers, one is Rick Rickert a former co-worker and friend whom I have known for 14 years. Check back time to time and look at the property listings, they are updated throughout the quarter.

   Denny J. Chittick