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U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-QSB

(MARK ONE)

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED

JUNE 30, 2002
[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM _______________ TO _______________

COMMISSION FILE NUMBER 000-24803

VESTIN GROUP, INC.

(EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)

|                                                                        |  |                                                
|----------------------------------------------------------------------- |  | -----------------------------------------------
|DELAWARE
(STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION) |  | 52-2102142
(I.R.S. EMPLOYER
IDENTIFICATION NO.)

2901 EL CAMINO AVENUE, SUITE 206, LAS VEGAS, NEVADA 89102

(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

(702) 227-0965

(ISSUERS TELEPHONE NUMBER)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.

Yes [X]      No [   ]

Number of shares outstanding of each of the issuers classes of common equity,
as of July 31, 2002:

5,321,298 Shares of Common Stock





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TABLE OF CONTENTS



|                           |                                                             |                                                 |  |  |  |  |  | 
|-------------------------- | ----------------------------------------------------------- | ----------------------------------------------- |  |  |  |  |  | 
|                           |                                                             | CONSOLIDATED BALANCE SHEET                     
|                           |                                                             | CONSOLIDATED STATEMENTS OF INCOME              
|                           |                                                             | CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
|                           |                                                             | CONSOLIDATED STATEMENTS OF CASH FLOWS          
|                           |                                                             | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS     
|                           | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS               
|PART II. OTHER INFORMATION
|                           | ITEM 1. LEGAL PROCEEDINGS                                  
|                           | ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS          
|                           | ITEM 3. DEFAULTS UPON SENIOR SECURITIES                    
|                           | ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
|                           | ITEM 5. OTHER INFORMATION                                  
|                           | ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                   
|SIGNATURES                
|EXHIBIT 99.1              



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##### Table of Contents



VESTIN GROUP, INC. AND
SUBSIDIARIES

INDEX

|           |  |                                                            |  |         
|---------- |  | ---------------------------------------------------------- |  | --------
|           |  |                                                            |  | Page No.
|PART I     |  | FINANCIAL INFORMATION                                      |  |         
|Item 1.    |  | Financial Statements                                       |  |         
|           |  | Consolidated Balance Sheet (unaudited)                     |  | 4       
|           |  | Consolidated Statements of Income (unaudited)              |  | 5       
|           |  | Consolidated Statement of Stockholders Equity (unaudited) |  | 6       
|           |  | Consolidated Statements of Cash Flows (unaudited)          |  | 7       
|           |  | Notes to Consolidated Financial Statements (unaudited)     |  | 9       
|Item 2.    |  | Managements Discussions and Analysis                      |  | 12      
|PART II    |  | OTHER INFORMATION                                          |  |         
|Item 1.    |  | Legal Proceedings                                          |  | 19      
|Item 2.    |  | Changes in Securities and Use of Proceeds                  |  | 19      
|Item 3.    |  | Defaults Upon Senior Securities                            |  | 19      
|Item 4.    |  | Submission of Matters to a Vote of Security Holders        |  | 19      
|Item 5.    |  | Other Information                                          |  | 19      
|Item 6.    |  | Exhibits and Reports on Form 8-K                           |  | 19      
|SIGNATURES |  | 20                                                        





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##### Table of Contents






Vestin Group, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEET

June 30, 2002(Unaudited)

ASSETS

|                                                        |                                                                                                                         |                                            |           |            |            |  | 
|------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | --------- | ---------- | ---------- |  | 
|Cash                                                    |                                                                                                                         | $                                          | 3,525,994 |           
|Accounts receivable, net                                |                                                                                                                         |                                            | 3,569,372 |           
|Due from related parties                                |                                                                                                                         |                                            | 1,079,806 |           
|Notes receivable                                        |                                                                                                                         |                                            | 746,000   |           
|Investments in marketable securities available for sale |                                                                                                                         |                                            | 143,317   |           
|Investments in real estate held for sale                |                                                                                                                         |                                            | 1,321,600 |           
|Investments in mortgage loans on real estate            |                                                                                                                         |                                            | 7,206,735 |           
|Other investments  related parties                     |                                                                                                                         |                                            | 2,588,500 |           
|Other assets                                            |                                                                                                                         |                                            | 554,813   |           
|Property and equipment, net                             |                                                                                                                         |                                            | 365,672   |           
|                                                        |                                                                                                                         |                                            |           |           
|                                                        |                                                                                                                         | Total assets                               |           | $          | 21,101,809 | 
|                                                        |                                                                                                                         |                                            |           |           
|LIABILITIES AND STOCKHOLDERS EQUITY                   
|Accounts payable and accrued expenses                   |                                                                                                                         | $                                          | 1,801,369 |           
|Dividends payable                                       |                                                                                                                         |                                            | 187,398   |           
|Income taxes payable                                    |                                                                                                                         |                                            | 2,012,891 |           
|Lines of credit                                         |                                                                                                                         |                                            |          |           
|Notes payable                                           |                                                                                                                         |                                            | 158,000   |           
|                                                        |                                                                                                                         |                                            |           |           
|                                                        |                                                                                                                         | Total liabilities                          |           |            | 4,159,658  | 
|                                                        |                                                                                                                         |                                            |           |           
|Commitments and contingencies                           |                                                                                                                         |                                            |          |           
|                                                        |                                                                                                                         |                                            |           |           
|Stockholders equity                                    |                                                                                                                         |                                            |           |           
|                                                        | Preferred stock, $.0001 par value; 20 million shares
authorized; 937,800 shares issued and outstanding                  |                                            |           | 94         |           
|                                                        | Common stock, $.0001 par value; 100 million shares
authorized; 5,568,198 shares issued and 5,343,698 shares outstanding |                                            |           | 557        |           
|                                                        | Treasury
stock, 224,500 shares                                                                                          |                                            |           | (1,885,582 | )         
|                                                        | Additional paid-in capital                                                                                              |                                            |           | 8,450,737  |           
|                                                        | Retained earnings                                                                                                       |                                            |           | 10,563,352 |           
|                                                        | Accumulated other comprehensive loss                                                                                    |                                            |           | (187,007   | )         
|                                                        |                                                                                                                         |                                            |           |           
|                                                        |                                                                                                                         | Total stockholders equity                 |           |            | 16,942,151 | 
|                                                        |                                                                                                                         |                                            |           |           
|                                                        |                                                                                                                         | Total liabilities and stockholders equity |           | $          | 21,101,809 | 
|                                                        |                                                                                                                         |                                            |           |           

The accompanying notes are an integral part of these statements.

4



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Vestin Group, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

|                                                               |                                     |                                                                     |           |                            |           |                          |           |               |           |               |           |            |            |  |           |           |           |  
|-------------------------------------------------------------- | ----------------------------------- | ------------------------------------------------------------------- | --------- | -------------------------- | --------- | ------------------------ | --------- | ------------- | --------- | ------------- | --------- | ---------- | ---------- |  | --------- | --------- | --------- | -
|                                                               |                                     |                                                                     |           | For the three months ended |           | For the six months ended
|                                                               |                                     |                                                                     |           |                            |           |                         
|                                                               |                                     |                                                                     |           | June 30, 2002              |           | June 30, 2001            |           | June 30, 2002 |           | June 30, 2001
|                                                               |                                     |                                                                     |           |                            |           |                          |           |               |           |              
|Revenues                                                       |                                     |                                                                     |           |                            |           |                          |           |               |           |               |           |            |            |  |           |          
|                                                               | Loan placement and related fees     |                                                                     | $         | 8,740,203                  |           |                          | $         | 4,535,539     |           |               | $         | 13,347,801 |            |  | $         | 8,253,646 |          
|                                                               | Interest income                     |                                                                     |           | 63,722                     |           |                          |           | 119,937       |           |               |           | 242,501    |            |  |           | 329,359   |          
|                                                               | Other income                        |                                                                     |           | 63,097                     |           |                          |           | 60,131        |           |               |           | 297,625    |            |  |           | 87,994    |          
|                                                               |                                     |                                                                     |           |                            |           |                          |           |               |           |               |           |            |            |  |           |          
|                                                               |                                     | Total revenues                                                      |           |                            | 8,867,022 |                          |           |               | 4,715,607 |               |           |            | 13,887,927 |  |           |           | 8,670,999 |  
|                                                               |                                     |                                                                     |           |                            |           |                          |           |               |           |               |           |            |            |  |           |          
|Expenses                                                       |                                     |                                                                     |           |                            |           |                          |           |               |           |               |           |            |            |  |           |          
|                                                               | Sales and marketing expenses        |                                                                     |           | 2,533,215                  |           |                          |           | 1,962,262     |           |               |           | 4,067,698  |            |  |           | 4,435,173 |          
|                                                               | General and administrative expenses |                                                                     |           | 2,908,906                  |           |                          |           | 2,357,996     |           |               |           | 5,277,695  |            |  |           | 4,401,385 |          
|                                                               | Interest expenses                   |                                                                     |           | 170,709                    |           |                          |           | 96,647        |           |               |           | 440,591    |            |  |           | 227,370   |          
|                                                               |                                     |                                                                     |           |                            |           |                          |           |               |           |               |           |            |            |  |           |          
|                                                               |                                     | Total expenses                                                      |           |                            | 5,612,830 |                          |           |               | 4,416,905 |               |           |            | 9,785,984  |  |           |           | 9,063,928 |  
|                                                               |                                     |                                                                     |           |                            |           |                          |           |               |           |               |           |            |            |  |           |          
|                                                               |                                     | Income from continuing operations before
provision for income taxes |           |                            | 3,254,192 |                          |           |               | 298,702   |               |           |            | 4,101,943  |  |           |           | (392,929  | )
|Provision for income taxes                                     |                                     |                                                                     | 1,106,425 |                            |           |                          | 109,870   |               |           |               | 1,394,661 |            |            |  | (125,285  | )        
|                                                               |                                     |                                                                     |           |                            |           |                          |           |               |           |               |           |            |            |  |           |          
|                                                               |                                     | NET INCOME                                                          |           | $                          | 2,147,767 |                          |           | $             | 188,832   |               |           | $          | 2,707,282  |  |           | $         | (267,644  | )
|                                                               |                                     |                                                                     |           |                            |           |                          |           |               |           |               |           |            |            |  |           |          
|Earnings per common share  Basic                              |                                     |                                                                     |           |                            |           |                          |           |               |           |               |           |            |            |  |           |          
|                                                               | Net income                          |                                                                     | $         | 0.35                       |           |                          | $         | 0.03          |           |               | $         | 0.41       |            |  | $         | (0.04     | )        
|                                                               |                                     |                                                                     |           |                            |           |                          |           |               |           |               |           |            |            |  |           |          
|Earnings per common share  Diluted                            |                                     |                                                                     |           |                            |           |                          |           |               |           |               |           |            |            |  |           |          
|                                                               | Net income                          |                                                                     | $         | 0.22                       |           |                          | $         | 0.03          |           |               | $         | 0.26       |            |  | $         | (0.04     | )        
|                                                               |                                     |                                                                     |           |                            |           |                          |           |               |           |               |           |            |            |  |           |          
|Weighted average number of common shares
outstanding  Basic   |                                     |                                                                     | 5,444,883 |                            |           |                          | 6,161,809 |               |           |               | 5,482,952 |            |            |  | 6,169,363 |          
|                                                               |                                     |                                                                     |           |                            |           |                          |           |               |           |               |           |            |            |  |           |          
|Weighted average number of common shares
outstanding  Diluted |                                     |                                                                     | 8,738,727 |                            |           |                          | 6,958,449 |               |           |               | 8,662,066 |            |            |  | 6,169,363 |          
|                                                               |                                     |                                                                     |           |                            |           |                          |           |               |           |               |           |            |            |  |           |          

The accompanying notes are an integral part of these statements.

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Vestin Group, Inc. and Subsidiaries

CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY

For the six months ended June 30, 2002
(Unaudited)

|                                           |                                                                             |                            |         |                 |   |              |    |                |   |            |           |          |   |               |     |         |   |          |          |        |   |       |            |   |   |   |           |   |   |   |            |           |   |   |          |             |          |   |            |           |            | 
|------------------------------------------ | --------------------------------------------------------------------------- | -------------------------- | ------- | --------------- | - | ------------ | -- | -------------- | - | ---------- | --------- | -------- | - | ------------- | --- | ------- | - | -------- | -------- | ------ | - | ----- | ---------- | - | - | - | --------- | - | - | - | ---------- | --------- | - | - | -------- | ----------- | -------- | - | ---------- | --------- | ---------- | 
|                                           |                                                                             |                            |         |                 |   |              |    |                |   |            |           |          |   |               |     |         |   |          |          |        |   |       |            |   |   |   |           |   |   |   |            |           |   |   |          | Accumulated |          |   |            |          
|                                           |                                                                             |                            |         | Preferred Stock |   | Common Stock |    | Treasury Stock |   | Additional |           |          |   |               |     | Other   |   |          |          |       
|                                           |                                                                             |                            |         |                 |   |              |    |                |   | Paid-in    |           | Retained |   | Comprehensive |     |        
|                                           |                                                                             |                            |         | Shares          |   | Amount       |    | Shares         |   | Amount     |           | Shares   |   | Amount        |     | Capital |   | Earnings |          | Income |   | Total
|                                           |                                                                             |                            |         |                 |   |              |    |                |   |            |           |          |   |               |     |         |   |          |          |        |   |      
|Balance at January 1, 2002                 |                                                                             |                            | 937,800 |                 |   | $            | 94 |                |   |            | 5,568,198 |          |   | $             | 557 |         |   |          |         |        |   | $     |           |   |   | $ | 7,948,778 |   |   | $ | 8,984,283  |           |   | $ | (163,523 | )           |          | $ | 16,770,189 |          
|Comprehensive income:                      |                                                                             |                            |         |                 |   |              |    |                |   |            |           |          |   |               |     |         |   |          |          |        |   |       |            |   |   |   |           |   |   |   |            |           |   |   |          |             |          |   |            |          
|                                           | Net income                                                                  |                            |         |                |   |              |    |               |   |            |           |         |   |               |     |        |   |          |          |       |   |       |            |  |   |   |           |  |   |   |            | 2,707,282 |   |   |          |            |          |   |            | 2,707,282 |           
|                                           | Net unrealized loss on investments
available-for-sale, net of tax of $8,944 |                            |         |                |   |              |    |               |   |            |           |         |   |               |     |        |   |          |          |       |   |       |            |  |   |   |           |  |   |   |            |          |   |   |          | (23,484     | )        |   |            | (23,484   | )         
|                                           |                                                                             |                            |         |                 |   |              |    |                |   |            |           |          |   |               |     |         |   |          |          |        |   |       |            |   |   |   |           |   |   |   |            |           |   |   |          |             |          |   |            |          
|                                           |                                                                             | Total comprehensive income |         |                 |  |              |    |                |  |            |           |          |  |               |     |         |  |          |          |        |  |       |            |   |  |   |           |   |  |   |            |           |  |   |          |             | (187,007 | ) |            |           | 19,453,987 | 
|Declaration
of dividend on preferred stock |                                                                             |                            |        |                 |   |              |   |                |   |            |          |          |   |               |    |         |   |          |         |        |   |       |           |   |   |   |          |   |   |   | (468,900   | )         |   |   |         |             |          |   | (468,900   | )        
|Declaration
of dividend on common stock    |                                                                             |                            |        |                 |   |              |   |                |   |            |          |          |   |               |    |         |   |          |         |        |   |       |           |   |   |   |          |   |   |   | (659,313   | )         |   |   |         |             |          |   | (659,313   | )        
|Expenses related to issuance of warrants   |                                                                             |                            |        |                 |   |              |   |                |   |            |          |          |   |               |    |         |   |          |         |        |   |       |           |   |   |   | 501,959   |   |   |   |           |           |   |   |         |             |          |   | 501,959    |          
|Treasury stock acquired                    |                                                                             |                            |        |                 |   |              |   |                |   |            |          |          |   |               |    |         |   |          | (224,500 | )      |   |       | (1,885,582 | ) |   |   |          |   |   |   |           |           |   |   |         |             |          |   | (1,885,582 | )        
|                                           |                                                                             |                            |         |                 |   |              |    |                |   |            |           |          |   |               |     |         |   |          |          |        |   |       |            |   |   |   |           |   |   |   |            |           |   |   |          |             |          |   |            |          
|Balance at June 30, 2002                   |                                                                             |                            | 937,800 |                 |   | $            | 94 |                |   |            | 5,568,198 |          |   | $             | 557 |         |   |          | (224,500 | )      |   | $     | (1,885,582 | ) |   | $ | 8,450,737 |   |   | $ | 10,563,352 |           |   | $ | (187,007 | )           |          | $ | 16,942,151 |          
|                                           |                                                                             |                            |         |                 |   |              |    |                |   |            |           |          |   |               |     |         |   |          |          |        |   |       |            |   |   |   |           |   |   |   |            |           |   |   |          |             |          |   |            |          

The accompanying notes are an integral part of these statements.

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Vestin Group, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the six months ended June 30,
(Unaudited)

|                                      |                                                                                                                               |                                                               |                                       |                                                     |         |          |           |          |         |          |            |  
|------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------- | ------------------------------------- | --------------------------------------------------- | ------- | -------- | --------- | -------- | ------- | -------- | ---------- | -
|                                      |                                                                                                                               |                                                               |                                       |                                                     |         | 2002     |           | 2001    
|                                      |                                                                                                                               |                                                               |                                       |                                                     |         |          |           |         
|Cash flow from operating activities:  |                                                                                                                               |                                                               |                                       |                                                     |         |          |           |         
|                                      | Net income (loss)                                                                                                             |                                                               | $                                     | 2,707,282                                           |         |          | $         | (267,644 | )      
|                                      | Adjustments to reconcile net income (loss) from continuing
operations to net cash provided by (used in) operating activities: |                                                               |                                       |                                                     |         |          |           |          |        
|                                      |                                                                                                                               | Depreciation and amortization                                 |                                       |                                                     | 50,589  |          |           |          | 26,754  |         
|                                      |                                                                                                                               | Stock based compensation                                      |                                       |                                                     | 501,959 |          |           |          | 464,842 |         
|                                      |                                                                                                                               | Net
loss from sale of investment in real estate held for sale |                                       |                                                     | 198,111 |          |           |          |        |         
|                                      |                                                                                                                               | Changes in operating assets and liabilities:                  |                                       |                                                     |         |          |           |          |         |         
|                                      |                                                                                                                               |                                                               | Accounts receivable                   |                                                     |         | 139,098  |           |          |         | (779,599 | )         
|                                      |                                                                                                                               |                                                               | Other assets                          |                                                     |         | (12,802  | )         |          |         | (252,994 | )         
|                                      |                                                                                                                               |                                                               | Due from related parties              |                                                     |         | (100,077 | )         |          |         | (27,589  | )         
|                                      |                                                                                                                               |                                                               | Prepaid expenses                      |                                                     |         |         |           |          |         | (250,000 | )         
|                                      |                                                                                                                               |                                                               | Accounts payable and accrued expenses |                                                     |         | (122,573 | )         |          |         | 683,600  |           
|                                      |                                                                                                                               |                                                               | Income taxes payable                  |                                                     |         | 549,648  |           |          |         | (439,394 | )         
|                                      |                                                                                                                               |                                                               |                                       |                                                     |         |          |           |         
|                                      |                                                                                                                               |                                                               |                                       | Net cash provided by (used in) operating activities |         |          | 3,911,235 |          |         |          | (842,024   | )
|                                      |                                                                                                                               |                                                               |                                       |                                                     |         |          |           |         
|Cash flows from investing activities: |                                                                                                                               |                                                               |                                       |                                                     |         |          |           |         
|                                      | Purchase of property and equipment                                                                                            |                                                               |                                       | (111,544                                            | )       |          |           | (118,730 | )      
|                                      | Cash advanced on notes receivable                                                                                             |                                                               |                                       | (110,000                                            | )       |          |           | (812,500 | )      
|                                      | Principal payments received on notes receivable                                                                               |                                                               |                                       | 991,499                                             |         |          |           | 153,000  |        
|                                      | Purchase of investment in real estate held for sale                                                                           |                                                               |                                       | (30,721                                             | )       |          |           |         |        
|                                      | Proceeds from sale of investments in real estate held for sale                                                                |                                                               |                                       | 4,717,000                                           |         |          |           | 896,000  |        
|                                      | Net purchase of investment in marketable securities                                                                           |                                                               |                                       | (138,039                                            | )       |          |           | (19,068  | )      
|                                      | Net sale (purchase) of other investments                                                                                      |                                                               |                                       | 114,999                                             |         |          |           | (679,289 | )      
|                                      | Purchase of investments in mortgage loans on real
estate, net of sales                                                        |                                                               |                                       | (2,293,341                                          | )       |          |           | (700,719 | )      
|                                      |                                                                                                                               |                                                               |                                       |                                                     |         |          |           |         
|                                      |                                                                                                                               |                                                               |                                       | Net cash provided by (used in) investing activities |         |          | 3,139,853 |          |         |          | (1,281,306 | )
|                                      |                                                                                                                               |                                                               |                                       |                                                     |         |          |           |         

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Vestin Group, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS  CONTINUED

For the six months ended June 30,
(Unaudited)

|                                            |                                                                       |                                                     |           |            |            |      |           |           |           |  
|------------------------------------------- | --------------------------------------------------------------------- | --------------------------------------------------- | --------- | ---------- | ---------- | ---- | --------- | --------- | --------- | -
|                                            |                                                                       |                                                     |           | 2002       |            | 2001
|                                            |                                                                       |                                                     |           |            |            |     
|Cash flows from financing activities:       |                                                                       |                                                     |           |            |            |      |           |          
|                                            | Advances on line of credit, net                                       |                                                     | $         |           |            |      | $         | 2,000,000 |          
|                                            | Payments on notes payable                                             |                                                     |           | (4,397,232 | )          |      |           | (140,000  | )        
|                                            | Issuance of preferred stock dividend                                  |                                                     |           | (468,900   | )          |      |           |          |          
|                                            | Issuance of common stock dividend                                     |                                                     |           | (550,062   | )          |      |           |          |          
|                                            | Purchase of treasury stock                                            |                                                     |           | (1,885,582 | )          |      |           | (156,176  | )        
|                                            |                                                                       |                                                     |           |            |            |      |           |          
|                                            |                                                                       | Net cash provided by (used in) financing activities |           |            | (7,301,776 | )    |           |           | 1,703,824 |  
|                                            |                                                                       |                                                     |           |            |            |      |           |          
|                                            |                                                                       | NET DECREASE IN CASH                                |           |            | (250,688   | )    |           |           | (419,506  | )
|Cash at beginning of year                   |                                                                       |                                                     | 3,776,682 |            |            |      | 1,048,855 |          
|                                            |                                                                       |                                                     |           |            |            |      |           |          
|Cash at end of year                         |                                                                       | $                                                   | 3,525,994 |            |            | $    | 629,349   |          
|                                            |                                                                       |                                                     |           |            |            |      |           |          
|Supplemental cash flow information:         |                                                                       |                                                     |           |            |            |      |           |          
|                                            | Cash paid for federal income taxes                                    |                                                     | $         | 1,335,091  |            |      | $         | 500,000   |          
|                                            |                                                                       |                                                     |           |            |            |      |           |          
|                                            | Cash paid for interest                                                |                                                     | $         | 325,883    |            |      | $         | 191,007   |          
|                                            |                                                                       |                                                     |           |            |            |      |           |          
|Noncash investing and financing activities: |                                                                       |                                                     |           |            |            |      |           |          
|                                            | Dividends declared on preferred stock                                 |                                                     | $         | 78,150     |            |      | $         |          |          
|                                            |                                                                       |                                                     |           |            |            |      |           |          
|                                            | Dividends declared on common stock                                    |                                                     | $         | 109,248    |            |      | $         |          |          
|                                            |                                                                       |                                                     |           |            |            |      |           |          
|                                            | Investments in real estate held for sale acquired through foreclosure |                                                     | $         | 1,321,600  |            |      | $         |          |          
|                                            |                                                                       |                                                     |           |            |            |      |           |          
|                                            | Notes payable assumed through foreclosure                             |                                                     | $         | 158,000    |            |      | $         |          |          
|                                            |                                                                       |                                                     |           |            |            |      |           |          

The accompanying notes are an integral part of these statements.

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VESTIN GROUP, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 1  BASIS OF PRESENTATION

The accompanying consolidated financial statements have been prepared in
accordance with Securities and Exchange Commission requirements for interim
financial statements. Therefore, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. The financial statements should be read in conjunction
with the Forms 10-KSB and 10-KSB/A for the year ended December 31, 2001 of
Vestin Group, Inc. (Vestin or the Company).

The Company conducts its operations primarily through Vestin Mortgage, Inc., a
wholly owned subsidiary (Vestin Mortgage). Vestin Mortgage operates as a
mortgage broker licensed in the state of Nevada. Vestin Mortgage is engaged in
the brokerage and placement of commercial loans secured by real property. The
Companys primary operations consist of managing Vestin
Fund I and Vestin Fund II and arranging for investor funding of
commercial, construction, acquisition and development, land and residential
mortgage loans.

The interim consolidated financial statements present the balance sheet,
statements of income, stockholders equity and cash flows of Vestin Group, Inc.
and its subsidiaries. The consolidated financial statements have been prepared
in accordance with accounting principles generally accepted in the United
States. All significant intercompany balances have been eliminated in
consolidation.

The interim consolidated financial information is unaudited. In the opinion of
management, all adjustments necessary to present fairly the financial position
as of June 30, 2002 and the results of operations and cash flows presented
herein have been included in the consolidated financial statements. Interim
results are not necessarily indicative of results of operations for the full
year.

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from
those estimates.

The Company is currently undergoing an audit of its interim consolidated
financial statements as of and for the six months ended June 30, 2002 for the
purpose of facilitating future SEC filings. The results of the audit may
impact the Companys consolidated interim financial information presented
herein.

NOTE 2  RELATED PARTY TRANSACTIONS

Due from related parties approximating $1,080,000 as of June 30, 2002 is
comprised of the following:



| |  |  | A note receivable of approximately $211,000 from an employee of the Company
dated April 19, 2000. The note is unsecured, matures on April 19, 2004 and
bears interest at 10%. Interest only payments are made on a semi-annual basis
with the principal and any accrued interest due as a lump sum at
maturity.
| |  |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Amounts due from Vestin Fund I, LLC (Fund I) approximating a
total of $218,000 relate to management fees, earnings on units
invested in Fund I, and reimbursable expenses. Amounts due from
Fund I bear no interest and are due on demand.                                                                   
|
| |  |  | Amounts due from Vestin Fund II, LLC (Fund II) approximating a
total of $651,000 relate to management fees, earnings on units
invested in Fund II, and reimbursable expenses. Amounts due from
Fund II bear no interest and are due on demand.                                                               

During the three and six months ended June 30, 2002, the Company paid
approximately $67,400 and $126,300, respectively, for legal fees to a law firm
in which the Executive Vice President of Legal and Corporate Affairs of the
Company has an equity ownership.

The Companys President and Chief Financial Officer, Financial Advisor, and Tax Manager are equity
owners in a Certified Public Accounting (CPA) firm.
During the three and six months ended June 30, 2002, the CPA
firms staff assisted in the preparation of the Companys
financial reports and provided bookkeeping services at no charge to the Company.

9



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##### Table of Contents



VESTIN GROUP, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

For the three month periods ended June 30, 2002 and 2001, the Company recorded
revenues of approximately $31,000 and $-0-, respectively, from its investment
in Fund I as a result of distributions declared during those periods. For the
six month periods ended June 30, 2002 and 2001, the Company recorded revenues
of $64,000 and $-0-, respectively, from its investment in Fund I. Vestin
Mortgage, Inc., as the Managing Member, is entitled to an annual management fee
of up to 0.25% of the aggregate capital contributions to Fund I. During the
three month periods ended June 30, 2002 and 2001, Vestin Mortgage recorded
management fees from Fund I of approximately $63,000 and $-0-, respectively.
For the six month periods ended June 30, 2002 and 2001, Vestin Mortgage
recorded management fees from Fund I of approximately $124,000 and $7,000,
respectively.

For the three month periods ended June 30, 2002 and 2001, the Company recorded
revenues of approximately $34,000 and $-0-, respectively, from its investment
in Fund II as a result of distributions declared during those periods. For the
six month periods ended June 30, 2002 and 2001, the Company recorded revenues
of $69,000 and $-0-, respectively, from its investment in Fund II. Vestin
Mortgage, Inc. is also the Managing Member of Fund II entitling it to receive
annual management fees of up to 0.25% of the aggregate capital contributions to
Fund II. During the three month periods ended June 30, 2002 and 2001, Vestin
Mortgage recorded management fees from Fund II approximating $134,000 and $-0-,
respectively. For the six month periods ended June 30, 2002 and 2001, Vestin
Mortgage recorded management fees from Fund II of approximately $237,000 and
$-0-, respectively. During the three and six month periods ended
June 30, 2002, the Company sold $10,000,000 in loans to
Fund II pursuant to the terms of the Operating Agreement of
Fund II which permits Fund II to acquire loans from the
Company if such loan was acquired to facilitate its acquisition by
Fund II and provided that the price paid by Fund II is no
greater than the Companys cost.

NOTE 3  INVESTMENTS IN MORTGAGE LOANS ON REAL ESTATE

Approximately $3,241,000 in loans were more than
90 days past due in payment of interest at June 30, 2002.
The Company has commenced foreclosure proceedings with respect to
such loans. As of June 30, 2002, all other mortgage loans
payments were current and performing according to their terms.
Management has evaluated the collectibility of the loans in the
process of foreclosure in light of the types and dollar amounts of
such loans, adverse situations that may affect the borrowers
ability to repay, prevailing economic conditions and the underlying
collateral securing the loan. Accordingly, the Companys
management estimates that an allowance for loan losses is not
necessary.

NOTE 4  INVESTMENTS IN REAL ESTATE HELD FOR SALE

Investments in real estate held for sale
approximating $1,322,000 as of June 30, 2002, consisted of the
following:

| |                                                                                                                                                                                                                                                    
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | A residential property located in Las Vegas, Nevada with a carrying value of $797,000. The Company
acquired this property through foreclosure and took title to the property during the three month
period ended June 30, 2002.                    
|
| | Two
developed parcels of land located in Las Vegas, Nevada with a total
carrying value of $525,000. The Company acquired these properties
through foreclosure and took title to these properties during the
three month period ended June 30, 2002.

During the three month period ended June 30,
2002, the Company acquired through foreclosure a commercial property
located in Las Vegas, Nevada with a value of approximately
$3,183,000. The Company subsequently sold the property to a third
party for $3,550,000. The buyer of the property (the
Buyer) received funding from Funds I and II in the
aggregate amount of $3,130,000. The loans from Funds I and II
are interest only, payable monthly at an annual rate of 10% with the
principal due in June 2003. The resulting gain to the Company of
approximately $367,000 was deferred as of June 30, 2002 due to
an inadequate initial investment by the Buyer (i.e., cash payment in
excess of 20%) in accordance with Statement of Financial Accounting
Standards (SFAS) No. 66, Accounting for Sales of Real
Estate. The deferred gain of $367,000 is included in accrued
liabilities in the accompanying consolidated balance sheet as of
June 30, 2002. On August 9, 2002, Funds 1 and II
received total proceeds of $300,000 from the Buyer, which were
applied against the Buyers indebtedness to Funds I and II.
As a result of this payment, the Buyer satisfied the minimum initial
investment requirements to achieve full profit recognition in accordance with SFAS No. 66. Accordingly, the Company will record the
gain of $367,000 during the three months ending September 30,
2002.

During the three month period ended June 30, 2002, the Company sold a
commercial property located in Las Vegas, Nevada that was acquired through
foreclosure in 2001 for $2,250,000, resulting in a gain to the Company of
approximately $111,000.

During the three month period ended June 30, 2002, the Company sold a
residential property located in Las Vegas, Nevada that was acquired through
foreclosure in 2001 for $2,100,000, resulting in a loss to the Company of
approximately $309,000.

NOTE 5  LINES OF CREDIT

The Company maintains a total of $7,000,000 in
revolving lines of credit with two financial institutions
specifically for interim funding of mortgage loans placed. As of
June 30, 2002, the Company had no outstanding balance on any of
the lines of credit. These lines of credit are payable in monthly
installments of interest only at the prime lending rate plus an
additional rate ranging from 1.0% to 2.0% (prime lending rate of
4.75% at June 30, 2002) and expire in June 2003. These lines of
credit are guaranteed by the Companys Chief Executive Officer
and majority stockholder and will be secured by deed of trust on the
property which will be pledged as collateral under the terms of the
lines of credit. As of June 30, 2002, the Company was in
compliance with all applicable covenants related to the lines of
credit.

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##### Table of Contents



VESTIN GROUP, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 6  NOTES PAYABLE

Notes payable totaling $158,000 as of June 30, 2002, consists of promissory notes
to various parties related to foreclosed real estate properties (developed parcels
of land) during the three months ended June 30, 2002. The notes
payable are collateralized
by the foreclosed real estate properties, at an interest rate of 13%, and due on demand.

NOTE 7  TREASURY STOCK

During the six months ended June 30, 2002, the Company acquired 224,500 shares
of the Companys common stock for a total value of $1,885,582 which was held in
treasury as of June 30, 2002.

NOTE 8  DIVIDENDS PAYABLE

In June 2002, the Company declared cash dividends on common and preferred stock
holders of $0.02 and $0.08 per share, respectively, that were paid in July
2002.

NOTE 9  EARNINGS (LOSS) PER SHARE

Basic earnings (loss) per share exclude the effects of dilution and are
computed by dividing net income (loss) available to common shareholders
adjusted for dividends to preferred shareholders by the weighted average amount
of common stock outstanding for the periods. Diluted earnings (loss) per
share reflect the potential dilution that occur if options, convertible
preferred stock or other contracts to issue stock were exercised or converted
into common stock. During the three and six months ended June 30, 2002, basic
and diluted earnings per share included adjustments for dividends to preferred
shareholders of $234,450 and $468,900, respectively. There were no dividends
to preferred shareholders during the same periods in 2001.

NOTE 10  NEW ACCOUNTING PRONOUNCEMENT

In August 2001, FASB issued SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets, (SFAS No. 144). SFAS No. 144 superceded FASB
Statement No. 121, Accounting for the Impairment of Long-Lived Assets and
Long-Lived Assets to be Disposed Of (SFAS No. 121), and certain of the
accounting and reporting provisions of APB Opinion No. 30. For long-lived
assets to be held and used, SFAS No. 144 retained the requirements of SFAS No.
121 to (a) recognize an impairment loss only if the carrying value of
long-lived asset is not recoverable from its undiscounted cash flows and (b)
measure an impairment loss as the difference between the carrying amount and
fair value of the asset. For long-lived assets to be disposed of by sale, the
SFAS No. 121 model was also retained which requires an asset to be measured at
the lower of its carrying amount or fair value less cost to sell and to cease
depreciation. SFAS No. 144 establishes criteria beyond that previously
specified in SFAS No. 121 to determine when a long-lived asset is held for
sale. SFAS No. 144 is effective for financial statements issued for fiscal
years beginning after December 15, 2001 and is generally to be applied
prospectively. The Company is currently evaluating the impact of SFAS No. 144;
however, it is not expected that the adoption of SFAS No. 144 will have a
material impact on the Companys financial position or results of operations.

NOTE 11  SUBSEQUENT EVENT

In August 2002, the Company made payments of
$800,000 towards its income taxes payable.

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##### Table of Contents






ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS

Background

Vestin Group, Inc. (Vestin Group), was incorporated in Delaware on June 2,
1998 under the name Sunderland Acquisition Corporation. Vestin Group is a
holding company that conducts all of its operations through its wholly owned
subsidiaries. Vestin Group together with its subsidiaries shall be hereinafter
referred to as the Company.

On August 13, 1998, Vestin Group filed a Registration Statement on Form 10-SB
under the Securities Exchange Act of 1934, as amended (the Exchange Act),
registering its class of common stock, $.0001 par value per share (the Common
Stock). On April 27, 1999, Vestin Group acquired all the outstanding capital
stock of Capsource, Inc., a licensed Nevada mortgage company (Capsource), in
exchange for 20,000 shares of Vestin Groups Common Stock. Simultaneously with
the acquisition of Capsource, Vestin Group acquired certain assets and assumed
certain liabilities of Del Mar Mortgage, Inc. and Del Mar Holdings, Inc.
(collectively, the Del Mar Entities) in exchange for 4,891,270 shares of
Common Stock of Vestin Group. The Del Mar Entities are controlled by Michael V.
Shustek, Chief Executive Officer and Chairman of the Board of Vestin Group.

As part of a corporate restructuring, Vestin Group transferred the commercial
mortgage brokerage business of the Del Mar Entities to Capsource. On October
15, 1999, Vestin Group filed a Registration Statement on Form SB-2 registering
1,926,270 shares of its Common Stock held by various stockholders. On July 6,
2000, Capsource changed its name to Vestin Mortgage, Inc. (Vestin Mortgage).
Vestin Mortgage is currently a wholly-owned subsidiary of Vestin Group and
holds a mortgage brokers license in Nevada.

In April 2000, Vestin Group acquired Vestin Capital, Inc., formerly DM
Financial Services, Inc., a registered broker-dealer in 43 states (Vestin
Capital). In December 1999, Vestin Group also acquired DM Mortgage Advisors, Inc., an Arizona
based mortgage funding business which has changed its name to Vestin Mortgage
Advisers (VM Advisers). Both Vestin Capital and VM Advisers were wholly owned by Michael
Shustek, who received 10,300 shares of Vestin Groups Common Stock for Vestin
Capital, and 17,700 shares of Vestin Groups Common Stock for VM Advisors.

OVERVIEW

The Company is primarily engaged in the commercial mortgage brokerage business.
The Company arranges loans to owners and developers of real property whose
financing needs are not being met by traditional mortgage lenders. The
underwriting standards and length of time required by traditional mortgage
lenders, such as commercial banks, results in certain potential borrowers who
are unable to or unwilling to go through the process required by traditional
lenders. As a non-conventional lender, the Company focuses on the needs of
borrowers unable or unwilling to meet the more restrictive requirements of
traditional lenders. When evaluating prospective borrowers, the Company will
typically focus on the value of collateral, which reduces the paperwork and
time needed to evaluate other factors.

Vestin Mortgage serves as the manager of Vestin Fund I, LLC (formerly DM
Mortgage Investors, LLC), a Nevada limited liability company (Fund I), which
was organized to invest in mortgage loans. In June 2001, Fund I completed a
public offering of its units, raising an aggregate of $100 million. The Company
has also organized Vestin Fund II, LLC (Fund II), a Nevada limited liability
company which invests in mortgage loans. Fund II is currently conducting a
public offering of its units pursuant to a registration statement which was
declared effective on June 13, 2001. As of
June 30, 2002, Fund II had raised approximately $231 million from the sale of
units. Fund II intends to continue the offering of its units until the earlier
of June 2003 or such time as it raises an aggregate of $500 million.

Vestin Capital serves as the lead broker dealer on the sale of units for Fund I
and Fund II and also provides administrative services. Vestin Capital
does not
receive any commissions from the sale of units
for Fund I and Fund II. Rather, Vestin Capital receives an administrative fee
from Vestin Mortgage related to the maintenance of investor files.

Fund I and Fund II (collectively referred to as the Funds) are the main
funding sources for Vestin Mortgages commercial mortgage brokerage activities.
As manager of the Funds, Vestin Mortgage evaluates prospective investments,
selects the mortgages in which they will invest and makes all investment
decisions for the Funds. Additionally, Vestin Mortgage is responsible for all
administrative matters such as accounting, tax and legal requirements for the
Funds. Vestin Mortgage is entitled to receive an annual management fee from
each fund of up to 0.25% of the aggregate capital contributions to each fund.
The Company may, in its sole discretion, waive its management fee. The Company
received management fees for the three and six months ended June 30, 2002 of
$63,000 and $124,000 for Fund I and $134,000 and $237,000 for Fund II,
respectively. As of June 30, 2002, the Company owns approximately 100,000 units
in Fund I and 110,000 units in Fund II as consideration for expenses paid by the Company to
unaffiliated third parties in connection with the offering of such units. The
Companys ownership interest in Funds I and II represent approximately 1.0% and
0.48% of the outstanding amount of units, respectively, as of June 30, 2002.

12



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FINANCIAL REVIEW

The following financial review and analysis concerns the financial condition
and results of operations of the Company for the quarters ended June 30, 2002
and 2001. This information should be read in conjunction with the Companys
unaudited Consolidated Financial Statements and accompanying notes and other
detailed information regarding the Company appearing elsewhere in this Form
10-QSB and in the Companys annual report on Form 10-KSB for the year ended
December 31, 2001.

RESULTS OF OPERATIONS

COMPARISON OF THE QUARTERS ENDED JUNE 30, 2002 AND JUNE 30, 2001

Revenue

The Company reported total revenues of
approximately $8.9 million for the three
month period ended June 30, 2002, an increase of 88% from
approximately $4.7 million for the three month period ended
June 30, 2001. Approximately 94% of the Companys revenue for
both periods was derived from its mortgage brokerage operations. The
remaining revenue was principally generated by interest earned from
investments in mortgage loans, distributions from its investments in
Fund I and II, and interest earned from bank depository
accounts for the quarters ended June 30, 2002 and 2001.

For the six months ended June 30, 2002, the
Company reported a 60% increase in
revenue of approximately $13.9 million as compared to $8.7 million for the same
period the previous year.

Loan placement fees increased from $2.6 million in the second quarter of 2001
to $6.8 million for the second quarter of 2002, an increase of approximately
162%. The increase in loan placement fee revenues resulted largely from the
significant increase in the dollar amount of loans arranged by the Company.
This is a direct result of the additional funds available to the Company from
Fund II which was not conducting business during the second quarter of 2001.
Loan placement fees as a percentage of loans made decreased from 4.7% during
the second quarter of 2001 to 4.4% during the second quarter of 2002,
primarily as a result of the fact that the principal amount of the
loans arranged by the Company in 2002 have generally been larger than
the size of the loans arranged in 2001.
Servicing and extension fees also decreased from $1.98 million in the second
quarter of 2001 to $1.95 million in the second quarter of 2002. Such fees will
fluctuate from quarter to quarter depending upon the nature of the loan
portfolio and the level of requests for extensions from borrowers.

Approximately $102 thousand and $86 thousand of revenues in the three month
periods ended June 30, 2002 and 2001, respectively, were derived from investments in mortgage
loans, and investments in Fund I and II. As of June 30, 2002, the Company had
approximately $7.6 million invested in mortgage loans, and $2.1 million
invested in Funds I and II. The Company earns additional income from interest
earned on monies in its bank deposits.

Although the Company has historically focused its operations in certain Western
states, the Company has commenced expansion of its operations throughout the
U.S. The Company has developed a significant degree of knowledge with respect
to the real estate markets in the Western states. Such knowledge is critical to
the Companys business as it enables the Company to process loan applications
more quickly than many conventional lenders. The Company is able to rapidly
process loan applications in large part because the Companys underwriting
standards focus heavily on the value of the underlying property rather than the
creditworthiness of the borrower. The Companys ability to quickly assess the
underlying value of real estate when it arranges the terms of a mortgage loan
is therefore essential to its strategy of providing fast turnaround for loan
applications.

Real estate markets are significantly influenced by local conditions as well as
by national economic conditions. Thus, real estate markets vary greatly from
place to place and local knowledge of a real estate market is essential to
prudent lending. In order to obtain such local knowledge, the Company intends
to engage the services of local real estate brokers and real estate lawyers who
are believed to be familiar with the markets into which the Company may expand.
No assurances can be given that the Company will be successful in any
geographical expansion of its operations or that it will be able to
mitigate the risk of such expansion by working with local brokers and
lawyers. Any difficulties
encountered by the Company in this regard could adversely affect the
Companys results of operations, slow down its expansion plans
or result in a reduction of loan placement fees.

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Sales and Marketing Expenses

Sales and marketing expenses primarily consist of advertising costs, public
relations expenses, commissions and travel expenses. Sales and marketing
expenses amounted to approximately 29% and 42% or $2.5 million and $2.0
million, respectively, of the Companys total revenues for the three-month
periods ended June 30, 2002 and 2001, respectively. The decrease for the second
quarter 2002 is primarily related to a decreased focus on advertising. During
the second quarter of 2001, the Company engaged in an extensive promotional
campaign intended to expand public recognition of its mortgage brokerage
activities and investment programs. It was also during the second quarter of
2001 that the Company began to fully utilize the services of Joe Namath as Company
spokesman. Although the Company continues to pursue various promotional
efforts, its overall advertising efforts have been reduced from 2001.

Sales and marketing expenses for the six months ended June 30, 2002,
approximated $4.1 million versus $4.4 million for the same period 2001. This
decrease is primarily related to the aforementioned decrease in advertising
efforts.

General and Administrative Expenses

General and administrative expenses included payroll and related expenses,
consultation fees, professional fees, and general corporate expenses. General
and administrative expenses of the Company amounted to
$2.9 million or 33% of
total revenues for the second quarter of 2002, and $2.4 million or 50% for the
second quarter of 2001. The Company anticipates that, as the
Companys operations grow, general and administrative
expenses will increase at a more moderate rate and will decrease as a
percentage of total revenues. The Company believes that its current management
infrastructure is largely sufficient to handle the increasing level of lending
activity resulting from the growth in the Companys funding sources.

General and administrative expenses for the six months ended June 30, 2002 were
$5.3 million versus $4.4 million for the same period in 2001. This increase is
related to a number of factors including an increase in legal and professional
fees as well as a general increase related to the Companys growth.

Income Before Income Taxes

As a result of the foregoing factors, results from operations before provision
for income taxes generated $3.3 million in the three month period ended June
30, 2002 as compared to $0.3 million generated in the second quarter of 2001.

For the six months ended June 30, 2002 results from operations before provision
for income taxes generated $4.1 million versus a loss from continuing
operations of $(0.4) million in the six months ended June 30, 2001.

CRITICAL ACCOUNTING POLICIES

Revenue Recognition

The Company recognizes revenue primarily from loan placement fees, loan
servicing fees and extension fees. Loan placement fees are recorded as revenue
at the close of escrow and reduced by direct loan placement costs on loans
which the Company has not recorded as investments in mortgage loans on its
financial statements. Typically, deeds of trust related to loans placed are
initially in the Companys name to facilitate the loan placement process. Upon
receipt of funding source for such loans placed, the deeds of trust are
assigned to the respective investor (i.e., individual investors, Fund I, and
Fund II). Loan servicing fees are recorded as revenue when such services are
rendered. Servicing fees represent the interest spread between what is paid to
the investor and what the borrower pays for the use of the money. This can
vary from loan to loan. Extension fees are recorded as revenue at the
extension grant date.

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##### Table of Contents



Investments in Real Estate Held for Sale

Investments in real estate held for sale
approximating $1,322,000 as of June 30, 2002, consisted of the
following:

| |                                                                                                                                                                                                                                                    
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | A residential property located in Las Vegas, Nevada with a carrying value of $797,000. The Company
acquired this property through foreclosure and took title to the property during the three month
period ended June 30, 2002.                    
|
| | Two
developed parcels of land located in Las Vegas, Nevada with a total
carrying value of $525,000. The Company acquired these properties
through foreclosure and took title to these properties during the
three month period ended June 30, 2002.

During the three month period ended June 30,
2002, the Company acquired through foreclosure a commercial property
located in Las Vegas, Nevada with a value of approximately
$3,183,000. The Company subsequently sold the property to a third
party for $3,550,000. The buyer of the property (the
Buyer) received funding from Funds I and II in the
aggregate amount of $3,130,000. The loans from Funds I and II
are interest only, payable monthly at an annual rate of 10% with the
principal due in June 2003. The resulting gain to the Company of
approximately $367,000 was deferred as of June 30, 2002 due to
an inadequate initial investment by the Buyer (i.e., cash payment in
excess of 20%) in accordance with Statement of Financial Accounting
Standards (SFAS) No. 66, Accounting for Sales of Real
Estate. The deferred gain of $367,000 is included in accrued
liabilities in the accompanying consolidated balance sheet as of
June 30, 2002. On August 9, 2002, Funds 1 and II
received total proceeds of $300,000 from the Buyer, which were
applied against the Buyers indebtedness to Funds I and II.
As a result of this payment, the Buyer satisfied the minimum initial
investment requirements in accordance with SFAS No. 66 to
achieve sale accounting. Accordingly, the Company will record the
gain of $367,000 during the three months ended September 30,
2002.

During the three month period ended June 30, 2002, the Company sold a
commercial property located in Las Vegas, Nevada that was acquired
through foreclosure in 2001 for $2,250,000, resulting in a gain to the
Company of approximately $111,000.

During the three month period ended June 30, 2002, the Company sold a
residential property located in Las Vegas, Nevada that was acquired
through foreclosure in 2001 for $2,100,000, resulting in a loss to the
Company of approximately $309,000.

Investments in Mortgage Loans

Investments in mortgage loans are secured by trust deeds and mortgages.
Currently, all of the Companys mortgage loans require interest only payments
with a balloon payment of the principal at maturity. The Company has both the
intent and ability to hold mortgage loans until maturity and therefore,
mortgage loans are classified and accounted for as held for investment and are
carried at cost. Interest income on loans is accrued by the effective interest
method. The Company does not recognize interest income from loans once they
are determined to be impaired. A loan is impaired 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. As of June 30,
2002, the Company had approximately $3,241,000 in loans that were greater than
90 days past due in payment of interest; the Company has commenced
foreclosure proceedings with respect to such loans. Management has evaluated the collectibility of the loans in light
of the types and dollar amounts of loans in the portfolio, adverse situations
that may effect the borrowers ability to repay, prevailing economic conditions
and loan-to-value ratio on the underlying collateral securing the loan.
Accordingly, the Companys management estimates that an allowance for loan
losses is not necessary.

Allowance for Loan Losses

When deemed necessary, the Company will set an allowance for possible credit
losses on mortgage loans. Additions to the reserve are based on an assessment
of certain factors including, but not limited to, estimated future losses on
the loans and general economic conditions. Additions to the reserve are
provided through a charge to earnings. Actual losses on loans are recorded as a
charge-off or a reduction to the loan loss reserve. Subsequent recoveries of
amounts previously charged off are added back to the reserve. The Company has
evaluated all factors, including losses as discussed in the Investments in Real
Estate Held for Sale section, and determined it unnecessary to establish an
allowance for loan losses as of June 30, 2002.

Investments in Funds

The Companys investments in the Funds are
accounted for under the equity method in which the Companys
share of the Funds earnings or losses are included in the
consolidated statements of income.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity is a measure of an entitys ability to meet potential cash
requirements, including ongoing commitments to fund lending activities. The
Company has historically met its capital requirements through cash flows from
operations and its ability to access individual investors who acquire interests
in mortgage loans.

For the six months ended June 30, 2002, the cash flows provided by operating
activities of the Company approximated $4.3 million or 31% of the Companys
total revenue, compared to cash used in operating activities of $0.8 million or
9% during the six months period ended June 30, 2001. Cash provided by investing
activities of $2.8 million during the six months ended June 30, 2002, compared
to cash used in investing activities of $1.3 million during the same period of
the prior year, a change resulting primarily from sales in investments on
mortgage loans on real estate of $4.4 million.

The Company has historically relied upon cash flow
from operations and the sale of securities to provide
for its capital requirements and the sale of securities. During the six months ended June 30, 2002, the
Company generated net income of $2.7 million and a positive cash flow from
operating activities of $4.3 million. The Company believes that cash generated
from operations, together with cash and cash flows from investments in mortgage
loans on real estate on hand at June 30, 2002, will be sufficient to provide
for its capital requirements to sustain currently expected loan volumes for at
least the next 12 months.

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However, the Company will require additional financing in order to expand its
business operations. During 2001, the Company raised $9,378,000 from the
private placement of Series A Convertible Preferred Stock (Preferred Stock).
The holders of the Preferred Stock are entitled to receive, when, as and if
declared by the Board of Directors, dividends in an amount to be determined by
the Board of Directors, but not less than 0.83% of the Original Issue Price per
annum and not more than 10% of the Original Issue Price per annum, prior and in
preference to any declaration or payment of any dividends on the Companys
Common Stock, which may be paid in cash or in Common Stock and are not
cumulative. At the option of the holder thereof, the Preferred Stock is
convertible into Common Stock at the conversion price of $6.08 per share. There
is no liquidation preference for the holders of Preferred Stock in the event of
voluntary or involuntary liquidation; however, the holders will participate, on
an as-converted basis, ratably with the holders of Common Stock then
outstanding. The Preferred Stock is redeemable at the option of the Company
according to the terms of the Companys Certificate of Designations, as
amended.

The Company is also exploring additional sources of financing including new
and/or expanded credit facilities. There can be no assurance that the Company
will be able to obtain any additional financing.

Funding Sources

In order to maintain and expand its business, the
Company must have access to funding sources that are prepared to
invest in mortgage loans which the Company brokers. Historically, the
Company has relied primarily upon individual investors for this
purpose. The Company now relies primarily on Fund I and
Fund II as funding sources. As of June 30, 2002,
Fund I had approximately $100 million of capital and
Fund II had approximately $231 million of capital. The
Company placed approximately $156 million and $54.8 million
in mortgage loans in the three month periods ended June 30,
2002, and 2001, respectively. Of the $156 million placed in the
three months ended June 30, 2002, $68.4 million is subject
to future disbursements as may be required by the borrowers and
$87.8 million was disbursed during the three month period. Of
this amount, the Funds provided approximately $81.9 million and
individual investors provided approximately $5.9 million. Of the
$81.9 million, approximately $71.9 million represents
mortgage loans placed directly with the Funds, and approximately
$10 million represents mortgage loans sold by Vestin Mortgage to
the Funds in accordance with the terms of the operating agreements
which govern the Funds. For
the three months ended June 30, 2001, the Funds provided
approximately $48.1 million and individual investors provided
approximately $6.7 million.

The Companys ability to attract investors to acquire interests in mortgage
loans, either directly or through the Funds, depends upon a number of factors,
some of which are beyond the Companys control. The key factors in this regard
include general economic conditions, the condition of real estate markets, the
availability of alternative investment opportunities, the Companys track
record and the Companys reputation. The Company believes that its ability to
attract investors for mortgage loans has been enhanced by the high historical
yields generated by such mortgage loans. These yields may prove more attractive
in the near term if equity markets are perceived as being risky or volatile and
if most fixed rate investments do not offer comparable yields.

Notwithstanding the high historical yields generated by its mortgage loans
compared to conventional mortgage lenders, the Company believes its ability to
attract investors may be impaired by the Companys small size and limited
operating history. In addition, the mortgage loan investments offered by the
Company are not federally insured as are certain bank deposits and the mortgage
loan interests are generally illiquid as compared to government or corporate
bonds. Thus, the Companys ability to place loans with high yields is critical
to offsetting some of the disadvantages of investments in mortgage loans. The
Companys ability to attract investors would suffer if the performance of
Company-brokered mortgage loans declines or if alternative investment vehicles
offering comparable rates and greater safety or liquidity become available.

In order to address these issues, the Company has pursued a strategy of: (i)
using great care in the selection of mortgage loans in order to maintain its
current track record, and (ii) developing additional funding sources such as
Fund I and Fund II. In this manner, the Company is seeking to maintain its
access to funding from current investors while broadening its funding sources,
thereby enabling it to expand the scope of its mortgage brokerage operations.
No assurance can be given that the Company will be successful in this effort.
If its access to funding sources deteriorates for any reason, then the scope of
the Companys operations may decline proportionately.

Additionally, the Company maintains a total of
$7,000,000 in revolving lines of credit with two financial
institutions specifically for interim funding of mortgage loans.
There was no balance outstanding on the lines of credit as of
June 30, 2002. The line of credit is payable in monthly
installments of interest only at the prime lending rate plus an
additional rate ranging from 1.0% to 2.0% (prime lending rate of
4.75% at June 30, 2002) and expires in June 2003. These lines of
credit are guaranteed by the Companys majority stockholder and will
be secured by deeds of trust on the property to be pledged as
collateral for any advances made under the lines of credit. As of
June 30, 2002, the Company is in compliance with all applicable
covenants related to the lines of credit.

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FACTORS AFFECTING THE COMPANYS OPERATING RESULTS

This quarterly report and other written reports and oral statements made from
time to time by the Company may contain forward looking statements. Such
forward looking statements may be identified by the use of such words as
expects, plans, estimates, forecasts, projects, anticipates,
believes and words of similar meaning. Forward looking statements are likely
to address such matters as the Companys business strategy, future operating
results, future sources of funding for mortgage loans brokered by the Company,
future economic conditions and pending litigation involving the Company. As a
result, investors should carefully consider any forward looking statements in
light of the various factors which could affect future results. Some of these
factors are discussed below.

The Companys business is subject to numerous factors affecting its operating
results. In addition to the factors discussed above, the Companys operating
results may be affected by:

Limited Experience in Certain Real Estate Markets

Currently, the Company brokers mortgage loans or works with mortgage brokers
primarily in areas in which Vestin Mortgage has substantial experience such as
Arizona, California, Nevada, Texas, and Hawaii. Depending on the market and on
the Companys performance, it plans to expand the Companys operations
throughout the United States. However, Vestin Mortgage has limited experience
outside of certain western states. Real estate markets vary greatly from
location to location. Vestin Mortgages limited experience in most U.S. real
estate markets may impact its ability to make prudent investment decisions and
may delay the loan approval process. This delay could have a material impact on
the Companys competitive advantage of providing fast loan approvals.
Accordingly, Vestin Mortgage plans to utilize independent real estate advisors
located in markets where Vestin Mortgage lacks experience for consultation
prior to making investment decisions. No assurance can be given such advisors
will provide effective assistance to the Company.

Dependence on Key Personnel

The Companys success depends upon the continued contributions of certain key
personnel, including Michael V. Shustek, Stephen J. Byrne and Lance Bradford,
each of whom would be difficult to replace because of his extensive experience
in his field, extensive market contacts and familiarity with the Companys
activities. If any of these key employees were to cease employment, the
Companys operating results could suffer. The Companys future success also
depends in large part upon its ability to hire and retain additional highly
skilled managerial, operational and marketing personnel. Should the Company be
unable to attract and retain skilled personnel, the Companys performance may
suffer.

Risks of Underwriting Standards and Procedures

The Companys underwriting standards and procedures are more lenient than
conventional lenders in that the Company will invest in loans to borrowers who
will not be required to meet the credit standards of conventional mortgage
lenders.

The Company approves mortgage loans more quickly than other mortgage lenders.
Due to the nature of loan approvals, there may be a risk that the credit
inquiry the Company performs may not reveal all material facts pertaining to
the borrower and the security. As a result, loans arranged by the
Company and loans in which the Company may invest may suffer from a
higher rate of defaults as compared to loans arranged by more
conventional lenders. The Company attempts to mitigate this risk by
insisting upon lower loan to value ratios. Nonetheless, the
Companys
future results of operations may be adversely affected by defaulting
borrowers and the attendant risk and expense of foreclosure
proceedings.

Risks of Interest

The Companys results of operations will vary with changes in interest rates
and with the performance of the relevant real estate markets.

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If the economy is healthy, the Company expects that more people will be
borrowing money to acquire, develop or renovate real property. However, if the
economy grows too fast, interest rates may increase too much and the cost of
borrowing may become too expensive. This could result in a slowdown in real
estate lending which may mean the Company will have fewer loans to acquire,
thus reducing its revenues and the distributions to stockholders.

One of the results of interest rate fluctuations is that borrowers may
seek to extend their low-interest-rate mortgage loans after market interest
rates have increased. Generally, the Companys loan documents permit the
Company to raise the interest rate it charges on extended loans anywhere from
between 3/4% to 3% from the then-current rate on the loan. This creates three
risks for the Company:

(i) There can be no assurance that this permitted rate increase will be
adequate if interest rates have increased beyond the range contemplated by the
Companys loan documents.

(ii) If interest rates rise, borrowers under loans with monthly or
quarterly principal payments may be compelled to extend their loans to decrease
the principal paid with each payment because the interest component has
increased. If this happens, there is a higher risk that the borrower may
default on the extended loan, and the increase in the interest rate on the loan
may not be adequate compensation for the increased risk. Distributions on
mortgage loans placed by the Company may decline if lenders are unable to
reinvest at higher rates or if an increasing number of borrowers default on
their loans.

(iii) If, at a time of relatively low interest rates, a borrower prepays
obligations that have a higher interest rate from an earlier period, investors
will likely not be able to reinvest the funds in mortgage loans earning that
higher rate of interest. In the absence of a prepayment fee, the investors will
receive neither the anticipated revenue stream at the higher rate nor
compensation for their loss. This in turn could harm the Companys reputation
and may make it more difficult for the Company to attract investors willing to
acquire interests in mortgage loans.

Competition For Funds

The ability of the Company to access funds for mortgage loans depends upon the
perceived attractiveness of yields on loans placed by the Company, the safety
of the underlying investment, the Companys reputation, general economic
conditions and real estate market conditions. The Companys principal advantage
in attracting investors is the high historical yields generated by loans
brokered by the Company. The Company is at a disadvantage compared to
alternative investment vehicles to the extent that an investment in mortgage
loans lacks liquidity and is not guaranteed or insured by a governmental
agency. In addition, the fact that the Company is smaller than many of the full
service financial firms offering alternative investment vehicles and has a more
limited operating history may be disadvantages in seeking to attract investors.

Competition For Borrowers

The Company considers its competitors for borrowers to be the providers of
non-conventional mortgage loans, that is, lenders who offer short-term,
equity-based loans on an expedited basis for slightly higher fees and rates
than those charged by conventional lenders. To a lesser extent, the Company
also competes with conventional mortgage lenders and mortgage loan investors,
such as commercial banks, thrifts, conduit lenders, insurance companies,
mortgage brokers, pension funds and other financial institutions that offer
conventional mortgage loans. Many of the companies against which the Company
competes have substantially greater financial, technical and other resources
than the Company. Competition in the Companys market niche depends upon a
number of factors, including price and interest rates of the loan, speed of
loan processing, cost of capital, reliability, quality of service and support
services.

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PART II. OTHER INFORMATION




ITEM 1. LEGAL PROCEEDINGS

There have been no material changes in the legal proceedings reported by the
Company in its Annual Report on Form 10-KSB for the year ended December 31,
2001.




ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

Not applicable




ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable




ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable




ITEM 5. OTHER INFORMATION

Not applicable




ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits

|               |  |                                                                                                                                                        |  |              
|-------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -------------
|               |  |                                                                                                                                                        |  | Page Number/ 
|Exhibit Number |  | Description                                                                                                                                            |  | Filing Method
|               |  |                                                                                                                                                        |  |              
|2.1            |  | Agreement and Plan of Reorganization among the Company, Capsource, Inc. and Stephen J. Byrne, dated
as of April 9, 1999                                |  | *            
|2.2            |  | Asset Acquisition Agreement between the Company and Del Mar Holdings, Inc., dated as of April 9, 1999                                                  |  | *            
|2.3            |  | Asset Acquisition Agreement between the Company and Del Mar Mortgage, Inc., dated as of April 9. 1999                                                  |  | *            
|2.4            |  | Agreement and Plan of Reorganization among the Company, L. L. Bradford & Company and the
Shareholders of L. L. Bradford & Company, dated June 30, 2000 |  | **           
|3.1            |  | Certificate of Incorporation                                                                                                                           |  | ***          
|3.2            |  | By-laws                                                                                                                                                |  | ***          
|10.1           |  | Employment Agreement between Del Mar Mortgage, Inc. and Steve Byrne, dated November 3, 1998                                                            |  | ***          
|10.2           |  | Transition Agreement between Del Mar Mortgage, Inc. and Capsource, Inc., dated April 27, 1999 and
First Amendment thereto                              |  | ****         

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|               |  |                                                                                                            |  |              
|-------------- |  | ---------------------------------------------------------------------------------------------------------- |  | -------------
|               |  |                                                                                                            |  | Page Number/ 
|Exhibit Number |  | Description                                                                                                |  | Filing Method
|               |  |                                                                                                            |  |              
|10.3           |  | Employment Agreement between Del Mar Mortgage and Mike Whiteaker, dated May 3, 1999                        |  | ****         
|10.4           |  | The 2000 Stock Option Plan of Sunderland Corporation                                                       |  | ****         
|10.5           |  | Employment Agreement between the Company and Michael V. Shustek, dated December 1, 1999                    |  | ****         
|10.6           |  | Employment Agreement between the Company and Ira S. Levine, dated September 1, 2000                        |  | ******       
|10.7           |  | Employment Agreement between the Company and Lance K. Bradford, dated April 1, 2000                        |  | *******      
|10.8           |  | Third Amended and Restated Operating Agreement of DM Mortgage Investors, LLC, dated as of
November 2, 2000 |  | *****        
|99.1           |  | Certification Pursuant to U.S.C. 18 Section 1350                                                           |  | 21           



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|*       |  | Previously filed on Form 8-K (File No. 000-24803) on May 4, 1999.        
|------- |  | -------------------------------------------------------------------------
|       
|       
|       
|       
|**      |  | Previously filed on Form 8-K (File No. 000-24803) on April 14, 2000.     
|       
|       
|       
|       
|***     |  | Previously filed on Form 10-SB/A (File No. 000-24803) on August 13, 1998.
|       
|       
|       
|       
|****    |  | Previously filed on Form 10-KSB (File No. 000-24803) on June 30, 2000.   
|       
|       
|       
|       
|*****   |  | Previously filed on Form 424B5 (File No. 333-32800) on November 15, 2000.
|       
|       
|       
|       
|******  |  | Previously filed on Form 10-KSB (File No. 000-24803) on April 2, 2001.   
|       
|       
|       
|       
|******* |  | Previously filed on Form 10-KSB/A (File No. 000-24803) on April 30, 2001.

(b)  Reports on Form 8-K



| |  |  | Current Reports on Form 8-K
filed with the Commission on April 25, 2002 and June 4, 2002, which report the following items:
| |  |  | ---------------------------------------------------------------------------------------------------------------------------
|
| |  |  | (i) Item 4  Changes in Registrants Certifying Accountant; and                                                            
|
| |  |  | (ii) Item 7  Exhibits.                                                                                                    




SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned there unto duly
authorized.



|VESTIN GROUP, INC | 
|----------------- | 



|By: /s/ Lance K. Bradford
Lance K. Bradford, President and Chief Financial Officer
(Authorized Officer and Principal Accounting Officer) | 
|---------------------------------------------------------------------------------------------------------------------------------------- | 

|Date: August 12, 2002 | 
|--------------------- | 

20