Item 1.01 Entry into a Material Definitive Agreement.

We (VRTA) and Vestin Realty Mortgage II, Inc. (VRTB) announced today that they, along with VRM Merger Sub, Inc. (a wholly owned subsidiary of VRTB), have entered into a definitive merger agreement pursuant to which VRM Merger Sub will merge with and into VRTA in a stock-for-stock merger, with VRTA surviving the transaction as a wholly owned subsidiary of VRTB. Under the terms of the transaction, which has been approved by the boards of directors of both companies, stockholders of VTRA (other than VRTB) will receive a fixed ratio of 0.82 share of VRTB common stock for each share of VRTA common stock they own. Upon closing, which is expected in the fourth quarter of 2012, VRTA stockholders will own approximately 30% of VRTB common stock. Pursuant to the terms of the agreement, one member of the VRTA Board of Directors will replace an existing Director on the VRTB Board of Directors. The primary purpose of the proposed merger is the potential cost savings and operating synergies that will be achieved through a combination. A registration statement relating to the stock to be issued by VRTB in the proposed transaction will be filed with the SEC. The transaction is subject to customary approvals and closing conditions and requires the approval of the VRTA stockholders (with respect to the merger) and the VRTB stockholders (with respect to the issuance of VRTB common stock). This document shall not constitute an offer to sell or the solicitation of an offer to buy such securities. For additional information, contact Michael Shustek.

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