Manhattan Bridge Capital, Inc. Reports First Quarter 2023 Results

Rhea-AI Summary

Manhattan Bridge Capital, Inc. (Nasdaq: LOAN) reported a net income of approximately $1,260,000, or $0.11 per share, for Q1 2023, a decline of 11.6% from $1,425,000, or $0.12 per share, in Q1 2022. This decrease is largely due to increased interest expenses related to higher LIBOR/SOFR rates and a special bonus to officers. Despite this, total revenues increased by 13.4% to approximately $2,398,000, driven by higher lending operations and interest rates. Interest income from secured commercial loans rose to about $1,954,000, with revenues supported by real estate collateral. As of March 31, 2023, total shareholders' equity was about $42,833,000. The Board authorized a share buyback program for up to 100,000 shares, valid until April 10, 2024. CEO Assaf Ran noted the challenges of a high-interest environment but emphasized the strength of their loan portfolio.

Positive

• Total revenues increased by 13.4% to approximately $2,398,000.
• Interest income from secured commercial loans rose to about $1,954,000.

Negative

• Net income decreased by 11.6% to approximately $1,260,000.
• Interest expenses nearly doubled compared to the previous year.

GREAT NECK, N.Y., April 19, 2023 (GLOBE NEWSWIRE) -- Manhattan Bridge Capital, Inc. (Nasdaq: LOAN) announced today that its net income for the three months ended March 31, 2023 was approximately $1,260,000, or $0.11 per share (based on approximately 11.5 million weighted-average outstanding common shares), compared to approximately $1,425,000 or $0.12 per share (based on approximately 11.5 million weighted-average outstanding common shares) for the three months ended March 31, 2022, a decrease of $165,000, or 11.6%. This decrease is primarily attributable to a significant increase in interest expense due to higher LIBOR/SOFR rates relating to the use of the Company’s credit line in order to support its ability to increase loan originations and a special bonus to officers in 2023, partially offset by the increase in interest income.

Total revenues for the three months ended March 31, 2023 were approximately $2,398,000 compared to approximately $2,115,000 for the three months ended March 31, 2022, an increase of $283,000, or 13.4%. The increase in revenue was due to an increase in lending operations and higher interest rates charged on the Company’s commercial loans. For the three months ended March 31, 2023, approximately $1,954,000 of the Company’s revenue represents interest income on secured commercial loans that we offer to real estate investors, compared to approximately $1,644,000 for the same period in 2022, and approximately $444,000 and $471,000, respectively, represent origination fees on such loans. The loans are principally secured by collateral consisting of real estate and accompanied by personal guarantees from the principals of the borrowers.

As of March 31, 2023, total shareholders’ equity was approximately $42,833,000.

On April 11, 2023, the Company’s Board of Directors authorized a share buy back program, pursuant to which it may, from time to time, purchase up to 100,000 of its common shares. This program does not obligate the Company to purchase any shares and expires on April 10, 2024. The authorization for the program is able to be terminated, increased or decreased by the Company’s Board of Directors in its discretion at any time.

Assaf Ran, Chairman of the Board and Chief Executive Officer of the Company, stated, “The high interest environment contributed to our revenue increase. However, our interest expense almost doubled versus the same quarter a year ago. Generally, we have experienced slower and riskier real estate markets in our geographic areas of operation, together with tight liquidity and less competition. Yet, due to the strength of our loan portfolio, we suffered no losses and impairment expenses.”

About Manhattan Bridge Capital, Inc.

Manhattan Bridge Capital, Inc. offers short-term secured, non–banking loans (sometimes referred to as ‘‘hard money’’ loans) to real estate investors to fund their acquisition, renovation, rehabilitation or improvement of properties located in the New York metropolitan area, including New Jersey and Connecticut, and in Florida. We operate the website: https://www.manhattanbridgecapital.com.

MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS

Assets	March 31, 2023 (unaudited)			December 31, 2022 (audited)
Loans receivable	$	71,950,185		$	74,483,463
Interest receivable on loans		1,259,047			1,363,502
Cash		75,192			103,540
Other assets		98,948			59,566
Operating lease right-of-use asset, net		248,508			262,222
Deferred financing costs, net		37,130			7,708
Total assets	$	73,669,010		$	76,280,001

Liabilities and Stockholders’ Equity
Liabilities:
Line of credit	$	22,580,277				$	24,994,234
Senior secured notes (net of deferred financing costs of $228,384 and $247,155, respectively)		5,771,616					5,752,845
Deferred origination fees		650,856					669,128
Accounts payable and accrued expenses		261,825					289,868
Operating lease liability		260,455					273,485
Loan holdback		17,500					—
Dividends payable		1,293,181					1,436,868
Total liabilities		30,835,710					33,416,428
Commitments and contingencies
Stockholders’ equity:
Preferred shares - $.01 par value; 5,000,000 shares authorized; none issued		—					—
Common shares - $.001 par value; 25,000,000 shares authorized; 11,757,058 issued; 11,494,945 outstanding		11,757					11,757
Additional paid-in capital		45,539,077					45,535,811
Treasury stock, at cost - 262,113 shares		(798,939	)				(798,939	)
Accumulated deficit		(1,918,595	)				(1,885,056	)
Total stockholders’ equity		42,833,300					42,863,573
Total liabilities and stockholders’ equity	$	73,669,010				$	76,280,001

MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARY

	Three Months Ended March 31,
	2023		2022
Interest income from loans	$	1,953,821	$	1,643,789
Origination fees		443,971		471,271
Total revenue		2,397,792		2,115,060
Operating costs and expenses:
Interest and amortization of deferred financing costs		646,263		331,853
Referral fees		291		1,361
General and administrative expenses		496,096		361,489
Total operating costs and expenses		1,142,650		694,703
Income from operations		1,255,142		1,420,357
Other income		4,500		4,500
Net income	$	1,259,642	$	1,424,857
Basic and diluted net income per common share outstanding:
–Basic	$	0.11	$	0.12
–Diluted	$	0.11	$	0.12
Weighted average number of common shares outstanding:
–Basic		11,494,945		11,494,945
–Diluted		11,494,945		11,494,945

MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(unaudited)

FOR THE THREE MONTHS ENDED MARCH 31, 2023

	Common Shares			Additional Paid-in Capital	Treasury Stock				Accumulated Deficit		Totals
	Shares	Amount			Shares	Cost
Balance, January 1, 2023	11,757,058	$11,757		$45,535,811	262,113	$(798,939		)	$(1,885,056	)	$42,863,573
Non-cash compensation				3,266							3,266
Dividends declared and payable									(1,293,181	)	(1,293,181	)
Net income	___________								1,259,642		1,259,642
Balance, March 31, 2023	11,757,058	$11,757		$45,539,077	262,113	$(798,939		)	$(1,918,595	)	$42,833,300

FOR THE THREE MONTHS ENDED MARCH 31, 2022

	Common Shares			Additional Paid-in Capital	Treasury Stock				Accumulated Deficit		Totals
	Shares	Amount			Shares	Cost
Balance, January 1, 2022	11,757,058	$11,757		$45,522,746	262,113	$(798,939		)	$(1,349,322	)	$43,386,242
Non-cash compensation				3,266							3,266
Dividends declared and payable									(1,436,868	)	(1,436,868	)
Net income	___________								1,424,857		1,424,857
Balance, March 31, 2022	11,757,058	$11,757		$45,526,012	262,113	$(798,939		)	$(1,361,333	)	$43,377,497

MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

		Three Months Ended March 31,
			2023				2022
Cash flows from operating activities:
Net income		$	1,259,642			$	1,424,857
Adjustments to reconcile net income to net cash provided by operating activities -
Amortization of deferred financing costs			27,540				24,015
Adjustment to operating lease right-of-use asset and liability			685				1,224
Depreciation			892				469
Non-cash compensation expense			3,266				3,266
Changes in operating assets and liabilities:
Interest receivable on loans			104,455				(73,474	)
Other assets			(35,189	)			(27,280	)
Accounts payable and accrued expenses			(28,043	)			(5,958	)
Deferred origination fees			(18,272	)			107,772
Net cash provided by operating activities			1,314,976				1,454,891
Cash flows from investing activities:
Issuance of short term loans			(13,734,803	)			(18,295,339	)
Collections received from loans			16,285,581				15,572,367
Purchase of fixed assets			(5,085	)			—
Net cash provided by (used in) investing activities			2,545,693				(2,722,972	)
Cash flows from financing activities:
(Repayment of) proceeds from line of credit, net			(2,413,957	)			2,743,588
Dividend paid			(1,436,868	)			(1,436,868	)
Deferred financing costs incurred			(38,192	)			(35,819	)
Net cash (used in) provided by financing activities			(3,889,017	)			1,270,901
Net (decrease) increase in cash			(28,348	)			2,820
Cash, beginning of year			103,540				142,546
Cash, end of period		$	75,192			$	145,366

Supplemental Cash Flow Information:
Interest paid during the period	$	636,990		$	277,757
Operating leases paid during the period	$	15,917		$	15,881
Supplemental Information – Noncash Information:
Dividend declared and payable	$	1,293,181		$	1,436,868
Loan holdback relating to mortgage receivable	$	17,500		$	—

SOURCE: Manhattan Bridge Capital, Inc.

FAQ

What was the net income for Manhattan Bridge Capital for Q1 2023?

The net income was approximately $1,260,000, or $0.11 per share.

How much did total revenues increase for Q1 2023?

Total revenues increased by 13.4%, reaching approximately $2,398,000.

What factors contributed to the decline in net income for LOAN in Q1 2023?

The decline was primarily due to increased interest expenses and a special bonus to officers.

When does the share buyback program for LOAN expire?

The share buyback program expires on April 10, 2024.

What was the total shareholders' equity for LOAN as of March 31, 2023?

The total shareholders' equity was approximately $42,833,000.