Manhattan Bridge Capital, Inc. Reports Results for 2023

Rhea-AI Summary

Manhattan Bridge Capital, Inc. (LOAN) reports a 5.1% increase in net income for 2023, reaching $5,476,000. Total revenue rose by 14.3% to $9,796,000, driven by higher interest rates on commercial loans. Operating costs and expenses increased by 28.9% primarily due to higher interest expenses and bonuses. Shareholders' equity slightly increased to $42,933,000. A share buyback program was initiated, repurchasing 54,294 common shares by December 31, 2023.

Insights

Financial Analyst

The financial results reported by Manhattan Bridge Capital, Inc. reflect a positive trend in profitability, with a 5.1% increase in net income year-over-year. This performance can be attributed to the company's strategic positioning in a high-interest rate environment, which has allowed it to capitalize on increased interest income from its commercial loan operations. The reported increase in revenue of 14.3% indicates a robust demand for the company's loan products, particularly in the secured real estate loan market.

However, it is important to note the 28.9% increase in operating costs and expenses, a significant jump that could be a cause for concern if such trends continue. The higher interest expenses due to increased borrowing and the additional bonuses paid to officers contribute to these elevated costs.

The share buyback program authorized by the Board of Directors could signal confidence in the company's current valuation and future prospects. The repurchase of shares can be seen as an attempt to increase shareholder value and manage equity dilution. However, the effectiveness of this strategy should be monitored closely, as the actual impact on the stock price will depend on market conditions and investor perception.

Market Research Analyst

Manhattan Bridge Capital's performance in the context of the broader real estate finance sector showcases the company's ability to adapt to market changes, specifically the transition to a higher interest rate environment. The company's focus on secured real estate loans, accompanied by personal guarantees, suggests a risk-averse approach that could appeal to investors seeking stability within the sector.

The static size of the loan portfolio, despite the high-interest rates, indicates a careful balance between growth and risk management. This strategy has seemingly paid off with record revenue and net earnings, but it will be crucial to observe how the company manages potential liquidity challenges and loan performance as economic conditions evolve.

Economist

Manhattan Bridge Capital's results can be partially understood through the lens of macroeconomic conditions, notably the rising interest rate environment that has prevailed. This scenario often leads to a liquidity crunch for real estate investors, who then turn to alternative financing sources such as Manhattan Bridge Capital. The company's ability to avoid problematic loans and maintain interest collection efficiency is commendable, especially in a period where many borrowers may face financial stress.

However, the company's performance should be analyzed with a degree of caution. The economic outlook, which includes potential for continued rate hikes or economic slowdown, could impact borrower's ability to service debts and the demand for new loans. The company's resilience in the face of such economic headwinds will be a key factor to watch in the coming periods.

GREAT NECK, N.Y., March 11, 2024 (GLOBE NEWSWIRE) -- Manhattan Bridge Capital, Inc. (Nasdaq: LOAN) (the “Company”) announced today that net income for the year ended December 31, 2023 was approximately $5,476,000, or $0.48 per share (based on approximately 11.5 million weighted-average outstanding common shares), versus approximately $5,212,000, or $0.45 per share (based on approximately 11.5 million weighted-average outstanding common shares) for the year ended December 31, 2022, an increase of $264,000, or 5.1%. This increase is primarily attributable to an increase in interest income from loans, partially offset by increases in interest expense and in general and administrative expenses.

Total revenue for the year ended December 31, 2023 was approximately $9,796,000, compared to approximately $8,571,000 for the year ended December 31, 2022, an increase of $1,225,000, or 14.3%. The increase in revenue was due to higher interest rates charged on the Company’s commercial loans. In 2023, approximately $7,976,000 of its revenue represents interest income on secured, real estate loans that the Company offers to real estate investors, compared to approximately $6,773,000 in 2022, and approximately $1,820,000 represents origination fees on such loans, compared to approximately $1,798,000 in 2022. The loans are principally secured by collateral consisting of real estate and accompanied by personal guarantees from the principals of the borrowers.

Total operating costs and expenses for the year ended December 31, 2023 were approximately $4,353,000, compared to approximately $3,377,000 for the year ended December 31, 2022, an increase of $976,000, or 28.9%. The increase in operating costs and expenses was primarily attributable to an increase in interest expense due to higher interest rates and increases in amounts borrowed relating to the use of the Company’s credit line in order to support its ability to increase loan originations, and a special bonus as well as an annual bonus totaling $195,000 to its officers in 2023.

As of December 31, 2023, total shareholders' equity was approximately $42,933,000, compared to approximately $42,864,000 as of December 31, 2022.

On April 11, 2023, the Company’s Board of Directors authorized a share buyback program for the repurchase of up to 100,000 of its common shares in the next twelve months. This program does not obligate the Company to purchase any shares and expires on April 10, 2024. As of December 31, 2023, the Company had purchased an aggregate of 54,294 common shares under this repurchase program, at an aggregate cost of approximately $262,000.

Assaf Ran, Chairman of the Board and Chief Executive Officer of the Company, stated, “As real estate investors are adjusting to a high-interest rate environment, liquidity crunches are more frequent. Thus, our challenge for 2023 was to avoid problematic loans and interest collection issues. I can proudly state that I believe we succeeded in meeting the challenge.”

“The size of our loan portfolio was approximately the same as the prior year; however, due to the fact that we’re low-leveraged, we benefited from the higher interest rates and broke our records of both revenue and net earnings,” added Mr. Ran.

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 December 31, 2023 and 2022
		2023			2022
Assets
Loans receivable	$	73,048,403		$	74,483,463
Interest receivable on loans		1,395,905			1,363,502
Cash		104,222			103,540
Cash - restricted		1,587,773			---
Other assets		63,636			59,566
Operating lease right-of-use asset, net		207,364			262,222
Deferred financing costs, net		27,583			7,708
Total assets	$	76,434,886		$	76,280,001

Liabilities and Stockholders’ Equity
Liabilities:
Line of credit	$	25,152,338			$	24,994,234
Senior secured notes (net of deferred financing costs of $172,069 and $247,155, respectively)		5,827,931				5,752,845
Deferred origination fees		719,019				669,128
Accounts payable and accrued expenses		295,292				289,868
Operating lease liability		220,527				273,485
Dividends payable		1,287,073				1,436,868
Total liabilities		33,502,180				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; 11,440,651 and 11,494,945 outstanding, respectively		11,757				11,757
Additional paid-in capital		45,548,876				45,535,811
Less: Treasury stock, at cost – 316,407 and 262,113 shares		(1,060,606	)			(798,939	)
Accumulated deficit		(1,567,321	)			(1,885,056	)
Total stockholders’ equity		42,932,706				42,863,573
Total liabilities and stockholders’ equity	$	76,434,886			$	76,280,001

MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED December 31, 2023 and 2022
		2023				2022
Revenue:
Interest income from loans	$	7,976,232			$	6,772,889
Origination fees		1,820,024				1,798,075
Total Revenue		9,796,256				8,570,964
Operating costs and expenses:
Interest and amortization of deferred financing costs		2,525,935				1,822,825
Referral fees		2,153				4,500
General and administrative expenses		1,825,227				1,549,251
Total operating costs and expenses		4,353,315				3,376,576
Income from operations		5,442,941				5,194,388
Other income		33,880				18,000
Income before income tax expense		5,476,821				5,212,388
Income tax expense		(650	)			(650	)
Net income	$	5,476,171			$	5,211,738
Basic and diluted net income per common share outstanding:
--Basic	$	0.48			$	0.45
--Diluted	$	0.48			$	0.45
Weighted average number of common shares outstanding
--Basic		11,469,741				11,494,945
--Diluted		11,469,741				11,494,945

MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE YEARS ENDED December 31, 2023 and 2022
	Common Stock			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					13,065									13,065
Dividends paid											(4,310,604	)		(4,310,604	)
Dividends declared and payable											(1,436,868	)		(1,436,868	)
Net income for the year ended December 31, 2022											5,211,738			5,211,738
Balance, December 31, 2022	11,757,058		11,757		45,535,811	262,113		(798,939	)		(1,885,056	)		42,863,573
Purchase of treasury shares						54,294		(261,667	)					(261,667	)
Non-cash compensation					13,065									13,065
Dividends paid											(3,871,363	)		(3,871,363	)
Dividends declared and payable											(1,287,073	)		(1,287,073	)
Net income for the year ended December 31, 2023											5,476,171			5,476,171
Balance, December 31, 2023	11,757,058	$11,757		$45,548,876		316,407	$(1,060,606		)	$(1,567,321		)	$42,932,706

MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED December 31, 2023 and 2022
		2023				2022
Cash flows from operating activities:
Net income	$	5,476,171			$	5,211,738
Adjustments to reconcile net income to net cash provided by operating activities -
Amortization of deferred financing costs		93,403				113,736
Depreciation		4,057				2,307
Non-cash compensation expense		13,065				13,065
Adjustment to operating lease right-of-use asset and liability		1,900				4,096
Changes in operating assets and liabilities:
Interest receivable on loans		(32,403	)			(408,059	)
Other assets		(3,042	)			5,742
Accounts payable and accrued expenses		5,424				135,699
Deferred origination fees		49,891				88,667
Net cash provided by operating activities		5,608,466				5,166,991
Cash flows from investing activities:
Issuance of short term loans		(56,301,376	)			(60,915,596	)
Collections received from loans		57,736,436				52,147,497
Purchase of fixed assets		(5,085	)			(2,871	)
Net cash provided by (used in) investing activities		1,429,975				(8,770,970	)
Cash flows from financing activities:
Proceeds from line of credit, net		158,104				9,348,264
Dividends paid		(5,308,231	)			(5,747,472	)
Purchase of treasury shares		(261,667	)			---
Deferred financing costs incurred		(38,192	)			(35,819	)
Net cash (used in) provided by financing activities		(5,449,986	)			3,564,973
Net increase (decrease) in cash and restricted cash		1,588,455				(39,006	)
Cash, beginning of year		103,540				142,546
Cash and restricted cash, end of year*	$	1,691,995			$	103,540
Supplemental Disclosure of Cash Flow Information:
Cash paid for taxes during the year	$	650			$	650
Cash paid for interest during the year	$	2,423,838			$	1,581,935
Cash paid for operating leases during the year	$	64,055			$	63,621
Supplemental Schedule of Noncash Financing Activities: Dividend declared and payable	$	1,287,073			$	1,436,868

* At December 31, 2023, cash and restricted cash included $1,587,773 of restricted cash.

FAQ

What was Manhattan Bridge Capital, Inc.'s (LOAN) net income for the year ended December 31, 2023?

Manhattan Bridge Capital, Inc.'s net income for the year ended December 31, 2023 was approximately $5,476,000.

What was the total revenue for Manhattan Bridge Capital, Inc. (LOAN) in 2023?

The total revenue for Manhattan Bridge Capital, Inc. in 2023 was approximately $9,796,000.

Why did the total revenue increase for Manhattan Bridge Capital, Inc. in 2023?

The total revenue increased due to higher interest rates charged on the Company's commercial loans.

How many common shares did Manhattan Bridge Capital, Inc. repurchase under the share buyback program by December 31, 2023?

Manhattan Bridge Capital, Inc. repurchased 54,294 common shares under the share buyback program by December 31, 2023.

Who is the Chairman of the Board and Chief Executive Officer of Manhattan Bridge Capital, Inc.?

Assaf Ran is the Chairman of the Board and Chief Executive Officer of Manhattan Bridge Capital, Inc.