Manhattan Bridge Capital, Inc. Reports Results for 2020

Rhea-AI Summary

Manhattan Bridge Capital reported a net income of approximately $4.23 million for the year ended December 31, 2020, a 5.9% decline from $4.50 million in 2019. Total revenue decreased 4.6% to about $7.01 million, primarily due to lower interest rates and reduced demand for loans amid the COVID-19 pandemic. The company's operating expenses fell slightly, with total operating costs at approximately $2.80 million. Despite these challenges, shareholders' equity saw a marginal increase to around $31.96 million. The CEO highlighted the company's zero default record since inception.

Positive

• Maintained a zero default record since inception.
• Continued regular dividend payments.
• Shareholders' equity increased slightly to approximately $31.96 million.

Negative

• Net income decreased by $266,000, or 5.9%, compared to 2019.
• Total revenue declined by $334,000, or 4.6%, primarily due to market conditions and competition.
• Interest income from secured loans decreased from approximately $6.19 million in 2019 to $5.99 million in 2020.

GREAT NECK, N.Y., March 11, 2021 (GLOBE NEWSWIRE) -- Manhattan Bridge Capital, Inc. (NASDAQ: LOAN) announced today that net income for the year ended December 31, 2020 was approximately $4,229,000, or $0.44 per share (based on approximately 9.6 million weighted-average outstanding common shares), versus approximately $4,495,000, or $0.47 per share (based on approximately 9.7 million weighted-average outstanding common shares) for the year ended December 31, 2019, a decrease of $266,000, or 5.9%. This decrease is primarily attributable to a decrease in revenue, partially offset by a decrease in interest expense.

Total revenue for the year ended December 31, 2020 was approximately $7,006,000 compared to approximately $7,340,000 for the year ended December 31, 2019, a decrease of $334,000, or 4.6%. The decrease in revenue was primarily attributable to lower interest rates and origination fees charged on loans due to market conditions and intense competition from other lenders, as well as lower demand for new loans resulting from the COVID-19 pandemic. In 2020, approximately $5,989,000 of our revenue represents interest income on secured, real estate loans that we offer to small businesses compared to approximately $6,186,000 in 2019, and approximately $1,018,000 represents origination fees on such loans, compared to approximately $1,154,000 in 2019. The loans are principally secured by collateral consisting of real estate and, generally, accompanied by personal guarantees from the principals of the borrowers.

Total operating costs and expenses for the year ended December 31, 2020 were approximately $2,796,000 compared to approximately $2,842,000 for the year ended December 31, 2019, a decrease of $46,000 or 1.6%. The decrease in operating costs and expenses is primarily attributable to decreased interest expense due to lower LIBOR rates and decreases in travel expense, advertising fees and appraisal fees, offset by increases in payroll expenses and compensation to members of our board of directors, as well as an annual bonus paid to officers in 2020 and a voluntary waiver from the Company’s CEO forgoing his base salary for the months of November and December 2019.

As of December 31, 2020, total shareholders' equity was approximately $31,964,000 compared to approximately $31,943,000 as of December 31, 2019.

Assaf Ran, Chairman of the Board and CEO, stated, “I’m pleased that we have managed to continue our track record of zero defaults since inception through another major crisis. During March and April of 2020, the marketplace experienced panic and hysteria. Yet, we kept our portfolio under control, we paid dividends on a regular schedule and we instituted another stock buy-back program. I believe that our performance during the challenges related to COVID-19 during 2020 demonstrates responsible underwriting, lower risk versus many of our peers and management’s commitment to provide shareholder value even in rough times,” 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.

Forward Looking Statements

This press release and the statements of our representatives related thereto contain or may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as “plan,” “project,” “potential,” “seek,” “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” or “continue” are intended to identify forward-looking statements. For example, when we discuss our underwriting, lower risk and shareholder value, we are using forward-looking statements. Readers are cautioned that certain important factors may affect the Company’s actual results and could cause such results to differ materially from any forward-looking statements that may be made in this news release. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual results may differ materially from those projected, expressed or implied in the forward-looking statements as a result of various factors, including but not limited to the following: (i) our loan origination activities, revenues and profits are limited by available funds; (ii) we operate in a highly competitive market and competition may limit our ability to originate loans with favorable interest rates; (iii) our Chief Executive Officer is critical to our business and our future success may depend on our ability to retain him; (iv) if we overestimate the yields on our loans or incorrectly value the collateral securing the loan, we may experience losses; (v) we may be subject to “lender liability” claims; (vi) our due diligence may not uncover all of a borrower’s liabilities or other risks to its business; (vii) borrower concentration could lead to significant losses; (viii) we may choose to make distributions in our own stock, in which case you may be required to pay income taxes in excess of the cash dividends you receive and (ix) if the effect of the COVID-19 pandemic on our business is greater than anticipated. The risk factors contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the Securities and Exchange Commission identify important factors that could cause such differences. These forward-looking statements speak only as of the date of this press release, and we caution potential investors not to place undue reliance on such statements. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2020 AND 2019

Assets		2020				2019
Loans receivable	$	58,097,970			$	53,485,014
Interest receivable on loans		827,236				675,996
Cash		131,654				118,407
Cash - restricted		327,483				---
Other assets		66,566				53,218
Operating lease right-of-use asset, net		369,699				87,754
Deferred financing costs, net		22,807				22,637
Total assets	$	59,843,415			$	54,443,026

Liabilities and Stockholders’ Equity

Liabilities:
Line of credit	$	20,308,873			$	15,232,993
Senior secured notes (net of deferred financing costs of $397,327 and $472,413, respectively)		5,602,673				5,527,587
Deferred origination fees		367,638				322,119
Accounts payable and accrued expenses		168,940				151,823
Operating lease liability		372,907				91,025
Other liabilities		---				15,000
Dividends payable		1,058,194				1,159,061
Total liabilities		27,879,225				22,499,608
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; 9,882,058 issued; 9,619,945 and 9,658,844 outstanding, respectively		9,882				9,882
Additional paid-in capital		33,157,096				33,144,032
Treasury stock, at cost – 262,113 and 223,214 shares		(798,939	)			(619,688	)
Accumulated deficit		(403,849	)			(590,808	)
Total stockholders’ equity		31,964,190				31,943,418
Total liabilities and stockholders’ equity	$	59,843,415			$	54,443,026

MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

		2020				2019
Interest income from loans	$	5,988,622			$	6,185,764
Origination fees		1,017,729				1,153,941
Total Revenue		7,006,351				7,339,705
Operating costs and expenses:
Interest and amortization of deferred financing costs		1,356,015				1,635,134
Referral fees		5,875				3,750
General and administrative expenses		1,434,438				1,202,739
Total operating costs and expenses		2,796,328				2,841,623
Income from operations		4,210,023				4,498,082
Other income		20,000				12,000
Loss on write-off of investment in privately held company		---				(15,000	)
Income before income tax expense		4,230,023				4,495,082
Income tax expense		(645	)			(572	)
Net income	$	4,229,378			$	4,494,510
Basic and diluted net income per common share outstanding:
--Basic	$	0.44			$	0.47
--Diluted	$	0.44			$	0.47
Weighted average number of common shares outstanding
--Basic		9,631,296				9,658,147
--Diluted		9,631,296				9,659,285

MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

	Common Stock			Additional Paid-in Capital		Treasury Stock				Accumulated Deficit			Totals
	Shares	Amount				Shares	Cost
Balance, January 1, 2019	9,874,191	$	9,874	$	33,110,536	218,214	$	(590,234	)	$	(448,801	)	$	32,081,375
Exercise of warrants and options	7,867		8		20,432									20,440
Non cash compensation					13,064									13,064
Purchase of treasury shares						5,000		(29,454	)					(29,454	)
Dividends paid											(3,477,456	)		(3,477,456	)
Dividends declared and payable											(1,159,061	)		(1,159,061	)
Net income for the year ended December 31, 2019											4,494,510			4,494,510
Balance, December 31, 2019	9,882,058	$	9,882		33,144,032	223,214		(619,688	)		(590,808	)		31,943,418
Non cash compensation					13,064									13,064
Purchase of treasury shares						38,899		(179,251	)					(179,251	)
Dividends paid											(2,984,225	)		(2,984,225	)
Dividends declared and payable											(1,058,194	)		(1,058,194	)
Net income for the year ended December 31, 2020											4,229,378			4,229,378
Balance, December 31, 2020	9,882,058	$	9,882	$	33,157,096	262,113	$	(798,939	)	$	(403,849	)	$	31,964,190

MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

		2020				2019
Cash flows from operating activities:
Net income	$	4,229,378			$	4,494,510
Adjustments to reconcile net income to net cash provided by operating activities -
Amortization of deferred financing costs		102,017				94,489
Depreciation		1,135				1,414
Non cash compensation expense		13,064				13,064
Loss on write-off of investment in privately held company		---				15,000
Adjustment to operating lease right-of-use asset and liability		(62	)			3,271
Changes in operating assets and liabilities
Interest receivable on loans		(180,911	)			(79,219	)
Other assets		(5,724	)			3,499
Accounts payable and accrued expenses		17,117				(31,893	)
Deferred origination fees		45,519				(82,557	)
Net cash provided by operating activities		4,221,533				4,431,578
Cash flows from investing activities:
Issuance of short term loans		(43,719,304	)			(48,053,965	)
Collections received from loans		39,136,019				49,420,078
Release of loan holdback relating to mortgage receivable		(15,000	)			---
Purchase of fixed assets		(8,759	)			---
Net cash (used in) provided by investing activities		(4,607,044	)			1,366,113
Cash flows from financing activities:
Proceeds from (repayments of) line of credit, net		5,075,880				(1,389,154	)
Dividends paid		(4,143,286	)			(4,636,173	)
Purchase of treasury shares		(179,251	)			(29,454	)
Deferred financing costs incurred		(27,102	)			---
Proceeds from exercise of stock options and warrants		---				20,440
Net cash provided by (used in) financing activities		726,241				(6,034,341	)
Net increase (decrease) in cash and restricted cash		340,730				(236,650	)
Cash and restricted cash, beginning of year		118,407				355,057
Cash and restricted cash, end of year	$	459,137			$	118,407
Supplemental Cash Flow Information:
Taxes paid during the year	$	645			$	572
Interest paid during the year	$	1,264,533			$	1,560,644
Operating leases paid during the year	$	56,572			$	52,571
Supplemental Information – Noncash Information: Dividend declared and payable	$	1,058,194			$	1,159,061
Establishment of right-of-use asset and operating lease liability	$	329,421			$	135,270
Interest receivable converted to loans receivable in connection with forbearance agreements	$	29,671			$	---
Loan holdback relating to mortgage receivable	$	---			$	15,000

FAQ

What was Manhattan Bridge Capital's net income for 2020?

Manhattan Bridge Capital reported a net income of approximately $4.23 million for the year ended December 31, 2020.

How much did the company's total revenue decline in 2020?

Total revenue decreased by approximately $334,000, or 4.6%, to about $7.01 million in 2020.

What factors contributed to the decline in revenue for LOAN?

The decline in revenue was primarily due to lower interest rates, origination fees, and reduced demand for new loans resulting from the COVID-19 pandemic.

What is the shareholders' equity for Manhattan Bridge Capital as of December 31, 2020?

As of December 31, 2020, total shareholders' equity was approximately $31.96 million.

How did Manhattan Bridge Capital manage its expenses in 2020?

Total operating costs decreased by approximately $46,000, primarily due to reduced interest expenses and lower costs in travel, advertising, and appraisals.