Manhattan Bridge Capital, Inc. Reports Second Quarter 2020 Results

Rhea-AI Summary

Manhattan Bridge Capital reported total revenues of approximately $1.74 million for Q2 2020, down 2.1% from $1.78 million in Q2 2019, primarily due to lower interest rates and reduced demand for loans amid COVID-19. Net income for the quarter was approximately $1.1 million, matching the previous year's income per share. For the first half of 2020, revenues fell 3.2% to about $3.45 million. The firm maintains a strong equity position of $32.85 million and highlights its ability to uphold dividends despite the pandemic's challenges.

Positive

• Net income remains stable at approximately $1.1 million for Q2 2020.
• Total stockholders' equity is approximately $32.85 million, indicating a solid financial position.
• The company did not pause or substantially reduce dividends amid the pandemic.

Negative

• Total revenues decreased by $38,000 in Q2 2020 compared to Q2 2019.
• Revenue for the first half of 2020 declined by $115,000 compared to the same period in 2019.
• Lower demand for new loans and lower interest rates are impacting earnings.

GREAT NECK, N.Y., July 23, 2020 (GLOBE NEWSWIRE) -- Manhattan Bridge Capital, Inc. (Nasdaq: LOAN) announced today that its total revenues for the three months ended June 30, 2020 were approximately $1,741,000 compared to approximately $1,779,000 for the three months ended June 30, 2019, a decrease of $38,000, or 2.1%. The decrease in revenues was primarily attributable to lower interest rates and origination points 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. For the three months ended June 30, 2020 and 2019, approximately $1,490,000 and $1,487,000, respectively, of our revenues were attributable to interest income on secured commercial loans that we offer to small businesses, and approximately $251,000 and $292,000, respectively, of our revenues were attributable to origination fees on such loans.

Net income for the three months ended June 30, 2020 was approximately $1,097,000, or $0.11 per basic and diluted share (based on approximately 9.63 million weighted-average outstanding common shares), as compared to approximately $1,084,000, or $0.11 per basic and diluted share (based on approximately 9.66 million weighted-average outstanding common shares), for the three months ended June 30, 2019. The increase is primarily attributable to the decrease in interest expense, offset by the decrease in revenue.

Total revenues for the six months ended June 30, 2020 were approximately $3,452,000 compared to approximately $3,567,000 for the six months ended June 30, 2019, a decrease of $115,000, or 3.2%. The decrease in revenues were primarily attributable to lower interest rates and origination points 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. For the six months ended June 30, 2020 and 2019, revenues of approximately $2,964,000 and $2,990,000, respectively, were attributable to interest income on secured commercial loans that we offer to small businesses, and approximately $488,000 and $577,000, respectively, were attributable to origination fees on such loans.

Net income for the six months ended June 30, 2020 was approximately $2,113,000, or $0.22 per basic and diluted share (based on approximately 9.64 million weighted-average outstanding common shares), as compared to approximately $2,205,000, or $0.23 per basic and diluted share (based on approximately 9.66 million weighted-average outstanding common shares), for the six months ended June 30, 2019. This decrease is primarily attributable to the decrease in revenue and the increase in general and administrative expenses, offset by the decrease in interest expense.
     
As of June 30, 2020, total stockholders' equity was approximately $32,852,000.

Assaf Ran, Chairman of the Board and CEO, stated, “We hope that the worst is behind us, yet, the level of uncertainty about the future is still high. The COVID-19 is a reality test for our underwriting skills and performance, and so far, I’m proud to say – we are passing! Although we have dealt, and still are dealing with, some COVID-19 related issues, at this point we consider them manageable, minor and immaterial. I believe that based on our underwriting skills and performance, we belong to a selective group of REITs that did not pause or substantially reduce dividends. Further, due to the hard work and devotion of our team, we managed to approximately match the results of the same quarter a year ago.”

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 web site: 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 hope that the worst of the COVID-19 pandemic is behind us, our belief that the COVID-19 pandemic was a reality test for our underwriting skills and performance and so far we believe we are passing, our belief that the COVID-19 related issues, at this point, are manageable, minor and immaterial and that based on our underwriting skills and performance, and our belief that we belong to a selective group of REITs that did not pause or substantially reduce dividends, 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, 2019 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

100%; border-collapse:collapse !important;">

		June 30, 2020		December 31, 2019
		(unaudited)		(audited)
Assets	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	12%; width:12%; min-width:12%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	12%; width:12%; min-width:12%;">	1%; width:1%; min-width:1%;">
70%; width:70%; min-width:70%;">Loans receivable	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">$	12%; width:12%; min-width:12%;">55,857,217	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">$	12%; width:12%; min-width:12%;">53,485,014	1%; width:1%; min-width:1%;">
Interest receivable on loans			770,628				675,996
Cash			194,026				118,407
Other assets			118,909				53,218
Operating lease right-of-use asset, net			64,506				87,754
Deferred financing costs			37,026				22,637
Total assets		$	57,042,312			$	54,443,026
Liabilities and Stockholders’ Equity
Liabilities:
Line of credit		$	18,076,228			$	15,232,993
Senior secured notes (net of deferred financing costs of $434,870 and $472,413)			5,565,130				5,527,587
Deferred origination fees			361,632				322,119
Accounts payable and accrued expenses			119,808				151,823
Operating lease liability			67,577				91,025
Other liabilities			---				15,000
Dividends payable			---				1,159,061
Total liabilities			24,190,375				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; 9,626,845 and 9,658,844 outstanding, respectively			9,882				9,882
Additional paid-in capital			33,150,564				33,144,032
Treasury stock, at cost – 255,213 and 223,214 shares			(771,559	)			(619,688	)
Retained earnings (accumulated deficit)			463,050				(590,808	)
Total stockholders’ equity			32,851,937				31,943,418
Total liabilities and stockholders’ equity		$	57,042,312			$	54,443,026

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

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	Three Months Ended June 30,	Six Months Ended June 30,
52%; width:52%; min-width:52%;">	1%; width:1%; min-width:1%;">	10%; width:10%; min-width:10%;">2020	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	10%; width:10%; min-width:10%;">2019	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	10%; width:10%; min-width:10%;">2020	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	10%; width:10%; min-width:10%;">2019	1%; width:1%; min-width:1%;">
Interest income from loans	$	1,490,395		$	1,487,117		$	2,963,940		$	2,990,202
Origination fees		250,791			292,253			488,233			577,227
Total revenue		1,741,186			1,779,370			3,452,173			3,567,429
Operating costs and expenses:
Interest and amortization of debt service costs		326,247			387,511			678,689			766,393
Referral fees		1,386			625			1,928			2,708
General and administrative expenses		318,726			309,619			663,507			598,356
Total operating costs and expenses		646,359			697,755			1,344,124			1,367,457
Income from operations		1,094,827			1,081,615			2,108,049			2,199,972
Other income		3,000			3,000			6,000			6,000
Income before income tax expense		1,097,827			1,084,615			2,114,049			2,205,972
Income tax expense		(645	)		(572	)		(645	)		(572	)
Net income	$	1,097,182		$	1,084,043		$	2,113,404		$	2,205,400
Basic and diluted net income per common    share outstanding:
--Basic	$	0.11		$	0.11		$	0.22		$	0.23
--Diluted	$	0.11		$	0.11		$	0.22		$	0.23
Weighted average number of common shares outstanding:
--Basic		9,628,405			9,659,317			9,640,146			9,657,557
--Diluted		9,628,405			9,661,620			9,640,146			9,659,897

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

FOR THE THREE MONTHS ENDED JUNE 30, 2020

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	Common Shares	Additional Paid in Capital	Treasury Stock	Retained Earnings	Totals
	Shares	Amount		Shares	Cost
27%; width:27%; min-width:27%;">Balance, April 1, 2020	10%; width:10%; min-width:10%;">9,882,058	1%; width:1%; min-width:1%;">$	9%; width:9%; min-width:9%;">9,882	1%; width:1%; min-width:1%;">$	9%; width:9%; min-width:9%;">33,147,298	10%; width:10%; min-width:10%;">249,823	1%; width:1%; min-width:1%;">$	9%; width:9%; min-width:9%;">(750,724	1%; width:1%; min-width:1%;">)	1%; width:1%; min-width:1%;">$	9%; width:9%; min-width:9%;">  425,414	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">$	9%; width:9%; min-width:9%;">  32,831,870	1%; width:1%; min-width:1%;">
Purchase of treasury shares				5,390		(20,835	)			(20,835	)
Non - cash compensation				3,266					3,266
Dividends paid							(1,059,546	)		(1,059,546	)
Net income							1,097,182			1,097,182
Balance, June 30, 2020	9,882,058	$	9,882	$	33,150,564	255,213	$	(771,559	)	$	463,050		$	32,851,937

FOR THE THREE MONTHS ENDED JUNE 30, 2019

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	Common Shares	Additional Paid in Capital	Treasury Stock	Retained   Earnings	Totals
	Shares	Amount		Shares	Cost
27%; width:27%; min-width:27%;">Balance, April 1, 2019	10%; width:10%; min-width:10%;">9,881,191	1%; width:1%; min-width:1%;">$	9%; width:9%; min-width:9%;">9,881	1%; width:1%; min-width:1%;">$	9%; width:9%; min-width:9%;">33,134,235	10%; width:10%; min-width:10%;">219,214	1%; width:1%; min-width:1%;">$	9%; width:9%; min-width:9%;">(595,878	1%; width:1%; min-width:1%;">)	1%; width:1%; min-width:1%;">$	9%; width:9%; min-width:9%;">672,556	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">$	9%; width:9%; min-width:9%;">  33,220,794	1%; width:1%; min-width:1%;">
Purchase of treasury shares				4,000		(23,810	)			(23,810	)
Non - cash compensation				3,266					3,266
Dividends paid							(1,159,438	)		(1,159,438	)
Net income							1,084,043			1,084,043
Balance, June 30, 2019	9,881,191	$	9,881	$	33,137,501	223,214	$	(619,688	)	$	597,161		$	33,124,855

FOR THE SIX MONTHS ENDED JUNE 30, 2020    

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	Common Shares	Additional Paid in Capital	Treasury Stock	Accumulated Deficit (Retained Earnings)	Totals
	Shares	Amount		Shares	Cost
27%; width:27%; min-width:27%;">Balance, January 1, 2020	10%; width:10%; min-width:10%;">9,882,058	1%; width:1%; min-width:1%;">$	9%; width:9%; min-width:9%;">9,882	1%; width:1%; min-width:1%;">$	9%; width:9%; min-width:9%;">33,144,032	10%; width:10%; min-width:10%;">223,214	1%; width:1%; min-width:1%;">$	9%; width:9%; min-width:9%;">(619,688	1%; width:1%; min-width:1%;">)	1%; width:1%; min-width:1%;">$	9%; width:9%; min-width:9%;">  (590,808	1%; width:1%; min-width:1%;">)	1%; width:1%; min-width:1%;">$	9%; width:9%; min-width:9%;"> 31,943,418	1%; width:1%; min-width:1%;">
Non - cash compensation				6,532					6,532
Purchase of treasury shares				31,999		(151,871	)			(151,871	)
Dividends paid							(1,059,546	)		(1,059,546	)
Net income							2,113,404			2,113,404
Balance, June 30, 2020	9,882,058	$	9,882	$	33,150,564	255,213	$	(771,559	)	$	463,050		$	32,851,937

FOR THE SIX MONTHS ENDED JUNE 30, 2019    

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	Common Shares	Additional Paid in Capital	Treasury Stock	Accumulated Deficit (Retained Earnings)	Totals
	Shares	Amount		Shares	Cost
27%; width:27%; min-width:27%;">Balance, January 1, 2019	10%; width:10%; min-width:10%;">9,874,191	1%; width:1%; min-width:1%;">$	9%; width:9%; min-width:9%;">9,874	1%; width:1%; min-width:1%;">$	9%; width:9%; min-width:9%;">33,110,536	10%; width:10%; min-width:10%;">218,214	1%; width:1%; min-width:1%;">$	9%; width:9%; min-width:9%;">(590,234	1%; width:1%; min-width:1%;">)	1%; width:1%; min-width:1%;">$	9%; width:9%; min-width:9%;">(448,801	1%; width:1%; min-width:1%;">)	1%; width:1%; min-width:1%;">$	9%; width:9%; min-width:9%;">  32,081,375	1%; width:1%; min-width:1%;">
Exercise of options	7,000		7		20,433					20,440
Purchase of treasury shares				5,000		(29,454	)			(29,454	)
Non – cash compensation				6,532					6,532
Dividends paid							(1,159,438	)		(1,159,438	)
Net income							2,205,400			2,205,400
Balance, June 30, 2019	9,881,191	$	9,881	$	33,137,501	223,214	$	(619,688	)	$	597,161		$	33,124,855

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

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50%; min-width:50%;">	1%; min-width:1%;">	1%; min-width:1%;">	1%; min-width:1%;">	10%; min-width:10%;">Six Months Ended June 30,
72%; width:72%; min-width:72%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	10%; width:10%; min-width:10%;"> 2020	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	1%; width:1%; min-width:1%;">	10%; width:10%; min-width:10%;"> 2019	1%; width:1%; min-width:1%;">
Cash flows from operating activities:
Net income				$	2,113,404			$	2,205,400
Adjustments to reconcile net income to net cash provided by    operating activities -
Amortization of deferred financing costs					50,256				47,244
Adjustment to operating lease right-of-use asset and liability					(200	)			---
Depreciation					548				815
Non-cash compensation expense					6,532				6,532
Changes in operating assets and liabilities:
Interest receivable on loans					(124,303	)			(76,123	)
Other assets					(65,316	)			(55,243	)
Accounts payable and accrued expenses					(32,015	)			(60,927	)
Deferred origination fees					39,513				(8,233	)
Net cash provided by operating activities					1,988,419				2,059,465
Cash flows from investing activities:
Issuance of short term loans					(21,798,160	)			(24,697,965	)
Collections received from loans					19,455,628				23,622,125
Release of loan holdback relating to mortgage receivable					(15,000	)			---
Purchase of fixed assets					(923	)			---
Net cash used in investing activities					(  2,358,455	)			(  1,075,840	)
Cash flows from financing activities:
Proceeds from line of credit, net					2,843,235				1,115,656
Dividends paid					(2,218,607	)			(2,318,155	)
Purchase of treasury shares					(151,871	)			(29,454	)
Deferred financing costs incurred					(27,102	)			---
Proceeds from exercise of stock options					---				20,440
Net cash provided by (used in) financing activities					445,655				(1,211,513	)
Net increase (decrease) in cash					75,619				(227,888	)
Cash, beginning of period					118,407				355,057
Cash, end of period				$	194,026			$	127,169
Supplemental Cash Flow Information:
Taxes paid during the period				$	645			$	572
Interest paid during the period				$	650,130			$	733,160
Operating leases paid during the period				$	27,227			$	25,584
Supplemental Information – Noncash Information:
Establishment of right-of-use asset and operating lease liability				$	---			$	135,270
Interest receivable converted to loans receivable in connection with forbearance agreements				$	29,671			$	---

SOURCE: Manhattan Bridge Capital, Inc. 

FAQ

What were the total revenues for Manhattan Bridge Capital in Q2 2020?

Total revenues for Q2 2020 were approximately $1.74 million.

How much did net income change for Manhattan Bridge Capital in Q2 2020?

Net income for Q2 2020 was approximately $1.1 million, matching the previous year.

What factors contributed to the revenue decline for Manhattan Bridge Capital?

The decline was primarily due to lower interest rates, reduced origination points, and decreased demand for loans due to COVID-19.

What is the stockholders' equity for Manhattan Bridge Capital as of June 30, 2020?

Total stockholders' equity was approximately $32.85 million.

Did Manhattan Bridge Capital reduce its dividends during the pandemic?

No, the company did not pause or substantially reduce its dividends.