Manhattan Bridge Capital, Inc. Reports Second Quarter 2024 Results

Rhea-AI Summary

Manhattan Bridge Capital (Nasdaq: LOAN) reported its Q2 2024 results, showing a 1.8% increase in total revenues to $2,443,000 compared to Q2 2023. The company's net income slightly decreased by 0.9% to $1,409,000, or $0.12 per share. For the first half of 2024, total revenues rose by 4.6% to $5,016,000, with net income increasing by 7.6% to $2,885,000, or $0.25 per share. The revenue growth was primarily due to higher interest rates on commercial loans, partially offset by reduced loan receivables and slower new loan originations. As of June 30, 2024, total stockholders' equity stood at approximately $43,184,000. The company's CEO, Assaf Ran, noted that while real estate markets in their operational areas remain slow due to high interest rates, property prices are holding steady or increasing due to inventory and inflation impacts.

Positive

• Total revenues increased by 1.8% to $2,443,000 in Q2 2024
• First half 2024 revenues grew by 4.6% to $5,016,000
• Net income for H1 2024 increased by 7.6% to $2,885,000
• Earnings per share for H1 2024 rose to $0.25 from $0.23 in H1 2023
• Higher interest rates on commercial loans boosted interest income

Negative

• Q2 2024 net income decreased by 0.9% to $1,409,000
• Reduction in loans receivable impacted revenue growth
• Slowdown in new loan originations affected origination fees
• Real estate markets in operational areas remain slow due to high interest rates

Insights

Financial Analyst

Revenue Analysis: Manhattan Bridge Capital's revenue for Q2 2024 increased by 1.8% to $2.443 million compared to the same period in 2023. The increase was primarily driven by higher interest rates on commercial loans. However, this was partially negated by a reduction in loans receivable and lower origination fees. This suggests the company is benefiting from the high-interest-rate environment but is also facing challenges with loan origination.

Net Income: Despite the increase in revenue, net income for Q2 2024 slightly decreased by 0.9% to $1.409 million. This slight dip in net income can be attributed to higher interest expenses. However, for the first half of 2024, net income increased by 7.6% to $2.885 million, indicating a generally positive trend driven by increased interest income and lower general and administrative expenses.

Investor Perspective: For retail investors, the minimal growth in Q2 might be a concern, but the overall H1 performance is promising. The steady revenue growth from interest income and controlled expenses are positive signs. However, the company's future performance will heavily depend on its ability to navigate the current high-interest-rate environment and manage loan origination effectively.

Market Research Analyst

Industry Context: The real estate market remains sluggish due to high-interest rates, yet Manhattan Bridge Capital's performance shows resilience. Their strategy to capitalize on higher interest rates while mitigating risks through secured loans with personal guarantees appears sound. The company's focus on ‘cherry-picking’ opportunities amidst a lack of inventory and inflationary pressures is a cautious yet optimistic approach.

Competitive Position: Manhattan Bridge Capital's niche in providing secured loans to real estate investors differentiates it from larger financial institutions. Their ability to maintain relatively stable revenues and net income despite market pressures speaks to effective management and a robust business model.

Investment Implications: Long-term investors might view the company's cautious strategy and steady income from interest as a sign of stability. The slight dip in Q2 net income could be seen as a minor hiccup in an otherwise positive financial trajectory for H1 2024.

Tech Expert

Technology Integration: While the article does not delve into the technological aspects of Manhattan Bridge Capital's operations, it is worth considering how fintech advancements could impact their business. Efficient loan origination processes, risk assessment through AI and improved customer relationship management systems could provide a competitive edge in the high-interest rate environment.

Future Prospects: Embracing technology to streamline operations and improve customer experience could help the company maintain its growth trajectory. Investors should look for signals of technological investments or innovations in future reports, as these could enhance operational efficiency and profitability.

GREAT NECK, N.Y., July 22, 2024 (GLOBE NEWSWIRE) -- Manhattan Bridge Capital, Inc. (Nasdaq: LOAN) (the “Company”) announced today that its total revenues for the three months ended June 30, 2024 were approximately $2,443,000 compared to approximately $2,399,000 for the three months ended June 30, 2023, an increase of $44,000, or 1.8%. The increase in revenue was due to higher interest rates charged on the Company’s commercial loans, partially offset by a reduction in loans receivable, period over period, and reduced origination fees, which were impacted by a slowdown in new loan originations. For the three months ended June 30, 2024 and 2023, approximately $2,033,000 and $1,943,000, respectively, of the Company’s revenues were attributable to interest income on secured commercial loans that the Company offers to real estate investors, and approximately $411,000 and $457,000, respectively, of its revenues were attributable to 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.

Net income for the three months ended June 30, 2024 was approximately $1,409,000, or $0.12 per basic and diluted share (based on approximately 11.44 million weighted-average outstanding common shares), as compared to approximately $1,422,000, or $0.12 per basic and diluted share (based on approximately 11.48 million weighted-average outstanding common shares), for the three months ended June 30, 2023, a decrease of $13,000, or 0.9%.

Total revenues for the six months ended June 30, 2024 were approximately $5,016,000 compared to approximately $4,797,000 for the six months ended June 30, 2023, an increase of $219,000, or 4.6%. The increase in revenue was due to higher interest rates charged on the Company’s commercial loans, partially offset by a reduction in loans receivable, period over period, and reduced origination fees, which were impacted by a slowdown in new loan originations. For the six months ended June 30, 2024 and 2023, revenues of approximately $4,175,000 and $3,896,000, respectively, were attributable to interest income on secured commercial loans that the Company offers to real estate investors, and approximately $841,000 and $901,000, respectively, were attributable to 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.

Net income for the six months ended June 30, 2024 was approximately $2,885,000, or $0.25 per basic and diluted share (based on approximately 11.44 million weighted-average outstanding common shares), as compared to approximately $2,681,000, or $0.23 per basic and diluted share (based on approximately 11.49 million weighted-average outstanding common shares), for the six months ended June 30, 2023, an increase of $204,000, or 7.6%. This increase is primarily attributable to the increase in interest income from loans and the decrease in general and administrative expenses, partially offset by the increase in interest expense.

As of June 30, 2024, total stockholders' equity was approximately $43,184,000.

Assaf Ran, Chairman of the Board and Chief Executive Officer of the Company, stated, “While real estate markets in our geographic areas of operations are still slow and heavy due to the high-interest-rate environment, it seems like prices of real estate properties are holding on and sometimes increasing due to lack of inventory and the impact of inflation. As always, we’re carefully monitoring our portfolio and cherry-picking good opportunities.”

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
	June 30, 2024			December 31, 2023
Assets	(unaudited)			(audited)
Loans receivable	$	66,859,733		$	73,048,403
Interest and other fees receivable on loans		1,488,784			1,395,905
Cash		105,929			104,222
Cash - restricted		---			1,587,773
Other assets		134,321			63,636
Right-of-use asset - operating lease, net		180,446			207,364
Deferred financing costs, net		23,101			27,583
Total assets	$	68,792,314		$	76,434,886

Liabilities and Stockholders’ Equity
Liabilities:
Line of credit	$	17,345,510		$	25,152,338
Senior secured notes (net of deferred financing costs of $134,528 and $172,069, respectively)	5,865,472			5,827,931
Deferred origination fees	646,027			719,019
Accounts payable and accrued expenses	242,248			295,292
Operating lease liability	193,800			220,527
Dividends payable	1,315,445			1,287,073
Total liabilities	25,608,502			33,502,180
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; 11,438,651 and 11,440,651 outstanding, respectively	11,757			11,757
Additional paid-in capital	45,555,408			45,548,876
Less: Treasury stock, at cost – 318,407 and 316,407 shares, respectively		(1,070,406	)		(1,060,606)
Accumulated deficit		(1,312,947	)		(1,567,321)
Total stockholders’ equity	43,183,812			42,932,706
Total liabilities and stockholders’ equity	$	68,792,314		$	76,434,886

MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
	Three Months Ended June 30,						Six Months Ended June 30,
		2024			2023			2024			2023
Revenue: Interest income from loans	$	2,032,687		$	1,942,527		$	4,175,174		$	3,896,349
Origination fees		410,528			456,835			841,119			900,806
Total revenue		2,443,215			2,399,362			5,016,293			4,797,155
Operating costs and expenses:
Interest and amortization of deferred financing costs		603,230			595,427			1,293,819			1,241,690
Referral fees		500			1,000			1,000			1,292
General and administrative expenses		434,282			400,979			844,560			897,075
Total operating costs and expenses		1,038,012			997,406			2,139,379			2,140,057
Income from operations		1,405,203			1,401,956			2,876,914			2,657,098
Other income		4,500			20,380			9,000			24,880
Income before income tax expense		1,409,703			1,422,336			2,885,914			2,681,978
Income tax expense		(650	)		(650	)		(650	)		(650	)
Net income	$	1,409,053		$	1,421,686		$	2,885,264		$	2,681,328
Basic and diluted net income per common share outstanding:
--Basic	$	0.12		$	0.12		$	0.25		$	0.23
--Diluted	$	0.12		$	0.12		$	0.25		$	0.23
Weighted average number of common shares outstanding:
--Basic		11,438,651			11,475,406			11,438,662			11,485,116
--Diluted		11,438,651			11,475,406			11,438,662			11,485,116

MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (unaudited) FOR THE THREE MONTHS ENDED JUNE 30, 2024
	Common Shares		Additional Paid in Capital	Treasury Stock			Accumulated Deficit		Totals
	Shares	Amount		Shares	Cost
Balance, April 1, 2024	11,757,058	$11,757	$45,552,142	318,407	$(1,070,406	)	$(1,406,555	)	$43,086,938
Non - cash compensation			3,266						3,266
Dividends declared and payable							(1,315,445	)	(1,315,445	)
Net income							1,409,053		1,409,053
Balance, June 30, 2024	11,757,058	$11,757	$45,555,408	318,407	$(1,070,406	)	$(1,312,947	)	$43,183,812

FOR THE THREE MONTHS ENDED JUNE 30, 2024
	Common Shares		Additional Paid in Capital	Treasury Stock			Accumulated Deficit		Totals
	Shares	Amount		Shares	Cost
Balance, April 1, 2023	11,757,058	$11,757	$45,539,077	262,113	$(798,939	)	$(1,918,595	)	$42,833,300
Purchase of treasury shares				33,360	(164,806	)			(164,806	)
Non - cash compensation			3,266						3,266
Dividends declared and payable							(1,289,428	)	(1,289,428	)
Net income							1,421,686		1,421,686
Balance, June 30, 2024	11,757,058	$11,757	$45,542,343	295,473	$(963,745	)	$(1,786,337	)	$42,804,018

FOR THE SIX MONTHS ENDED JUNE 30, 2024
	Common Shares		Additional Paid in Capital	Treasury Stock			Accumulated Deficit		Totals
	Shares	Amount		Shares	Cost
Balance, January 1, 2024	11,757,058	$11,757	$45,548,876	316,407	$(1,060,606	)	$(1,567,321	)	$42,932,706
Purchase of treasury shares				2,000	(9,800	)			(9,800	)
Non - cash compensation			6,532						6,532
Dividends paid							(1,315,445	)	(1,315,445	)
Dividends declared and payable							(1,315,445	)	(1,315,445	)
Net income							2,885,264		2,885,264
Balance, June 30, 2024	11,757,058	$11,757	$45,555,408	318,407	$(1,070,406	)	$(1,312,947	)	$43,183,812

FOR THE SIX MONTHS ENDED JUNE 30, 2024
	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
Purchase of treasury shares				33,360	(164,806	)			(164,806	)
Non - cash compensation			6,532						6,532
Dividends paid							(1,293,181	)	(1,293,181	)
Dividends declared and payable							(1,289,428	)	(1,289,428	)
Net income							2,681,328		2,681,328
Balance, June 30, 2024	11,757,058	$11,757	$45,542,343	295,473	$(963,745	)	$(1,786,337	)	$42,804,018

MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
			Six Months Ended June 30,
			2024				2023
Cash flows from operating activities:
Net income			$	2,885,264			$	2,681,328
Adjustments to reconcile net income to net cash provided by operating activities -
Amortization of deferred financing costs				44,191			49,494
Adjustment to right-of-use asset - operating lease and liability				190			1,230
Depreciation				2,209			1,946
Non-cash compensation expense				6,532			6,532
Changes in operating assets and liabilities:
Interest and other fees receivable on loans			(92,879		)		89,214
Other assets			(71,703		)		(72,115		)
Accounts payable and accrued expenses			(53,044		)		(58,132		)
Deferred origination fees			(72,992		)		17,853
Net cash provided by operating activities				2,647,768			2,717,350
Cash flows from investing activities:
Issuance of short-term loans			(19,677,520		)		(28,122,249		)
Collections received from loans				25,866,190			32,811,877
Purchase of fixed assets			(1,191		)		(5,085		)
Net cash provided by investing activities				6,187,479			4,684,543
Cash flows from financing activities:
Repayment of line of credit, net			(7,806,828		)		(4,323,513		)
Dividends paid			(2,602,518		)		(2,730,049		)
Purchase of treasury shares			(9,800		)		(164,806		)
Deferred financing costs incurred			(2,167		)		(38,191		)
Net cash used in financing activities			(10,421,313		)		(7,256,559		)
Net (decrease) increase in cash			(1,586,066		)		145,334
Cash and cash - restricted, beginning of period*				1,691,995			103,540
Cash, end of period			$	105,929			$	248,874
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for taxes			$	650			$	650
Cash paid during the period for interest			$	1,297,587			$	1,215,297
Cash paid during the period for operating leases			$	32,208			$	31,863
Supplemental Schedule of Noncash Financing Activities:
Dividend declared and payable			$	1,315,445			$	1,289,428
Loan holdback relating to mortgage receivable			$	---			$	17,500

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

FAQ

What was Manhattan Bridge Capital's (LOAN) revenue for Q2 2024?

Manhattan Bridge Capital (LOAN) reported total revenues of $2,443,000 for Q2 2024, a 1.8% increase from Q2 2023.

How did Manhattan Bridge Capital's (LOAN) net income change in Q2 2024?

Manhattan Bridge Capital's (LOAN) net income for Q2 2024 slightly decreased by 0.9% to $1,409,000, compared to $1,422,000 in Q2 2023.

What was Manhattan Bridge Capital's (LOAN) earnings per share for Q2 2024?

Manhattan Bridge Capital (LOAN) reported earnings of $0.12 per basic and diluted share for Q2 2024, unchanged from Q2 2023.

How did Manhattan Bridge Capital's (LOAN) revenue perform in the first half of 2024?

Manhattan Bridge Capital's (LOAN) total revenues for the first half of 2024 increased by 4.6% to $5,016,000, compared to $4,797,000 in the same period of 2023.

What factors affected Manhattan Bridge Capital's (LOAN) revenue growth in Q2 2024?

Manhattan Bridge Capital's (LOAN) revenue growth in Q2 2024 was driven by higher interest rates on commercial loans, but partially offset by reduced loans receivable and slower new loan originations.