Manhattan Bridge Capital, Inc. Reports Results for 2023
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.
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.
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.
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.
03/11/2024 - 07:05 AM
GREAT NECK, N.Y., March 11, 2024 (GLOBE NEWSWIRE) -- Manhattan Bridge Capital, Inc. (Nasdaq: LOAN $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 t o 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 SUBSIDIARYCONSOLIDATED 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 Capital Treasury Stock Accumulated 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 SUBSIDIARYCONSOLIDATED 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 ) 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: $ 1,287,073 $ 1,436,868
* At December 31, 2023, cash and restricted cash included $1,587,773 of restricted cash.
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.
