MANHATTAN BRIDGE CAPITAL INC
For the period ended Sep 30, 2024. Filed Oct 23, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Oct 23, 2024
LOAN$3.34+0.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-07-22.
0001493152-24-028628
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-10-23.
0001493152-24-042160
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 46 previous paragraphs and 45 current paragraphs.
23 unchanged; 20 reworded; 2 added; 3 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 0 previous and 0 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (2)
Removed paragraphs (3)
Previous report
Total revenue
Previous report
Total revenue
Previous report
On January 31, 2023, we entered into an amendment, effective as of January 2, 2023, with respect to the Amended and Restated Credit Agreement with the Lenders and Mr. Ran, as guarantor, to (i) extend the maturity date of the credit line by three years to February 28, 2026; (ii) transition the applicable benchmark from LIBOR to SOFR and adjust the applicable margin with respect to Base Rate Loans and SOFR Loans; (iii) update the required calculation with respect to the fixed charge coverage ratio covenant; (iv) further increase the limit on individual loans and the concentration of any mortgagor (together with guarantors and other related entities and affiliates); and (v) eliminate the requirement to pledge an additional mortgage loans as collateral for the credit line. In addition, the terms of the personal guaranty provided by Mr. Ran were amended such that the potential sums owed under such guaranty will not exceed the sum of $1,000,000 plus any costs relating to the enforcement of the personal guaranty.
Reworded paragraphs (20)
Previous wording
The properties securing the loans are generally classified as residential or commercial real estate and, typically, are not income producing. Each loan is secured by a first mortgage lien on real estate. In addition, each loan is personally guaranteed by the principal(s) of the borrower, which guarantee may be collaterally secured by a pledge of the guarantor’s interest in the borrower. The face amount of the loans we originated in the past seven years ranged from $40,000 to a maximum of $3.6 million. Our lending policy limits the maximum amount of any loan to the lower of (i) 9.9% of the aggregate amount of our loan portfolio (not including the loan under consideration) and (ii) $4 million. Our loans typically have a maximum initial term of 12 months and bear interest at a fixed rate of 9% to 13.5% per year. In addition, we usually receive origination fees or “points” ranging from 0% to 2% of the original principal amount of the loan as well as other fees relating to underwriting and funding the loan. Interest is always payable monthly, in arrears. In the case of acquisition financing, the principal amount of the loan usually does not exceed 75% of the value of the property (as determined by an independent appraiser) and in the case of construction financing, it is typically up to 80% of construction costs.
Current wording
The properties securing the loans are generally classified as residential or commercial real estate and, typically, are not income producing. Our loans are generally secured by a first mortgage lien on real estate. In addition, each loan is personally guaranteed by the principal(s) of the borrower, which guarantee may be collaterally secured by a pledge of the guarantor’s interest in the borrower. The face amount of the loans we originated in the past seven years ranged from $40,000 to a maximum of $3.6 million. Our lending policy limits the maximum amount of any loan to the lower of (i) 9.9% of the aggregate amount of our loan portfolio (not including the loan under consideration) and (ii) $4 million. Our loans typically have a maximum initial term of 12 months and bear interest at a fixed rate of 9% to 13.5% per year. In addition, we usually receive origination fees or “points” ranging from 0% to 2% of the original principal amount of the loan as well as other fees relating to underwriting and funding the loan. Interest is always payable monthly, in arrears. In the case of acquisition financing, the principal amount of the loan usually does not exceed 75% of the value of the property (as determined by an independent appraiser) and in the case of construction financing, it is typically up to 80% of construction costs.
Previous wording
For the six month periods ended June 30, 2024 and 2023, the total amounts of $19,677,520 and $28,122,249, respectively, have been lent, offset by collections received from borrowers, under our commercial loans of $25,866,190 and $32,811,877, respectively.
Current wording
For the nine month periods ended September 30, 2024 and 2023, the total amounts of $29,362,922 and $40,810,565, respectively, have been lent, offset by collections received from borrowers, under our commercial loans of $33,749,887 and $44,512,989, respectively.
Previous wording
At June 30, 2024, we were committed to $9,057,307 in construction loans that can be drawn by our borrowers when certain conditions are met.
Current wording
At September 30, 2024, we were committed to $8,147,338 in construction loans that can be drawn by our borrowers when certain conditions are met.
Previous wording
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 our 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 our revenues were attributable to interest income on secured commercial loans that we offer to real estate investors, and approximately $411,000 and $457,000, respectively, of our 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.
Current wording
Total revenues for the three months ended September 30, 2024 were approximately $2,313,000 compared to approximately $2,434,000 for the three months ended September 30, 2023, a decrease of $121,000 or 5.0%. The decrease in revenue was due to a reduction in loans receivable, period over period, and reduced origination fees, which were impacted by a slowdown in new loan originations, partially offset by higher interest rates charged on our commercial loans. For the three months ended September 30, 2024 and 2023, approximately $1,953,000 and $1,992,000, respectively, of our revenues were attributable to interest income on secured commercial loans that we offer to real estate investors, and approximately $360,000 and $441,000, respectively, of our 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.
Previous wording
Interest and amortization of deferred financing costs for the three months ended June 30, 2024 were approximately $603,000 compared to approximately $595,000 for the three months ended June 30, 2023, an increase of $8,000, or 1.3%. The increase is primarily due to higher interest expenses resulting from elevated interest rates, partially offset by a reduction in borrowed amounts related to the use of the Webster Credit Line. (See Note 5 to the condensed consolidated financial statements included elsewhere in this quarterly report on Form 10-Q).
Current wording
Interest and amortization of deferred financing costs for the three months ended September 30, 2024 were approximately $537,000 compared to approximately $614,000 for the three months ended September 30, 2023, a decrease of $77,000, or 12.5%. The decrease is primarily attributable to the decrease in interest expense due to a reduction in borrowed amounts related to the use of the Webster Credit Line. (See Note 5 to the condensed consolidated financial statements included elsewhere in this quarterly report on Form 10-Q).
Previous wording
General and administrative expenses for the three months ended June 30, 2024 were approximately $434,000 compared to approximately $401,000 for the three months ended June 30, 2023, an increase of $33,000, or 8.2%. The increase is primarily due to costs related to the filing of our registration statement on Form S-3 incurred in 2024, along with higher salaries and legal fees, partially offset by reductions in marketing and banking expenses.
Current wording
General and administrative expenses for the three months ended September 30, 2024 were approximately $380,000 compared to approximately $377,000 for the three months ended September 30, 2023, an increase of $3,000. The increase is primarily due to higher salaries, partially offset by reductions in marketing expenses and legal fees.
Previous wording
Net income for the three months ended June 30, 2024 was approximately $1,409,000 compared to approximately $1,422,000 for the three months ended June 30, 2023, a decrease of $13,000, or 0.9%.
Current wording
Net income for the three months ended September 30, 2024 was approximately $1,399,000 compared to approximately $1,446,000 for the three months ended September 30, 2023, a decrease of $47,000, or 3.3%. This decrease is primarily attributable to the decrease in revenue, partially offset by the decrease in interest expense.
Previous wording
Six months ended June 30, 2024 compared to six months ended June 30, 2023
Current wording
Nine months ended September 30, 2024 compared to nine months ended September 30, 2023
Previous wording
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 our 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 we offer 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.
Current wording
Total revenues for the nine months ended September 30, 2024 were approximately $7,330,000 compared to approximately $7,231,000 for the nine months ended September 30, 2023, an increase of $99,000, or 1.4%. The increase in revenue was due to higher interest rates charged on our 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 nine months ended September 30, 2024 and 2023, revenues of approximately $6,128,000 and $5,889,000, respectively, were attributable to interest income on the secured commercial loans that we offer to real estate investors, and approximately $1,201,000 and $1,342,000, respectively, of our 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.
Previous wording
Interest and amortization of deferred financing costs for the six months ended June 30, 2024 were approximately $1,294,000 compared to approximately $1,242,000 for the six months ended June 30, 2023, an increase of $52,000, or 4.2%. The increase is primarily due to higher interest expenses resulting from elevated interest rates, partially offset by a reduction in borrowed amounts related to the use of the Webster Credit Line. (See Note 5 to the condensed consolidated financial statements included elsewhere in this quarterly report on Form 10-Q).
Current wording
Interest and amortization of deferred financing costs for the nine months ended September 30, 2024 were approximately $1,831,000 compared to approximately $1,856,000 for the nine months ended September 30, 2023, a decrease of $25,000, or 1.3%. The decrease is primarily attributable to the decrease in interest expense due to a reduction in borrowed amounts related to the use of the Webster Credit Line. (See Note 5 to the condensed consolidated financial statements included elsewhere in this quarterly report on Form 10-Q).
Previous wording
General and administrative expenses for the six months ended June 30, 2024 were approximately $845,000 compared to approximately $897,000 for the six months ended June 30, 2023, a decrease of $52,000, or 5.8%. The decrease is primarily due to a special bonus awarded to officers in 2023 for extending the Webster Credit Line, partially offset by costs related to the filing of our registration statement on Form S-3 incurred in 2024.
Current wording
General and administrative expenses for the nine months ended September 30, 2024 were approximately $1,225,000 compared to approximately $1,274,000 for the nine months ended September 30, 2023, a decrease of $49,000, or 3.8%. The decrease is primarily due to a special bonus awarded to officers in 2023 for extending the Webster Credit Line and a reduction in marketing expenses, partially offset by higher salaries and costs related to the filing of our registration statement on Form S-3 incurred in 2024.
Previous wording
Net income for the six months ended June 30, 2024 was approximately $2,885,000 compared to approximately $2,681,000 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.
Current wording
Net income for the nine months ended September 30, 2024 was approximately $4,285,000 compared to approximately $4,128,000 for the nine months ended September 30, 2023, an increase of $157,000, or 3.8%. This increase is primarily attributable to the increase in interest income from loans, partially offset by the decrease in origination fees.
Previous wording
At June 30, 2024, we had cash of approximately $106,000, compared to cash of approximately $104,000 at December 31, 2023.
Current wording
At September 30, 2024, we had cash of approximately $168,000, compared to cash of approximately $104,000 at December 31, 2023.
Previous wording
For the six months ended June 30, 2024, net cash provided by operating activities was approximately $2,648,000, compared to approximately $2,717,000 for the six months ended June 30, 2023. The decrease in net cash provided by operating activities primarily resulted from the increase in interest and other fees receivable on loans and the decrease in deferred origination fees, partially offset by the increase in net income.
Current wording
For the nine months ended September 30, 2024, net cash provided by operating activities was approximately $4,005,000, compared to approximately $4,137,000 for the nine months ended September 30, 2023. The decrease in net cash provided by operating activities primarily resulted from the increase in interest and other fees receivable on loans and the decrease in deferred origination fees, partially offset by the increase in net income.
Previous wording
For the six months ended June 30, 2024, net cash provided by investing activities was approximately $6,187,000, compared to approximately $4,685,000 for the six months ended June 30, 2023. Net cash provided by investing activities for the six months ended June 30, 2024 mainly consisted of the collection of our commercial loans of approximately $25,866,000, offset by the issuance of commercial loans of approximately $19,678,000. Net cash provided by investing activities for the six months ended June 30, 2023 mainly consisted of the collection of our commercial loans of approximately $32,812,000, offset by the issuance of commercial loans of approximately $28,122,000.
Current wording
For the nine months ended September 30, 2024, net cash provided by investing activities was approximately $4,383,000, compared to approximately $3,697,000 for the nine months ended September 30, 2023. Net cash provided by investing activities for the nine months ended September 30, 2024 mainly consisted of the collection of our commercial loans of approximately $33,750,000 (not including a $50,000 holdback), offset by the issuance of commercial loans of approximately $29,363,000. Net cash provided by investing activities for the nine months ended September 30, 2023, mainly consisted of the collection of our commercial loans of approximately $44,513,000, offset by the issuance of commercial loans of approximately $40,811,000.
Previous wording
For the six months ended June 30, 2024, net cash used in financing activities was approximately $10,421,000, compared to approximately $7,257,000 for the six months ended June 30, 2023. Net cash used in financing activities for the six months ended June 30, 2024 reflects the partial repayment of the Webster Credit Line of approximately $7,807,000, dividend payments of approximately $2,603,000, repurchase of treasury shares of approximately $10,000 and deferred financing costs of approximately $2,000. Net cash used in financing activities for the six months ended June 30, 2023 reflects the partial repayment of the Webster Credit Line of approximately $4,324,000, dividend payments of approximately $2,730,000, repurchase of treasury shares of approximately $165,000 and deferred financing costs of approximately $38,000.
Current wording
For the nine months ended September 30, 2024, net cash used in financing activities was $9,912,000, compared to approximately $7,805,000 for the nine months ended September 30, 2023. Net cash used in financing activities for the nine months ended September 30, 2024 reflects the partial repayment of the Webster Credit Line of approximately $5,982,000, dividend payments of approximately $3,918,000, repurchase of treasury shares of approximately $10,000 and deferred financing costs of approximately $2,000. Net cash used in financing activities for the nine months ended September 30, 2023 reflects the partial repayment of the Webster Credit Line of approximately $3,561,000, dividend payments of approximately $4,019,000, repurchase of treasury shares of approximately $186,000 and deferred financing costs of approximately $38,000.
Previous wording
Our Amended and Restated Credit and Security Agreement with Webster, Flushing Bank and Mizrahi provides for the Webster Credit Line. Currently, the Webster Credit Line provides us with a credit line of $32.5 million in the aggregate until February 28, 2026, secured by assignments of mortgages and other collateral. The interest rates relating to the Webster Credit Line equal (i) SOFR plus a premium, which rate aggregated approximately 8.9%, including a 0.5% agency fee, as of June 30, 2024, or (ii) a Base Rate (as defined in the Amended and Restated Credit Agreement) plus 2.00% and a 0.5% agency fee, as chosen by the Company for each drawdown.
Current wording
Our Amended and Restated Credit and Security Agreement with Webster, Flushing Bank and Mizrahi provides for the Webster Credit Line. Currently, the Webster Credit Line provides us with a credit line of $32.5 million in the aggregate until February 28, 2026, secured by assignments of mortgages and other collateral. The interest rates relating to the Webster Credit Line equal (i) SOFR plus a premium, which rate aggregated approximately 8.4%, including a 0.5% agency fee, as of September 30, 2024, or (ii) a Base Rate (as defined in the Amended and Restated Credit Agreement) plus 2.00% and a 0.5% agency fee, as chosen by the Company for each drawdown.
Previous wording
The Webster Credit Line contains various covenants and restrictions including covenants limiting the amount that the Company can borrow relative to the value of the underlying collateral, maintaining various financial ratios and limitations on the terms of loans the Company makes to its customers, limiting the Company’s ability to pay dividends under certain circumstances, and limiting the Company’s ability to repurchase its common shares, sell assets, engage in mergers or consolidations, grant liens, and enter into transactions with affiliates. In addition, the Webster Credit Line contains a cross default provision which will deem any default under any indebtedness owed by us or our subsidiary, MBC Funding II, as a default under the credit line. Under the Amended and Restated Credit Agreement, the Company may repurchase, redeem or otherwise retire its equity securities in an amount not to exceed ten percent of our annual net income from the prior fiscal year. Further, the Company may issue up to $20 million in bonds through its subsidiary, of which not more than $10 million of such bonds may be secured by mortgage notes receivable, and provided that the terms and conditions of such bonds are approved by Webster, subject to its reasonable discretion.
Current wording
The Webster Credit Line contains various covenants and restrictions including covenants limiting the amount that the Company can borrow relative to the value of the underlying collateral, maintaining various financial ratios and limitations on the terms of loans the Company makes to its customers, limiting the Company’s ability to pay dividends under certain circumstances, and limiting the Company’s ability to repurchase its common shares, sell assets, engage in mergers or consolidations, grant liens, and enter into transactions with affiliates. In addition, the Webster Credit Line contains a cross default provision which will deem any default under any indebtedness owed by us or our subsidiary, MBC Funding II, as a default under the credit line. Under the Amended and Restated Credit Agreement, the Company may repurchase, redeem or otherwise retire its equity securities in an amount not to exceed ten percent of our annual net income from the prior fiscal year. Further, the Company may issue up to $20 million in bonds through its subsidiary, of which not more than $10 million of such bonds may be secured by mortgage notes receivable, and provided that the terms and conditions of such bonds are approved by Webster, subject to its reasonable discretion. In addition, the terms of the personal guaranty provided by Mr. Ran were amended such that the potential sums owed under such guaranty will not exceed the sum of $1,000,000 plus any costs relating to the enforcement of the personal guaranty.
Previous wording
We were in compliance with all covenants of the Webster Credit Line, as amended, as of June 30, 2024. At June 30, 2024, the outstanding amount under the Amended and Restated Credit Agreement was $17,345,510. The interest rate on the amount outstanding fluctuates daily. The rate, including a 0.5% agency fee, was approximately 8.9% as of June 30, 2024.
Current wording
We were in compliance with all covenants of the Webster Credit Line, as amended, as of September 30, 2024. At September 30, 2024, the outstanding amount under the Amended and Restated Credit Agreement was $19,170,268. The interest rate on the amount outstanding fluctuates daily. The rate, including a 0.5% agency fee, was approximately 8.4% as of September 30, 2024.
Previous wording
On April 11, 2023, our board of directors authorized a share buyback program for the repurchase of up to 100,000 of our common shares in the next twelve months. Before this program expired on April 10, 2024, we had purchased an aggregate of 56,294 common shares at an aggregate cost of approximately $271,000.
Current wording
On April 11, 2023, our board of directors authorized a share buyback program for the repurchase of up to 100,000 of our common shares. Before this program expired on April 10, 2024, we had purchased an aggregate of 56,294 common shares at an aggregate cost of approximately $271,000.