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MainStreet Bancshares Inc. Reports a Profitable Second Quarter

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MainStreet Bancshares Inc. (Nasdaq: MNSB & MNSBP) reported a profitable second quarter with net income of $2.6 million. Total deposits reached $1.8 billion, up 10.2% year-over-year, while loan growth increased by 8.6% to $1.8 billion. The company's net interest margin settled at 3.15%, showing resilience in the face of higher deposit costs.

The bank's core customer funding sources now comprise 78% of total deposits. Loan growth was driven by demand in commercial and industrial borrowing and high-quality owner-occupied commercial real estate lending. The loan portfolio remains solid with net charge-offs at just eight basis points of average gross loans, and nonperforming assets accounting for 0.99% of total assets.

MainStreet Bank's Banking-as-a-Service (BaaS) initiative, Avenu, is live and in production, with final enhancements being implemented to ensure a scalable and compliance-rich solution.

MainStreet Bancshares Inc. (Nasdaq: MNSB & MNSBP) ha riportato un secondo trimestre redditizio con un utile netto di 2,6 milioni di dollari. I depositi totali hanno raggiunto 1,8 miliardi di dollari, con un aumento del 10,2% rispetto all'anno precedente, mentre la crescita dei prestiti è aumentata dell'8,6% fino a 1,8 miliardi di dollari. Il margine di interesse netto dell'azienda si è attestato a 3,15%, dimostrando resilienza di fronte all'aumento dei costi dei depositi.

Le fonti di finanziamento core della banca ora costituiscono il 78% dei depositi totali. La crescita dei prestiti è stata guidata dalla domanda nel settore commerciale e industriale e nel prestito di immobili commerciali di alta qualità occupati dai proprietari. Il portafoglio prestiti rimane solido con oneri netti di appena otto punti base sui prestiti lordi medi, e le attività non performanti rappresentano lo 0,99% delle attività totali.

Il Banking-as-a-Service (BaaS) di MainStreet Bank, Avenu, è operativo e in produzione, con ultime migliorie in fase di attuazione per garantire una soluzione scalabile e ricca di conformità.

MainStreet Bancshares Inc. (Nasdaq: MNSB & MNSBP) reportó un segundo trimestre rentable con ingresos netos de 2,6 millones de dólares. Los depósitos totales alcanzaron 1,8 mil millones de dólares, un aumento del 10,2% en comparación con el año anterior, mientras que el crecimiento de los préstamos se incrementó en un 8,6% hasta 1,8 mil millones de dólares. El margen de interés neto de la empresa se estableció en 3,15%, mostrando resiliencia ante los costos más altos de los depósitos.

Las fuentes de financiación principales del banco ahora comprenden el 78% de los depósitos totales. El crecimiento de los préstamos fue impulsado por la demanda en préstamos comerciales e industriales y en el financiamiento de bienes raíces comerciales de alta calidad ocupados por sus propietarios. La cartera de préstamos se mantiene sólida con pérdidas netas de solo ocho puntos básicos sobre los préstamos brutos promedio, y los activos no productivos representan el 0,99% de los activos totales.

La iniciativa de Banking-as-a-Service (BaaS) de MainStreet Bank, Avenu, está en funcionamiento y en producción, con las últimas mejoras siendo implementadas para asegurar una solución escalable y rica en cumplimiento.

MainStreet Bancshares Inc. (Nasdaq: MNSB & MNSBP)260만 달러의 순이익을 기록하며 수익성 있는 2분기를 보고했습니다. 총 예금은 18억 달러에 도달했으며, 전년 대비 10.2% 증가했고, 대출 성장률은 8.6% 증가하여 18억 달러에 달했습니다. 회사의 순이자 마진은 3.15%로 설정되어 예금 비용 상승에도 불구하고 강한 저항력을 보였습니다.

은행의 주요 고객 자금 조달 출처는 현재 총 예금의 78%를 차지합니다. 대출 성장은 상업 및 산업 차입에 대한 수요와 고품질 소유주 점유 상업용 부동산 대출에 의해 주도되었습니다. 대출 포트폴리오는 평균 총 대출의 단지 8 베이시스 포인트의 순 부실률을 기록하고 있으며, 비수익 자산은 총 자산의 0.99%를 차지합니다.

MainStreet 은행의 Banking-as-a-Service (BaaS) 이니셔티브, Avenu는 가동 중이며 생산 중이며, 확장 가능하고 규정 준수가 오는 솔루션을 보장하기 위한 최종 개선 사항이 구현되고 있습니다.

MainStreet Bancshares Inc. (Nasdaq: MNSB & MNSBP) a rapporté un deuxième trimestre rentable avec un revenu net de 2,6 millions de dollars. Les dépôts totaux ont atteint 1,8 milliard de dollars, en hausse de 10,2 % par rapport à l'année précédente, tandis que la croissance des prêts a augmenté de 8,6 % pour atteindre 1,8 milliard de dollars. La marge d'intérêt nette de l'entreprise s'est établit à 3,15%, montrant une résilience face à l'augmentation des coûts de dépôts.

Les sources de financement principales de la banque constituent maintenant 78 % des dépôts totaux. La croissance des prêts a été stimulée par la demande de prêts commerciaux et industriels ainsi que par le financement immobilier commercial de haute qualité occupé par les propriétaires. Le portefeuille de prêts reste solide avec des défauts nets représentant seulement huit points de base des prêts bruts moyens, et les actifs non performants représentant 0,99 % des actifs totaux.

L'initiative de Banking-as-a-Service (BaaS) de MainStreet Bank, Avenu, est en ligne et en production, avec les dernières améliorations mises en œuvre pour garantir une solution évolutive et riche en conformité.

MainStreet Bancshares Inc. (Nasdaq: MNSB & MNSBP) berichtete über ein profitables zweites Quartal mit einem Nettoeinkommen von 2,6 Millionen Dollar. Die Gesamteinlagen erreichten 1,8 Milliarden Dollar, was einem Anstieg von 10,2 % im Vergleich zum Vorjahr entspricht, während das Kreditwachstum um 8,6 % auf 1,8 Milliarden Dollar stieg. Die Nettozinsmarge des Unternehmens lag bei 3,15%, was eine Widerstandsfähigkeit gegenüber höheren Einlagenkosten zeigt.

Die Hauptquellen für die Kundenfinanzierung der Bank machen jetzt 78 % der Gesamteinlagen aus. Das Kreditwachstum wurde durch die Nachfrage im Bereich der gewerblichen und industriellen Kreditvergabe sowie durch hochqualitative, vom Eigentümer bewohnte gewerbliche Immobilienfinanzierungen vorangetrieben. Das Kreditportfolio bleibt solide, mit Nettoausfällen von nur acht Basispunkten der durchschnittlichen Bruttokredite, und nicht leistungsfähige Vermögenswerte machen 0,99 % der Gesamtvermögenswerte aus.

Die Banking-as-a-Service (BaaS)-Initiative von MainStreet Bank, Avenu, ist aktiv und in Produktion, wobei letzte Verbesserungen umgesetzt werden, um eine skalierbare und compliance-reiche Lösung zu gewährleisten.

Positive
  • Net income of $2.6 million for Q2 2024
  • Total deposits increased by 10.2% YoY to $1.8 billion
  • Loan growth up 8.6% YoY to $1.8 billion
  • Net interest margin at 3.15%
  • Core customer funding sources comprise 78% of total deposits
  • Net charge-offs at only eight basis points of average gross loans
Negative
  • Nonperforming assets account for 0.99% of total assets
  • Banking-as-a-Service (Avenu) still in production

Insights

MainStreet Bancshares' Q2 2024 results reveal a mixed financial picture. While the bank reported a profit of $2.6 million, the lack of comparative data makes it challenging to assess year-over-year performance. However, there are several positive indicators:

  • Total deposits increased by 10.2% year-over-year to $1.8 billion
  • Loan growth of 8.6% year-over-year, also reaching $1.8 billion
  • Net interest margin at 3.15%, which management describes as 'healthy'
  • Core deposits now constitute 78% of total deposits

The bank's focus on commercial and industrial lending, as well as owner-occupied commercial real estate, appears to be driving loan growth. This strategy could provide stability, especially in a potentially challenging economic environment.

However, investors should note some potential concerns:

  • Net charge-offs at 8 basis points of average gross loans
  • Nonperforming assets at 0.99% of total assets

While these figures aren't alarming, they warrant monitoring, especially given the current economic uncertainties. The bank's emphasis on risk management and proactive engagement with borrowers is prudent in this context.

The development of the Avenu Banking-as-a-Service platform could be a significant differentiator for MainStreet. If successful, this could open new revenue streams and potentially improve the bank's net interest margin. However, the platform is still in production and its full impact remains to be seen.

MainStreet Bancshares' foray into Banking-as-a-Service (BaaS) through its Avenu platform is a strategic move that could potentially reshape the bank's future. Here's why this is significant:

  • Direct Integration: Avenu connects partners and their apps directly to MainStreet's purpose-built core solution, eliminating the need for middleware.
  • Compliance Focus: The bank has emphasized implementing enhancements to ensure a 'scalable and compliance-rich solution,' addressing a critical concern in the fintech space.
  • Competitive Advantage: By owning both the technology and the bank, MainStreet is positioning itself uniquely in the BaaS market.

However, the success of Avenu is not guaranteed. The BaaS market is becoming increasingly crowded, with both established banks and fintech startups vying for market share. MainStreet will need to demonstrate clear advantages over competitors to gain traction.

The production status of Avenu suggests that MainStreet is taking a cautious approach to rollout, which is prudent given the regulatory scrutiny on bank-fintech partnerships. However, this also means that any significant financial impact from Avenu is likely still some time away.

Investors should closely monitor the progress of Avenu, particularly:

  • The timeline for full integration of the 'final enhancements'
  • Early adoption rates among fintechs and other potential partners
  • Any regulatory feedback or challenges

If successful, Avenu could provide MainStreet with a diversified revenue stream and potentially higher-margin business, which could significantly impact the bank's future profitability and growth trajectory.

Rise in Core Deposits Fueled an Uptick in Loan Growth

FAIRFAX, Va., July 29, 2024 /PRNewswire/ -- MainStreet Bancshares, Inc. (Nasdaq: MNSB & MNSBP), the holding company for MainStreet Bank, reported net income of $2.6 million for the second quarter of 2024.

Total deposits reached $1.8 billion in the second quarter, an increase of 10.2% from the second quarter of 2023. Loan growth is up 8.6% over the same period, also reaching $1.8 billion.

"We are now nine full quarters into the current interest rate cycle, and the entire industry has felt the effect of higher deposit costs.  I'm happy to report that we experienced the softest impact this quarter, with our net interest margin settling in at a healthy 3.15%," said Jeff W. Dick, Chairman and CEO of MainStreet Bancshares, Inc. and MainStreet Bank.  "We see signs of an improving net interest margin going forward, but FOMC actions or other unforeseen externalities could affect momentum.  Externalities aside, as our strategic initiatives start to bear fruit, we are confident and optimistic that the trail we have blazed to offer Banking as a Service (BaaS) will positively affect our net interest margin and our bottom line."

"We remain focused on caring for our customers and meeting their continuing banking and borrowing needs while judiciously adding promising new relationships," said Abdul Hersiburane, President of MainStreet Bank. "We've built our core customer funding sources up to 78% of total deposits."

Loan growth in the second quarter was driven by a healthy rise in demand for commercial and industrial borrowing and in high-quality owner-occupied commercial real estate lending, a traditional area of strength for MainStreet Bank.

The Bank maintains a strong portfolio of earning assets, with very nominal AOCI exposure.  The loan portfolio remains solid with net charge offs representing a mere eight basis points of average gross loans.  Nonperforming assets account for 0.99% of total assets.

"We continue to carefully underwrite each loan opportunity and the lending team remains engaged with each borrower throughout their project lifecycle.  If a borrower experiences a challenge, we work with them to face that challenge promptly and transparently," said Tom Floyd, EVP and Chief Lending Officer at MainStreet Bank. "We have a meticulous understanding of our loan book and a rigorous risk management mindset."

Banking-as-a-Service
In recent months, the weaknesses of other embedded banking solutions have been exposed—to the detriment of banks, their fintech clients and their end-customers.  The Avenu team digested all the lessons that could be learned from these weaknesses and is implementing final enhancements to ensure a scalable and compliance-rich solution.  Avenu is live and in limited production until the final enhancements are fully integrated.

Avenu
Avenu is the first and only embedded banking solution that connects our partners and their apps directly and seamlessly to our purpose-built Avenu core solution. We are not a sponsor bank without our own technology, and we are not a middleware software company without our own bank. We are Avenu, a leading financial technology company owned by an established community bank in the heart of Washington, D.C.

Avenu's clients are fintechs, social media, application developers, money movers, and entrepreneurs. They all have one thing in common: They are innovating how money moves to solve real-world issues and help communities thrive. We are focused on servicing our community and creating long-term business relationships.

ABOUT MAINSTREET BANK: MainStreet operates six branches in Herndon, Fairfax, McLean, Leesburg, Clarendon, and Washington, D.C. MainStreet Bank has 55,000 free ATMs and a fully integrated online and mobile banking solution. The Bank is not restricted by a conventional branching system, as it can offer business customers the ability to Put Our Bank in Your Office®. With robust and easy-to-use online business banking technology, MainStreet has "put our bank" in thousands of businesses in the metropolitan area.

MainStreet Bank has a robust line of business and professional lending products, including government contracting lines of credit, commercial lines and term loans, residential and commercial construction, and commercial real estate. MainStreet is an SBA Preferred Lender. From sophisticated cash management to enhanced mobile banking and instant-issue Debit Cards, MainStreet Bank is always looking for ways to improve our customer's experience.

MainStreet Bank was the first community bank in the Washington, D.C., metropolitan area to offer a full online business banking solution. MainStreet Bank was also the first bank headquartered in the Commonwealth of Virginia to offer CDARS – a solution that provides multi-million-dollar FDIC insurance. Further information on the Bank can be obtained by visiting its website at mstreetbank.com.

This release contains forward-looking statements, including our expectations with respect to future events that are subject to various risks and uncertainties. The statements contained in this release that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Words such as "may," "will," "could," "should," "expect," "plan," "project," "intend," "anticipate," "believe," "estimate," "predict," "potential," "pursuant," "target," "continue," and similar expressions are intended to identify such forward-looking statements. Factors that could cause actual results to differ materially from management's projections, forecasts, estimates and expectations include: fluctuation in market rates of interest and loan and deposit pricing, adverse changes in the overall national economy as well as adverse economic conditions in our specific market areas, future impacts of the novel coronavirus (COVID-19) outbreak, maintenance and development of well-established and valued client relationships and referral source relationships, and acquisition or loss of key production personnel. We caution readers that the list of factors above is not exclusive. The forward-looking statements are made as of the date of this release, and we may not undertake steps to update the forward-looking statements to reflect the impact of any circumstances or events that arise after the date the forward-looking statements are made. In addition, our past results of operations are not necessarily indicative of future performance.

 

MainStreet Bancshares, Inc.

UNAUDITED CONSOLIDATED BALANCE SHEET INFORMATION

(In thousands)




June 30,
2024



March 31,
2024



December
31, 2023*



September
30, 2023



June 30,
2023


ASSETS





















Cash and cash equivalents





















Cash and due from banks


$

41,697



$

49,208



$

53,581



$

44,912



$

67,700


Federal funds sold



49,762




75,533




60,932




76,271




30,341


Total cash and cash equivalents



91,459




124,741




114,513




121,183




98,041


Investment securities available for sale, at fair value



57,605




58,699




59,928




56,726




60,579


Investment securities held to maturity, at amortized cost, net of allowance for credit losses of $0 for all periods



16,036




17,251




17,275




17,565




17,590


Restricted equity securities, at amortized cost



26,797




23,924




24,356




20,619




20,304


Loans, net of allowance for credit losses of $17,098, $16,531, $16,506, $15,626, and $16,047, respectively



1,778,840




1,727,110




1,705,137




1,681,444




1,637,484


Premises and equipment, net



13,787




14,081




13,944




14,275




14,427


Accrued interest and other receivables



11,916




10,727




12,390




11,184




10,256


Computer software, net of amortization



17,205




15,691




14,657




13,373




12,266


Bank owned life insurance



38,901




38,609




38,318




38,035




37,763


Other assets



41,200




39,182




34,914




47,087




40,641


Total Assets


$

2,093,746



$

2,070,015



$

2,035,432



$

2,021,491



$

1,949,351


LIABILITIES AND STOCKHOLDERS' EQUITY





















Liabilities:





















Non-interest bearing deposits


$

314,636



$

348,945



$

364,606



$

394,859



$

388,992


Interest bearing demand deposits



179,513




165,331




137,128




76,423




71,308


Savings and NOW deposits



60,867




46,036




45,878




46,550




51,294


Money market deposits



476,396




446,903




442,179




461,398




380,500


Time deposits



723,951




725,520




696,336




703,960




701,289


Total deposits



1,755,363




1,732,735




1,686,127




1,683,190




1,593,383


Federal funds purchased









15,000







30,000


Subordinated debt



72,841




72,741




72,642




72,543




72,444


Other liabilities



40,827




41,418




40,146




52,015




43,016


Total Liabilities



1,869,031




1,846,894




1,813,915




1,807,748




1,738,843


Stockholders' Equity:





















Preferred stock



27,263




27,263




27,263




27,263




27,263


Common stock



29,452




29,514




29,198




29,188




29,177


Capital surplus



66,392




65,940




65,985




65,407




64,768


Retained earnings



109,651




108,334




106,549




102,694




97,646


Accumulated other comprehensive loss



(8,043)




(7,930)




(7,478)




(10,809)




(8,346)


Total Stockholders' Equity



224,715




223,121




221,517




213,743




210,508


Total Liabilities and Stockholders' Equity


$

2,093,746



$

2,070,015



$

2,035,432



$

2,021,491



$

1,949,351



*Derived from audited financial statements

 

MainStreet Bancshares, Inc.

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME INFORMATION

(In thousands, except share and per share data)




Year-to-Date



Three Months Ended




June 30,
2024



June 30,
2023



June 30,
2024



March 31,
2024



December
31, 2023



September
30, 2023



June 30,
2023


INTEREST INCOME:





























Interest and fees on loans


$

62,034



$

55,586



$

31,546



$

30,487



$

30,849



$

29,750



$

28,855


Interest on investment securities





























Taxable securities



865




926




430




435




451




459




407


Tax-exempt securities



538




529




268




270




268




268




265


Interest on federal funds sold



2,264




2,311




1,083




1,182




1,510




1,217




1,179


Total interest income



65,701




59,352




33,327




32,374




33,078




31,694




30,706


INTEREST EXPENSE:





























Interest on interest bearing demand deposits



4,032




594




2,172




1,860




1,058




240




251


Interest on savings and NOW deposits



347




255




190




157




146




145




147


Interest on money market deposits



10,816




4,129




5,638




5,178




5,639




4,156




2,926


Interest on time deposits



17,861




11,221




9,027




8,833




8,257




7,526




7,077


Interest on federal funds purchased



298




239




191




107




25




35




201


Interest on Federal Home Loan Bank advances



46




919







46




118




186




13


Interest on subordinated debt



1,640




1,632




820




820




828




828




820


Total interest expense



35,040




18,989




18,038




17,001




16,071




13,116




11,435


Net interest income



30,661




40,363




15,289




15,373




17,007




18,578




19,271


Provision for (recovery of) credit losses



443




921




638




(195)




466




255




638


Net interest income after provision for (recovery of) credit losses



30,218




39,442




14,651




15,568




16,541




18,323




18,633


NON-INTEREST INCOME:





























Deposit account service charges



959




1,125




490




469




510




514




535


Bank owned life insurance income



583




514




291




292




283




272




259


Net loss on securities



(48)







(48)














Other non-interest income



270




174




140




130




68




177




16


Total other income



1,764




1,813




873




891




861




963




810


NON-INTEREST EXPENSES:





























Salaries and employee benefits



14,972




14,216




7,484




7,488




7,129




6,924




6,595


Furniture and equipment expenses



1,875




1,270




940




935




804




713




772


Advertising and marketing



1,020




1,495




566




454




271




577




698


Occupancy expenses



849




912




415




435




397




375




426


Outside services



1,614




994




839




774




352




697




504


Administrative expenses



471




426




229




242




219




277




211


Other operating expenses



4,190




3,242




2,195




1,996




1,964




1,866




1,646


Total non-interest expenses



24,991




22,555




12,668




12,324




11,136




11,429




10,852


Income before income tax expense



6,991




18,700




2,856




4,135




6,266




7,857




8,591


Income tax expense



1,068




3,602




238




830




1,120




1,516




1,645


Net income



5,923




15,098




2,618




3,305




5,146




6,341




6,946


Preferred stock dividends



1,078




1,078




539




539




539




539




539


Net income available to common shareholders


$

4,845



$

14,020



$

2,079



$

2,766



$

4,607



$

5,802



$

6,407


Net income per common share, basic and diluted


$

0.64



$

1.86



$

0.27



$

0.36



$

0.61



$

0.77



$

0.85


Weighted average number of common shares, basic and diluted



7,610,188




7,519,949




7,608,389




7,611,990




7,527,327




7,524,332




7,522,764


 

MainStreet Bancshares, Inc.

UNAUDITED LOAN, DEPOSIT AND BORROWING DETAIL

(In thousands)




June 30, 2024



March 31, 2024



June 30, 2023



Percentage Change




$ Amount



% of
Total



$ Amount



% of
Total



$ Amount



% of
Total



Last 3
Mos



Last 12
Mos


LOANS:

































Construction and land development loans


$

410,698




22.8

%


$

408,903




23.4

%


$

421,277




25.4

%



0.4

%



-2.5

%

Residential real estate loans



449,700




25.0

%



451,991




25.8

%



410,550




24.7

%



-0.5

%



9.5

%

Commercial real estate loans



845,030




46.9

%



813,387




46.5

%



727,772




43.9

%



3.9

%



16.1

%

Commercial and industrial loans



93,559




5.2

%



71,822




4.1

%



93,604




5.6

%



30.3

%



0.0

%

Consumer loans



2,232




0.1

%



2,902




0.2

%



5,750




0.4

%



-23.1

%



-61.2

%

Total Gross Loans


$

1,801,219




100.0

%


$

1,749,005




100.0

%


$

1,658,953




100.0

%



3.0

%



8.6

%

Less: Allowance for credit losses



(17,098)








(16,531)








(16,047)














Net deferred loan fees



(5,281)








(5,364)








(5,422)














Net Loans


$

1,778,840







$

1,727,110







$

1,637,484














DEPOSITS:

































Non-interest bearing deposits


$

314,636




17.9

%


$

348,945




20.1

%


$

388,992




24.4

%



-9.8

%



-19.1

%

Interest-bearing deposits:

































Demand deposits



179,513




10.2

%



165,331




9.5

%



71,308




4.5

%



8.6

%



151.7

%

Savings and NOW deposits



60,867




3.5

%



46,036




2.7

%



51,294




3.2

%



32.2

%



18.7

%

Money market accounts



476,396




27.1

%



446,903




25.8

%



380,500




23.9

%



6.6

%



25.2

%

Certificates of deposit $250,000 or more



473,827




27.0

%



467,892




27.0

%



406,583




25.5

%



1.3

%



16.5

%

Certificates of deposit less than $250,000



250,124




14.3

%



257,628




14.9

%



294,706




18.5

%



-2.9

%



-15.1

%

Total Deposits


$

1,755,363




100.0

%


$

1,732,735




100.0

%


$

1,593,383




100.0

%



1.3

%



10.2

%

BORROWINGS:

































Federal funds borrowed






0.0

%






0.0

%



30,000




29.3

%



-100.0

%



-100.0

%

Subordinated debt



72,841




100.0

%



72,741




100.0

%



72,444




70.7

%



0.1

%



0.5

%

Total Borrowings


$

72,841




100.0

%


$

72,741




100.0

%


$

102,444




100.0

%



0.1

%



-28.9

%

Total Deposits and Borrowings


$

1,828,204







$

1,805,476







$

1,695,827








1.3

%



7.8

%


































Core customer funding sources (1)


$

1,376,991




75.3

%


$

1,312,746




72.7

%


$

1,184,958




69.9

%



4.9

%



16.2

%

Brokered and listing service sources (2)



378,372




20.7

%



419,989




23.3

%



408,425




24.1

%



-9.9

%



-7.4

%

Federal funds borrowed






0.0

%






0.0

%



30,000




1.7

%



-100.0

%



-100.0

%

Subordinated debt (3)



72,841




4.0

%



72,741




4.0

%



72,444




4.3

%



0.1

%



0.5

%

Total Funding Sources


$

1,828,204




100.0

%


$

1,805,476




100.0

%


$

1,695,827




100.0

%



1.3

%



7.8

%



(1)

Includes ICS, CDARS, and reciprocal deposits maintained by customers, which represent sweep accounts tied to customer operating accounts

(2)

Consists of certificates of deposit (CD) through multiple listing services and multiple brokered deposit services, as well as ICS and CDARS one-way certificates of deposit and regional money market accounts.


Excludes $290.5 million in core deposits placed in reciprocal networks for FDIC insurance coverage that will be classified as brokered deposits on the call report in pursuant to rule 12 CFR 337.6(e) as of June 30, 2024.

(3)

Subordinated debt obligation qualifies as Tier 2 capital at the holding company and Tier 1 capital at the Bank

 

MainStreet Bancshares, Inc.

UNAUDITED AVERAGE BALANCE SHEETS, INTEREST AND RATES

(In thousands)




For the three months ended June 30, 2024



For the three months ended June 30, 2023




Average
Balance



Interest
Income/
Expense
(3)(4)



Average
Yields/ Rate
(annualized)
(3)(4)



Average
Balance



Interest
Income/
Expense
(3)(4)



Average
Yields/ Rate
(annualized)
(3)(4)


ASSETS:

























Interest-earning assets:

























Loans (1)(2)


$

1,782,124



$

31,546




7.10

%


$

1,649,300



$

28,855




7.02

%

Securities:

























Taxable



55,323




430




3.12

%



54,270




407




3.01

%

Tax-exempt



36,717




339




3.71

%



37,876




335




3.55

%

Federal funds and interest-bearing deposits



84,705




1,083




5.13

%



87,608




1,179




5.40

%

Total interest-earning assets


$

1,958,869



$

33,398




6.84

%


$

1,829,054



$

30,776




6.75

%

Other assets



131,656












83,599










Total assets


$

2,090,525











$

1,912,653










Liabilities and Stockholders' Equity:

























Interest-bearing liabilities:

























Interest-bearing demand deposits


$

172,221



$

2,172




5.06

%


$

73,800



$

251




1.36

%

Savings and NOW deposits



47,767




190




1.60

%



50,644




147




1.16

%

Money market deposit accounts



463,641




5,638




4.88

%



344,118




2,926




3.41

%

Time deposits



715,777




9,027




5.06

%



723,056




7,077




3.93

%

Total interest-bearing deposits


$

1,399,406



$

17,027




4.88

%


$

1,191,618



$

10,401




3.50

%

Federal funds borrowed



13,298




191




5.76

%



15,174




201




5.31

%

FHLB advances












989




13




5.27

%

Subordinated debt



72,802




820




4.52

%



72,405




820




4.54

%

Total interest-bearing liabilities


$

1,485,506



$

18,038




4.87

%


$

1,280,186



$

11,435




3.58

%

Demand deposits and other liabilities



381,825












424,505










Total liabilities


$

1,867,331











$

1,704,691










Stockholders' Equity



223,194












207,962










Total Liabilities and Stockholders' Equity


$

2,090,525











$

1,912,653










Interest Rate Spread











1.97

%











3.17

%

Net Interest Income






$

15,360











$

19,341






Net Interest Margin











3.15

%











4.24

%



(1)

Includes loans classified as non-accrual

(2)

Total loan interest income includes amortization of deferred loan fees, net of deferred loan costs

(3)

Income and yields for all periods presented are reported on a tax-equivalent basis using the federal statutory rate of 21%

(4)

Refer to Appendix for reconciliation of non-GAAP measures

 

MainStreet Bancshares, Inc.

UNAUDITED AVERAGE BALANCE SHEETS, INTEREST AND RATES

(In thousands)




For the six months ended June 30, 2024



For the six months ended June 30, 2023




Average
Balance



Interest
Income/
Expense
(3)(4)



Average
Yields/ Rate
(annualized)
(3)(4)



Average
Balance



Interest
Income/
Expense
(3)(4)



Average
Yields/ Rate
(annualized)
(3)(4)


ASSETS:

























Interest-earning assets:

























Loans (1)(2)


$

1,755,443



$

62,034




7.13

%


$

1,624,664



$

55,586




6.90

%

Securities:

























Taxable



55,708




865




3.13

%



56,011




926




3.33

%

Tax-exempt



37,068




681




3.70

%



37,908




670




3.56

%

Federal funds and interest-bearing deposits



88,349




2,264




5.17

%



103,053




2,311




4.52

%

Total interest-earning assets


$

1,936,568



$

65,844




6.86

%


$

1,821,636



$

59,493




6.59

%

Other assets



127,430












77,601










Total assets


$

2,063,998











$

1,899,237










Liabilities and Stockholders' Equity:

























Interest-bearing liabilities:

























Interest-bearing demand deposits


$

159,234



$

4,032




5.11

%


$

78,568



$

594




1.52

%

Savings and NOW deposits



45,993




347




1.52

%



51,290




255




1.00

%

Money market deposit accounts



448,647




10,816




4.86

%



284,906




4,129




2.92

%

Time deposits



712,898




17,861




5.05

%



698,384




11,221




3.24

%

Total interest-bearing deposits


$

1,366,772



$

33,056




4.88

%


$

1,113,148



$

16,199




2.93

%

Federal funds borrowed



10,386




298




5.79

%



9,103




239




5.29

%

FHLB advances



1,648




46




5.63

%



39,199




919




4.73

%

Subordinated debt



72,752




1,640




4.55

%



72,355




1,632




4.55

%

Total interest-bearing liabilities


$

1,451,558



$

35,040




4.87

%


$

1,233,805



$

18,989




3.10

%

Demand deposits and other liabilities



389,792












535,075










Total liabilities


$

1,841,350











$

1,768,880










Stockholders' Equity



222,648












190,839










Total Liabilities and Stockholders' Equity


$

2,063,998











$

1,959,719










Interest Rate Spread











1.99

%











3.49

%

Net Interest Income






$

30,804











$

40,504






Net Interest Margin











3.21

%











4.48

%



(1)

Includes loans classified as non-accrual

(2)

Total loan interest income includes amortization of deferred loan fees, net of deferred loan costs

(3)

Income and yields for all periods presented are reported on a tax-equivalent basis using the federal statutory rate of 21%

(4)

Refer to Appendix for reconciliation of non-GAAP measures

 

MainStreet Bancshares, Inc.

UNAUDITED SUMMARY FINANCIAL DATA

(Dollars in thousands except per share data)




At or For the Three
Months Ended



At or For the Six Months
Ended




June 30,



June 30,




2024



2023



2024



2023


Per share Data and Shares Outstanding

















Earnings per common share (basic and diluted)


$

0.27



$

0.85



$

0.64



$

1.86


Book value per common share


$

25.99



$

24.36



$

25.99



$

24.36


Tangible book value per common share(2)


$

23.72



$

22.73



$

23.72



$

22.73


Weighted average common shares (basic and diluted)



7,608,389




7,522,764




7,610,188




7,519,949


Common shares outstanding at end of period



7,598,529




7,522,297




7,598,529




7,522,297


Performance Ratios

















Return on average assets (annualized)



0.50

%



1.46

%



0.58

%



1.60

%

Return on average equity (annualized)



4.70

%



13.40

%



5.36

%



14.87

%

Return on average common equity (annualized)



5.36

%



14.22

%



6.11

%



15.92

%

Yield on earning assets (FTE) (2) (annualized)



6.84

%



6.75

%



6.86

%



6.59

%

Cost of interest-bearing liabilities (annualized)



4.87

%



3.58

%



4.87

%



3.10

%

Net interest spread (FTE) (2)



1.97

%



3.17

%



1.99

%



3.49

%

Net interest margin (FTE) (2) (annualized)



3.15

%



4.24

%



3.21

%



4.48

%

Noninterest income as a percentage of average assets (annualized)



0.17

%



0.17

%



0.17

%



0.19

%

Noninterest expense to average assets (annualized)



2.43

%



2.28

%



2.44

%



2.39

%

Efficiency ratio (3)



78.38

%



54.04

%



77.07

%



53.48

%

Asset Quality

















Allowance for credit losses (ACL)

















Beginning balance, ACL - loans


$

16,531



$

15,435



$

16,506



$

14,114


Add: recoveries



6




1




8




12


Less: charge-offs



(370)




(6)




(511)




(6)


Add: provision for (recovery of) credit losses - loans



931




617




1,095




1,032


Add: current expected credit losses, nonrecurring adoption












895


Ending balance, ACL - loans


$

17,098



$

16,047



$

17,098



$

16,047



















Beginning balance, reserve for unfunded commitment (RUC)


$

650



$

1,178



$

1,009



$


Add: current expected credit losses, nonrecurring adoption












1,310


Add: provision for (recovery of) unfunded commitments, net



(293)




21




(652)




(111)


Ending balance, RUC


$

357



$

1,199



$

357



$

1,199


Total allowance for credit losses


$

17,455



$

17,246



$

17,455



$

17,246



















Allowance for credit losses on loans to total gross loans



0.95

%



0.97

%



0.95

%



0.97

%

Allowance for credit losses to total gross loans



0.97

%



1.04

%



0.97

%



1.04

%

Allowance for credit losses on loans to non-performing loans


84

%



N/A



84

%



N/A


Net charge-offs (recoveries) to average gross loans (annualized)



0.08

%



0.00

%



0.06

%



0.00

%

Concentration Ratios

















Commercial real estate loans to total capital (4)



367.24

%



363.70

%



367.24

%



363.70

%

Construction loans to total capital (5)



130.19

%



139.59

%



130.19

%



139.59

%

Non-performing Assets

















Loans 30-89 days past due to total gross loans



0.81

%



0.00

%



0.81

%



0.00

%

Loans 90 days past due and accruing to total gross loans



0.00

%



0.00

%



0.00

%



0.00

%

Non-accrual loans to total gross loans



1.15

%



0.00

%



1.15

%



0.00

%

Other real estate owned


$



$



$



$


Non-performing loans


$

20,691



$



$

20,691



$


Non-performing assets to total assets



0.99

%



0.00

%



0.99

%



0.00

%

Regulatory Capital Ratios (Bank only) (1)

















Total risk-based capital ratio



16.78

%



16.79

%



16.78

%



16.79

%

Tier 1 risk-based capital ratio



15.85

%



15.83

%



15.85

%



15.83

%

Leverage ratio



14.22

%



14.81

%



14.22

%



14.81

%

Common equity tier 1 ratio



15.85

%



15.83

%



15.85

%



15.83

%

Other information

















Closing stock price


$

17.73



$

22.66



$

17.73



$

22.66


Tangible equity / tangible assets (2)



9.99

%



10.24

%



9.99

%



10.24

%

Average tangible equity / average tangible assets (2)



9.97

%



10.34

%



10.10

%



10.28

%

Number of full time equivalent employees



195




179




195




179


Number of full service branch offices



6




6




6




6




(1)

Regulatory capital ratios as of June 30, 2024 are preliminary

(2)

Refer to Appendix for reconciliation of non-GAAP measures

(3)

Efficiency ratio is calculated as non-interest expense as a percentage of net interest income and non-interest income

(4)

Commercial real estate includes only non-owner occupied and construction loans as a percentage of Bank capital

(5)

Construction loans as a percentage of Bank capital

 

MainStreet Bancshares, Inc.

Unaudited Reconciliation of Certain Non-GAAP Financial Measures

(Dollars In thousands)




For the three months
ended June 30,



For the six months ended
June 30,




2024



2023



2024



2023


Net interest margin (FTE)

















Net interest income (GAAP)


$

15,289



$

19,271



$

30,661



$

40,363


FTE adjustment on tax-exempt securities



71




70




143




141


Net interest income (FTE) (non-GAAP)



15,360




19,341




30,804




40,504



















Average interest earning assets



1,958,869




1,829,054




1,936,568




1,821,636


Net interest margin (GAAP)



3.13

%



4.23

%



3.19

%



4.47

%

Net interest margin (FTE) (non-GAAP)



3.15

%



4.24

%



3.21

%



4.48

%

 



For the three months
ended June 30,



For the six months ended
June 30,




2024



2023



2024



2023


Yield on earning assets (FTE)

















Total interest income


$

33,327



$

30,706



$

65,701



$

59,352


FTE adjustment on tax-exempt securities



71




70




143




141


Total interest income (FTE) (non-GAAP)



33,398




30,776




65,844




59,493



















Average interest earning assets



1,958,869




1,829,054




1,936,568




1,821,636


Yield on earning assets (GAAP)



6.82

%



6.73

%



6.84

%



6.57

%

Yield on earning assets (FTE) (non-GAAP)



6.84

%



6.75

%



6.86

%



6.59

%

 



For the three months
ended June 30,



For the six months ended
June 30,




2024



2023



2024



2023


Net interest spread (FTE)

















Yield on earning assets (GAAP)



6.82

%



6.73

%


6.84

%


6.57

%

Yield on earning assets (FTE) (non-GAAP)



6.84

%



6.75

%


6.86

%


6.59

%


















Yield on interest-bearing liabilities



4.87

%



3.58

%


4.87

%



3.10

%

Net interest spread (GAAP)



1.95

%



3.15

%


1.97

%


3.47

%

Net interest spread (FTE) (non-GAAP)



1.97

%



3.17

%



1.99

%


3.48

%

 



As of June 30,



As of June 30,




2024



2023



2024



2023


Tangible common stockholders' equity

















Total stockholders equity (GAAP)


$

224,715



$

210,508



$

224,715



$

210,508


Less: intangible assets



(17,205)




(12,266)




(17,205)




(12,266)


Tangible stockholders' equity (non-GAAP)



207,510




198,242



$

207,510



$

198,242


Less: preferred stock



(27,263)




(27,263)




(27,263)




(27,263)


Tangible common stockholders' equity (non-GAAP)



180,247




170,979




180,247




170,979



















Common shares outstanding



7,598,529




7,522,297




7,598,529




7,522,297


Tangible book value per common share (non-GAAP)


$

23.72



$

22.73



$

23.72



$

22.73


 



As of June 30,



As of June 30,




2024



2023



2024



2023


Stockholders equity, adjusted

















Total stockholders equity (GAAP)


$

224,715



$

210,509



$

224,715



$

210,509


Less: intangible assets



(17,205)




(12,266)




(17,205)




(12,266)


Total tangible stockholders equity (non-GAAP)



207,510




198,243




207,510




198,243


 



As of June 30,



As of June 30,




2024



2023



2024



2023


Total tangible assets

















Total assets (GAAP)


$

2,093,746



$

1,948,429



$

2,093,746



$

1,948,429


Less: intangible assets



(17,205)




(12,266)




(17,205)




(12,266)


Total tangible assets (non-GAAP)



2,076,541




1,936,163




2,076,541




1,936,163


 



For the three months
ended June 30,



For the six months ended
June 30,




2024



2023



2024



2023


Average tangible stockholders' equity

















Total average stockholders' equity (GAAP)


$

223,194



$

207,962



$

222,648



$

204,800


Less: average intangible assets



(16,386)




(11,284)




(15,732)




(10,585)


Total average tangible stockholders' equity (non-GAAP)



206,808




196,678




206,916




194,215


 



For the three months
ended June 30,



For the six months ended
June 30,




2024



2023



2024



2023


Average tangible assets

















Total average assets (GAAP)


$

2,090,525



$

1,912,653



$

2,063,998



$

1,899,237


Less: average intangible assets



(16,386)




(11,284)




(15,732)




(10,585)


Total average tangible assets (non-GAAP)



2,074,139




1,901,369




2,048,266




1,888,652


 

Contact: Debra Cope
Director of Corporate Communications
Desk (703) 481-4599
Mobile (202) 468-3184

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/mainstreet-bancshares-inc-reports-a-profitable-second-quarter-302208358.html

SOURCE MainStreet Bancshares, Inc.

FAQ

What was MainStreet Bancshares' (MNSB) net income for Q2 2024?

MainStreet Bancshares Inc. (MNSB) reported a net income of $2.6 million for the second quarter of 2024.

How much did MainStreet Bancshares' (MNSB) deposits grow in Q2 2024?

MainStreet Bancshares' (MNSB) total deposits reached $1.8 billion in Q2 2024, representing a 10.2% increase from the second quarter of 2023.

What was MainStreet Bancshares' (MNSB) loan growth in Q2 2024?

MainStreet Bancshares (MNSB) reported loan growth of 8.6% year-over-year, reaching $1.8 billion in the second quarter of 2024.

What is the current status of MainStreet Bancshares' (MNSB) Banking-as-a-Service initiative?

MainStreet Bancshares' (MNSB) Banking-as-a-Service initiative, called Avenu, is currently live and in production, with final enhancements being implemented.

MainStreet Bancshares, Inc.

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