MainStreet Bancshares, Inc. Reports Pandemic's Impact on Second Quarter

Rhea-AI Summary

MainStreet Bancshares, Inc. (MNSB) reported a net loss of ($634,000) for Q2 2020, primarily due to a $5.6 million provision related to COVID-19. Despite the loss, year-to-date earnings are positive, totaling $2.8 million. Pre-Tax Pre-Provision Income (PTPP) was $4.7 million, a 2.47% increase from Q1 2020. The company reported net interest income of $10.7 million and noninterest income of $1.3 million for the quarter. The total assets amounted to $1.5 billion. The Board initiated payment deferral programs for borrowers, with 77.5% opting out of assistance.

Positive

• Year-to-date earnings of $2.8 million, or $0.34 per share.
• Pre-Tax Pre-Provision Income (PTPP) rose to $4.7 million, marking a 2.47% increase from the previous quarter.
• Net interest income increased by 9.3% year-over-year, totaling $21.0 million for the first six months.
• Strong asset quality with non-performing assets at 0.16% of total assets.
• Total assets grew to $1.5 billion, supported by robust core deposit base.

Negative

• Net loss of ($634,000) in Q2 2020 due to substantial provisions.
• Provision expense of $5.6 million primarily related to the pandemic's impact.
• Charge-off of a $1.76 million loan due to pandemic-related impacts.

FAIRFAX, Va., July 29, 2020 /PRNewswire/ -- MainStreet Bancshares, Inc. (Nasdaq: MNSB) reported a net loss of ($634,000) for the second quarter of 2020.  The loss is a result of a provision expense of $5.6 million made during the quarter largely related to the effects of the COVID-19 pandemic.  Year-to-date earnings remain positive and management is optimistic that future earnings will normalize if the pandemic is contained.

Pre-Tax Pre-Provision (PTPP) Income was $4.7 million for the quarter-ended June 30, 2020¹. Which is a 2.47% increase from the first quarter of 2020.  PTPP Income held steady at $9.3 million for the six months ended June 30, 2020 as compared to the same period last year, in spite of the ongoing net interest income compression.  In addition, the Company will continue to recognize fee income from the Paycheck Protection Program (PPP), which is currently estimated at $5.765 million with $765,000 realized during the second quarter, which will effectively offset the second quarter provision expense.

For the six months ended June 30, 2020, the Company reported net income of $2.8 million, which represents a 0.40% return on average assets and 4.04% return on average equity, or $0.34 per share of common stock (basic and diluted).

Net interest income of $10.7 million and noninterest income of $1.3 million continued to trend favorably and consistently for the quarter ended June 30, 2020. Net interest income and noninterest income for the six months ended June 30, 2020 increased to $21.0 million and $2.7 million, respectively. Net interest income and noninterest income for the six months ended June 30, 2020 increased 9.3% and 20.5%, respectively, over the same period in 2019. 

Total assets were $1.5 billion and net loans were $1.3 billion as of June 30, 2020, which included $171.7 million in loans related to the Payment Protection Program ("PPP"). Asset quality remained good with non-performing assets to total assets at 0.16% as of June 30, 2020.  Non-interest-bearing deposits were $388.1 million, representing 28.9% of total deposits as of June 30, 2020.  Total deposits as of June 30, 2020 were $1.3 billion.  The Company continues to build its core deposit base (currently at 69% of total deposits) and reduce its overall cost of deposits.  The Company's asset quality remains strong.  Capital levels for the Company remain strong. 

COVID-19
In order to maintain the Company's strong asset quality, the Board and management initiated two payment deferral programs to support borrowers needs during the pandemic:

Phase 1 – Borrowers could opt to defer up to two months of principal and interest payments, and
Phase 2 – Commercial lenders would work with borrowers individually to design and implement a custom solution to achieve a positive outcome for the borrower.

An overwhelming number of borrowers, 77.5% (by dollar amount), did not indicate a need for any support from either phase to continue performing on their loan obligations.   

Phase 1 - Initiated March 24th.  Important to note that at this point little was known about the state of the pandemic with no predictions on its duration or severity.  A total of 195 borrowers participated in this phase, representing 22.5% of the dollar amount of loans outstanding.  This phase is essentially complete.

Phase 1 was evenly distributed across the portfolio, save for the hotel loan portfolio.  The Company has 15 operating hotels in its portfolio totaling $92.4 million.  The hospitality industry was significantly impacted by the pandemic and 14 hotels that we financed requested to participate in Phase 1.  The Table below shows the distribution of participants across all portfolios for Phase 1. 

Phase 1 of Loan Deferment Program
Loan Type	Total Deferred (000's)	Percentage of Total Loans
Commercial Real Estate	$165,920	13.0%
Owner-Occupied Commercial Real Estate	55,232	4.3%
C&I	20,152	1.6%
Other Const & Land	15,465	1.2%
Closed-end 1st Lien	14,215	1.1%
1-4 Fam Construction	10,880	0.9%
Multifamily	2,610	0.2%
Closed-end Jr Lien	1,075	0.1%
Revolving Secured by 1-4 Fam	1,050	0.1%
Total	$286,599	22.5%

Paycheck Protection Program – Initiated April 3, 2020.  During Phase 1, the commercial lending and credit teams were also fully engaged implementing the Paycheck Protection Program (PPP) to provide additional liquidity assistance to our borrowers.  The Team processed 1,071 PPP loans totaling nearly $172 million in short order.  Underwriting standards were focused on providing precisely the amount that would qualify for forgiveness by the federal government.  Approximately 44% of borrowers participating in Phase 1 program also participated in the PPP. 

Phase 2 – Initiated May 4, 2020.  The Board and management aligned the maximum deferment for Phase 2 with the Federal Reserve Board's Main Street Lending Program and set the maximum deferment period at 12 months.   The Board and management also established several restrictive covenants for borrowers participating in Phase 2. 

The objective was for each borrower to attain a greater than 90% probability of a positive outcome.  The lending teams worked with their borrowers to determine what amount and term of deferment, if any, would be reasonable to achieve that objective.

An estimated 42 borrowers representing 7.4% of total loans outstanding plan to participate in Phase 2.  While still a concentration, only 60% of the hotels requested additional payment deferrals for Phase 2.  Refer to the table below recapping planned participation in Phase 2.

Phase 2 Estimated Loan Deferments
	Deferred Amount by Month (000's)
Loan Type	1	2	3	4	5	6	Total Deferred	Number of Borrowers
Other Const & Land			$6,732		$164	$9,665	$16,562	4
Closed-end 1st Lien		943	2,165				3,109	2
Multifamily			1,564				1,564	2
Owner-Occupied Com'l CRE	1,982	1,221	3,665		2,844		9,713	12
Commercial Real Estate		8,092	3,496	7,029		41,875	60,491	12
- Hotels		8,092		7,029		38,350		9
- Office			155					1
- Retail-Commercial						3,525		1
- Shopping Center			3,341					1
Commercial & Industrial	202	128	1,367	591	245		2,533	9
Other Consumer		64					64	1
Total	$2,184	$10,448	$18,990	$7,619	$3,253	$51,540	$94,035	42

The general qualitative factor for the COVID-19 provision for the quarter ended June 30, 2020 was $2 million for the commercial portfolio.  In a separate pooled loan analysis, the Company determined that a $762,000 provision should be included for the indirect consumer automobile portfolio. 

The Company had one Commercial & Industrial (C&I) borrower that was immediately and fully impacted by the pandemic. Good collateral became uncollectible and new sales ceased to exist.  The Company charged-off the $1.76 million balance of the loan during the quarter.  In addition to address the ongoing impact of the COVID-19 pandemic, the Company added a general qualitative factor to the allowance for loan losses calculation during the second quarter of 2020, resulting in additional provision of $2.76 million for the quarter. The two provisions amount to $4.5 million of the total provision for the quarter. The remaining $1.1 million provision was made to support continued loan growth and shifts in other qualitative factors.

The balance of the ALLL after provisions and charge-offs for June 30, 2020 represents 1.25% of total loans (net of PPP loans), and 1.08% of total loans.

QUOTES: "The Company continues to perform well despite issues arising from the pandemic," said Jeff W. Dick, Chairman & CEO of MainStreet Bancshares Inc., and MainStreet Bank.  "The Board and management took a very conservative approach to assessing the loan portfolio based upon current and anticipated conditions.  We will continue to work with all of our customers in pursuit of a positive outcome throughout the course of this pandemic and beyond."

ABOUT MAINSTREET BANK:  MainStreet operates seven branches in Herndon, Fairfax, Fairfax City, 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 well over 1,000 businesses in the metropolitan area.

MainStreet Bank has a full complement of payment system services for third party payment providers with nationally known market leaders on-staff ready to help payment providers create a solution perfect for their needs.

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 also works with the SBA to offer 7A and 504 lending solutions.  From sophisticated cash management to enhanced mobile banking and instant-issue Debit Cards, MainStreet Bank is always looking for ways to improve its customer experience.  

MainStreet Bank was the first community bank in the Washington, DC 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.

¹Use of Certain Non-GAAP Financial Measures. The accounting and reporting policies of the Company conform to GAAP in the United States and prevailing practices in the banking industry. However, certain non-GAAP measures are used by management to supplement the evaluation of the Company's performance. This included adjusted net income.

Management believes that the use of non-GAAP measures provides meaningful information about operating performance by enhancing comparability with other financial periods, other financial institutions, and between different sources of income. The non-GAAP measures used by management enhance comparability by excluding the effects of items that do not reflect ongoing operating performance, including non-recurring gains or charges. These non-GAAP financial measures should not be considered an alternative to GAAP-basis financial statements, and other bank holding companies may define or calculate these or similar measures differently. A reconciliation of the non-GAAP financial measures used by the Company to evaluate and measure the Company's performance to the most directly comparable GAAP financial measures is presented below.

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.

Contact: Jeff W. Dick, Chairman & CEO
(703) 481-4567

 

UNAUDITED CONSOLIDATED BALANCE SHEET INFORMATION
(In thousands, except share data)
		June 30, 2020				March 31, 2020				December 31, 2019				September 30, 2019				June 30, 2019
ASSETS
Cash and cash equivalents
Cash and due from banks		$	55,273			$	62,098			$	53,376			$	52,580			$	44,976
Federal funds sold			21,081				10,677				11,468				19,432				19,835
Total cash and cash equivalents			76,354				72,775				64,844				72,012				64,811
Investment securities available for sale, at fair value			91,823				102,191				92,791				88,198				60,079
Investment securities held to maturity, at carrying value			23,843				23,878				23,914				24,410				24,946
Restricted equity securities, at cost			5,041				5,041				6,157				4,882				5,307
Loans, net of allowance for loan losses of $13,731, $9,898, $9,584, $9,370, and $9,185, respectively			1,259,012				1,059,628				1,030,425				992,609				983,574
Premises and equipment, net			14,416				14,666				14,153				14,109				14,208
Other real estate owned, net			1,175				1,207				1,207				1,207				1,207
Accrued interest and other receivables			7,458				4,809				5,420				5,373				5,681
Bank owned life insurance			24,959				24,761				24,562				19,381				14,275
Other assets			24,786				20,786				13,885				11,414				9,945
Total Assets		$	1,528,867			$	1,329,742			$	1,277,358			$	1,233,595			$	1,184,033
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Non-interest bearing deposits		$	388,104			$	240,979			$	252,707			$	218,087			$	201,405
Interest bearing DDA deposits			18,266				16,846				53,707				54,438				65,117
Savings and NOW deposits			65,876				60,454				63,015				63,746				61,945
Money market deposits			332,246				265,443				141,337				125,716				115,641
Time deposits			537,840				559,489				560,857				601,896				566,292
Total deposits			1,342,332				1,143,211				1,071,623				1,063,883				1,010,400
Federal Home Loan Bank advances and other borrowings			10,000				10,000				40,000				10,000				20,000
Subordinated debt			14,819				14,812				14,805				14,798				14,791
Other liabilities			21,546				21,424				13,896				11,697				9,806
Total Liabilities			1,388,697				1,189,447				1,140,324				1,100,378				1,054,997
Stockholders' Equity:
Common stock, par value $4 per share, authorized 10,000,000    shares; issued and outstanding, 8,263,941 shares at June 30, 2020    including 155,742 unvested shares, 8,260,231 shares at March 31,        2020 including 155,742 unvested shares, 8,260,259 shares at    December 31, 2019 including 160,961 unvested shares,    8,260,259 shares at September 30, 2019 including 160,961    unvested shares, 8,250,259 at June 30, 2019 including    153,586 unvested shares.			32,433				32,418				32,397				32,397				32,387
Capital surplus			74,850				74,482				75,117				74,860				74,609
Retained earnings			31,933				32,567				29,097				25,535				21,826
Accumulated other comprehensive income			954				828				423				425				214
Total Stockholders' Equity			140,170				140,295				137,034				133,217				129,036
Total Liabilities and Stockholders' Equity		$	1,528,867			$	1,329,742			$	1,277,358			$	1,233,595			$	1,184,033

 

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME INFORMATION
(In thousands, except share and per share data)
		Year-to-Date								Three Months Ended
		June 30, 2020				June 30, 2019				June 30, 2020				March 31, 2020				December 31, 2019				September 30, 2019				June 30, 2019
INTEREST INCOME:
Interest and fees on loans		$	28,619			$	26,793			$	14,399			$	14,220			$	14,223			$	14,192			$	13,877
Interest on investment securities			997				1,171				496				501				534				497				615
Interest on federal funds sold			404				720				9				395				271				412				375
Total interest income			30,020				28,684				14,904				15,116				15,028				15,101				14,867
INTEREST EXPENSE:
Interest on interest bearing DDA deposits			153				528				36				117				195				275				283
Interest on savings and NOW deposits			114				147				50				64				71				71				74
Interest on money market deposits			1,252				1,350				474				778				489				539				587
Interest on time deposits			6,900				6,566				3,333				3,566				3,730				3,900				3,635
Interest on Federal Home Loan Bank    advances and other borrowings			94				381				44				50				92				76				162
Interest on subordinated debt			482				479				241				241				244				244				241
Total interest expense			8,995				9,451				4,178				4,816				4,821				5,105				4,982
Net interest income			21,025				19,233				10,726				10,300				10,207				9,996				9,885
Provision for loan losses			5,925				1,075				5,575				350				358				185				750
Net interest income after provision    for loan losses			15,100				18,158				5,151				9,950				9,849				9,811				9,135
NON-INTEREST INCOME:
Deposit account service charges			920				816				433				487				460				392				446
Bank owned life insurance income			397				211				198				199				181				106				106
Loan swap fee income			826				471				423				403				111				407				181
Net gain on available-for-sale securities			—				5				—				—				—				—				5
Net gains on sale of loans			—				263				—				—				—				303				263
Other fee income			589				501				264				325				407				228				340
Total other income			2,732				2,267				1,318				1,414				1,158				1,436				1,341
NON-INTEREST EXPENSES:
Salaries and employee benefits			8,696				7,707				4,263				4,433				4,179				3,890				3,847
Furniture and equipment expenses			954				820				500				454				457				451				435
Advertising and marketing			447				296				191				256				375				235				191
Occupancy expenses			578				430				311				267				221				214				217
Outside services			481				388				205				276				169				306				161
Administrative expenses			341				343				177				164				198				190				176
Other operating expenses			3,006				2,201				1,713				1,293				1,104				1,203				1,150
Total other expenses			14,503				12,185				7,360				7,143				6,703				6,489				6,177
INCOME (LOSS) BEFORE INCOME TAXES			3,329				8,240				(891)				4,221				4,304				4,758				4,299
Income tax expense (benefit)			494				1,562				(257)				751				742				1,049				868
NET INCOME (LOSS)		$	2,835			$	6,678			$	(634)			$	3,470			$	3,562			$	3,709			$	3,431
Net income (loss) per common share,    basic and diluted		$	0.34			$	0.81			$	(0.08)			$	0.42			$	0.43			$	0.45			$	0.42
Weighted average number of shares,    basic and diluted			8,275,344				8,246,562				8,263,370				8,287,317				8,260,259				8,251,672				8,250,210

 

UNAUDITED LOAN, DEPOSIT AND BORROWING DETAIL
(In thousands)
		June 30, 2020								March 31, 2020								June 30, 2019								Percentage Change
		$ Amount				% of Total				$ Amount				% of Total				$ Amount				% of Total				Last 3 Mos				Last 12 Mos
LOANS:
Construction and land development loans		$	284,843				22.2	%		$	286,756				26.7	%		$	203,873				20.5	%			-0.7	%			39.7	%
Residential real estate loans			169,924				13.3	%			149,173				13.9	%			158,406				15.9	%			13.9	%			7.3	%
Commercial real estate loans			497,279				38.8	%			449,786				42.0	%			425,862				42.8	%			10.6	%			16.8	%
Commercial industrial loans			268,290				21.0	%			118,258				11.0	%			117,905				11.9	%			126.9	%			127.5	%
Consumer loans			60,166				4.7	%			68,159				6.4	%			88,421				8.9	%			-11.7	%			-32.0	%
Total Gross Loans		$	1,280,502				100.0	%		$	1,072,132				100.0	%		$	994,467				100.0	%			19.4	%			28.8	%
Less: Allowance for loan losses			(13,731)								(9,898)								(9,185)
Net deferred loan fees			(7,759)								(2,606)								(1,708)
Net Loans		$	1,259,012							$	1,059,628							$	983,574
DEPOSITS:
Non-interest bearing demand deposits		$	388,104				28.9	%		$	240,979				21.1	%		$	201,405				19.9	%			61.1	%			92.7	%
Interest-bearing demand deposits:
Demand deposits			18,266				1.4	%			16,846				1.5	%			65,117				6.4	%			8.4	%			-71.9	%
Savings and NOW deposits			65,876				4.9	%			60,454				5.3	%			61,945				6.1	%			9.0	%			6.3	%
Money market accounts			332,246				24.8	%			265,443				23.2	%			115,641				11.4	%			25.2	%			187.3	%
Certificates of deposit $250,000 or more			213,051				15.9	%			213,409				18.7	%			222,292				22.0	%			-0.2	%			-4.2	%
Certificates of deposit less than $250,000			324,789				24.1	%			346,080				30.2	%			344,000				34.2	%			-6.2	%			-5.6	%
Total Deposits		$	1,342,332				100.0	%		$	1,143,211				100.0	%		$	1,010,400				100.0	%			17.4	%			32.9	%
BORROWINGS:
Federal Home Loan Bank advances			10,000				40.3	%			10,000				40.3	%			20,000				57.5	%			0.0	%			-50.0	%
Subordinated debt			14,819				59.7	%			14,812				59.7	%			14,791				42.5	%			0.0	%			0.2	%
Total Borrowings		$	24,819				100.0	%		$	24,812				100.0	%		$	34,791				100.0	%			0.0	%			-28.7	%
Total Deposits and Borrowings		$	1,367,151							$	1,168,023							$	1,045,191								17.0	%			30.8	%
Core customer funding sources (1)		$	939,474				68.7	%		$	785,661				67.2	%		$	605,484				57.9	%			19.6	%			55.2	%
Brokered and listing service sources (2)			402,858				29.5	%			357,550				30.6	%			404,916				38.7	%			12.7	%			-0.5	%
Federal Home Loan Bank advances			10,000				0.7	%			10,000				0.9	%			20,000				1.9	%			0.0	%			-50.0	%
Subordinated debt (3)			14,819				1.1	%			14,812				1.3	%			14,791				1.4	%			0.0	%			0.2	%
Total Funding Sources		$	1,367,151				100.0	%		$	1,168,023				100.0	%		$	1,045,191				100.0	%			17.0	%			30.8	%

(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.
(3)	Subordinated debt obligation qualifies as Tier 2 capital at the holding company and Tier 1 capital at the Bank.

 

UNAUDITED AVERAGE BALANCE SHEETS, INTEREST AND RATES
(In thousands)
		For the three months ended June 30, 2020												For the three months ended June 30, 2019
		Average Balance				Interest Income/ Expense				Average Yields/ Rate (annualized)				Average Balance				Interest Income/ Expense				Average Yields/ Rate (annualized)
ASSETS:
Interest earning assets:
Loans (1)		$	1,213,250			$	14,399				4.75	%		$	978,282			$	13,877				5.67	%
Investment securities			73,186				496				2.71	%			73,218				615				3.36	%
Federal funds and interest-bearing deposits			126,164				9				0.03	%			73,494				375				2.04	%
Total interest earning assets		$	1,412,600			$	14,904				4.22	%		$	1,124,994			$	14,867				5.29	%
Other assets			69,741												40,842
Total assets		$	1,482,341											$	1,165,836
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing demand deposits		$	17,507			$	36				0.82	%		$	57,299			$	283				1.98	%
Money market deposit accounts			303,118				474				0.63	%			123,110				587				1.91	%
Savings and NOW deposits			62,733				50				0.32	%			62,613				74				0.47	%
Time deposits			548,728				3,333				2.43	%			548,669				3,635				2.65	%
Total interest-bearing deposits		$	932,086			$	3,893				1.67	%		$	791,691			$	4,579				2.31	%
Federal funds and repos purchased			1				—				—				—				—				—
Subordinated debt			14,816				241				6.51	%			14,788				241				6.52	%
FHLB borrowings			10,000				44				1.76	%			23,956				162				2.70	%
Total interest-bearing liabilities		$	956,903			$	4,178				1.75	%		$	830,435			$	4,982				2.40	%
Demand deposits and other liabilities			383,480												208,405
Total liabilities		$	1,340,383											$	1,038,840
Stockholders' Equity			141,958												126,996
Total Liabilities and Stockholders' Equity		$	1,482,341											$	1,165,836
Interest Rate Spread											2.47	%											2.89	%
Net Interest Income and Margin						$	10,726				3.04	%						$	9,885				3.51	%

(1)	Includes loans classified as non-accrual.

 

UNAUDITED AVERAGE BALANCE SHEETS, INTEREST AND RATES
(In thousands)
		For the six months ended June 30, 2020												For the six months ended June 30, 2019
		Average Balance				Interest Income/ Expense				Average Yields/ Rate (annualized)				Average Balance				Interest Income/ Expense				Average Yields/ Rate (annualized)
ASSETS:
Interest earning assets:
Loans (1)		$	1,135,995			$	28,619				5.04	%		$	957,457			$	26,793				5.60	%
Investment securities			73,512				997				2.71	%			70,897				1,171				3.30	%
Federal funds and interest-bearing deposits			131,239				404				0.62	%			69,242				720				2.08	%
Total interest earning assets		$	1,340,746			$	30,020				4.48	%		$	1,097,596			$	28,684				5.23	%
Other assets			64,550												38,827
Total assets		$	1,405,296											$	1,136,423
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing demand deposits		$	25,532			$	153				1.20	%		$	57,013			$	528				1.85	%
Money market deposit accounts			266,638				1,252				0.94	%			133,410				1,350				2.02	%
Savings and NOW deposits			62,716				114				0.36	%			60,626				147				0.48	%
Time deposits			557,921				6,900				2.47	%			508,421				6,566				2.58	%
Total interest-bearing deposits		$	912,807			$	8,419				1.84	%		$	759,470			$	8,591				2.26	%
Federal funds and repos purchased			1				—				0.00	%			69				1				2.89	%
Subordinated debt			14,813				482				6.51	%			14,784				479				6.48	%
FHLB borrowings			10,165				94				1.85	%			29,006				380				2.62	%
Total interest-bearing liabilities		$	937,786			$	8,995				1.92	%		$	803,329			$	9,451				2.35	%
Demand deposits and other liabilities			326,949												207,925
Total liabilities		$	1,264,735											$	1,011,254
Stockholders' Equity			140,561												125,169
Total Liabilities and Stockholders' Equity		$	1,405,296											$	1,136,423
Interest Rate Spread											2.56	%											2.88	%
Net Interest Income and Margin						$	21,025				3.14	%						$	19,233				3.50	%

(1)	Includes loans classified as non-accrual.

 

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,
		2020				2019			2020				2019
Per share Data and Shares Outstanding
Earnings (losses) per share (basic and diluted)		$	(0.08)			$	0.42		$	0.34			$	0.81
Tangible book value per share		$	16.96			$	15.64		$	16.96			$	15.64
Weighted average common shares (basic and diluted)			8,263,370				8,250,210			8,275,344				8,246,562
Common shares outstanding at end of period			8,263,941				8,250,259			8,263,941				8,250,259
Performance Ratios
Return on average assets (annualized)			(0.17)	%			1.18	%		0.40	%			1.18	%
Return on average equity (annualized)			(1.79)	%			10.81	%		4.04	%			10.67	%
Yield on earning assets (annualized)			4.22	%			5.29	%		4.48	%			5.23	%
Cost of interest bearing liabilities (annualized)			1.75	%			2.40	%		1.92	%			2.35	%
Net interest spread			2.47	%			2.89	%		2.56	%			2.88	%
Net interest margin (annualized)			3.04	%			3.51	%		3.14	%			3.50	%
Net interest margin less PPPL (annualized)			3.17	%			—			3.21	%			—
Noninterest income as a percentage of average assets (annualized)			0.36	%			0.46	%		0.39	%			0.40	%
Noninterest expense to average assets (annualized)			1.99	%			2.12	%		2.06	%			2.14	%
Efficiency ratio			61.11	%			55.02	%		61.04	%			56.67	%
Asset Quality
Loans 30-89 days past due to total gross loans			0.01	%			0.03	%		0.01	%			0.03	%
Loans 90 days past due to total gross loans			0.00	%			0.00	%		0.00	%			0.00	%
Non-accrual loans to total gross loans			0.10	%			0.00	%		0.10	%			0.00	%
Other real estate owned		$	1,175			$	1,207		$	1,175			$	1,207
Non-performing assets		$	2,480			$	1,242		$	2,480			$	1,242
Non-performing assets to total assets			0.16	%			0.10	%		0.16	%			0.10	%
Allowance for loan losses to total gross loans			1.07	%			0.92	%		1.07	%			0.92	%
Allowance for loan losses to total gross loans less PPPL			1.24	%			—			1.24	%			—
Allowance for loan losses to non-performing assets			5.54				7.40			5.54				7.40
Net loan charge-offs (recoveries)		$	1,742			$	754		$	1,778			$	721
Net charge-offs to average loans (annualized)			0.57	%			0.31	%		0.31	%			0.15	%
Troubled debt restructurings (total)
Performing in accordance with modified terms		$	—			$	1,494		$	—			$	1,494
Not performing in accordance with modified terms		$	—			$	—		$	—			$	—
Regulatory Capital Ratios (Bank only) (1)
Total risk-based capital ratio			13.26	%			13.41	%		13.26	%			13.41	%
Tier 1 risk-based capital ratio			12.16	%			12.59	%		12.16	%			12.59	%
Leverage ratio			10.23	%			12.07	%		10.23	%			12.07	%
Common equity tier 1 ratio			12.16	%			12.59	%		12.16	%			12.59	%
Other information
Closing stock price		$	13.20			$	22.79		$	13.20			$	22.79
Tangible equity / tangible assets			9.17	%			10.89	%		9.17	%			10.89	%
Tangible equity / tangible assets less PPPL loans			10.33	%			—			10.33	%			—
Average tangible equity / average tangible assets			9.58	%			10.89	%		10.00	%			11.01	%
Number of full time equivalent employees			121				120			121				120
# Full service branch offices			7				6			7				6

(1)	Regulatory capital ratios as of June 30, 2020 are preliminary.

 

Reconciliation of Certain Non-GAAP Financial Measures
(In thousands)
		For the three months ended June 30,								For the six months ended June 30,
			2020				2019				2020				2019
Adjusted Net Income
Net income (loss), as reported		$	(634)			$	3,431			$	2,835			$	6,678
Tax expense (benefit)			(257)				868				494				1,562
Provision for loan losses			5,575				750				5,925				1,075
Adjusted net income		$	4,684			$	5,049			$	9,254			$	9,315

 

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SOURCE MainStreet Bancshares, Inc.

FAQ

What was MainStreet Bancshares' net loss for Q2 2020?

MainStreet Bancshares reported a net loss of ($634,000) for the second quarter of 2020.

What is the Pre-Tax Pre-Provision Income (PTPP) for MNSB in Q2 2020?

The Pre-Tax Pre-Provision Income (PTPP) for MainStreet Bancshares in Q2 2020 was $4.7 million.

How much net income did MNSB report year-to-date as of June 30, 2020?

MainStreet Bancshares reported net income of $2.8 million year-to-date as of June 30, 2020.

What was the impact of COVID-19 on MNSB's financial performance?

The COVID-19 pandemic resulted in a provision expense of $5.6 million, contributing to a net loss in Q2 2020.

What percentage of total deposits were non-interest bearing for MNSB as of June 30, 2020?

Non-interest-bearing deposits represented 28.9% of total deposits for MainStreet Bancshares as of June 30, 2020.