MainStreet Bancshares, Inc. Reports Record Strong and Steady Third Quarter 2021 Earnings

Rhea-AI Summary

MainStreet Bancshares, Inc. (MNSB & MNSBP) reported a third-quarter net income of $4.8 million, totaling $17.4 million year-to-date, reflecting a 13.14% return on average equity and $2.09 earnings per share. The bank's net interest income increased 20.5% to $39.7 million, with a cost of funds at 1.03%. Total assets remained at $1.7 billion, while commercial loans reached $264 million. The hotel portfolio demonstrated strong performance with an occupancy rate of 67.8%. AvenuTM Banking as a Service will be announced on October 25th.

Positive

• Year-to-date net income of $17.4 million.
• 20.5% increase in net interest income to $39.7 million.
• 1.03% cost of funds, down 32% year-over-year.
• Strong asset quality with non-performing assets at 0.07%.

Negative

• Remaining $88 million in PPP loans could impact future earnings.
• Challenges in achieving normal growth levels due to high PPP activity.

FAIRFAX, Va., Oct. 19, 2021 /PRNewswire/ -- MainStreet Bancshares, Inc. (Nasdaq: MNSB & MNSBP), the holding company for MainStreet Bank, reported net income of $4.8 million for the third quarter of 2021.  Year-to-date net income through September 30^th is $17.4 million, and year-to-date results represent:

• 13.14% return on average equity
• 1.37% return on average assets
• $2.09 earnings per share of common stock (basic and diluted)
• $20.64 per common share book value

The Company is well positioned for a stable or rising interest rate environment.

Year-to-date net interest income through September 30^th of $39.7 million is up 20.5% over the same period last year.    

The Company's cost of funds for the quarter-ended September 30, 2021, is 1.03%, down 32% from the same period a year earlier. The Company is on-track to continue reducing funding costs.  The Company's efficiency ratio is 54.7% for the nine-months ended September 30, 2021.

Total assets remain steady through the year at $1.7 billion.  Net loans of $1.2 billion include approximately $264 million of new commercial loans and advances and $86 million of new Paycheck Protection Program (PPP) loans.  The table below provides a reconcilement of gross loans, inclusive and net of Paycheck Protection Program (PPP) loans.  Asset quality continues to be strong with non-performing assets representing a negligible seven hundredths of a percent of total assets on September 30, 2021. 

Reconcilement of Gross Loans through September 30, 2021
	Gross Loans (millions)		Gross Loans Net of PPP (millions)
		% Gross Loans		% Gross Loans
Gross loans 12/31/2020	$1,300		$1,164
+ New loans & advances	$351	27%	$264	23%
- Repayments	$364	-28%	$229	-20%
- Sold loans*	$30		$30
Gross loans 9/30/2021	$1,257		$1,169
- ALLL 9/30/2021	$11		$11
+ PPP loans	**		$88
Net loans 9/30/2021	$1,246		$1,246

*Sold loans represent the amount of loans sold for concentration risk management purposes.  The loans that were sold yielded a net premium on sale.

** Already included in Gross Loans.

Non-interest-bearing deposits represent 34% of the $1.4 billion in total deposits.  Seventy-six percent of total deposits are core deposits. 

"The Company is extremely well positioned for a stable or rising interest rate environment," said Jeff W. Dick, Chairman & CEO of MainStreet Bancshares, Inc. and MainStreet Bank.  "Inflation and market indicators are certainly pointing toward an interest rate adjustment, and we are well prepared for it."

As of September 30th, the Company has $88 million remaining in PPP loans.  The origination fees yet to be realized on the remaining balance approximate $3.8 million.  Total PPP activity is recapped in the table below.

	Round 1 2020	Round 2 2021
	(millions)
Originated	$192	$86
Paydowns during 2020	$41	-
Paydowns during 2021	$132	$17
Remaining balance 9/30/2021	$19	$69

All loans that were provided with deferrals of interest or principal during the pandemic have returned to their original payment structure prior to September 30, 2021. 

"The federal government's implementation of PPP was vital to our customer's financial health during the pandemic, and we are proud to have distributed $279 million of that program to many of our existing and new customers.  I'm excited to report that 68% of PPP proceeds has already been forgiven," said Abdul Hersiburane, President of MainStreet Bank.  "With the high volume of PPP activity, it has been a challenge to achieve our normal level of growth during 2021, but we are optimistic for a strong 4^th quarter."

The Company's hotel portfolio is performing well, reporting average August occupancy at 67.8% and average revenue per available room at $74.60.  The Company continues to retain a special 40 basis point COVID 19 Allowance for Loan and Lease Losses (ALLL) provision against the remaining balance of its hotel loan portfolio. 

The Company will be announcing its Avenu^TM Banking as a Service (BaaS) solution for fintechs on October 25^th, Dick added.  "We are designing Avenu^TM to be a transformational solution for fintechs.  We look forward to sharing details about how we are serving a market segment that needs robust and fully compliant BaaS solutions."

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, 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 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 our customer's 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. 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)
		September 30, 2021				June 30, 2021				March 31, 2021				December 31, 2020				September 30, 2020
ASSETS
Cash and cash equivalents
Cash and due from banks		$	67,992			$	120,121			$	118,399			$	75,935			$	102,480
Federal funds sold			65,725				56,164				51,598				31,593				25,074
Total cash and cash equivalents			133,717				176,285				169,997				107,528				127,554
Investment securities available for sale, at fair value			171,603				165,791				180,028				147,414				118,844
Investment securities held to maturity, at carrying value			26,081				26,136				26,427				22,520				23,114
Restricted equity securities, at cost			5,039				5,039				4,664				4,616				4,616
Loans held for sale			—				—				—				57,006				—
Loans, net of allowance for loan losses of $11,428, $11,133, $13,215, $12,877, and $14,346, respectively			1,246,331				1,256,436				1,299,169				1,230,379				1,279,899
Premises and equipment, net			14,795				13,929				13,975				14,289				14,474
Other real estate owned, net			1,158				1,158				1,180				1,180				1,580
Accrued interest and other receivables			4,718				8,752				9,349				9,604				8,579
Computer software, net of amortization			1,165				—				—				—				—
Bank owned life insurance			35,987				35,736				25,518				25,341				25,157
Other assets			16,605				18,433				12,722				23,288				26,371
Total Assets		$	1,657,199			$	1,707,695			$	1,743,029			$	1,643,165			$	1,630,188
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Non-interest bearing deposits		$	475,157			$	486,001			$	492,463			$	370,497			$	416,648
Interest bearing DDA deposits			63,622				68,028				69,180				70,307				72,807
Savings and NOW deposits			79,556				72,353				72,259				74,099				69,015
Money market deposits			310,776				310,303				342,468				426,600				348,146
Time deposits			485,255				528,247				561,772				496,743				510,429
Total deposits			1,414,366				1,464,932				1,538,142				1,438,246				1,417,045
Subordinated debt			40,635				40,576				14,841				14,834				14,827
Other liabilities			18,169				22,559				17,868				22,420				25,055
Total Liabilities			1,473,170				1,528,067				1,570,851				1,475,500				1,456,927
Stockholders' Equity:
Preferred stock			27,263				27,263				27,263				27,263				27,527
Common stock			29,462				29,446				29,437				29,130				32,460
Capital surplus			67,152				66,667				66,233				66,116				75,217
Retained earnings			59,920				55,676				49,090				44,179				37,105
Accumulated other comprehensive income			232				576				155				977				952
Total Stockholders' Equity			184,029				179,628				172,178				167,665				173,261
Total Liabilities and Stockholders' Equity		$	1,657,199			$	1,707,695			$	1,743,029			$	1,643,165			$	1,630,188

 

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME INFORMATION
(In thousands, except share and per share data)
		Year-to-Date								Three Months Ended
		September 30, 2021				September 30, 2020				September 30, 2021				June 30, 2021				March 31, 2021				December 31, 2020				September 30, 2020
INTEREST INCOME:
Interest and fees on loans		$	46,211			$	43,702			$	15,162			$	15,257			$	15,792			$	15,933			$	15,083
Interest on investment securities			1,712				1,488				585				597				530				519				491
Interest on federal funds sold			73				416				38				20				15				15				12
Total interest income			47,996				45,606				15,785				15,874				16,337				16,467				15,586
INTEREST EXPENSE:
Interest on interest bearing DDA deposits			170				209				60				55				55				108				56
Interest on savings and NOW deposits			127				169				38				47				42				52				55
Interest on money market deposits			645				1,742				148				220				277				418				490
Interest on time deposits			6,039				9,740				1,795				1,994				2,250				2,583				2,841
Interest on Federal Home Loan Bank    advances and other borrowings			—				107				—				—				—				—				13
Interest on subordinated debt			1,346				727				541				567				238				240				245
Total interest expense			8,327				12,694				2,582				2,883				2,862				3,401				3,700
Net interest income			39,669				32,912				13,203				12,991				13,475				13,066				11,886
Provision for (recovery of) loan losses			(1,470)				6,560				290				(2,080)				320				(2,950)				635
Net interest income after provision    for (recovery of) loan losses			41,139				26,352				12,913				15,071				13,155				16,016				11,251
NON-INTEREST INCOME:
Deposit account service charges			1,802				1,407				642				621				539				509				487
Bank owned life insurance income			647				595				252				218				177				183				199
Loan swap fee income			—				2,677				—				—				—				833				1,851
Net gain on held-to-maturity securities			3				—				—				—				3				—				—
Net gain (loss) on sale of loans			434				33				(40)				130				344				—				33
Other fee income			1,601				878				632				586				383				378				288
Total other income			4,487				5,590				1,486				1,555				1,446				1,903				2,858
NON-INTEREST EXPENSES:
Salaries and employee benefits			14,276				13,191				4,847				4,663				4,767				4,746				4,495
Furniture and equipment expenses			1,743				1,528				716				500				526				601				574
Advertising and marketing			1,115				713				438				402				275				290				266
Occupancy expenses			1,092				910				399				387				306				360				332
Outside services			908				696				292				280				336				263				215
Administrative expenses			493				508				202				141				150				166				167
Other operating expenses			4,517				4,595				1,567				1,500				1,449				1,732				1,589
Total other expenses			24,144				22,141				8,461				7,873				7,809				8,158				7,638
Income before income tax expense			21,482				9,801				5,938				8,753				6,792				9,761				6,471
Income tax expense			4,124				1,793				1,155				1,627				1,342				2,051				1,299
Net Income			17,358				8,008				4,783				7,126				5,450				7,710				5,172
Preferred stock dividends			1,617				—				539				539				539				635				—
Net income available to common shareholders		$	15,741			$	8,008			$	4,244			$	6,587			$	4,911			$	7,075			$	5,172
Net income per common share,    basic and diluted		$	2.09			$	0.97			$	0.56			$	0.87			$	0.65			$	0.92			$	0.63
Weighted average number of common shares,    basic and diluted			7,547,254				8,274,419				7,571,214				7,546,452				7,523,547				7,700,470				8,272,570

 

UNAUDITED LOAN, DEPOSIT AND BORROWING DETAIL
(In thousands)
		September 30, 2021								June 30, 2021								September 30, 2020								Percentage Change
		$ Amount				% of Total				$ Amount				% of Total				$ Amount				% of Total				Last 3 Mos				Last 12 Mos
LOANS:
Construction and land development loans		$	327,004				25.9	%		$	328,480				25.8	%		$	325,516				25.0	%			-0.4	%			0.5	%
Residential real estate loans			223,029				17.6	%			190,426				14.9	%			157,518				12.1	%			17.1	%			41.6	%
Commercial real estate loans			494,766				39.1	%			503,514				39.5	%			505,201				38.8	%			-1.7	%			-2.1	%
Commercial industrial loans - Other			102,747				8.1	%			93,837				7.4	%			88,884				6.8	%			9.5	%			15.6	%
Commercial industrial loans - PPP Loans			88,534				7.0	%			124,578				9.8	%			173,075				13.3	%			-28.9	%			-48.8	%
Consumer loans			27,740				2.3	%			33,643				2.6	%			51,505				4.0	%			-17.5	%			-46.1	%
Total Gross Loans		$	1,263,820				100.0	%		$	1,274,478				100.0	%		$	1,301,699				100.0	%			-0.8	%			-2.9	%
Less: Allowance for loan losses			(11,428)								(11,133)								(14,346)
Net deferred loan fees			(6,061)								(6,909)								(7,454)
Net Loans		$	1,246,331							$	1,256,436							$	1,279,899
DEPOSITS:
Non-interest bearing demand deposits		$	475,157				33.6	%		$	486,001				33.2	%		$	416,648				29.4	%			-2.2	%			14.0	%
Interest-bearing demand deposits:
Demand deposits			63,622				4.5	%			68,028				4.6	%			72,807				5.1	%			-6.5	%			-12.6	%
Savings and NOW deposits			79,556				5.6	%			72,353				4.9	%			69,015				4.9	%			10.0	%			15.3	%
Money market accounts			310,776				22.0	%			310,303				21.2	%			348,146				24.6	%			0.2	%			-10.7	%
Certificates of deposit $250,000 or more			295,454				20.9	%			303,769				20.7	%			211,800				14.9	%			-2.7	%			39.5	%
Certificates of deposit less than $250,000			189,801				13.4	%			224,478				15.4	%			298,629				21.1	%			-15.4	%			-36.4	%
Total Deposits		$	1,414,366				100.0	%		$	1,464,932				100.0	%		$	1,417,045				100.0	%			-3.5	%			-0.2	%
BORROWINGS:
Subordinated debt			40,635				100.0	%			40,576				100.0	%			14,827				100.0	%			0.1	%			174.1	%
Total Borrowings		$	40,635				100.0	%		$	40,576				100.0	%		$	14,827				100.0	%			0.1	%			174.1	%
Total Deposits and Borrowings		$	1,455,001							$	1,505,508							$	1,431,872								-3.4	%			1.6	%
Core customer funding sources (1)		$	1,097,948				75.5	%		$	1,118,795				74.3	%		$	1,066,236				74.5	%			-1.9	%			3.0	%
Brokered and listing service sources (2)			316,418				21.7	%			346,137				23.0	%			350,809				24.5	%			-8.6	%			-9.8	%
Subordinated debt (3)			40,635				2.8	%			40,576				2.7	%			14,827				1.0	%			0.1	%			174.1	%
Total Funding Sources		$	1,455,001				100.0	%		$	1,505,508				100.0	%		$	1,431,872				100.0	%			-3.4	%			1.6	%

(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 September 30, 2021												For the three months ended September 30, 2020
		Average Balance				Interest Income/ Expense				Average Yields/ Rate (annualized)				Average Balance				Interest Income/ Expense				Average Yields/ Rate (annualized)
ASSETS:
Interest earning assets:
Loans (1)(2)(3)		$	1,258,485			$	15,162				4.78	%		$	1,292,566			$	15,083				4.63	%
Investment securities			102,893				585				2.26	%			73,486				491				2.65	%
Federal funds and interest-bearing deposits			234,363				38				0.06	%			108,666				12				0.04	%
Total interest earning assets		$	1,595,741			$	15,785				3.92	%		$	1,474,718			$	15,586				4.19	%
Other assets			88,521												65,665
Total assets		$	1,684,262											$	1,540,383
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing demand deposits		$	64,966			$	60				0.37	%		$	26,469			$	56				0.84	%
Money market deposit accounts			302,848				148				0.19	%			332,750				490				0.58	%
Savings and NOW deposits			75,968				38				0.20	%			62,066				55				0.35	%
Time deposits			507,254				1,795				1.40	%			522,995				2,841				2.16	%
Total interest-bearing deposits		$	951,036			$	2,041				0.85	%		$	944,280			$	3,442				1.45	%
Federal funds and repos purchased			2				—				—				—				—				—
Subordinated debt			40,609				541				5.29	%			14,823				245				6.56	%
FHLB borrowings			—				—				—				4,511				13				1.14	%
Total interest-bearing liabilities		$	991,647			$	2,582				1.03	%		$	963,614			$	3,700				1.52	%
Demand deposits and other liabilities			510,008												428,726
Total liabilities		$	1,501,655											$	1,392,340
Stockholders' Equity			182,607												148,043
Total Liabilities and Stockholders' Equity		$	1,684,262											$	1,540,383
Interest Rate Spread											2.89	%											2.67	%
Net Interest Income						$	13,203											$	11,886
Net Interest Margin											3.28	%											3.20	%
Net Interest Margin, excluding PPP loans(4)											3.14	%											3.29	%

(1)	Includes loans classified as non-accrual
(2)	Includes average PPP balances of $105.2 million, related interest income of approximately $263,000, and $1.1 million in PPP fees recognized for the three months ended September 30, 2021
(3)	Total loan interest income includes amortization of deferred loan fees, net of deferred loan costs
(4)	Refer to Appendix for reconciliation of non-GAAP measures

 

UNAUDITED AVERAGE BALANCE SHEETS, INTEREST AND RATES
(In thousands)
		For the nine months ended September 30, 2021												For the nine months ended September 30, 2020
		Average Balance				Interest Income/ Expense				Average Yields/ Rate (annualized)				Average Balance				Interest Income/ Expense				Average Yields/ Rate (annualized)
ASSETS:
Interest earning assets:
Loans (1)(2)(3)		$	1,293,359			$	46,211				4.78	%		$	1,188,565			$	43,702				4.92	%
Investment securities			94,575				1,712				2.42	%			73,504				1,488				2.71	%
Federal funds and interest-bearing deposits			224,521				73				0.04	%			123,217				416				0.45	%
Total interest earning assets		$	1,612,455			$	47,996				3.98	%		$	1,385,286			$	45,606				4.40	%
Other assets			76,758												65,368
Total assets		$	1,689,213											$	1,450,654
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing demand deposits		$	67,345			$	170				0.34	%		$	25,847			$	209				1.08	%
Money market deposit accounts			345,662				645				0.25	%			288,836				1,742				0.81	%
Savings and NOW deposits			72,591				127				0.23	%			64,513				169				0.35	%
Time deposits			508,722				6,039				1.59	%			543,531				9,740				2.40	%
Total interest-bearing deposits		$	994,320			$	6,981				0.94	%		$	922,727			$	11,860				1.72	%
Federal funds and repos purchased			1				—				—				—				—				—
Subordinated debt			31,815				1,346				5.66	%			14,816				727				6.56	%
FHLB borrowings			—				—				—				8,266				107				1.73	%
Total interest-bearing liabilities		$	1,026,136			$	8,327				1.08	%		$	945,809			$	12,694				1.79	%
Demand deposits and other liabilities			486,510												361,771
Total liabilities		$	1,512,646											$	1,307,580
Stockholders' Equity			176,567												143,074
Total Liabilities and Stockholders' Equity		$	1,689,213											$	1,450,654
Interest Rate Spread											2.90	%											2.61	%
Net Interest Income						$	39,669											$	32,912
Net Interest Margin											3.29	%											3.18	%
Net Interest Margin, excluding PPP loans(4)											3.15	%											3.22	%

(1)	Includes loans classified as non-accrual and loans held for sale
(2)	Includes average PPP balances of $140.2 million, related interest income of approximately $1.1 million, and $4.0 million in PPP fees recognized for the nine months ended September, 2021
(3)	Total loan interest income includes amortization of deferred loan fees, net of deferred loan costs
(4)	Refer to Appendix for reconciliation of non-GAAP measures

 

UNAUDITED SUMMARY FINANCIAL DATA
(Dollars in thousands except per share data)
		At or For the Three Months Ended							At or For the Nine Months Ended
		September 30,							September 30,
		2021				2020			2021				2020
Per share Data and Shares Outstanding
Earnings per common share (basic and diluted)		$	0.56			$	0.63		$	2.09			$	0.97
Book value per common share		$	20.64			$	17.61		$	20.64			$	17.61
Tangible book value per common share(2)		$	20.49			$	17.61		$	20.49			$	17.61
Weighted average common shares (basic and diluted)			7,571,214				8,272,570			7,547,254				8,274,419
Common shares outstanding at end of period			7,593,749				8,277,837			7,593,749				8,277,837
Performance Ratios
Return on average assets (annualized)			1.13	%			1.33	%		1.37	%			0.74	%
Return on average assets, excluding impact of PPP loans (annualized)(2)			0.85	%			1.19	%		1.07	%			0.60	%
Return on average equity (annualized)			10.39	%			13.86	%		13.14	%			7.48	%
Return on average common equity (annualized)			10.84	%			14.29	%		14.09	%			7.56	%
Yield on earning assets (annualized)			3.92	%			4.19	%		3.98	%			4.40	%
Cost of interest bearing liabilities (annualized)			1.03	%			1.52	%		1.08	%			1.79	%
Net interest spread			2.89	%			2.67	%		2.90	%			2.61	%
Net interest margin (annualized)			3.28	%			3.20	%		3.29	%			3.18	%
Net interest margin, excluding PPP loans (annualized)(2)			3.14	%			3.29	%		3.15	%			3.22	%
Noninterest income as a percentage of average assets (annualized)			0.35	%			0.74	%		0.36	%			0.52	%
Noninterest expense to average assets (annualized)			1.99	%			1.97	%		1.91	%			2.04	%
Efficiency ratio(3)			57.60	%			51.80	%		54.68	%			57.50	%
Asset Quality
Commercial real estate loans to total capital (4)			341.44	%			416.76	%		341.44	%			416.76	%
Construction loans to total capital (5)			150.42	%			190.10	%		150.42	%			190.10	%
Loans 30-89 days past due to total gross loans			0.00	%			0.08	%		0.00	%			0.08	%
Loans 90 days past due to total gross loans			0.00	%			0.08	%		0.00	%			0.08	%
Non-accrual loans to total gross loans			0.00	%			0.10	%		0.00	%			0.10	%
Other real estate owned		$	1,158			$	1,580		$	1,158			$	1,580
Non-performing assets		$	1,158			$	2,822		$	1,158			$	2,822
Non-performing assets to total assets			0.07	%			0.17	%		0.07	%			0.17	%
Non-performing assets to total assets, excluding PPP loans(2)			0.07	%			0.19	%		0.07	%			0.19	%
Allowance for loan losses to total gross loans			0.90	%			1.10	%		0.90	%			1.10	%
Allowance for loan losses to total loans, excluding PPP loans(2)			0.97	%			1.27	%		0.97	%			1.27	%
Allowance for loan losses to non-performing assets			9.87				5.08			9.87				5.08
Net loan charge-offs (recoveries)		$	(5)			$	20		$	(21)			$	1,798
Net charge-offs (recoveries) to average gross loans (annualized)			0.00	%			0.01	%		0.00	%			0.20	%
Net charge-offs (recoveries) to average gross loans, excluding PPP loans (annualized)(2)			0.00	%			0.01	%		0.00	%			0.16	%
Regulatory Capital Ratios (Bank only) (1)
Total risk-based capital ratio			16.55	%			13.39	%		16.55	%			13.39	%
Tier 1 risk-based capital ratio			15.68	%			12.27	%		15.68	%			12.27	%
Leverage ratio			12.23	%			10.19	%		12.23	%			10.19	%
Common equity tier 1 ratio			15.68	%			12.27	%		15.68	%			12.27	%
Other information
Closing stock price		$	23.99			$	12.24		$	23.99			$	12.24
Equity / assets			11.10	%			10.63	%		11.10	%			10.63	%
Equity / assets, excluding PPP loans(2)			11.73	%			11.89	%		11.73	%			11.89	%
Average equity / average assets			10.84	%			9.61	%		10.45	%			10.00	%
Average equity / average assets, less average PPP loans(2)			11.56	%			10.82	%		11.40	%			10.62	%
Number of full time equivalent employees			128				123			128				123
# Full service branch offices			6				7			6				7

(1)	Regulatory capital ratios as of September 30, 2021 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 non-owner occupied and construction loans as a percentage of Bank capital
(5)	Construction loans as a percentage of Bank capital

 

Reconciliation of Certain Non-GAAP Financial Measures
(Dollars In thousands)
		For the three months ended September 30,								For the nine months ended September 30,
			2021				2020				2021				2020
Paycheck Protection Program adjustment impact
Loans held for investment (GAAP)		$	1,263,820			$	1,301,699			$	1,263,820			$	1,301,699
Less: PPP loans			88,534				173,075				88,534				173,075
Loans held for investment, excluding PPP (non-GAAP)		$	1,175,286			$	1,128,624			$	1,175,286			$	1,128,624
Average loans held for investment (GAAP)		$	1,258,485			$	1,292,566			$	1,293,359			$	1,188,565
Less: Average PPP loans			105,153				172,659				140,210				102,891
Average loans held for investment, excluding PPP (non-GAAP)		$	1,153,332			$	1,119,907			$	1,153,149				1,085,674
		For the three months ended September 30,								For the nine months ended September 30,
			2021				2020				2021				2020
Net interest margin adjustment
Net interest income (GAAP)		$	13,203			$	11,886			$	39,669			$	32,912
Less: PPP fees recognized			1,136				644				3,958				1,235
Less: PPP interest income earned			263				432				1,052				772
Net interest income, excluding PPP income (non-GAAP)			11,804				10,810				34,659				30,905
Average interest earning assets (GAAP)			1,595,741				1,474,718				1,612,455				1,385,286
Less: average PPP loans			105,153				172,659				140,210				102,891
Average interest earning assets, excluding PPP (non-GAAP)			1,490,588				1,302,059				1,472,245				1,282,395
Net interest margin (GAAP)			3.28	%			3.20	%			3.29	%			3.18	%
Net interest margin, excluding PPP (non-GAAP)			3.14	%			3.29	%			3.15	%			3.22	%
		For the three months ended September 30,								For the nine months ended September 30,
			2021				2020				2021				2020
Total asset adjustment
Total assets (GAAP)		$	1,657,199			$	1,630,188			$	1,657,199			$	1,630,188
Less: PPP loans			88,534				173,075				88,534				173,075
Total assets, excluding PPP loans (non-GAAP)			1,568,665				1,457,113				1,568,665				1,457,113
Total equity (GAAP)			184,029				173,261				184,029				173,261
Equity / assets, excluding PPP loans (non-GAAP)			11.73	%			11.89	%			11.73	%			11.89	%
Average asset adjustment
Average assets (GAAP)			1,684,262				1,540,383				1,689,213				1,450,654
Less: average PPP loans			105,153				172,659				140,210				102,891
Total average assets, excluding average PPP loans			1,579,109				1,367,724				1,549,003				1,347,763
Total average equity (GAAP)			182,607				148,043				176,567				143,074
Average equity / average assets, excluding average PPP loans (non-GAAP)			11.56	%			10.82	%			11.40	%			10.62	%
		For the three months ended September 30,								For the nine months ended September 30,
			2021				2020				2021				2020
Return on Average Assets, adjusted
Net income (GAAP)		$	4,783			$	5,172			$	17,358			$	8,008
Less: PPP fees recognized			1,136				644				3,958				1,235
Less: PPP interest income earned			263				432				1,052				772
Net income, excluding PPP income (non-GAAP)			3,384				4,096				12,348				6,001
Average total assets			1,684,262				1,540,383				1,689,213				1,450,654
Less: average PPP loans			105,153				172,659				140,210				102,891
Average total assets, excluding PPP (non-GAAP)			1,579,109				1,367,724				1,549,003				1,347,763
Return on average assets, excluding PPP (non-GAAP)			0.85	%			1.19	%			1.07	%			0.60	%
		For the three months ended September 30,								For the nine months ended September 30,
			2021				2020				2021				2020
Nonperforming Assets to total assets, adjusted
Total nonperforming assets (GAAP)		$	1,158			$	2,822			$	1,158			$	2,822
Total assets (GAAP)			1,657,199				1,630,188				1,657,199				1,630,188
Less: PPP loans			88,534				173,075				88,534				173,075
Total assets, excluding PPP loans (non-GAAP)			1,568,665				1,457,113				1,568,665				1,457,113
Nonperforming assets to total assets, excluding PPP loans (non-GAAP)			0.07	%			0.19	%			0.07	%			0.19	%
		For the three months ended September 30,								For the nine months ended September 30,
			2021				2020				2021				2020
Allowance for loan losses, adjusted
Allowance for loan losses (GAAP)		$	11,428			$	14,346			$	11,428			$	14,346
Total gross loans (GAAP)			1,263,820				1,301,699				1,263,820				1,301,699
Less: PPP loans			88,534				173,075				88,534				173,075
Total gross loans, excluding PPP loans (non-GAAP)			1,175,286				1,128,624				1,175,286				1,128,624
Allowance for loan losses to total loans, excluding PPP (non-GAAP)			0.97	%			1.27	%			0.97	%			1.27	%
		For the three months ended September 30,								For the nine months ended September 30,
			2021				2020				2021				2020
Net charge-offs to average loans, adjusted
Total net charge-offs (recoveries) (GAAP)		$	(5)				20			$	(21)			$	1,778
Total average gross loans (GAAP)			1,258,485				1,292,566				1,293,359				1,188,565
Less: average PPP loans			105,153				172,659				140,210				102,891
Total average gross loans, excluding PPP loans (non-GAAP)			1,153,332				1,119,907				1,153,149				1,085,674
Net charge-offs (recoveries) to average gross loans, excluding PPP (annualized) (non-GAAP)			0.00	%			0.01	%			0.00	%			0.16	%
		For the three months ended September 30,								For the nine months ended September 30,
			2021				2020				2021				2020
Stockholders equity, adjusted
Total common stockholders equity		$	156,766				145,734			$	156,766			$	145,734
Less: intangible assets			1,165				—				1,165				—
Tangible common stockholders equity			155,601				145,734				155,601				145,734
Shares outstanding			7,593,749				8,277,837				7,593,749				8,277,837
Tangible book value per common share		$	20.49			$	17.61			$	20.49			$	17.61

 

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SOURCE MainStreet Bancshares, Inc.

FAQ

What are the Q3 2021 earnings results for MNSB?

MainStreet Bancshares reported net income of $4.8 million for Q3 2021.

How much is MainStreet Bancshares' year-to-date net income?

The year-to-date net income is $17.4 million.

What is the earnings per share for MainStreet Bancshares?

The earnings per share is $2.09.

What was the increase in net interest income for MNSB?

Net interest income increased by 20.5% to $39.7 million.

When will MainStreet announce its Avenu Banking as a Service?

MainStreet will announce its Avenu Banking as a Service on October 25th.