MainStreet Bancshares, Inc. Reports Record Third Quarter Earnings

Rhea-AI Summary

MainStreet Bancshares reported record earnings of $5.2 million for Q3 2020, driven by $2.9 million in non-interest income and $11.9 million in net interest income. Year-to-date, net income reached $8.0 million, with a 0.74% return on average assets and 7.46% return on average equity. The company collected $5.8 million from the Paycheck Protection Program, while total assets stood at $1.6 billion. The bank remains proactive in managing borrower liquidity amid the pandemic, reporting strong asset quality with non-performing assets at only 0.17% of total assets.

Positive

• Record Q3 2020 earnings of $5.2 million.
• Net interest income increased to $11.9 million.
• Year-to-date net income of $8.0 million with a strong 7.46% return on equity.
• Collected $5.8 million from the Paycheck Protection Program.
• Total assets reached $1.6 billion with strong asset quality.

Negative

• Special $4.5 million provision to the Allowance for Loan and Lease Losses.

FAIRFAX, Va., Oct. 20, 2020 /PRNewswire/ -- MainStreet Bancshares, Inc. (Nasdaq: MNSB & MNSBP), the holding company for MainStreet Bank, reported record earnings of $5.2 million for the third quarter of 2020.  The quarter was propelled by $2.9 million of non-interest income and a favorable funding trend that produced $11.9 million of net interest income for the quarter.

We're doing everything we can to work with our customers during this pandemic-induced recession.

Year-to-date September 30, 2020 the Company reported net income of $8.0 million, which represents a 0.74% return on average assets and 7.46% return on average equity, or $0.97 per share of common stock (basic and diluted).  Net interest income and noninterest income for the nine months ended September 30, 2020 increased to $32.9 million and $5.6 million, respectively. Net interest income and noninterest income for the nine months ended September 30, 2020 increased 12.6% and 50.9%, respectively, over the same period in 2019. 

The Company collected $5.8 million from the Paycheck Protection Program (PPP), with $1.2 million realized during the nine months ended September 30, 2020. 

Total assets were $1.6 billion and net loans were $1.3 billion as of September 30, 2020, which included $173.1 million in loans related to the PPP.  Asset quality remains strong with non-performing assets representing only 0.17% of total assets as of September 30, 2020. 

Non-interest-bearing deposits were $416.6 million, representing 29.4% of total deposits as of September 30, 2020.  Total deposits as of September 30, 2020 were $1.4 billion, and core deposits represent 75% of total deposits. 

Starting from a position of strong asset quality, the Company completed a "worst-case" assessment of the loan portfolio assuming unforeseen liquidity issues caused by the pandemic-induced recession.  As a result of the assessment, the Company made a special $4.5 million provision to the Allowance for Loan and Lease Losses (ALLL) in addition to the normal $1.1 million provision as of June 30, 2020, which took earnings negative for the quarter.   The September 30, 2020 ALLL also reflects a strengthened provision, currently at 1.27% of total loans (net of PPP loans).  Capital levels remain strong. 

Pandemic Recession
At the onset of the pandemic, the Company structured two payment deferral programs aimed at preserving borrower liquidity. The first program was offered to all commercial borrowers, no questions asked, on March 24^th - at a time where little was known about the state of the pandemic.  The Bank assisted 195 borrowers by deferring two months of principal and interest payments. This represented 22.5% of the total loan portfolio dollars outstanding.

The second program started on May 4, 2020 as a negotiated solution and a maximum deferment of 12-months of principal and interest (consistent with the Federal Reserve Board's, Main Street Lending program).  Borrowers agreed to enact restrictive covenants aimed to preserve liquidity in order to participate.

Of the 42 borrowers (7.4% of net loans) that participated in the second program, 16 remain in deferred status (3.3% of net loans) as of September 30, 2020. 

The Bank's hotel portfolio was initially a significant concern, as the hospitality industry was hit particularly hard by the recession.  However, the portfolio is faring well, with average occupancy data for the hotels approximating 50% during August, up significantly from March and April.  Only 5 of the 14 operating hotels in the portfolio remain in payment deferral status.  Refer to the chart entitled Outstanding Loan Deferments below for additional information.

Outstanding Loan Deferments
Loan Type	Number of Months Deferred				Total Deferred	Number of Borrowers
	1	2	3	4
	(000's)
Residential mortgages	$2,165				$2,165	1
Owner-occupied commercial real estate	$441	$1,747		$235	$2,423	3
Investor-owned commercial real estate	$4,518	$26,924	$7,040		$38,482	8
- Hotels		22,600	7,040		29,640	5
- Office	993	4,324			5,317	2
- Other	3,525				3,525	1
Commercial & industrial	$606		$3,000		$3,606	3
Consumer	$64				$64	1
Total	$7,794	$28,671	$10,040	$235	$46,740	16

"We're doing everything we can to work with our customers during this pandemic-induced recession and it seems to be working so far," said Jeff W. Dick, Chairman & CEO of MainStreet Bancshares, Inc and MainStreet Bank. "With the election just a fortnight away, we are optimistic that the post-election Congress and Administration will take swift action to provide meaningful additional stimulus to continue our path toward economic recovery."

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 solutions for financial technology companies and has nationally known market leaders on-staff ready to create a perfect solution 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 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, 2020				June 30, 2020				March 31, 2020				December 31, 2019				September 30, 2019
ASSETS
Cash and cash equivalents
Cash and due from banks		$	102,480			$	55,273			$	62,098			$	53,376			$	52,580
Federal funds sold			25,074				21,081				10,677				11,468				19,432
Total cash and cash equivalents			127,554				76,354				72,775				64,844				72,012
Investment securities available for sale, at fair value			118,844				91,823				102,191				92,791				88,198
Investment securities held to maturity, at carrying value			23,114				23,843				23,878				23,914				24,410
Restricted equity securities, at cost			4,616				5,041				5,041				6,157				4,882
Loans, net of allowance for loan losses of $14,346, $13,731, $9,898, $9,584, and $9,370, respectively			1,279,899				1,259,012				1,059,628				1,030,425				992,609
Premises and equipment, net			14,474				14,416				14,666				14,153				14,109
Other real estate owned, net			1,580				1,175				1,207				1,207				1,207
Accrued interest and other receivables			8,579				7,458				4,809				5,420				5,373
Bank owned life insurance			25,157				24,959				24,761				24,562				19,381
Other assets			26,371				24,786				20,786				13,885				11,414
Total Assets		$	1,630,188			$	1,528,867			$	1,329,742			$	1,277,358			$	1,233,595
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Non-interest bearing deposits		$	416,648			$	388,104			$	240,979			$	252,707			$	218,087
Interest bearing DDA deposits			72,807				18,266				16,846				53,707				54,438
Savings and NOW deposits			69,015				65,876				60,454				63,015				63,746
Money market deposits			348,146				332,246				265,443				141,337				125,716
Time deposits			510,429				537,840				559,489				560,857				601,896
Total deposits			1,417,045				1,342,332				1,143,211				1,071,623				1,063,883
Federal Home Loan Bank advances and other borrowings			—				10,000				10,000				40,000				10,000
Subordinated debt			14,827				14,819				14,812				14,805				14,798
Other liabilities			25,055				21,546				21,424				13,896				11,697
Total Liabilities			1,456,927				1,388,697				1,189,447				1,140,324				1,100,378
Stockholders' Equity:
Preferred stock, $1 par value - 2,000,000 shares authorized
Non-cumulative perpetual, 28,750 shares issued and outstanding			27,527				—				—				—				—
Common stock, par value $4 per share, authorized 10,000,000    shares; issued and outstanding, 8,277,837 shares at September 30,    2020 including 162,917 unvested shares, 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.			32,460				32,433				32,418				32,397				32,397
Capital surplus			75,217				74,850				74,482				75,117				74,860
Retained earnings			37,105				31,933				32,567				29,097				25,535
Accumulated other comprehensive income			952				954				828				423				425
Total Stockholders' Equity			173,261				140,170				140,295				137,034				133,217
Total Liabilities and Stockholders' Equity		$	1,630,188			$	1,528,867			$	1,329,742			$	1,277,358			$	1,233,595

 

 

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME INFORMATION (In thousands, except share and per share data)
		Year-to-Date								Three Months Ended
		September 30, 2020				September 30, 2019				September 30, 2020				June 30, 2020				March 31, 2020				December 31, 2019				September 30, 2019
INTEREST INCOME:
Interest and fees on loans		$	43,702			$	40,985			$	15,083			$	14,399			$	14,220			$	14,223			$	14,192
Interest on investment securities			1,488				1,668				491				496				501				534				497
Interest on federal funds sold			416				1,132				12				9				395				271				412
Total interest income			45,606				43,785				15,586				14,904				15,116				15,028				15,101
INTEREST EXPENSE:
Interest on interest bearing DDA deposits			209				803				56				36				117				195				275
Interest on savings and NOW deposits			169				218				55				50				64				71				71
Interest on money market deposits			1,742				1,889				490				474				778				489				539
Interest on time deposits			9,740				10,466				2,841				3,333				3,566				3,730				3,900
Interest on Federal Home Loan Bank    advances and other borrowings			107				457				13				44				50				92				76
Interest on subordinated debt			727				723				245				241				241				244				244
Total interest expense			12,694				14,556				3,700				4,178				4,816				4,821				5,105
Net interest income			32,912				29,229				11,886				10,726				10,300				10,207				9,996
Provision for loan losses			6,560				1,260				635				5,575				350				358				185
Net interest income after provision    for loan losses			26,352				27,969				11,251				5,151				9,950				9,849				9,811
NON-INTEREST INCOME:
Deposit account service charges			1,407				1,208				487				433				487				460				392
Bank owned life insurance income			596				317				199				198				199				181				106
Loan swap fee income			2,677				878				1,851				423				403				111				407
Net gain on available-for-sale securities			—				5				—				—				—				—				—
Net gains on sale of loans			33				566				33				—				—				—				303
Other fee income			877				730				288				264				325				407				228
Total other income			5,590				3,704				2,858				1,318				1,414				1,158				1,436
NON-INTEREST EXPENSES:
Salaries and employee benefits			13,191				11,597				4,495				4,263				4,433				4,179				3,890
Furniture and equipment expenses			1,528				1,271				574				500				454				457				451
Advertising and marketing			713				531				266				191				256				375				235
Occupancy expenses			910				644				332				311				267				221				214
Outside services			696				694				215				205				276				169				306
Administrative expenses			508				533				167				177				164				198				190
Other operating expenses			4,595				3,404				1,589				1,713				1,293				1,104				1,203
Total other expenses			22,141				18,674				7,638				7,360				7,143				6,703				6,489
Income before income tax (benefit)			9,801				12,999				6,471				(891)				4,221				4,304				4,758
Income tax expense (benefit)			1,793				2,612				1,299				(257)				751				742				1,049
Net income (loss) available to common shareholders		$	8,008			$	10,387			$	5,172			$	(634)			$	3,470			$	3,562			$	3,709
Net income (loss) per common share,    basic and diluted		$	0.97			$	1.26			$	0.63			$	(0.08)			$	0.42			$	0.43			$	0.45
Weighted average number of common        shares, basic and diluted			8,274,419				8,248,284				8,272,570				8,263,370				8,287,317				8,260,259				8,251,672

 

 

UNAUDITED LOAN, DEPOSIT AND BORROWING DETAIL (In thousands)
		September 30, 2020								June 30, 2020								September 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		$	325,516				25.0	%		$	284,843				22.2	%		$	207,441				20.7	%			14.3	%			56.9	%
Residential real estate loans			157,518				12.1	%			169,924				13.3	%			162,801				16.2	%			-7.3	%			-3.2	%
Commercial real estate loans			505,201				38.8	%			497,279				38.8	%			434,735				43.3	%			1.6	%			16.2	%
Commercial industrial loans - Other			88,884				6.8	%			96,640				7.5	%			115,902				11.5	%			-8.0	%			-23.3	%
Commercial industrial loans - PPP Loans			173,075				13.3	%			171,650				13.5	%			—				0.0	%			0.8	%			100.0	%
Consumer loans			51,505				4.0	%			60,166				4.7	%			83,013				8.3	%			-14.4	%			-38.0	%
Total Gross Loans		$	1,301,699				100.0	%		$	1,280,502				100.0	%		$	1,003,892				100.0	%			1.7	%			29.7	%
Less: Allowance for loan losses			(14,346)								(13,731)								(9,370)
Net deferred loan fees			(7,454)								(7,759)								(1,913)
Net Loans		$	1,279,899							$	1,259,012							$	992,609
DEPOSITS:
Non-interest bearing demand deposits		$	416,648				29.4	%		$	388,104				28.9	%		$	218,087				20.5	%			7.4	%			91.0	%
Interest-bearing demand deposits:
Demand deposits			72,807				5.1	%			18,266				1.4	%			54,438				5.1	%			298.6	%			33.7	%
Savings and NOW deposits			69,015				4.9	%			65,876				4.9	%			63,746				6.0	%			4.8	%			8.3	%
Money market accounts			348,146				24.6	%			332,246				24.8	%			125,716				11.8	%			4.8	%			176.9	%
Certificates of deposit $250,000 or more			211,800				14.9	%			213,051				15.9	%			239,719				22.4	%			-0.6	%			-11.6	%
Certificates of deposit less than $250,000			298,629				24.1	%			324,789				24.1	%			362,177				34.2	%			-8.1	%			-17.5	%
Total Deposits		$	1,417,045				100.0	%		$	1,342,332				100.0	%		$	1,063,883				100.0	%			5.6	%			33.2	%
BORROWINGS:
Federal Home Loan Bank advances			—				0.0	%			10,000				40.3	%			10,000				40.3	%			-100.0	%			-100.0	%
Subordinated debt			14,827				100.0	%			14,819				59.7	%			14,798				59.7	%			0.1	%			0.2	%
Total Borrowings		$	14,827				100.0	%		$	24,819				100.0	%		$	24,798				100.0	%			-40.3	%			-40.2	%
Total Deposits and Borrowings		$	1,431,872							$	1,367,151							$	1,088,681								4.7	%			31.5	%
Core customer funding sources (1)		$	1,066,236				74.5	%		$	939,474				68.7	%		$	655,631				60.2	%			13.5	%			62.6	%
Brokered and listing service sources (2)			350,809				24.5	%			402,858				29.5	%			408,252				37.5	%			-12.9	%			-14.1	%
Federal Home Loan Bank advances			—				0.0	%			10,000				0.7	%			10,000				0.9	%			-100.0	%			-100.0	%
Subordinated debt (3)			14,827				1.0	%			14,819				1.1	%			14,798				1.4	%			0.1	%			0.2	%
Total Funding Sources		$	1,431,872				100.0	%		$	1,367,151				100.0	%		$	1,088,681				100.0	%			4.7	%			31.5	%

(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, 2020												For the three months ended September 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)(2)(3)		$	1,292,566			$	15,083				4.67	%		$	996,777			$	14,192				5.70	%
Investment securities			73,486				491				2.67	%			71,182				497				2.79	%
Federal funds and interest-bearing deposits			108,666				12				0.04	%			82,056				412				2.01	%
Total interest earning assets		$	1,474,718			$	15,586				4.23	%		$	1,150,015			$	15,101				5.25	%
Other assets			65,665												43,524
Total assets		$	1,540,383											$	1,193,539
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing demand deposits		$	26,469			$	56				0.85	%		$	58,510			$	275				1.88	%
Money market deposit accounts			332,750				490				0.59	%			117,717				539				1.83	%
Savings and NOW deposits			62,066				55				0.35	%			62,975				71				0.45	%
Time deposits			522,995				2,841				2.17	%			587,537				3,900				2.66	%
Total interest-bearing deposits		$	944,280			$	3,442				1.46	%		$	826,739			$	4,785				2.32	%
Federal funds and repos purchased			—				—				—				—				—				—
Subordinated debt			14,823				245				6.61	%			14,795				244				6.60	%
FHLB borrowings			4,511				13				1.15	%			11,522				76				2.64	%
Total interest-bearing liabilities		$	963,614			$	3,700				1.54	%		$	853,056			$	5,105				2.39	%
Demand deposits and other liabilities			428,726												209,125
Total liabilities		$	1,392,340											$	1,062,181
Stockholders' Equity			148,043												131,358
Total Liabilities and Stockholders' Equity		$	1,540,383											$	1,193,539
Interest Rate Spread											2.69	%											2.86	%
Net Interest Income						$	11,886											$	9,996
Net Interest Margin											3.22	%											3.48	%
Net Interest Margin, excluding PPP loans(4)											3.32	%											3.48	%

(1)	Includes loans classified as non-accrual
(2)	Includes average PPP balances of $172.7 million and related interest income of approximately $432,000 for the three months ended September 30, 2020
(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, 2020												For the nine months ended September 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)(2)(3)		$	1,188,565			$	43,702				4.90	%		$	970,708			$	40,985				5.63	%
Investment securities			73,504				1,488				2.70	%			71,069				1,668				3.13	%
Federal funds and interest-bearing deposits			123,217				416				0.45	%			72,011				1,132				2.10	%
Total interest earning assets		$	1,385,286			$	45,606				4.39	%		$	1,113,788			$	43,785				5.24	%
Other assets			65,368												41,883
Total assets		$	1,450,654											$	1,155,671
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing demand deposits		$	25,847			$	209				1.08	%		$	57,517			$	803				1.86	%
Money market deposit accounts			288,836				1,742				0.80	%			128,122				1,889				1.97	%
Savings and NOW deposits			64,513				169				0.35	%			61,418				218				0.47	%
Time deposits			543,531				9,740				2.39	%			535,083				10,466				2.61	%
Total interest-bearing deposits		$	922,727			$	11,860				1.71	%		$	782,140			$	13,376				2.28	%
Federal funds and repos purchased			—				—				0.00	%			46				—				0.00	%
Subordinated debt			14,816				727				6.54	%			14,788				723				6.52	%
FHLB borrowings			8,266				107				1.73	%			23,114				457				2.64	%
Total interest-bearing liabilities		$	945,809			$	12,694				1.79	%		$	820,088			$	14,556				2.37	%
Demand deposits and other liabilities			361,771												208,328
Total liabilities		$	1,307,580											$	1,028,416
Stockholders' Equity			143,074												127,255
Total Liabilities and Stockholders' Equity		$	1,450,654											$	1,155,671
Interest Rate Spread											2.60	%											2.87	%
Net Interest Income						$	32,912											$	29,229
Net Interest Margin											3.17	%											3.50	%
Net Interest Margin, excluding PPP loans(4)											3.21	%											3.50	%

(1)	Includes loans classified as non-accrual
(2)	Includes average PPP balances of $102.9 million and related interest income of approximately $772,000 for the three months ended September 30, 2020
(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,
		2020				2019			2020				2019
Per share Data and Shares Outstanding
Earnings (losses) per common share (basic and diluted)		$	0.63			$	0.45		$	0.97			$	1.26
Book value per common share		$	17.63			$	16.13		$	17.63			$	16.13
Weighted average common shares (basic and diluted)			8,272,570				8,251,672			8,274,419				8,248,284
Common shares outstanding at end of period			8,277,837				8,260,259			8,277,837				8,260,259
Performance Ratios
Return on average assets (annualized)			1.34	%			1.24	%		0.74	%			1.20	%
Return on average assets, excluding impact of PPP loans (annualized)(2)			1.20	%			1.24	%		0.59	%			1.20	%
Return on average equity (annualized)			13.97	%			11.29	%		7.46	%			10.88	%
Yield on earning assets (annualized)			4.23	%			5.25	%		4.39	%			5.24	%
Cost of interest bearing liabilities (annualized)			1.54	%			2.39	%		1.79	%			2.37	%
Net interest spread			2.69	%			2.86	%		2.60	%			2.87	%
Net interest margin (annualized)			3.22	%			3.48	%		3.17	%			3.50	%
Net interest margin, excluding PPP loans (annualized)(2)			3.32	%			3.48	%		3.21	%			3.50	%
Noninterest income as a percentage of average assets (annualized)			0.74	%			0.48	%		0.51	%			0.43	%
Noninterest expense to average assets (annualized)			1.98	%			2.17	%		2.03	%			2.15	%
Efficiency ratio(3)			51.80	%			56.76	%		57.50	%			56.70	%
Asset Quality
Loans 30-89 days past due to total gross loans			0.08	%			0.01	%		0.08	%			0.01	%
Loans 90 days past due to total gross loans			0.08	%			0.00	%		0.08	%			0.00	%
Non-accrual loans to total gross loans			0.10	%			0.00	%		0.10	%			0.00	%
Other real estate owned		$	1,580			$	1,207		$	1,580			$	1,207
Non-performing assets		$	2,822			$	1,220		$	2,822			$	1,220
Non-performing assets to total assets			0.17	%			0.10	%		0.17	%			0.10	%
Non-performing assets to total assets, excluding PPP loans(2)			0.19	%			0.10	%		0.19	%			0.10	%
Allowance for loan losses to total gross loans			1.10	%			0.94	%		1.10	%			0.94	%
Allowance for loan losses to total loans, excluding PPP loans(2)			1.27	%			0.94	%		1.27	%			0.94	%
Allowance for loan losses to non-performing assets			5.08				7.68			5.08				7.68
Net loan charge-offs (recoveries)		$	20			$	—		$	1,798			$	721
Net charge-offs to average gross loans (annualized)			0.01	%			0.00	%		0.20	%			0.10	%
Net charge-offs to average gross loans, excluding PPP loans (annualized)(2)			0.01	%			0.00	%		0.22	%			0.10	%
Troubled debt restructurings (total)
Performing in accordance with modified terms		$	—			$	1,488		$	—			$	1,488
Not performing in accordance with modified terms		$	—			$	—		$	—			$	—
Regulatory Capital Ratios (Bank only) (1)
Total risk-based capital ratio			13.39	%			13.60	%		13.39	%			13.60	%
Tier 1 risk-based capital ratio			12.27	%			12.77	%		12.27	%			12.77	%
Leverage ratio			10.19	%			12.52	%		10.19	%			12.52	%
Common equity tier 1 ratio			12.27	%			12.77	%		12.27	%			12.77	%
Other information
Closing stock price		$	12.24			$	21.05		$	12.24			$	21.05
Equity / assets			10.63	%			10.79	%		10.63	%			10.79	%
Equity / assets, excluding PPP loans(2)			11.89	%			10.79	%		11.89	%			10.79	%
Average equity / average assets			9.61	%			11.01	%		9.86	%			11.01	%
Average equity / average assets, less average PPP loans(2)			10.82	%			11.01	%		10.62	%			11.01	%
Number of full time equivalent employees			123				118			123				118
# Full service branch offices			7				6			7				6

(1)	Regulatory capital ratios as of September 30, 2020 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

 

 

Reconciliation of Certain Non-GAAP Financial Measures (In thousands)
		For the three months ended September 30,								For the nine months ended September 30,
			2020				2019				2020				2019
Pre-tax pre-provision earnings
Net income (GAAP)		$	5,172			$	3,709			$	8,008			$	10,387
Tax expense (benefit)			1,299				1,049				1,793				2,612
Provision for loan losses			635				185				6,560				1,260
Pre-tax pre-provision earnings (non-GAAP)		$	7,106			$	4,943			$	16,361			$	14,259
		For the three months ended September 30,								For the nine months ended September 30,
			2020				2019				2020				2019
Paycheck Protection Program adjustment impact
Loans held for investment (GAAP)		$	1,301,699			$	1,001,979			$	1,301,699			$	1,001,979
Less: PPP loans			173,075				—				173,075				—
Loans held for investment, excluding PPP (non-GAAP)		$	1,128,624			$	1,001,979			$	1,128,624			$	1,001,979
Average loans held for investment (GAAP)		$	1,292,566			$	996,777			$	1,188,565			$	970,708
Less: Average PPP loans			172,659				—				102,891				—
Average loans held for investment, excluding PPP (non-GAAP)		$	1,119,907			$	996,777			$	1,085,674				970,708
		For the three months ended September 30,								For the nine months ended September 30,
			2020				2019				2020				2019
Net interest margin adjustment
Net interest income (GAAP)		$	11,886			$	9,996			$	32,912			$	29,229
Less: PPP fees recognized			644				—				1,235				—
Less: PPP interest income earned			432				—				772				—
Net interest income, excluding PPP income (non-GAAP)			10,810				9,996				30,905				29,229
Average interest earning assets (GAAP)			1,474,718				1,150,015				1,385,286				1,113,788
Less: average PPP loans			172,659				—				102,891				—
Average interest earning assets, excluding PPP (non-GAAP)			1,302,059				1,150,015				1,282,395				1,113,788
Net interest margin, excluding PPP (non-GAAP)			3.32	%			3.48	%			3.21	%			3.50	%
		For the three months ended September 30,								For the nine months ended September 30,
			2020				2019				2020				2019
Total asset adjustment
Total assets (GAAP)		$	1,630,188			$	1,233,595			$	1,630,188			$	1,233,595
Less: PPP loans			173,075				—				173,075				—
Total assets, excluding PPP loans (non-GAAP)			1,457,113				1,233,595				1,457,113				1,233,595
Total equity (GAAP)			173,261				133,217				173,261				133,217
Equity / assets, excluding PPP loans (non-GAAP)			11.89	%			10.80	%			11.89	%			10.80	%
Average asset adjustment
Average assets (GAAP)			1,540,383				1,193,539				1,450,654				1,155,671
Less: average PPP loans			172,659				—				102,891				—
Total average assets, excluding average PPP loans			1,367,724				1,193,539				1,347,763				1,155,671
Total average equity (GAAP)			148,043				131,358				143,074				127,240
Average equity / average assets, excluding average PPP loans (non- GAAP)			10.82	%			11.01	%			10.62	%			11.01	%
		For the three months ended September 30,								For the nine months ended September 30,
			2020				2019				2020				2019
Return on Average Assets, adjusted
Net income (GAAP)		$	5,172			$	3,709			$	8,008			$	10,387
Less: PPP fees recognized			644				—				1,235				—
Less: PPP interest income			432				—				772				—
Net income, excluding PPP income (non-GAAP)			4,096				3,709				6,001				10,387
Average total assets			1,540,383				1,193,539				1,450,654				1,155,671
Less: average PPP loans			172,659				—				102,891				—
Average total assets, excluding PPP (non-GAAP)			1,367,724				1,193,539				1,347,763				1,155,671
Return on average assets, excluding PPP (non-GAAP)			1.20	%			1.24	%			0.59	%			1.20	%
		For the three months ended September 30,								For the nine months ended September 30,
			2020				2019				2020				2019
Nonperforming Assets to total assets, adjusted
Total nonperforming assets (GAAP)		$	2,822			$	1,207			$	2,822			$	1,207
Total assets (GAAP)			1,630,675				1,234,276				1,630,675				1,234,276
Less: PPP loans			173,075				—				173,075				—
Total assets, excluding PPP loans (non-GAAP)			1,457,600				1,234,276				1,457,600				1,234,276
Nonperforming assets to total assets, excluding PPP loans (non- GAAP)			0.19	%			0.10	%			0.19	%			0.10	%
		For the three months ended September 30,								For the nine months ended September 30,
			2020				2019				2020				2019
Allowance for loan losses, adjusted
Allowance for loan losses (GAAP)		$	14,346			$	9,370			$	14,346			$	9,370
Total gross loans (GAAP)			1,301,699				1,001,979				1,301,699				1,001,979
Less: PPP loans			173,075				—				173,075				—
Total gross loans, excluding PPP loans (non-GAAP)			1,128,624				1,001,979				1,128,624				1,001,979
Allowance for loan losses to total loans, excluding PPP (non-GAAP)			1.27	%			0.94	%			1.27	%			0.94	%
		For the three months ended September 30,								For the nine months ended September 30,
			2020				2019				2020				2019
Net charge-offs to average loans, adjusted
Total net charge-offs (GAAP)		$	20				—			$	1,798			$	721
Total average gross loans (GAAP)			1,284,024				995,972				1,186,289				970,913
Less: average PPP loans			172,659				—				102,891				—
Total average gross loans, excluding PPP loans (non-GAAP)			1,111,365				995,972				1,083,398				970,913
Net charge-offs to average gross loans, excluding PPP (annualized) (non-GAAP)			0.01	%		N/A					0.22	%			0.10	%

 

 

 

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SOURCE MainStreet Bancshares, Inc.

FAQ

What were the earnings for MainStreet Bancshares in Q3 2020?

MainStreet Bancshares reported earnings of $5.2 million for Q3 2020.

How much net interest income did MainStreet Bancshares generate in Q3 2020?

The company generated $11.9 million in net interest income for Q3 2020.

What is the total assets of MainStreet Bancshares as of September 30, 2020?

As of September 30, 2020, MainStreet Bancshares reported total assets of $1.6 billion.

What was the return on equity for MainStreet Bancshares year-to-date?

The return on equity for MainStreet Bancshares year-to-date was 7.46%.

What provision was made for loan losses during Q3 2020?

A special provision of $4.5 million was made to the Allowance for Loan and Lease Losses.