MainStreet Bancshares, Inc. Reports Record Earnings

Rhea-AI Summary

MainStreet Bancshares, Inc. (NASDAQ: MNSB, MNSBP) reported record net income of $15.7 million for 2020, reflecting a 10.54% Return on Average Equity (ROAE) and $1.85 earnings per share. The bank's net interest income rose by 16.5% to $45.9 million, while noninterest income increased by 54% to $7.5 million. Total assets increased 29% to $1.6 billion, with net loans at $1.3 billion. Through the Paycheck Protection Program, the bank realized $2.6 million of fee income. The overall asset quality remains strong, with non-performing assets constituting just 0.08% of total assets.

Positive

• Record net income of $15.7 million in 2020.
• Net interest income increased by 16.5% to $45.9 million.
• Noninterest income rose by 54% to $7.5 million.
• Total assets increased by 29% to $1.6 billion.
• Strong asset quality with non-performing assets at 0.08% of total assets.

Negative

• None.

FAIRFAX, Va., Jan. 21, 2021 /PRNewswire/ -- MainStreet Bancshares, Inc. (Nasdaq: MNSB & MNSBP), the holding company for MainStreet Bank, reported record net income of $15.7 million for 2020, which represents a 10.54% Return on Average Equity (ROAE), a 1.05% Return on Average Assets (ROAA) and $1.85 per share of common stock (basic and diluted).

The strong year-end results can be attributed to the Bank's breakneck performance in response to the pandemic

Net interest income and noninterest income for the year-ended December 31, 2020 increased to $45.9 million and $7.5 million, respectively. Net interest income and noninterest income for the year-ended December 31, 2020 increased 16.5% and 54%, respectively, over the same period in 2019.  The Company realized $2.6 million of the $5.8 million recognized as fee income from the Paycheck Protection Program (PPP) during the year. 

Total assets were $1.6 billion, an increase of 29% from the previous year-end.  Net loans were $1.3 billion as of December 31, 2020, which included $135 million of the original $173 million in loans related to the PPP (22% were forgiven/repaid during 2020). Asset quality remains strong with non-performing assets and Other Real Estate Owned (OREO) representing only 0.08% of total assets as of December 31, 2020. 

Non-interest-bearing deposits were $371 million, representing 26% of total deposits as of December 31, 2020.  Total deposits as of December 31, 2020 were $1.4 billion, and core deposits represent a healthy 72% of total deposits. 

"The strong year-end results can be attributed to the Bank's breakneck performance in response to the pandemic, both at the start and throughout the entire year," said Abdul Hersiburane, President of MainStreet Bank.  "The Bank worked with all borrowers in order to assist, where prudent, with providing meaningful liquidity through the Paycheck Protection Plan, the Main Street Lending Program, payment deferrals and/or shifting to interest-only payments for a period." 

With the hospitality industry being most hard-hit, the team worked closely throughout the year with the 14 operating hotels in the Bank's portfolio.  Since April 2020, monthly Smith Travel Research (STR) reports for the portfolio of hotels showed favorable trends for occupancy.  As of January 2021, all previously reported borrowers with payment deferrals are scheduled to be back to making monthly payments.

The Company analyzed the loan portfolio and made a special pandemic provision to the Allowance for Loan and Lease Losses (ALLL) on June 30, 2020 in the amount of $4.5 million.  That special provision included a $1.76 million loan outstanding for one Commercial & Industrial (C&I) borrower that was immediately and fully impacted by the pandemic, $2.0 million for commercial borrowers with potential liquidity concerns and $760,000 for the indirect auto portfolio.

"At its outset, we didn't have a good sense of the pandemic's potential to affect the U.S. Economy or our market," said Jeff W. Dick, Chairman & CEO of MainStreet Bancshares Inc. and MainStreet Bank.  "As the year progressed, through a combination of federal programs and regulatory easing, our borrower's collective confidence started to return.  The vaccine approval announcements in December gave confirmation that the end was in sight.  As a result of the significant changes in data and information available, we determined it would be prudent to update our special pandemic loan loss provision."

The Company released $3.15 million from the Allowance for Loan and Lease Losses at year-end, as recapped in the table below.

Fourth Quarter Changes to the Allowance for Loan and Lease Losses
(000's)
Beginning Balance September 30, 2020	$14,345
+ Current Year Recovery (1)	1,498
- Release of Specific Reserve for Repaid Loan	329
- Release of Pandemic Provision for indirect loans (2)	500
- Release of Provision for Loans reclassified as Held for Sale (3)	825
+ Provision for Quarter Growth	186
- Release of Loss Recovery	1,498
Ending Balance December 31, 2020	$12,877

(1)	The Bank recovered $1.498 million of a loan charged-off earlier in the year.
(2)	The indirect loan portfolio losses for the year were less than previous years, so $500,000 was released from the special pandemic provision for indirect loans.
(3)	The Company reclassified approximately $60 million in investor-owned commercial real estate loans as loans held for sale. The loan sale should take place in the first quarter of 2021 and the Company released the associated provision to the ALLL prior to year-end 2020.

The $2.0 million that was previously allocated to commercial borrowers remains intact for the pandemic provision to the ALLL as of December 31, 2020.

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 thousands of businesses in the metropolitan area.

MainStreet Bank has a full complement of payment solutions for financial technology companies and has a team 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)
	December 31, 2020				September 30, 2020				June 30, 2020				March 31, 2020				December 31, 2019
ASSETS
Cash and cash equivalents
Cash and due from banks	$	75,935			$	102,480			$	55,273			$	62,098			$	53,376
Federal funds sold		31,593				25,074				21,081				10,677				11,468
Total cash and cash equivalents		107,528				127,554				76,354				72,775				64,844
Investment securities available for sale, at fair value		147,414				118,844				91,823				102,191				92,791
Investment securities held to maturity, at carrying value		22,520				23,114				23,843				23,878				23,914
Restricted equity securities, at cost		4,616				4,616				5,041				5,041				6,157
Loans held for sale, at carrying value		57,006				—				—				—				—
Loans, net of allowance for loan losses of $12,877, $14,346, $13,731, $9,898, and $9,584, respectively		1,230,379				1,279,899				1,259,012				1,059,628				1,030,425
Premises and equipment, net		14,289				14,474				14,416				14,666				14,153
Other real estate owned, net		1,180				1,580				1,175				1,207				1,207
Accrued interest and other receivables		9,604				8,579				7,458				4,809				5,420
Bank owned life insurance		25,341				25,157				24,959				24,761				24,562
Other assets		23,288				26,371				24,786				20,786				13,885
Total Assets	$	1,643,165			$	1,630,188			$	1,528,867			$	1,329,742			$	1,277,358
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Non-interest bearing deposits	$	370,497			$	416,648			$	388,104			$	240,979			$	252,707
Interest bearing DDA deposits		70,307				72,807				18,266				16,846				53,707
Savings and NOW deposits		74,099				69,015				65,876				60,454				63,015
Money market deposits		426,600				348,146				332,246				265,443				141,337
Time deposits		496,743				510,429				537,840				559,489				560,857
Total deposits		1,438,246				1,417,045				1,342,332				1,143,211				1,071,623
Federal Home Loan Bank advances and other borrowings		—				—				10,000				10,000				40,000
Subordinated debt		14,834				14,827				14,819				14,812				14,805
Other liabilities		22,420				25,055				21,546				21,424				13,896
Total Liabilities		1,475,500				1,456,927				1,388,697				1,189,447				1,140,324
Stockholders' Equity:
Preferred stock, $1 par value - 2,000,000 shares authorized
Non-cumulative perpetual, 28,750 shares issued and outstanding		27,263				27,527				—				—				—
Common stock, par value $4 per share, authorized 10,000,000 shares; issued and outstanding, 7,443,842 shares at December 31, 2020 including 161,435 unvested shares, 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.		29,130				32,460				32,433				32,418				32,397
Capital surplus		66,116				75,217				74,850				74,482				75,117
Retained earnings		44,179				37,105				31,933				32,567				29,097
Accumulated other comprehensive income		977				952				954				828				423
Total Stockholders' Equity		167,665				173,261				140,170				140,295				137,034
Total Liabilities and Stockholders' Equity	$	1,643,165			$	1,630,188			$	1,528,867			$	1,329,742			$	1,277,358

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME INFORMATION
(In thousands, except share and per share data)
	Year-Ended								Three Months Ended
	December 31, 2020				December 31, 2019				December 31, 2020				September 30, 2020				June 30, 2020				March 31, 2020				December 31, 2019
INTEREST INCOME:
Interest and fees on loans	$	59,634			$	55,208			$	15,933			$	15,083			$	14,399			$	14,220			$	14,223
Interest on investment securities		2,007				2,202				519				491				496				501				534
Interest on federal funds sold		431				1,403				15				12				9				395				271
Total interest income		62,072				58,813				16,467				15,586				14,904				15,116				15,028
INTEREST EXPENSE:
Interest on interest bearing DDA deposits		317				998				108				56				36				117				195
Interest on savings and NOW deposits		221				289				52				55				50				64				71
Interest on money market deposits		2,162				2,379				418				490				474				778				489
Interest on time deposits		12,322				14,196				2,583				2,841				3,333				3,566				3,730
Interest on Federal Home Loan Bank advances and other borrowings		107				549				—				13				44				50				92
Interest on subordinated debt		966				966				240				245				241				241				244
Total interest expense		16,095				19,377				3,401				3,700				4,178				4,816				4,821
Net interest income		45,977				39,436				13,066				11,886				10,726				10,300				10,207
Provision for loan losses		3,610				1,618				(2,950)				635				5,575				350				358
Net interest income after provision for loan losses		42,367				37,818				16,016				11,251				5,151				9,950				9,849
NON-INTEREST INCOME:
Deposit account service charges		1,916				1,668				509				487				433				487				460
Bank owned life insurance income		779				498				183				199				198				199				181
Loan swap fee income		3,510				989				833				1,851				423				403				111
Net gain on available-for-sale securities		—				5				—				—				—				—				—
Net gain on sale of loans		33				566				—				33				—				—				—
Other fee income		1,255				1,136				378				288				264				325				407
Total other income		7,493				4,862				1,903				2,858				1,318				1,414				1,158
NON-INTEREST EXPENSES:
Salaries and employee benefits		17,937				15,776				4,746				4,495				4,263				4,433				4,179
Furniture and equipment expenses		2,128				1,728				601				574				500				454				457
Advertising and marketing		1,003				906				290				266				191				256				375
Occupancy expenses		1,270				864				360				332				311				267				221
Outside services		959				863				263				215				205				276				169
Administrative expenses		674				731				166				167				177				164				198
Other operating expenses		6,329				4,508				1,732				1,589				1,713				1,293				1,104
Total other expenses		30,300				25,376				8,158				7,638				7,360				7,143				6,703
Income before income tax (benefit)		19,560				17,304				9,761				6,471				(891)				4,221				4,304
Income tax expense (benefit)		3,843				3,354				2,051				1,299				(257)				751				742
Net Income (loss)		15,717				13,950				7,710				5,172				(634)				3,470				3,562
Preferred stock dividends		635				—				635				—				—				—				—
Net income (loss) available to common shareholders		15,082			$	13,950			$	7,075			$	5,172			$	(634)			$	3,470			$	3,562
Net income (loss) per common share, basic and diluted	$	1.85			$	1.69			$	0.92			$	0.63			$	(0.08)			$	0.42			$	0.43
Weighted average number of common shares, basic and diluted		8,131,334				8,251,302				7,700,470				8,272,570				8,263,370				8,287,317				8,260,259

UNAUDITED LOAN, DEPOSIT AND BORROWING DETAIL
(In thousands)
	December 31, 2020								September 30, 2020								December 31, 2019								Percentage Change
	$ Amount				% of Total				$ Amount				% of Total				$ Amount				% of Total				Last 3 Mos				Last 12 Mos
LOANS:
Construction and land development loans	$	324,906				26.0	%		$	325,516				25.0	%		$	272,620				26.2	%			-0.2	%			19.2	%
Residential real estate loans		183,531				14.7	%			157,518				12.1	%			150,848				14.5	%			16.5	%			21.7	%
Commercial real estate loans		466,898				37.4	%			505,201				38.8	%			421,870				40.5	%			-7.6	%			10.7	%
Commercial industrial loans - Other		94,847				7.6	%			88,884				6.8	%			121,225				11.6	%			6.7	%			-21.8	%
Commercial industrial loans - PPP Loans		135,180				10.8	%			173,075				13.3	%			—				0.0	%			-21.9	%			100.0	%
Consumer loans		44,073				3.5	%			51,505				4.0	%			75,583				7.2	%			-14.4	%			-41.7	%
Total Gross Loans	$	1,249,435				100.0	%		$	1,301,699				100.0	%		$	1,042,146				100.0	%			-4.0	%			19.9	%
Less: Allowance for loan losses		(12,877)								(14,346)								(9,584)
Net deferred loan fees		(6,179)								(7,454)								(2,137)
Net Loans	$	1,230,379							$	1,279,899							$	1,030,425
DEPOSITS:
Non-interest bearing demand deposits	$	370,497				25.8	%			416,648				29.4	%		$	252,707				23.6	%			-11.1	%			46.6	%
Interest-bearing demand deposits:
Demand deposits		70,307				4.9	%			72,807				5.1	%			53,707				5.0	%			-3.4	%			30.9	%
Savings and NOW deposits		74,099				5.2	%			69,015				4.9	%			63,015				5.9	%			7.4	%			17.6	%
Money market accounts		426,600				29.7	%			348,146				24.6	%			141,337				13.2	%			22.5	%			201.8	%
Certificates of deposit $250,000 or more		213,077				14.8	%			211,800				14.9	%			211,935				19.8	%			0.6	%			0.5	%
Certificates of deposit less than $250,000		283,666				19.6	%			298,629				21.1	%			348,922				32.5	%			-5.0	%			-18.7	%
Total Deposits	$	1,438,246				100.0	%		$	1,417,045				100.0	%		$	1,071,623				100.0	%			1.5	%			34.2	%
BORROWINGS:
Federal Home Loan Bank advances		—				0.0	%			—				0.0	%			40,000				73.0	%			0.0	%			-100.0	%
Subordinated debt		14,834				100.0	%			14,819				100.0	%			14,805				27.0	%			0.1	%			0.2	%
Total Borrowings	$	14,834				100.0	%		$	14,819				100.0	%		$	54,805				100.0	%			0.1	%			-72.9	%
Total Deposits and Borrowings	$	1,453,080							$	1,431,864							$	1,126,428								1.5	%			29.0	%
Core customer funding sources (1)	$	1,046,087				72.0	%		$	1,066,236				74.5	%		$	654,213				58.1	%			-1.9	%			59.9	%
Brokered and listing service sources (2)		392,159				27.0	%			350,809				24.5	%			417,410				37.1	%			11.8	%			-6.0	%
Federal Home Loan Bank advances		—				0.0	%			—				0.0	%			40,000				3.5	%			0.0	%			-100.0	%
Subordinated debt (3)		14,834				1.0	%			14,819				1.0	%			14,805				1.3	%			0.1	%			0.2	%
Total Funding Sources	$	1,453,080				100.0	%		$	1,431,864				100.0	%		$	1,126,428				100.0	%			1.5	%			29.0	%

(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 December 31, 2020												For the three months ended December 31, 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)	$	1,311,726			$	15,933				4.86	%		$	1,023,614			$	14,223				5.56	%
Investment securities		85,084				519				2.44	%			71,387				534				2.99	%
Federal funds and interest-bearing deposits		171,933				15				0.03	%			74,519				271				1.45	%
Total interest earning assets	$	1,568,743			$	16,467				4.20	%		$	1,169,520			$	15,028				5.14	%
Other assets		71,013												55,251
Total assets	$	1,639,756											$	1,224,771
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing demand deposits	$	71,906			$	108				0.60	%		$	54,176			$	195				1.44	%
Money market deposit accounts		390,645				418				0.43	%			134,011				489				1.46	%
Savings and NOW deposits		70,542				52				0.29	%			63,916				71				0.44	%
Time deposits		509,963				2,583				2.03	%			570,794				3,730				2.61	%
Total interest-bearing deposits	$	1,043,056			$	3,161				1.21	%		$	822,897			$	4,485				2.18	%
Federal funds and repos purchased		—				—				—				11				—				—
Subordinated debt		14,831				240				6.47	%			14,802				244				6.59	%
FHLB borrowings		—				—				—				15,370				92				2.39	%
Total interest-bearing liabilities	$	1,057,887			$	3,401				1.29	%		$	853,080			$	4,821				2.26	%
Demand deposits and other liabilities		414,581												236,396
Total liabilities	$	1,472,468											$	1,089,476
Stockholders' Equity		167,288												135,295
Total Liabilities and Stockholders' Equity	$	1,639,756											$	1,224,771
Interest Rate Spread										2.91	%											2.88	%
Net Interest Income					$	13,066											$	10,207
Net Interest Margin										3.33	%											3.49	%
Net Interest Margin, excluding PPP loans(4)										3.21	%											3.49	%

(1)	Includes loans classified as non-accrual
(2)	Includes average PPP balances of $157.8 million and related interest income of approximately $394,000 for the three months ended December 31, 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 year ended December 31, 2020												For the year ended December 31, 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)	$	1,219,525			$	59,634				4.89	%		$	984,014			$	55,208				5.61	%
Investment securities		76,414				2,007				2.63	%			71,149				2,202				3.09	%
Federal funds and interest-bearing deposits		135,688				431				0.32	%			72,643				1,403				1.93	%
Total interest earning assets	$	1,431,627			$	62,072				4.34	%		$	1,127,806			$	58,813				5.21	%
Other assets		66,561												45,282
Total assets	$	1,498,188											$	1,173,088
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing demand deposits	$	37,431			$	317				0.85	%		$	56,675			$	998				1.76	%
Money market deposit accounts		314,398				2,162				0.69	%			129,606				2,379				1.84	%
Savings and NOW deposits		66,028				221				0.33	%			62,047				289				0.47	%
Time deposits		535,116				12,322				2.30	%			544,084				14,196				2.61	%
Total interest-bearing deposits	$	952,973			$	15,022				1.58	%		$	792,412			$	17,862				2.25	%
Federal funds and repos purchased		—				—				—				37				1				2.70	%
Subordinated debt		14,820				966				6.52	%			14,791				966				6.53	%
FHLB borrowings		6,189				107				1.73	%			21,162				548				2.59	%
Total interest-bearing liabilities	$	973,982			$	16,095				1.65	%		$	828,402			$	19,377				2.34	%
Demand deposits and other liabilities		375,046												215,405
Total liabilities	$	1,349,028											$	1,043,807
Stockholders' Equity		149,160												129,281
Total Liabilities and Stockholders' Equity	$	1,498,188											$	1,173,088
Interest Rate Spread										2.69	%											2.88	%
Net Interest Income					$	45,977											$	39,436
Net Interest Margin										3.21	%											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 $116.7 million and related interest income of approximately $1.2 million for the year ended December 31, 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 Year Ended
	December 31,							December 31,
	2020				2019			2020				2019
Per share Data and Shares Outstanding
Earnings (losses) per common share (basic and diluted)	$	0.92			$	0.43		$	1.85			$	1.69
Book value per common share	$	18.86			$	16.59		$	18.86			$	16.59
Weighted average common shares (basic and diluted)		7,700,470				8,260,259			8,131,334				8,251,302
Common shares outstanding at end of period		7,443,842				8,260,259			7,443,842				8,260,259
Performance Ratios
Return on average assets (annualized)		1.88	%			1.16	%		1.05	%			1.19	%
Return on average assets, excluding impact of PPP loans (annualized)(2)		1.61	%			1.16	%		0.87	%			1.19	%
Return on average equity (annualized)		18.44	%			10.53	%		10.54	%			10.79	%
Yield on earning assets (annualized)		4.20	%			5.14	%		4.34	%			5.21	%
Cost of interest bearing liabilities (annualized)		1.29	%			2.26	%		1.65	%			2.34	%
Net interest spread		2.91	%			2.88	%		2.69	%			2.88	%
Net interest margin (annualized)		3.33	%			3.49	%		3.21	%			3.50	%
Net interest margin, excluding PPP loans (annualized)(2)		3.21	%			3.49	%		3.21	%			3.50	%
Noninterest income as a percentage of average assets (annualized)		0.46	%			0.38	%		0.50	%			0.41	%
Noninterest expense to average assets (annualized)		1.99	%			2.19	%		2.02	%			2.16	%
Efficiency ratio(3)		54.50	%			58.98	%		56.67	%			57.28	%
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		0.01	%			0.00	%		0.01	%			0.00	%
Other real estate owned	$	1,180			$	1,207		$	1,180			$	1,207
Non-performing assets	$	1,330			$	1,207		$	1,330			$	1,207
Non-performing assets to total assets		0.08	%			0.09	%		0.08	%			0.09	%
Non-performing assets to total assets, excluding PPP loans(2)		0.09	%			0.09	%		0.09	%			0.09	%
Allowance for loan losses to total gross loans		1.03	%			0.92	%		1.03	%			0.92	%
Allowance for loan losses to total loans, excluding PPP loans(2)		1.16	%			0.92	%		1.16	%			0.92	%
Allowance for loan losses to non-performing assets		9.68				7.94			9.68				7.94
Net loan charge-offs (recoveries)	$	(1,480)			$	144		$	317			$	865
Net charge-offs (recoveries) to average gross loans (annualized)		-0.45	%			0.06	%		0.03	%			0.09	%
Net charge-offs (recoveries) to average gross loans, excluding PPP loans (annualized)(2)		-0.52	%			0.06	%		0.03	%			0.09	%
Troubled debt restructurings (total)
Performing in accordance with modified terms	$	—			$	1,482		$	—			$	1,482
Not performing in accordance with modified terms	$	—			$	—		$	—			$	—
Regulatory Capital Ratios (Bank only) (1)
Total risk-based capital ratio		12.13	%			13.74	%		12.13	%			13.74	%
Tier 1 risk-based capital ratio		11.00	%			12.91	%		11.00	%			12.91	%
Leverage ratio		10.78	%			12.65	%		10.78	%			12.65	%
Common equity tier 1 ratio		11.00	%			12.91	%		11.00	%			12.91	%
Other information
Closing stock price	$	16.91			$	23.00		$	16.91			$	23.00
Equity / assets		10.20	%			10.73	%		10.20	%			10.73	%
Equity / assets, excluding PPP loans(2)		11.12	%			10.73	%		11.12	%			10.73	%
Average equity / average assets		10.20	%			11.05	%		9.96	%			11.05	%
Average equity / average assets, less average PPP loans(2)		11.29	%			11.05	%		10.80	%			11.05	%
Number of full time equivalent employees		126				126			126				126
# Full service branch offices		7				6			7				6

(1)	Regulatory capital ratios as of December 31, 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 December 31,								For the year ended December 31,
		2020				2019				2020				2019
Paycheck Protection Program adjustment impact
Loans held for investment (GAAP)	$	1,249,435			$	1,042,146			$	1,249,435			$	1,042,146
Less: PPP loans		135,180				—				135,180				—
Loans held for investment, excluding PPP (non-GAAP)	$	1,114,255			$	1,042,146			$	1,114,255			$	1,042,146
Average loans held for investment (GAAP)	$	1,311,726			$	1,023,614			$	1,219,525			$	984,014
Less: Average PPP loans		157,787				—				116,690				—
Average loans held for investment, excluding PPP (non-GAAP)	$	1,153,939			$	1,023,614			$	1,102,835				984,014
	For the three months ended December 31,								For the year ended December 31,
		2020				2019				2020				2019
Net interest margin adjustment
Net interest income (GAAP)	$	13,066			$	10,207			$	45,977			$	39,436
Less: PPP fees recognized		1,363				—				2,598				—
Less: PPP interest income earned		394				—				1,167				—
Net interest income, excluding PPP income (non-GAAP)		11,309				10,207				42,212				39,436
Average interest earning assets (GAAP)		1,568,743				1,169,520				1,431,627				1,127,806
Less: average PPP loans		157,787				—				116,690				—
Average interest earning assets, excluding PPP (non-GAAP)		1,410,956				1,169,520				1,314,937				1,127,806
Net interest margin (GAAP)		3.33	%			3.49	%			3.21	%			3.50	%
Net interest margin, excluding PPP (non-GAAP)		3.21	%			3.49	%			3.21	%			3.50	%
	For the three months ended December 31,								For the year ended December 31,
		2020				2019				2020				2019
Total asset adjustment
Total assets (GAAP)	$	1,643,165			$	1,277,358			$	1,643,165			$	1,277,358
Less: PPP loans		135,180				—				135,180				—
Total assets, excluding PPP loans (non-GAAP)		1,507,985				1,277,358				1,507,985				1,277,358
Total equity (GAAP)		167,665				137,034				167,665				137,034
Equity / assets, excluding PPP loans (non-GAAP)		11.12	%			10.73	%			11.12	%			10.73	%
Average asset adjustment
Average assets (GAAP)		1,639,756				1,224,771				1,498,188				1,173,088
Less: average PPP loans		157,787				—				116,690				—
Total average assets, excluding average PPP loans		1,481,969				1,224,771				1,381,498				1,173,088
Total average equity (GAAP)		167,288				135,295				149,160				129,281
Average equity / average assets, excluding average PPP loans (non-GAAP)		11.29	%			11.05	%			10.80	%			11.02	%
	For the three months ended December 31,								For the year ended December 31,
		2020				2019				2020				2019
Return on Average Assets, adjusted
Net income (GAAP)	$	7,710			$	3,562			$	15,717			$	13,950
Less: PPP fees recognized		1,363				—				2,598				—
Less: PPP interest income		394				—				1,167				—
Net income, excluding PPP income (non-GAAP)		5,953				3,562				11,952				13,950
Average total assets		1,639,756				1,224,771				1,498,188				1,173,088
Less: average PPP loans		157,787				—				116,690				—
Average total assets, excluding PPP (non-GAAP)		1,481,969				1,224,771				1,381,498				1,173,088
Return on average assets, excluding PPP (non-GAAP)		1.61	%			1.16	%			0.87	%			1.19	%
	For the three months ended December 31,								For the year ended December 31,
		2020				2019				2020				2019
Nonperforming Assets to total assets, adjusted
Total nonperforming assets (GAAP)	$	1,330			$	1,207			$	1,330			$	1,207
Total assets (GAAP)		1,643,165				1,277,989				1,643,165				1,277,989
Less: PPP loans		135,180				—				135,180				—
Total assets, excluding PPP loans (non-GAAP)		1,507,985				1,277,989				1,507,985				1,277,989
Nonperforming assets to total assets, excluding PPP loans (non-GAAP)		0.09	%			0.09	%			0.09	%			0.09	%
	For the three months ended December 31,								For the year ended December 31,
		2020				2019				2020				2019
Allowance for loan losses, adjusted
Allowance for loan losses (GAAP)	$	12,877			$	9,584			$	12,877			$	9,584
Total gross loans (GAAP)		1,306,441				1,042,146				1,306,441				1,042,146
Less: PPP loans		135,180				—				135,180				—
Total gross loans, excluding PPP loans (non-GAAP)		1,171,261				1,042,146				1,171,261				1,042,146
Allowance for loan losses to total loans, excluding PPP (non-GAAP)		1.10	%			0.92	%			1.10	%			0.92	%
	For the three months ended December 31,								For the year ended December 31,
		2020				2019				2020				2019
Net charge-offs to average loans, adjusted
Total net charge-offs (GAAP)	$	(1,480)				144			$	317			$	865
Total average gross loans (GAAP)		1,307,267				1,024,602				1,216,699				984,446
Less: average PPP loans		157,787				—				116,690				—
Total average gross loans, excluding PPP loans (non-GAAP)		1,149,480				1,024,602				1,100,009				984,446
Net charge-offs (recoveries) to average gross loans, excluding PPP (annualized) (non-GAAP)		-0.52	%			0.06	%			0.03	%			0.09

 

 

 

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SOURCE MainStreet Bancshares, Inc.

FAQ

What were MainStreet Bancshares' earnings for 2020?

MainStreet Bancshares reported a record net income of $15.7 million for 2020.

How much did MainStreet Bancshares increase its net interest income in 2020?

The net interest income increased by 16.5% to $45.9 million for the year.

What is the return on average equity for MainStreet Bancshares in 2020?

The return on average equity (ROAE) for 2020 was 10.54%.

How did the Paycheck Protection Program impact MainStreet Bancshares' income?

MainStreet Bancshares realized $2.6 million from fee income related to the Paycheck Protection Program.

What was the total asset growth for MainStreet Bancshares in 2020?

Total assets increased by 29% to $1.6 billion as of December 31, 2020.