MainStreet Bancshares, Inc. Reports Strong Net Income as Interest Rates Rise

Rhea-AI Summary

MainStreet Bancshares, Inc. (MNSB, MNSBP) reported a robust financial performance for Q2 2022, with a net income of $5.9 million and a net interest margin expansion to 3.95%. Total assets reached $1.8 billion, a 5% increase year-over-year. The company’s loan portfolio is well-positioned for rising interest rates, benefiting from solid loan demand in Northern Virginia. MainStreet's Avenu™ platform continues to attract fintech interest, leading to additional noninterest income. Overall, the company displays strong asset quality, with zero non-performing assets.

Positive

• Net income increased to $5.9 million for Q2 2022.
• Net interest margin expanded to 3.95%, up 75 basis points from the previous year.
• Total assets rose to $1.8 billion, a 5% year-over-year increase.
• Zero non-performing assets reported.
• Avenu™ generated $488,000 in noninterest income over six months.

Negative

• None.

FAIRFAX, Va., July 25, 2022 /PRNewswire/ -- MainStreet Bancshares, Inc. (Nasdaq: MNSB & MNSBP), the holding company for MainStreet Bank, said its net interest margin widened as rates climbed in recent months, driving strong net income for the second quarter and six months ended June 30, 2022.

The Bank's loan portfolio is well positioned for increasing interest rates. "The FOMC's next announcement is due to be released on July 27 and based upon Street consensus we anticipate continued net interest margin expansion," said Jeff W. Dick, Chairman & CEO of MainStreet Bancshares, Inc. and MainStreet Bank.

"We have been anticipating this trend for some time and we strategically aligned our portfolio to flex as the economy shifts," Dick said. "Even as we focus on maintaining a rigorous credit culture, we are constantly looking to the future, sharpening our understanding of what clients demand in an evolving financial services market, and choosing to innovate."

A focal point of MainStreet Bank's innovation is its Avenu^™ Software as a Service (SaaS) and Banking as a Service (BaaS) platform. Dick and other MainStreet Bank executives will discuss quarterly and half-year earnings and preview business developments at Avenu™ during its virtual webcast and quarterly earnings call at 2 p.m. Eastern time today.

Net income totaled $5.9 million for three months ended June 30, and $11.4 million for the six months ended June 30. Net interest income totaled $16.1 million in the second quarter, 6% higher than the immediately preceding quarter and 24.1% higher than the comparable period in 2021. 

Rising interest rates propelled the net interest margin higher by 75 basis points to 3.95% for the quarter ended June 30, versus 3.20% a year earlier, on a tax equivalent basis. The Company's efficiency ratio remains solid at 55%. Total assets reached $1.8 billion in the second quarter, a 5.0% increase from a year earlier.

Quarterly results represent:

• 12.59% return on average equity
• 1.39% return on average assets
• $0.71 earnings per share of common stock (basic and diluted)
• $21.41 per common share book value

The level of Accumulated Other Comprehensive Income (AOCI) for the Company is low at -$6.56 million.  The level is consistent with the size and quality of the investment portfolio, as the Bank enjoys consistent strong in-market loan demand.

The average loans outstanding rose just over 4% since the first quarter of 2022, as the bank was able to capitalize on continued demand in a higher interest rate environment. Asset quality remains pristine, as the Company had zero non-performing assets as of quarter ended June 30. Noninterest-bearing deposits represent 36% of the $1.5 billion in total deposits, and 70% of total deposits are core deposits.

"We operate in a robust market in Northern Virginia and the Washington Metropolitan area, and loan demand remains steady," said Abdul Hersiburane, president of MainStreet Bank. "The surge in loan volume that occurred for banks nationwide during the height of the COVID crisis has normalized, and what we are seeing now is solid, steady, organic loan growth that reflects the confidence of businesses in this marketplace that they have opportunities to grow." He noted that federal Paycheck Protection Program loans now represent a negligible 0.3% of the bank's loan portfolio.

Avenu^™

Avenu^™, a division of MainStreet Bank, that provides Software as a Service (SaaS) and Banking as a Service (BaaS), continued to generate significant customer interest as additional fintechs joined the queue for our proprietary software solution. We are currently onboarding our initial beta customer with an anticipated go-live date in the fourth quarter of 2022.

"Fintechs have a strong need for knowledgeable, credible partners who can help them manage risk and compliance obligations," said Todd Youngren, President of Avenu^™. "Preparing them to become fully compliant is a critical, intensive element of this process, and we are focusing our energy on getting that right. Following the beta stage, we anticipate that onboarding will be streamlined into a 60-day process."

Youngren noted that at the end of the first quarter, Avenu^™ had 10 fintechs queued up at various stages of progress, including four that have indicated they intend to move forward as soon as the beta process is complete. These prospects include entities that serve the domestic needs of foreign nationals and entities that serve the education and nonprofit industries.  Avenu has another 36 fintechs that have signed up to be "in the queue," and 128 fintechs that have signed up to receive updates and are actively monitoring our progress.

In addition to serving fintechs, the Avenu^™ team has a robust array of existing customers that include payment processors and money service businesses. These relationships have been integral in identifying the needs and services that fintechs need banks to provide in order to have a successful partnership. These relationships provide the Bank with additional noninterest income and a strong source of low-cost deposits that can be integrated into the Bank's traditional source of income generation, net interest margin. As a benchmark, Youngren noted, Avenu™ is favorably impacting profitability, with its customers providing $70 million in noninterest bearing deposits and $488,000 in noninterest income in the six months ended June 30, 2022.

Refer to our press release on October 25, 2021, for additional information on the Company's proprietary Avenu^™ solution. If you are a fintech looking to add payments and deposits to your solution, go to Avenu.bank and join the queue today.

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

MainStreet Bank has a robust line of business and professional lending products, including government contracting lines of credit, commercial lines and term loans, residential and commercial construction, and commercial real estate. MainStreet 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)
		June 30, 2022				March 31, 2022				December 31, 2021				September 30, 2021				June 30, 2021
ASSETS
Cash and cash equivalents
Cash and due from banks		$	55,636			$	63,986			$	61,827			$	67,992			$	120,121
Federal funds sold			47,013				37,756				31,372				65,725				56,164
Total cash and cash equivalents			102,649				101,742				93,199				133,717				176,285
Investment securities available for sale, at fair value			143,240				123,802				99,913				171,603				165,791
Investment securities held to maturity, at carrying value			17,698				18,769				20,349				21,148				21,181
Restricted equity securities, at cost			16,485				17,209				15,609				9,972				9,994
Loans, net of allowance for loan losses of $12,982,      $12,500, $11,697,$11,428, and $11,133, respectively			1,416,875				1,413,238				1,341,760				1,246,331				1,256,436
Premises and equipment, net			14,756				14,833				14,863				14,795				13,929
Other real estate owned, net			—				—				775				1,158				1,158
Accrued interest and other receivables			7,313				6,980				7,701				4,718				8,752
Computer software, net of amortization			4,956				3,906				2,493				1,165				—
Bank owned life insurance			36,742				36,492				36,241				35,987				35,736
Other assets			32,665				24,777				14,499				16,605				18,433
Total Assets		$	1,793,379			$	1,761,748			$	1,647,402			$	1,657,199			$	1,707,695
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Non-interest bearing deposits		$	535,591			$	514,160			$	530,678			$	475,157			$	486,001
Interest bearing DDA deposits			99,223				76,286				69,232				63,622				68,028
Savings and NOW deposits			58,156				81,817				85,175				79,556				72,353
Money market deposits			231,207				301,842				267,730				310,776				310,303
Time deposits			575,950				460,839				459,148				485,255				528,247
Total deposits			1,500,127				1,434,944				1,411,963				1,414,366				1,464,932
Federal Home Loan Bank advances and other borrowings			—				40,000				—				—				—
Subordinated debt			72,047				71,955				29,294				40,635				40,576
Other liabilities			32,801				26,053				17,357				18,169				22,559
Total Liabilities			1,604,975				1,572,952				1,458,614				1,473,170				1,528,067
Stockholders' Equity:
Preferred stock			27,263				27,263				27,263				27,263				27,263
Common stock			29,178				29,642				29,466				29,462				29,446
Capital surplus			64,822				66,798				67,668				67,152				66,667
Retained earnings			73,702				68,691				64,194				59,920				55,676
Accumulated other comprehensive income (loss)			(6,561)				(3,598)				197				232				576
Total Stockholders' Equity			188,404				188,796				188,788				184,029				179,628
Total Liabilities and Stockholders' Equity		$	1,793,379			$	1,761,748			$	1,647,402			$	1,657,199			$	1,707,695

 

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME INFORMATION
(In thousands, except share and per share data)
		Year-to-Date									Three Months Ended
		June 30, 2022				June 30, 2021				June 30, 2022					March 31, 2022				December 31, 2021				September 30, 2021				June 30, 2021
INTEREST INCOME:
Interest and fees on loans		$	34,639			$	31,049				$	17,954			$	16,685			$	15,532			$	15,162			$	15,257
Interest on investment securities
Taxable securities			758				592					401				357				327				318				332
Tax-exempt securities			535				535					263				272				283				267				265
Interest on federal funds sold			229				35					195				34				61				38				20
Total interest income			36,161				32,211					18,813				17,348				16,203				15,785				15,874
INTEREST EXPENSE:
Interest on interest bearing DDA deposits			170				110					105				65				59				60				55
Interest on savings and NOW deposits			79				89					42				37				38				38				47
Interest on money market deposits			270				497					151				119				127				148				220
Interest on time deposits			2,961				4,244					1,530				1,431				1,574				1,795				1,994
Interest on Federal Home Loan Bank      advances and other borrowings			83				—					52				31				—				—				—
Interest on subordinated debt			1,280				805					812				468				539				541				567
Total interest expense			4,843				5,745					2,692				2,151				2,337				2,582				2,883
Net interest income			31,318				26,466					16,121				15,197				13,866				13,203				12,991
Provision for (recovery of) loan losses			1,280				(1,760)					480				800				295				290				(2,080)
Net interest income after provision       for (recovery of) loan losses			30,038				28,226					15,641				14,397				13,571				12,913				15,071
NON-INTEREST INCOME:
Deposit account service charges			1,209				1,160					597				611				624				642				621
Bank owned life insurance income			500				395					250				251				253				252				218
Loan swap fee income			100				—					101				—				83				—				—
Net gain on held-to-maturity securities			4				3					4				—				3				—				—
Net gain (loss) on sale of loans			43				474					—				43				413				(40)				130
Other fee income			569				969					312				257				247				632				586
Total other income			2,425				3,001					1,264				1,162				1,623				1,486				1,555
NON-INTEREST EXPENSES:
Salaries and employee benefits			11,152				9,430					5,604				5,548				5,029				4,847				4,663
Furniture and equipment expenses			1,316				1,026					659				657				726				716				500
Advertising and marketing			980				677					574				406				450				438				402
Occupancy expenses			693				693					352				341				449				399				387
Outside services			935				616					567				368				485				292				280
Administrative expenses			405				291					195				210				192				202				141
Other operating expenses			2,976				2,950					1,543				1,433				1,389				1,567				1,500
Total other expenses			18,457				15,683					9,494				8,963				8,720				8,461				7,873
Income before income tax expense			14,006				15,544					7,411				6,596				6,474				5,938				8,753
Income tax expense			2,654				2,969					1,481				1,173				1,660				1,155				1,627
Net Income			11,352				12,575					5,930				5,423				4,814				4,783				7,126
Preferred stock dividends			1,078				1,078					539				539				539				539				539
Net income available to common      shareholders		$	10,274			$	11,497				$	5,391			$	4,884			$	4,275			$	4,244			$	6,587
Net income per common share, basic and diluted		$	1.35			$	1.53				$	0.71			$	0.64			$	0.56			$	0.56			$	0.87
Weighted average number of common      shares, basic and diluted			7,611,303				7,535,061					7,575,484				7,647,519				7,595,062				7,571,214				7,546,452

 

UNAUDITED LOAN, DEPOSIT AND BORROWING DETAIL
(In thousands)
		June 30, 2022								March 31, 2022								June 30, 2021								Percentage Change
		$ Amount				% of Total				$ Amount				% of Total				$ Amount				% of Total				Last 3 Mos				Last 12 Mos
LOANS:
Construction and land development loans		$	358,062				25.0	%		$	344,605				24.1	%		$	328,480				25.8	%			3.9	%			9.0	%
Residential real estate loans			366,758				25.6	%			367,138				25.7	%			190,426				14.9	%			-0.1	%			92.6	%
Commercial real estate loans			599,683				41.8	%			588,004				41.1	%			503,514				39.5	%			2.0	%			19.1	%
Commercial industrial loans - Other			88,628				6.2	%			92,408				6.5	%			93,837				7.4	%			-4.1	%			-5.6	%
Commercial industrial loans - PPP Loans			4,044				0.3	%			18,776				1.3	%			124,578				9.8	%			-78.5	%			-96.8	%
Consumer loans			17,223				1.1	%			19,711				1.3	%			33,643				2.6	%			-12.6	%			-48.8	%
Total Gross Loans		$	1,434,398				100.0	%		$	1,430,642				100.0	%		$	1,274,478				100.0	%			0.3	%			12.5	%
Less: Allowance for loan losses			(12,982)								(12,500)								(11,133)
Net deferred loan fees			(4,541)								(4,904)								(6,909)
Net Loans		$	1,416,875							$	1,413,238							$	1,256,436
DEPOSITS:
Non-interest bearing demand deposits		$	535,591				35.7	%		$	514,160				35.8	%		$	486,001				33.2	%			4.2	%			10.2	%
Interest-bearing demand deposits:
Demand deposits			99,223				6.6	%			76,286				5.3	%			68,028				4.6	%			30.1	%			45.9	%
Savings and NOW deposits			58,156				3.9	%			81,817				5.7	%			72,353				4.9	%			-28.9	%			-19.6	%
Money market accounts			231,207				15.4	%			301,842				21.0	%			310,303				21.2	%			-23.4	%			-25.5	%
Certificates of deposit $250,000 or more			383,340				25.6	%			292,978				20.4	%			303,769				20.7	%			30.8	%			26.2	%
Certificates of deposit less than $250,000			192,610				12.8	%			167,861				11.8	%			224,478				15.4	%			14.7	%			-14.2	%
Total Deposits		$	1,500,127				100.0	%		$	1,434,944				100.0	%		$	1,464,932				100.0	%			4.5	%			2.4	%
BORROWINGS:
Federal Home Loan Bank advances			—				0.0	%			40,000				35.7	%			—				—				100.0	%			0.0	%
Subordinated debt			72,047				100.0	%			71,955				64.3	%			40,576				100.0	%			0.1	%			77.6	%
Total Borrowings		$	72,047				100.0	%		$	111,955				100.0	%		$	40,576				100.0	%			-35.6	%			77.6	%
Total Deposits and Borrowings		$	1,572,174							$	1,546,899							$	1,505,508								1.6	%			4.4	%
Core customer funding sources (1)		$	1,094,493				69.6	%		$	1,135,503				73.4	%		$	1,118,795				74.3	%			-3.6	%			-2.2	%
Brokered and listing service sources (2)			405,634				25.8	%			299,441				19.4	%			346,137				23.0	%			35.5	%			17.2	%
Federal Home Loan Bank advances			—				0.0	%			40,000				2.6	%			—				—				100.0	%			0.0	%
Subordinated debt (3)			72,047				4.6	%			71,955				4.6	%			40,576				2.7	%			0.1	%			77.6	%
Total Funding Sources		$	1,572,174				100.0	%		$	1,546,899				100.0	%		$	1,505,508				100.0	%			1.6	%			4.4	%

(1)	Includes ICS, CDARS, and reciprocal deposits maintained by customers, which represent sweep accounts tied to customer operating accounts
(2)	Consists of certificates of deposit (CD) through multiple listing services and multiple brokered deposit services, as well as ICS and CDARS one-way certificates of deposit and regional money market accounts
(3)	Subordinated debt obligation qualifies as Tier 2 capital at the holding company and Tier 1 capital at the Bank

 

UNAUDITED AVERAGE BALANCE SHEETS, INTEREST AND RATES
(In thousands)
		For the three months ended June 30, 2022												For the three months ended June 30, 2021
		Average Balance				Interest Income/ Expense (4)(5)				Average Yields/ Rate (annualized) (4)(5)				Average Balance				Interest Income/ Expense (4)(5)				Average Yields/Rate (annualized) (4)(5)
ASSETS:
Interest earning assets:
Loans (1)(2)(3)		$	1,434,877			$	17,954				5.02	%		$	1,302,722			$	15,257				4.70	%
Securities:
Taxable			73,153				401				2.20	%			54,810				332				2.43	%
Tax-exempt			38,507				333				3.47	%			36,010				335				3.74	%
Federal funds and interest- bearing deposits			98,326				195				0.80	%			245,257				20				0.03	%
Total interest earning assets		$	1,644,863			$	18,883				4.60	%		$	1,638,799			$	15,944				3.90	%
Other assets			65,225												69,950
Total assets		$	1,710,088											$	1,708,749
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing demand deposits		$	96,352			$	105				0.44	%		$	68,714			$	55				0.32	%
Savings and NOW deposits			62,588				42				0.27	%			71,747				47				0.26	%
Money market deposit accounts			234,097				151				0.26	%			322,332				220				0.27	%
Time deposits			499,734				1,530				1.23	%			538,766				1,994				1.48	%
Total interest-bearing deposits		$	892,771			$	1,828				0.82	%		$	1,001,559			$	2,316				0.93	%
Federal funds purchased			1				—				—				1				—				—
Subordinated debt			72,009				812				4.52	%			39,716				567				5.73	%
FHLB borrowings			35,275				52				0.59	%			—				—				—
Total interest-bearing liabilities		$	1,000,056			$	2,692				1.08	%		$	1,041,276			$	2,883				1.11	%
Demand deposits and other liabilities			521,130												491,857
Total liabilities		$	1,521,186											$	1,533,133
Stockholders' Equity			188,902												175,616
Total Liabilities and Stockholders' Equity		$	1,710,088											$	1,708,749
Interest Rate Spread											3.52	%											2.84	%
Net Interest Income						$	16,191											$	13,061
Net Interest Margin											3.95	%											3.20	%

(1)	Includes loans classified as non-accrual
(2)	Includes average PPP balances of $11.4 million, related interest income of approximately $28,000, and $392,000 in PPP fees recognized for the three months ended June 30, 2022. Includes average PPP balances of $161.8 million, related interest income of approximately $404,000, and $1.2 million in PPP fees recognized for the three months ended June 30, 2021
(3)	Total loan interest income includes amortization of deferred loan fees, net of deferred loan costs
(4)	Income and yields for all periods presented are reported on a tax-equivalent basis using the federal statutory rate of 21%
(5)	Refer to Appendix for reconciliation of non-GAAP measures

 

UNAUDITED AVERAGE BALANCE SHEETS, INTEREST AND RATES
(In thousands)
		For the six months ended June 30, 2022												For the six months ended June 30, 2021
		Average Balance				Interest Income/ Expense (4)(5)				Average Yields/ Rate (annualized) (4)(5)				Average Balance				Interest Income/ Expense (4)(5)				Average Yields/ Rate (annualized) (4)(5)
ASSETS:
Interest earning assets:
Loans (1)(2)(3)		$	1,406,457			$	34,639				4.97	%		$	1,311,085			$	31,049				4.78	%
Securities:
Taxable			73,283				758				2.09	%			54,100				592				2.21	%
Tax-exempt			39,023				677				3.50	%			36,247				677				3.77	%
Federal funds and interest- bearing deposits			91,081				229				0.51	%			219,648				35				0.03	%
Total interest earning assets		$	1,609,844			$	36,303				4.55	%		$	1,621,080			$	32,353				4.02	%
Other assets			76,387												70,337
Total assets		$	1,686,231											$	1,691,417
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing demand deposits		$	83,450			$	170				0.41	%		$	68,556			$	110				0.32	%
Savings and NOW deposits			72,617				79				0.22	%			70,875				89				0.25	%
Money market deposit accounts			250,908				270				0.22	%			367,424				497				0.27	%
Time deposits			478,376				2,961				1.25	%			509,465				4,244				1.68	%
Total interest-bearing deposits		$	885,351			$	3,480				0.79	%		$	1,016,320			$	4,940				0.98	%
Federal funds and repos purchased			1				—				—				—				—				—
Subordinated debt			58,079				1,280				4.44	%			27,346				805				5.94	%
FHLB borrowings			36,215				83				0.46	%			—				—				—
Total interest-bearing liabilities		$	979,646			$	4,843				1.00	%		$	1,043,666			$	5,745				1.11	%
Demand deposits and other liabilities			517,281												474,566
Total liabilities		$	1,496,927											$	1,518,232
Stockholders' Equity			189,304												173,185
Total Liabilities and Stockholders' Equity		$	1,686,231											$	1,691,417
Interest Rate Spread											3.55	%											2.91	%
Net Interest Income						$	31,460											$	26,608
Net Interest Margin											3.94	%											3.31	%

(1)	Includes loans classified as non-accrual
(2)	Includes average PPP balances of $25.2 million, related interest income of approximately $126,000, and $1.7 million in PPP fees recognized for the six months ended June 30, 2022. Includes average PPP balances of $158.0 million, related interest income of approximately $790,000, and $2.8 million in PPP fees recognized for the three months ended June 30, 2021
(3)	Total loan interest income includes amortization of deferred loan fees, net of deferred loan costs
(4)	Income and yields for all periods presented are reported on a tax-equivalent basis using the federal statutory rate of 21%
(5)	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 Six Months Ended
		June 30,								June 30,
		2022				2021				2022				2021
Per share Data and Shares Outstanding
Earnings per common share (basic and diluted)		$	0.71			$	0.87			$	1.35			$	1.53
Book value per common share		$	21.41			$	20.18			$	21.41			$	20.18
Tangible book value per common share(2)		$	20.75			$	20.18			$	20.75			$	20.18
Weighted average common shares (basic and diluted)			7,575,484				7,546,452				7,611,303				7,535,061
Common shares outstanding at end of period			7,526,463				7,549,398				7,526,463				7,549,398
Performance Ratios
Return on average assets (annualized)			1.39	%			1.67	%			1.36	%			1.50	%
Return on average equity (annualized)			12.59	%			16.28	%			12.09	%			14.64	%
Return on average common equity (annualized)			13.38	%			17.81	%			12.79	%			15.89	%
Yield on earning assets (FTE) (2) (annualized)			4.60	%			3.90	%			4.55	%			4.02	%
Cost of interest bearing liabilities (annualized)			1.08	%			1.11	%			1.00	%			1.11	%
Net interest spread (FTE)(2)			3.52	%			2.84	%			3.55	%			2.91	%
Net interest margin (FTE)(2) (annualized)			3.95	%			3.20	%			3.94	%			3.31	%
Noninterest income as a percentage of average assets (annualized)			0.30	%			0.37	%			0.29	%			0.36	%
Noninterest expense to average assets (annualized)			2.23	%			1.85	%			2.21	%			1.87	%
Efficiency ratio(3)			54.61	%			54.12	%			54.70	%			53.22	%
Asset Quality
Commercial real estate loans to total capital (4)			366.10	%			346.23	%			366.10	%			346.23	%
Construction loans to total capital (5)			138.16	%			154.63	%			138.16	%			154.63	%
Loans 30-89 days past due to total gross loans			0.01	%			0.07	%			0.01	%			0.07	%
Loans 90 days past due to total gross loans			0.00	%			0.00	%			0.00	%			0.00	%
Non-accrual loans to total gross loans			0.00	%			0.00	%			0.00	%			0.00	%
Other real estate owned		$	—			$	1,158			$	—			$	1,158
Non-performing assets		$	—			$	1,158			$	—			$	1,158
Non-performing assets to total assets			0.00	%			0.07	%			0.00	%			0.07	%
Allowance for loan losses to total gross loans			0.91	%			0.87	%			0.91	%			0.87	%
Allowance for loan losses to non-performing assets			N/A				9.61				N/A				9.61
Net loan charge-offs (recoveries)		$	(2)			$	2			$	(5)			$	(16)
Net charge-offs (recoveries) to average gross loans (annualized)			N/A				N/A				N/A				N/A
Regulatory Capital Ratios (Bank only) (1)
Total risk-based capital ratio			16.23	%			16.25	%			16.23	%			16.25	%
Tier 1 risk-based capital ratio			15.42	%			15.40	%			15.42	%			15.40	%
Leverage ratio			14.34	%			11.78	%			14.34	%			11.78	%
Common equity tier 1 ratio			15.42	%			15.40	%			15.42	%			15.40	%
Other information
Closing stock price		$	22.77			$	22.58			$	22.77			$	22.58
Equity / assets			10.61	%			10.52	%			10.61	%			10.52	%
Average equity / average assets			11.05	%			10.28	%			11.23	%			10.24	%
Number of full time equivalent employees			146				129				146				129
# Full service branch offices			6				7				6				7

(1)	Regulatory capital ratios as of June 30, 2022 are preliminary
(2)	Refer to Appendix for reconciliation of non-GAAP measures
(3)	Efficiency ratio is calculated as non-interest expense as a percentage of net interest income and non-interest income
(4)	Commercial real estate includes only non-owner occupied and construction loans as a percentage of Bank capital
(5)	Construction loans as a percentage of Bank capital

 

Unaudited Reconciliation of Certain Non-GAAP Financial Measures
(Dollars In thousands)
		For the three months ended June 30,								For the six months ended June 30,
		2022				2021				2022				2021
Net interest margin (FTE)
Net interest income (GAAP)		$	16,121			$	12,991			$	31,318			$	26,466
FTE adjustment on tax-exempt securities			70				70				142				142
Net interest income (FTE) (non-GAAP)			16,191				13,061				31,460				26,608
Average interest earning assets			1,644,863				1,638,799				1,609,844				1,621,080
Net interest margin (GAAP)			3.93	%			3.18	%			3.92	%			3.29	%
Net interest margin (FTE) (non-GAAP)			3.95	%			3.20	%			3.94	%			3.31	%
		For the three months ended June 30,								For the six months ended June 30,
		2022				2021				2022				2021
Stockholders equity, adjusted
Total stockholders equity (GAAP)		$	188,404			$	179,628			$	188,404			$	179,628
Less: preferred stock			(27,263)				(27,263)				(27,263)				(27,263)
Total common stockholders equity (GAAP)			161,141				152,365			$	161,141			$	152,365
Less: intangible assets			4,956				—				4,956				—
Tangible common stockholders equity (non-GAAP)			156,185				152,365				156,185				152,365
Shares outstanding			7,526,463				7,549,398				7,526,463				7,549,398
Tangible book value per common share (non-GAAP)		$	20.75			$	20.18			$	20.75			$	20.18

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SOURCE MainStreet Bancshares, Inc.

FAQ

What was MainStreet Bancshares' net income for Q2 2022?

MainStreet Bancshares reported a net income of $5.9 million for Q2 2022.

What is the current net interest margin for MainStreet Bancshares?

The net interest margin for MainStreet Bancshares is 3.95% as of June 30, 2022.

How much did MainStreet Bancshares' total assets increase by?

Total assets for MainStreet Bancshares increased by 5% year-over-year, reaching $1.8 billion.

What is the status of non-performing assets at MainStreet Bancshares?

MainStreet Bancshares reported zero non-performing assets as of June 30, 2022.

How much noninterest income did Avenu™ generate?

Avenu™ generated $488,000 in noninterest income over the six months ended June 30, 2022.