MainStreet Bancshares Inc. Reports Third Quarter Results

Rhea-AI Summary

MainStreet Bancshares (Nasdaq: MNSB) reported a Q3 2024 loss of -$0.04 per common share, with year-to-date earnings at $0.60 per share. The quarter saw $984,000 in reversed accrued interest income, resulting in a 3.05% quarterly net interest margin. The bank charged off $1.9 million in nonperforming loans and allocated $1 million to provision expense. Total deposits reached $1.9 billion, with core deposits at $1.47 billion. The company launched its Banking-as-a-Service solution, Avenu, targeting fintech partnerships and digital banking expansion.

Positive

• Core deposits represent 78% of total deposits at $1.47 billion
• Noninterest bearing core deposits grew by $33 million in Q3
• Total year-to-date loan losses only 0.1% of total loan portfolio
• Launch of new Avenu BaaS platform with potential for digital scaling

Negative

• Q3 2024 loss of $0.04 per common share
• Net interest margin declined to 3.05% in Q3 from YTD average of 3.19%
• $1.9 million charge-off of nonperforming loans
• $984,000 in reversed accrued interest income
• Avenu launch expenses will impact profitability until reaching break-even

Insights

Financial Analyst

MainStreet Bancshares' Q3 results reveal significant challenges and strategic developments. The -$0.04 loss per share stems from proactive handling of troubled real estate loans, with $1.9 million in charge-offs and a $1 million provision expense. The net interest margin declined to 3.05%, impacted by $984,000 in reversed accrued interest.

The bright spots include deposit growth to $1.9 billion, with core deposits at $1.47 billion representing a healthy 78% of total deposits. The launch of Avenu BaaS platform marks a strategic pivot toward digital banking, though near-term profitability will be impacted by implementation costs. The loan portfolio's year-to-date losses of 0.1% suggest underlying strength despite current challenges.

Technology Analyst

The launch of Avenu Banking-as-a-Service platform represents a strategic transformation for MainStreet Bank. This full-stack embedded banking solution positions the company to compete in the underserved BaaS market, offering significant scalability advantages over traditional branch-based growth. The platform's ability to integrate directly with fintech partners' applications through a purpose-built core system demonstrates technical sophistication. With five fintech partnerships in the pipeline, including one launching in November, the platform shows promising early traction, though investors should expect initial pressure on earnings during the scaling phase.

Increase in Core Deposits, a High-Quality Loan Portfolio and Strong Capital

FAIRFAX, Va., Oct. 28, 2024 /PRNewswire/ -- MainStreet Bancshares, Inc. (Nasdaq: MNSB & MNSBP), the financial holding company for MainStreet Bank, reported a loss of -$0.04 per common share for the third quarter of 2024 as it dealt decisively with a small number of nonperforming real estate loans.  Year-to-date 2024 earnings per common share are $0.60.  The Company remains strongly capitalized.

"Our third quarter annualized net interest margin was impacted by $984,000 in accrued interest income that was reversed in relation to loans placed on nonaccrual status," said Alex Vari, Chief Accountant for MainStreet Bank.  "This resulted in a quarterly net interest margin of 3.05% and a year-to-date net interest margin of 3.19%."  

The Company charged off $1.9 million of nonperforming loans during the quarter and allocated $1 million to provision expense to augment loan growth and ensure the Allowance for Credit Losses remains directionally consistent for the purposes of growth and quality.

In response to the bank's credit quality, Chris Johnston, Chief Credit Officer for MainStreet Bank, expanded, "this quarter showed the underlying strength of a portfolio shaped by a rigorous credit culture. The total principal losses incurred year-to-date 2024 approximates just 0.1% of total loans.  Our lending team has demonstrated great resolve in addressing troubled loans, both by working with borrowers and by finding acceptable solutions minimizing the impact on shareholder value. With that, we expect the level of problem loans to improve from this point."

Total deposits expanded to $1.9 billion.  The Bank continues to attract healthy amounts of core deposits, reaching $1.47 billion, or 78% of total deposits. 

"The DC Metropolitan area is a vibrant market.  Our Business Bankers continue to perform, growing noninterest bearing core deposits by $33 million during the quarter," noted Abdul Hersiburane, President of MainStreet Bank. "In an exercise of foresight, we structured noncore deposits with immediate rate repricing or callable options. We have now $233 million of our $423 million noncore deposits available to reprice as rates fall."

In 2021, the Board and management decided to make an investment in technology that would best serve clients requiring Banking-as-a-Service (BaaS).  The Avenu BaaS solution officially launched just prior to the end of the third quarter of 2024.  The ability to digitally offer banking services in a safe and compliant manner allows the Company to reach new customer deposit segments, diversify revenue streams and generate additional income.  The BaaS market is currently underserved, and the opportunities for a well-developed solution are robust.  The Avenu business model is in-line with the Company's physical branch-lite strategy.

"Avenu provides a full-stack embedded banking solution that connects our partners and their apps directly and seamlessly to our purpose-built Avenu core," said Jeff W. Dick, Chairman & CEO of MainStreet Bancshares, Inc. and MainStreet Bank.  "With Version 1 of Avenu placed in-service, the team is focused on getting the first fintech to general release in early November, and another four fintechs to follow soon thereafter.  Just as with any business expansion opportunity, the expenses associated with launching Avenu will impact profitability until we reach break-even.  However, after that point Avenu's ability to digitally scale can far surpass bricks and mortar growth and profitability."

Avenu's clients are fintechs, social media solutions, application developers, money movers, and entrepreneurs. They all have one thing in common: They are in search of a reliable partner to help innovate how money moves - solving real-world issues and helping communities thrive.  MainStreet Bank is that reliable partner dedicated to providing a best-in-class solution to sustain long-term business relationships.

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, D.C., 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 pandemic outbreaks, 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.

 

UNAUDITED CONSOLIDATED BALANCE SHEET INFORMATION
(In thousands)
		September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023*				September 30, 2023
ASSETS
Cash and cash equivalents
Cash and due from banks		$	40,955			$	41,697			$	49,208			$	53,581			$	44,912
Federal funds sold			191,159				49,762				75,533				60,932				76,271
Total cash and cash equivalents			232,114				91,459				124,741				114,513				121,183
Investment securities available for sale, at fair value			58,489				57,605				58,699				59,928				56,726
Investment securities held to maturity, at amortized cost, net of allowance for credit losses of $0 for all periods			16,016				16,036				17,251				17,275				17,565
Restricted equity securities, at amortized cost			26,745				26,797				23,924				24,356				20,619
Loans, net of allowance for credit losses of $18,327, $17,098, $16,531, $16,506, and $15,626, respectively			1,775,558				1,778,840				1,727,110				1,705,137				1,681,444
Premises and equipment, net			13,571				13,787				14,081				13,944				14,275
Accrued interest and other receivables			11,077				11,916				10,727				12,390				11,184
Computer software, net of amortization			18,881				17,205				15,691				14,657				13,373
Bank owned life insurance			39,203				38,901				38,609				38,318				38,035
Other assets			32,945				41,200				39,182				34,914				47,087
Total Assets		$	2,224,599			$	2,093,746			$	2,070,015			$	2,035,432			$	2,021,491
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Non-interest bearing deposits		$	347,575			$	314,636			$	348,945			$	364,606			$	394,859
Interest bearing demand deposits			197,527				179,513				165,331				137,128				76,423
Savings and NOW deposits			61,893				60,867				46,036				45,878				46,550
Money market deposits			451,936				476,396				446,903				442,179				461,398
Time deposits			834,738				723,951				725,520				696,336				703,960
Total deposits			1,893,669				1,755,363				1,732,735				1,686,127				1,683,190
Federal funds purchased			—				—				—				15,000				—
Subordinated debt			72,940				72,841				72,741				72,642				72,543
Other liabilities			31,939				40,827				41,418				40,146				52,015
Total Liabilities			1,998,548				1,869,031				1,846,894				1,813,915				1,807,748
Stockholders' Equity:
Preferred stock			27,263				27,263				27,263				27,263				27,263
Common stock			29,463				29,452				29,514				29,198				29,188
Capital surplus			67,083				66,392				65,940				65,985				65,407
Retained earnings			108,616				109,651				108,334				106,549				102,694
Accumulated other comprehensive loss			(6,374)				(8,043)				(7,930)				(7,478)				(10,809)
Total Stockholders' Equity			226,051				224,715				223,121				221,517				213,743
Total Liabilities and Stockholders' Equity		$	2,224,599			$	2,093,746			$	2,070,015			$	2,035,432			$	2,021,491

*Derived from audited financial statements

 

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME INFORMATION
(In thousands, except share and per share data)
		Year-to-Date								Three Months Ended
		September 30, 2024				September 30, 2023				September 30, 2024				June 30, 2024				March 31, 2024				December 31, 2023				September 30, 2023
INTEREST INCOME:
Interest and fees on loans		$	93,852			$	85,530			$	31,615			$	31,655			$	30,582			$	30,951			$	29,822
Interest on investment securities
Taxable securities			1,262				1,384				397				430				435				451				459
Tax-exempt securities			832				797				294				268				270				268				268
Interest on federal funds sold			3,550				3,528				1,285				1,083				1,182				1,510				1,217
Total interest income			99,496				91,239				33,591				33,436				32,469				33,180				31,766
INTEREST EXPENSE:
Interest on interest bearing demand deposits			6,049				761				2,117				2,118				1,814				1,027				216
Interest on savings and NOW deposits			553				400				206				190				157				146				145
Interest on money market deposits			15,911				8,091				5,277				5,542				5,092				5,538				4,068
Interest on time deposits			27,361				18,719				9,543				9,010				8,808				8,187				7,516
Interest on federal funds purchased			575				274				277				191				107				25				35
Interest on Federal Home Loan Bank advances			46				1,105				—				—				46				118				186
Interest on subordinated debt			2,468				2,460				828				820				820				828				828
Total interest expense			52,963				31,810				18,248				17,871				16,844				15,869				12,994
Net interest income			46,533				59,429				15,343				15,565				15,625				17,311				18,772
Provision for (recovery of) credit losses			3,356				1,176				2,913				638				(195)				466				255
Net interest income after provision for (recovery of) credit losses			43,177				58,253				12,430				14,927				15,820				16,845				18,517
NON-INTEREST INCOME:
Deposit account service charges			1,516				1,639				557				490				469				510				514
Bank owned life insurance income			885				786				302				291				292				283				272
Net loss on securities called or matured			(48)				—				—				(48)				—				—				—
Other non-interest income (loss)			93				158				27				31				35				(34)				105
Total non-interest income			2,446				2,583				886				764				796				759				891
NON-INTEREST EXPENSES:
Salaries and employee benefits			22,222				21,139				7,250				7,484				7,488				7,129				6,924
Furniture and equipment expenses			2,806				1,983				931				940				935				804				713
Advertising and marketing			1,599				2,072				579				566				454				271				577
Occupancy expenses			1,257				1,287				407				415				435				397				375
Outside services			2,458				1,691				845				839				774				352				697
Administrative expenses			686				703				215				229				242				219				277
Other operating expenses			7,508				5,404				2,992				2,362				2,153				2,166				1,988
Total non-interest expenses			38,536				34,279				13,219				12,835				12,481				11,338				11,551
Income before income tax expense (benefit)			7,087				26,557				97				2,856				4,135				6,266				7,857
Income tax expense (benefit)			900				5,119				(168)				238				830				1,120				1,516
Net income			6,187				21,438				265				2,618				3,305				5,146				6,341
Preferred stock dividends			1,617				1,617				539				539				539				539				539
Net income (loss) available to common shareholders		$	4,570			$	19,821			$	(274)			$	2,079			$	2,766			$	4,607			$	5,802
Earnings (loss) per common share, basic and diluted		$	0.60			$	2.64			$	(0.04)			$	0.27			$	0.36			$	0.61			$	0.77
Weighted average number of common shares, basic and diluted			7,607,431				7,521,426				7,601,925				7,608,389				7,611,990				7,527,327				7,524,332

 

UNAUDITED LOAN, DEPOSIT AND BORROWING DETAIL
(In thousands)
		September 30, 2024								June 30, 2024								September 30, 2023								Percentage Change
		$ Amount				% of Total				$ Amount				% of Total				$ Amount				% of Total				Last 3 Mos				Last 12 Mos
LOANS:
Construction and land development loans		$	373,486				20.8	%		$	410,698				22.8	%		$	426,698				25.1	%			-9.1	%			-12.5	%
Residential real estate loans			446,109				24.8	%			449,700				25.0	%			462,935				27.2	%			-0.8	%			-3.6	%
Commercial real estate loans			871,280				48.4	%			845,030				46.9	%			734,615				43.1	%			3.1	%			18.6	%
Commercial and industrial loans			106,249				5.9	%			93,559				5.2	%			73,855				4.3	%			13.6	%			43.9	%
Consumer loans			1,977				0.1	%			2,232				0.1	%			4,598				0.3	%			-11.4	%			-57.0	%
Total Gross Loans		$	1,799,101				100.0	%		$	1,801,219				100.0	%		$	1,702,701				100.0	%			-0.1	%			5.7	%
Less: Allowance for credit losses			(18,327)								(17,098)								(15,626)
Net deferred loan fees			(5,216)								(5,281)								(5,631)
Net Loans		$	1,775,558							$	1,778,840							$	1,681,444
DEPOSITS:
Non-interest bearing deposits		$	347,575				18.4	%		$	314,636				17.9	%		$	394,859				23.5	%			10.5	%			-12.0	%
Interest-bearing deposits:
Demand deposits			197,527				10.4	%			179,513				10.2	%			76,423				4.5	%			10.0	%			158.5	%
Savings and NOW deposits			61,893				3.3	%			60,867				3.5	%			46,550				2.8	%			1.7	%			33.0	%
Money market deposits			451,936				23.9	%			476,396				27.1	%			461,398				27.4	%			-5.1	%			-2.1	%
Certificates of deposit $250,000 or more			532,201				28.0	%			473,827				27.0	%			432,440				25.7	%			12.3	%			23.1	%
Certificates of deposit less than $250,000			302,537				16.0	%			250,124				14.3	%			271,520				16.1	%			21.0	%			11.4	%
Total Deposits		$	1,893,669				100.0	%		$	1,755,363				100.0	%		$	1,683,190				100.0	%			7.9	%			12.5	%
BORROWINGS:
Subordinated debt			72,940				100.0	%			72,841				100.0	%			72,543				100.0	%			0.1	%			0.5	%
Total Borrowings		$	72,940				100.0	%		$	72,841				100.0	%		$	72,543				100.0	%			0.1	%			0.5	%
Total Deposits and Borrowings		$	1,966,609							$	1,828,204							$	1,755,733								7.6	%			12.0	%
Core customer funding sources (1)		$	1,471,350				74.8	%		$	1,376,991				75.3	%		$	1,144,513				65.2	%			6.9	%			28.6	%
Brokered and listing service sources (2)			422,319				21.5	%			378,372				20.7	%			538,677				30.7	%			11.6	%			-21.6	%
Subordinated debt (3)			72,940				3.7	%			72,841				4.0	%			72,543				4.1	%			0.1	%			0.5	%
Total Funding Sources		$	1,966,609				100.0	%		$	1,828,204				100.0	%		$	1,755,733				100.0	%			7.6	%			12.0	%

(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.
	Excludes $278.6 million in core deposits placed in reciprocal networks for FDIC insurance coverage that will be classified as brokered deposits on the call report in pursuant to rule 12 CFR 337.6(e) as of September 30, 2024.
(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, 2024												For the three months ended September 30, 2023
		Average Balance				Interest Income/ Expense (3)(4)				Average Yields/ Rate (annualized) (3)(4)				Average Balance				Interest Income/ Expense (3)(4)				Average Yields/ Rate (annualized) (3)(4)
ASSETS:
Interest-earning assets:
Loans (1)(2)		$	1,807,882			$	31,615				6.94	%		$	1,665,474			$	29,822				7.10	%
Securities:
Taxable			54,523				397				2.89	%			57,981				459				3.14	%
Tax-exempt			35,881				372				4.11	%			37,812				339				3.56	%
Federal funds and interest-bearing deposits			104,459				1,285				4.88	%			94,808				1,217				5.09	%
Total interest-earning assets		$	2,002,745			$	33,669				6.67	%		$	1,856,075			$	31,837				6.81	%
Other assets			123,383												73,415
Total assets		$	2,126,128											$	1,929,490
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing demand deposits		$	173,996			$	2,117				4.83	%		$	77,047			$	216				1.11	%
Savings and NOW deposits			61,259				206				1.33	%			48,594				145				1.18	%
Money market deposits			445,730				5,277				4.70	%			413,710				4,068				3.90	%
Time deposits			759,247				9,543				4.99	%			700,405				7,516				4.26	%
Total interest-bearing deposits		$	1,440,232			$	17,143				4.72	%		$	1,239,756			$	11,945				3.82	%
Federal funds purchased			19,001				277				5.78	%			2,501				35				5.55	%
FHLB advances			—				—				—				13,478				186				5.48	%
Subordinated debt			72,901				828				4.51	%			72,504				828				4.53	%
Total interest-bearing liabilities		$	1,532,134			$	18,248				4.73	%		$	1,328,239			$	12,994				3.88	%
Demand deposits and other liabilities			368,349												388,004
Total liabilities		$	1,900,483											$	1,716,243
Stockholders' Equity			225,645												213,247
Total Liabilities and Stockholders' Equity		$	2,126,128											$	1,929,490
Interest Rate Spread											1.94	%											2.93	%
Net Interest Income						$	15,421											$	18,843
Net Interest Margin											3.05	%											4.03	%

(1)	Includes loans classified as non-accrual
(2)	Total loan interest income includes amortization of deferred loan fees, net of deferred loan costs
(3)	Income and yields for all periods presented are reported on a tax-equivalent basis using the federal statutory rate of 21%
(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, 2024												For the nine months ended September 30, 2023
		Average Balance				Interest Income/ Expense (3)(4)				Average Yields/ Rate (annualized) (3)(4)				Average Balance				Interest Income/ Expense (3)(4)				Average Yields/ Rate (annualized) (3)(4)
ASSETS:
Interest-earning assets:
Loans (1)(2)		$	1,773,050			$	93,852				7.08	%		$	1,640,460			$	85,530				6.97	%
Securities:
Taxable			55,478				1,262				3.04	%			60,640				1,384				3.05	%
Tax-exempt			36,670				1,053				3.84	%			37,876				1,009				3.56	%
Federal funds and interest-bearing deposits			93,853				3,550				5.06	%			99,004				3,528				4.76	%
Total interest-earning assets		$	1,959,051			$	99,717				6.81	%		$	1,837,980			$	91,451				6.65	%
Other assets			125,808												71,452
Total assets		$	2,084,859											$	1,909,432
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing demand deposits		$	164,192			$	6,049				4.93	%		$	78,018			$	761				1.30	%
Savings and NOW deposits			51,119				553				1.45	%			50,382				400				1.06	%
Money market deposit			447,668				15,911				4.75	%			328,037				8,091				3.30	%
Time deposits			728,459				27,361				5.02	%			699,377				18,719				3.58	%
Total interest-bearing deposits		$	1,391,438			$	49,874				4.79	%		$	1,155,814			$	27,971				3.24	%
Federal funds purchased			13,279				575				5.79	%			6,878				274				5.33	%
FHLB advances			1,095				46				5.62	%			30,531				1,105				4.84	%
Subordinated debt			72,802				2,468				4.53	%			72,405				2,460				4.54	%
Total interest-bearing liabilities		$	1,478,614			$	52,963				4.79	%		$	1,265,628			$	31,810				3.36	%
Demand deposits and other liabilities			382,591												436,157
Total liabilities		$	1,861,205											$	1,701,785
Stockholders' Equity			223,654												207,647
Total Liabilities and Stockholders' Equity		$	2,084,859											$	1,909,432
Interest Rate Spread											2.02	%											3.30	%
Net Interest Income						$	46,754											$	59,641
Net Interest Margin											3.19	%											4.34	%

(1)	Includes loans classified as non-accrual
(2)	Total loan interest income includes amortization of deferred loan fees, net of deferred loan costs
(3)	Income and yields for all periods presented are reported on a tax-equivalent basis using the federal statutory rate of 21%
(4)	Refer to Appendix for reconciliation of non-GAAP measures

 

UNAUDITED SUMMARY FINANCIAL DATA
(Dollars in thousands except share and per share data)
		At or For the Three Months Ended								At or For the Nine Months Ended
		September 30,								September 30,
		2024				2023				2024				2023
Per share Data and Shares Outstanding
Earnings (loss) per common share (basic and diluted)		$	(0.04)			$	0.77			$	0.60			$	2.64
Book value per common share		$	26.15			$	24.78			$	26.15			$	24.78
Tangible book value per common share(2)		$	23.66			$	23.00			$	23.66			$	23.00
Weighted average common shares (basic and diluted)			7,601,925				7,524,332				7,607,431				7,521,426
Common shares outstanding at end of period			7,602,783				7,524,887				7,602,783				7,524,887
Performance Ratios
Return on average assets (annualized)			0.05	%			1.30	%			0.40	%			1.50	%
Return on average equity (annualized)			0.47	%			11.80	%			3.70	%			13.80	%
Return on average common equity (annualized)			0.53	%			12.38	%			4.21	%			14.73	%
Yield on earning assets (FTE) (2) (annualized)			6.67	%			6.81	%			6.81	%			6.65	%
Cost of interest bearing liabilities (annualized)			4.73	%			3.88	%			4.79	%			3.36	%
Net interest spread (FTE)(2)			1.94	%			2.93	%			2.02	%			3.30	%
Net interest margin (FTE)(2) (annualized)			3.05	%			4.03	%			3.19	%			4.34	%
Non-interest income as a percentage of average assets (annualized)			0.17	%			0.18	%			0.16	%			0.18	%
Non-interest expense to average assets (annualized)			2.47	%			2.38	%			2.47	%			2.39	%
Efficiency ratio(3)			81.45	%			58.74	%			78.68	%			54.94	%
Asset Quality
Allowance for credit losses (ACL)
Beginning balance, ACL - loans		$	17,098			$	16,047			$	16,506			$	14,114
Add: recoveries			11				1				19				14
Less: charge-offs			(1,907)				(324)				(2,418)				(331)
Add: provision for (recovery of) credit losses - loans			3,125				(98)				4,220				934
Add: current expected credit losses, nonrecurring adoption			—				—				—				895
Ending balance, ACL - loans		$	18,327			$	15,626			$	18,327			$	15,626
Beginning balance, reserve for unfunded commitment (RUC)		$	357			$	1,199			$	1,009			$	—
Add: current expected credit losses, nonrecurring adoption			—				—				—				1,310
Add: provision for (recovery of) unfunded commitments, net			(212)				353				(864)				242
Ending balance, RUC		$	145			$	1,552			$	145			$	1,552
Total allowance for credit losses		$	18,472			$	17,178			$	18,472			$	17,178
Allowance for credit losses on loans to total gross loans			1.02	%			0.92	%			1.02	%			0.92	%
Allowance for credit losses to total gross loans			1.03	%			1.01	%			1.03	%			1.01	%
Allowance for credit losses on loans to non-performing loans			64.84	%			48.08X				64.84	%			48.08X
Net charge-offs (recoveries) to average gross loans (annualized)			0.42	%			0.08	%			0.18	%			0.02	%
Concentration Ratios
Commercial real estate loans to total capital (4)			360.26	%			372.48	%			360.26	%			372.48	%
Construction loans to total capital (5)			118.15	%			138.79	%			118.15	%			138.79	%
Non-performing Assets
Loans 30-89 days past due and accruing to total gross loans			0.61	%			0.05	%			0.61	%			0.05	%
Loans 90 days past due and accruing to total gross loans			0.00	%			0.00	%			0.00	%			0.00	%
Non-accrual loans to total gross loans			1.57	%			0.02	%			1.57	%			0.02	%
Other real estate owned		$	—			$	—			$	—			$	—
Non-performing loans		$	28,264			$	325			$	28,264			$	325
Non-performing assets to total assets			1.27	%			0.02	%			1.27	%			0.02	%
Regulatory Capital Ratios (Bank only) (1)
Total risk-based capital ratio			16.96	%			16.79	%			16.96	%			16.79	%
Tier 1 risk-based capital ratio			15.97	%			15.83	%			15.97	%			15.83	%
Leverage ratio			13.98	%			14.81	%			13.98	%			14.81	%
Common equity tier 1 ratio			15.97	%			15.83	%			15.97	%			15.83	%
Other information
Closing stock price		$	18.45			$	20.54			$	18.45			$	20.54
Tangible equity / tangible assets (2)			9.39	%			9.98	%			9.39	%			9.98	%
Average tangible equity / average tangible assets (2)			9.86	%			10.46	%			10.02	%			10.34	%
Number of full time equivalent employees			201				185				201				185
Number of full service branch offices			6				6				6				6

(1)	Regulatory capital ratios as of September 30, 2024 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, multifamily, 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 September 30,								For the nine months ended September 30,
		2024				2023				2024				2023
Net interest margin (FTE)
Net interest income (GAAP)		$	15,343			$	18,772			$	46,533			$	59,429
FTE adjustment on tax-exempt securities			78				71				221				212
Net interest income (FTE) (non-GAAP)			15,421				18,843				46,754				59,641
Average interest earning assets			2,002,745				1,856,075				1,959,051				1,837,980
Net interest margin (GAAP)			3.04	%			4.01	%			3.18	%			4.32	%
Net interest margin (FTE) (non-GAAP)			3.05	%			4.03	%			3.19	%			4.34	%

 

		For the three months ended September 30,								For the nine months ended September 30,
		2024				2023				2024				2023
Yield on earning assets (FTE)
Total interest income (GAAP)		$	33,591			$	31,766			$	99,496			$	91,239
FTE adjustment on tax-exempt securities			78				71				221				212
Total interest income (FTE) (non-GAAP)			33,669				31,837				99,717				91,451
Average interest earning assets			2,002,745				1,856,075				1,959,051				1,837,980
Yield on earning assets (GAAP)			6.65	%			6.79	%			6.79	%			6.64	%
Yield on earning assets (FTE) (non-GAAP)			6.67	%			6.81	%			6.81	%			6.65	%

 

		For the three months ended September 30,								For the nine months ended September 30,
		2024				2023				2024				2023
Net interest spread (FTE)
Yield on earning assets (GAAP)			6.65	%			6.79	%		6.79		%		6.64		%
Yield on earning assets (FTE) (non-GAAP)			6.67	%			6.81	%		6.81		%		6.65		%
Yield on interest-bearing liabilities (GAAP)			4.73	%			3.88	%		4.79		%			3.36	%
Net interest spread (GAAP)			1.92	%			2.91	%		2.00		%		3.29		%
Net interest spread (FTE) (non-GAAP)			1.94	%			2.93	%			2.02	%		3.30		%

 

		As of September 30,								As of September 30,
		2024				2023				2024				2023
Tangible common stockholders' equity
Total stockholders equity (GAAP)		$	226,051			$	213,743			$	226,051			$	213,743
Less: intangible assets			(18,881)				(13,373)				(18,881)				(13,373)
Tangible stockholders' equity (non-GAAP)			207,170				200,370			$	207,170				200,370
Less: preferred stock			(27,263)				(27,263)				(27,263)				(27,263)
Tangible common stockholders' equity (non-GAAP)			179,907				173,107				179,907				173,107
Common shares outstanding			7,602,783				7,524,887				7,602,783				7,524,887
Tangible book value per common share (non-GAAP)		$	23.66			$	23.00			$	23.66			$	23.00

 

		As of September 30,								As of September 30,
		2024				2023				2024				2023
Stockholders equity, adjusted
Total stockholders equity (GAAP)		$	226,051			$	213,743			$	226,051			$	213,743
Less: intangible assets			(18,881)				(13,373)				(18,881)				(13,373)
Total tangible stockholders equity (non-GAAP)			207,170				200,370				207,170				200,370

 

		As of September 30,								As of September 30,
		2024				2023				2024				2023
Total tangible assets
Total assets (GAAP)		$	2,224,599			$	2,021,491			$	2,224,599			$	2,021,491
Less: intangible assets			(18,881)				(13,373)				(18,881)				(13,373)
Total tangible assets (non-GAAP)			2,205,718				2,008,118				2,205,718				2,008,118

 

		For the three months ended September 30,								For the nine months ended September 30,
		2024				2023				2024				2023
Average tangible stockholders' equity
Total average stockholders' equity (GAAP)		$	225,645			$	213,247			$	223,654			$	207,647
Less: average intangible assets			(17,738)				(12,841)				(16,405)				(11,345)
Total average tangible stockholders' equity (non-GAAP)			207,907				200,406				207,249				196,302

 

		For the three months ended September 30,								For the nine months ended September 30,
		2024				2023				2024				2023
Average tangible assets
Total average assets (GAAP)		$	2,126,128			$	1,929,490			$	2,084,859			$	1,909,432
Less: average intangible assets			(17,738)				(12,841)				(16,405)				(11,345)
Total average tangible assets (non-GAAP)			2,108,390				1,916,649				2,068,454				1,898,087

Contact: Debra Cope
Director of Corporate Communications
Desk (703) 481-4599
Mobile (202) 468-3814

 

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SOURCE MainStreet Bancshares, Inc.

FAQ

What was MainStreet Bancshares (MNSB) earnings per share in Q3 2024?

MainStreet Bancshares reported a loss of -$0.04 per common share in Q3 2024.

What is the total deposit amount for MNSB in Q3 2024?

Total deposits reached $1.9 billion, with core deposits representing $1.47 billion or 78% of total deposits.

How much did MNSB charge off in nonperforming loans during Q3 2024?

The company charged off $1.9 million of nonperforming loans during Q3 2024.

What was MNSB's net interest margin in Q3 2024?

The quarterly net interest margin was 3.05%, affected by $984,000 in reversed accrued interest income.