Press Release

MainStreet Bancshares, Inc. Reports Record First Quarter Earnings

Company Release - 4/23/2019 8:00 AM ET

FAIRFAX, Va., April 23, 2019 /PRNewswire/ -- Mainstreet Bancshares, Inc. (NASDAQ: MNSB) (the "Company") reported a record net income of $3.2 million for the first quarter of 2019; an increase of 93% over the first quarter of 2018.

MainStreet Bancshares, Inc. Logo

Earnings per share for both common and diluted shares was $0.39 for the first quarter of 2019, compared to $0.29 for both common and diluted shares for the first quarter of 2018.  The Company produced a 1.17% return on average assets and 10.53% on average equity for the first quarter of 2019, compared to 0.84% and 9.66% consecutively for the first quarter of 2018.

Net interest income, the Company's primary source of revenue, was $9.3 million for the first quarter of 2019, up 38% from the first quarter of 2018. The respective net interest margins were 3.50% and 3.53%. 

A loan loss provision of $325,000 along with net recoveries of $33,000 were necessary to balance first quarter 2019 loan growth.  The Company incurred net charge-offs of $7,000 for the first quarter of 2018.

Fee income of $926,000 in the first quarter of 2019 was up 139% from the first quarter of 2018, due primarily to an increase in deposit account fees and interest rate swap fees related to loan transactions.  These sources are expected to continue in a consistent manner going forward.

Total assets were $1.1 billion at March 31, 2019, as compared to $843.7 million at March 31, 2018, an increase of 36%. Net loans at March 31, 2019 total $943.7 million against net loans outstanding at March 31, 2108 of $702.7 million, an increase of 34%.  Asset quality remains solid with non-performing assets to total assets at 0.17% as of March 31, 2019, down from 0.23% as of March 31, 2018. Capital levels for the Company remain strong. 

Non-interest-bearing deposits increased to $193.7 million as of March 31, 2019, an 18% increase from March 31, 2018.  Non-interest-bearing deposits represent 20% of total deposits at March 31, 2019.  Total deposits as of March 31, 2019 were $966.8 million an increase of $275.9 million from March 31, 2018.

As of March 31, 2019, the Company's tangible book value per share was $15.15, up 18.8% from $12.75 as of March 31, 2018.  According to OTCQX, there were 584 trades during the quarter for a total of 239,705 shares traded or $4,559,489.  The closing share price was $21.60, or 143% of book value. The market cap was $178.2 million as of March 31, 2019.

QUOTES: "We continue to expand our Business Banking team with a focus on increasing local depositors," says Chris Brockett, President of MainStreet Bancshares, Inc. and MainStreet Bank. "Our Business Bankers are world class at representing the Bank and have been very effective in their pursuit of business and professional relationships."

"The local economy is vibrant, and the quality of our loan portfolio remains good," says Jeff W. Dick, Chairman and CEO of MainStreet Bancshares, Inc. and MainStreet Bank.  "We are moderating our year-on-year asset growth for 2019 and focusing on building our core deposit base, with a goal of improving our net interest margin."

ABOUT MAINSTREET BANK:  MainStreet operates six branches in Herndon, Fairfax, Fairfax City, McLean, Leesburg and Clarendon.  A seventh branch in Washington, DC will be added during 2019. 

MainStreet has 55,000 free ATMs and a fully integrated online and mobile banking solution.  The Bank is not restricted by a conventional branching system, as it can offer business customers the ability to Put Our Bank in Your Office®. With robust and easy-to-use online business banking technology, MainStreet has "put our bank" in well over 1,000 businesses in the metropolitan area.

MainStreet has a full complement of payment system services for third party payment providers.  MainStreet has a nationally known market leader and a highly experienced team ready to help payment providers create a solution perfect for their needs.

MainStreet 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 mobile banking and Apple Pay to instant-issue Debit Cards, MainStreet Bank is always looking for ways to improve its customer 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, 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 


(703) 481-4567

 

UNAUDITED CONSOLIDATED BALANCE SHEET INFORMATION

(Unaudited)

(In thousands, except share data)








3/31/19

12/31/18

9/30/18

6/30/18

3/31/18

ASSETS






Cash and cash equivalents






  Cash and due from banks

$    29,741

$    27,886

$    38,634

$    27,163

$    21,597

  Federal funds sold

30,034

30,190

21,739

4,104

5,316

      Total cash and cash equivalents

59,775

58,076

60,373

31,267

26,913

Investment securities available for sale, at fair value

69,308

55,979

79,489

20,806

47,009

Investment securities held to maturity, at carrying value

25,487

26,178

26,221

27,422

27,469

Restricted equity securities, at cost

5,732

5,894

4,209

4,737

5,545

Loans, net of allowance for loan losses of $9,189, $8,831






$8,327, $7,731, and $6,334, consecutively

943,735

917,125

850,822

815,875

702,700

Premises and equipment, net

14,226

14,222

14,414

14,660

14,568

Accrued interest and other receivables

5,644

5,148

4,919

4,695

3,938

Bank owned life insurance

14,169

14,064

13,957

13,851

13,743

Other assets

8,005

3,927

2,577

2,842

1,794

   Total Assets

$ 1,146,081

$ 1,100,613

$ 1,056,981

$  936,155

$  843,679







LIABILITIES AND STOCKHOLDERS' EQUITY






Liabilities:






Non-interest bearing deposits

$    193,744

$    211,749

$    191,986

$  179,827

$  164,795

Interest-bearing DDA deposits

59,639

60,588

59,295

60,389

54,097

Savings and NOW deposits

61,537

51,371

52,602

48,659

49,935

Money market deposits

147,655

138,153

109,498

118,194

118,532

Time deposits

504,252

458,276

476,511

394,433

303,575

   Total deposits

966,827

920,137

889,892

801,502

690,934

Federal Home Loan Bank advances and other borrowings

30,000

40,000

30,000

45,117

64,129

Subordinated debt

14,783

14,776

14,769

14,762

14,755

Other liabilities

9,488

4,449

2,785

2,617

3,298

   Total Liabilities

1,021,098

979,362

937,446

863,998

773,116







Stockholders' Equity:






Common stock, par value $4 per share, authorized 10,000,000 s
hares; issued and outstanding, 8,249,759 at 3/31/2019
including 153,086 unvested shares, 8,177,978 at 12/31/2018
including 133,869 unvested shares, 8,179,871 shares at
9/30/2018 including 142,457 unvested shares, 5,810,498
shares at 6/30/2018 including 144,626 unvested shares,
5,533,605 at 3/31/2018 including 138,853 unvested shares.

32,387

32,177

32,177

22,691

21,579

Capital surplus

74,353

74,256

76,427

40,731

35,769

Retained earnings

18,395

15,185

11,371

9,020

13,368

Accumulated other comprehensive loss

(152)

(367)

(440)

(285)

(153)

   Total Stockholders' Equity

124,983

121,251

119,535

72,157

70,563

   Total Liabilities and Stockholders' Equity

$ 1,146,081

$ 1,100,613

$ 1,056,981

$  936,155

$  843,679

 

 

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME INFORMATION

(Unaudited)

(In thousands, except share and per share data)





Year-to-Date

Three Months Ended


3/31/19

3/31/18

3/31/19

12/31/18

9/30/18

6/30/18

3/31/18

INTEREST INCOME:








Interest and fees on loans

$  12,916

$    8,316

$  12,916

$  12,244

$  11,061

$    9,649

$    8,316

Interest on investment securities

556

341

556

381

341

407

341

Interest on federal funds sold

345

100

345

457

423

115

100

   Total interest income

13,817

8,757

13,817

13,082

11,825

10,171

8,757









INTEREST EXPENSE:








Interest on interest bearing DDA deposits

245

164

245

269

245

222

164

Interest on savings and NOW deposits

73

46

73

77

65

63

46

Interest on money market deposits

763

264

763

598

432

414

264

Interest on time deposits

2,931

1,091

2,931

2,784

2,677

1,513

1,091

Interest on Federal Home Loan Bank    

   advances and other borrowings

219

179

219

188

199

210

179

Interest on subordinated debt

238

238

238

244

243

241

238

     Total interest expense

4,469

1,982

4,469

4,160

3,861

2,663

1,982









Net interest income

9,348

6,775

9,348

8,922

7,964

7,508

6,775

Provision for loan losses

325

635

325

496

600

1,395

635

     Net interest income after provision

        for loan losses

9,023

6,140

9,023

8,426

7,364

6,113

6,140

OTHER INCOME:








Deposit account service charges

370

213

370

311

320

259

213

Bank owned life insurance income

105

106

105

107

105

109

106

Loan swap fee income

290

290

713

Other fee income

161

189

161

331

261

215

189

     Total other income

926

508

926

1,462

686

583

508

OTHER EXPENSES:








Salaries and employee benefits

3,860

2,749

3,860

3,267

3,018

2,811

2,749

Furniture and equipment expenses

385

381

385

534

493

451

381

Advertising and marketing

105

156

105

146

171

141

156

Occupancy expenses

213

151

213

220

206

159

151

Outside services

227

196

227

164

239

240

196

Administrative expenses

167

118

167

142

161

155

118

Other operating expenses

1,051

826

1,051

900

872

912

826

     Total other expenses

6,008

4,577

6,008

5,373

5,160

4,869

4,577









INCOME BEFORE INCOME TAXES

3,941

2,071

3,941

4,515

2,890

1,827

2,071









Income tax expense

694

385

694

846

539

324

385

NET INCOME

$  3,247

$  1,686

$   3,247

$   3,669

$   2,351

$   1,503

$   1,686

















Net income per common share,

   basic and diluted (1)

$    0.39

$    0.29

$     0.39

$     0.45

$     0.35

$     0.26

$     0.29

Weighted average number of shares,

   basic and diluted (1)

8,242,873

5,799,496

8,242,873

8,178,888

6,788,868

5,810,383

5,799,496









(1)     Amounts for all periods reflect the effect of the 5% stock dividend on April 30, 2018.

 

 


UNAUDITED LOAN, DEPOSIT AND BORROWING DETAIL

(Unaudited)

(In thousands)








March 31, 2019

December 31, 2018

March 31, 2018

Percentage Change


$ Amount

% of Total

$ Amount

% of Total

$ Amount

% of Total

Last 3 Mos

Last 12 Mos

LOANS:









Construction and land development
loans

$ 192,494

20.2%

$ 183,551

19.8%

$ 105,193

14.8%

4.9%

83.0%

Residential real estate loans

151,884

15.9%

149,628

16.2%

118,295

16.7%

1.5%

28.4%

Commercial real estate loans

409,522

42.9%

377,760

40.7%

278,355

39.2%

8.4%

47.1%

Commercial industrial loans

105,391

11.0%

114,221

12.3%

108,770

15.4%

-7.7%

-3.1%

Consumer loans

95,299

10.0%

102,277

11.0%

98,890

13.9%

-6.8%

-3.6%

       Total Gross Loans

$ 954,590

100.0%

$ 927,437

100.0%

$ 709,503

100.0%

2.9%

34.5%

Less: Allowance for loan losses

(9,189)


(8,831)


(6,334)




         Net deferred loan fees

(1,666)


(1,481)


(469)




  Net Loans

$ 943,735


$ 917,125


$ 702,700






















DEPOSITS:









Non-interest bearing demand deposits

$ 193,744

20.0%

$ 211,749

23.0%

$ 164,789

23.9%

-8.5%

17.6%

Interest-bearing demand deposits:









  Demand deposits

59,639

6.2%

60,588

6.6%

54,105

7.8%

-1.6%

10.2%

  Savings and NOW deposits

61,537

6.4%

51,371

5.6%

49,934

7.2%

19.8%

23.2%

  Money market accounts

147,655

15.3%

138,152

15.0%

118,531

17.2%

6.9%

24.6%

  Certificates of deposit









    $100,000 or more

465,605

48.1%

422,436

45.9%

277,799

40.2%

10.2%

67.6%

    Less than $100,000

38,647

4.0%

35,841

3.9%

25,775

3.7%

7.8%

49.9%

       Total Deposits 

$ 966,827

100.0%

$ 920,137

100.0%

$ 690,933

100.0%

5.1%

39.9%



















BORROWINGS:









Federal Home Loan Bank advances

30,000

67.0%

40,000

73.0%

64,129

81.3%

-25.0%

-53.2%

Subordinated debt

14,783

33.0%

14,776

27.0%

14,755

18.7%

0.0%

0.2%

       Total Borrowings

$      44,783

100.0%

$  54,776

100.0%

$   78,884

100.0%

18.2%

-43.2%










Total Deposits and Borrowings

$ 1,011,610


$ 974,913


$ 769,817


3.8%

31.4%










Core customer funding sources (1)

$   566,398

56.0%

$ 586,001

60.1%

$ 536,239

69.7%

-3.3%

5.6%

Brokered and listing service sources (2)

400,429

39.6%

334,136

34.3%

154,694

20.1%

19.8%

158.9%

Federal Home Loan Bank Advances

30,000

3.0%

40,000

4.1%

64,129

8.3%

-25.0%

-53.2%

Subordinated debt (3)

14,783

1.4%

14,776

1.5%

14,755

1.9%

0.0%

0.2%

       Total Funding Sources

$1,011,610

100.0%

$ 974,913

100.0%

$ 769,817

100.0%

3.8%

31.4%



















(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

(Unaudited)

(In thousands)



Three Months Ended March 31, 2019


Three Months Ended March 31, 2018


Average
Balance
 

Interest
Income/
Expense

Average
Yields/ Rate

(annualized)


Average
Balance
 

Interest
Income/
Expense

Average
Yields/ Rate

(annualized)

ASSETS:








Interest earning assets:








  Loans (1)

$      936,401

$    12,916

5.52%


$   681,232

$  8,316

4.88%

  Investment securities

68,550

556

3.24%


56,111

341

2.43%

  Federal funds and interest -








    bearing deposits

64,944

345

2.12%


30,117

100

1.33%

     Total interest earning assets

$   1,069,895

$    13,817

5.17%


$   767,460

$  8,757

4.56%

Other assets

36,788




31,711



Total assets

$   1,106,683




$   799,171











Liabilities and Stockholders' Equity:








Interest-bearing liabilities:








  Interest-bearing demand deposits

$     56,701

$       245

1.73%


$    51,240

$      164

1.28%

  Money market deposit accounts

143,825

763

2.12%


96,256

264

1.10%

  Savings and NOW deposits

58,616

73

0.50%


47,807

46

0.38%

  Time deposits

468,009

2,931

2.51%


307,343

1,091

1.42%

Total interest-bearing deposits

$    727,151

$   4,012

2.21%


$  502,646

$   1,565

1.24%









  Federal funds and repos purchased

139

1

2.88%


920

7

3.04%

  Subordinated debt

14,780

238

6.44%


14,752

238

6.45%

  FHLB borrowings

34,111

218

2.56%


44,026

172

1.56%

Total interest-bearing liabilities

$   776,181

$    4,469

2.30%


$  562,344

$   1,982

1.41%









Demand deposits and other liabilities

207,180




166,988



Total liabilities

$  983,361




$  729,332











Stockholders' Equity

123,322




69,839



Total Liabilities and Stockholders' Equity

$  1,106,683




$  799,171











Interest Rate Spread



2.87%




3.15%









Net Interest Income and Margin


$  9,348

3.50%



$  6,775

3.53%

















(1) Includes loans classified as non-accrual.

 

 

UNAUDITED AVERAGE BALANCE SHEETS, INTEREST AND RATES

(Unaudited)

(Dollars in thousands except per share data)




At or For Three Months Ended


 March 31,


2019

2018

   Per share Data and Shares Outstanding (1)



Earnings per share – (basic and diluted)

$                       0.39

$                       0.29

Tangible book value per share

$                     15.15

$                     12.75

Weighted average common shares (basic and diluted)

8,242,873

5,799,496

Common shares outstanding at end of period

8,249,759

5,533,605




   Performance Ratios



Return on average assets (annualized)

1.17%

0.84%

Return on average equity (annualized)

10.53%

9.66%

Yield on earning assets (annualized)

5.17%

4.56%

Cost of interest bearing liabilities (annualized)

2.30%

1.41%

Net interest spread

2.87%

3.15%

Net interest margin (annualized)

3.50%

3.53%

Noninterest income as a percentage of average assets (annualized)

0.33%

0.25%

Noninterest expense to average assets (annualized)

2.17%

2.29%

Efficiency ratio

58.48%

62.85%




   Asset Quality



Loans 30-89 days past due to total gross loans

0.01%

0.01%

Loans 90 days past due to total gross loans

0.00%

0.00%

Non-accrual loans to total gross loans

0.20%

0.27%

Non-performing assets

$                     1,973

$                     1,939

Non-performing assets to total assets

0.17%

0.23%

Allowance for loan losses to total gross loans

0.96%

0.89%

Allowance for loan losses to non-performing loans

4.66

3.27

Net loan charge-offs (recoveries)

$                         (33)

$                            7

Net charge-offs to average loans (annualized)

0.00%

0.00%

Troubled debt restructurings (total)



   Performing in accordance with modified terms

$                     1,502

$                     1,534

   Not performing in accordance with modified terms

$                     1,939

$                     1,939




   Regulatory Capital Ratios (Bank only)



Total risk-based capital ratio

13.45%

11.42%

Tier 1 risk-based capital ratio

12.61%

10.62%

Leverage ratio

12.38%

10.44%

Common equity tier 1 ratio

12.61%

10.62%




   Other information



Closing stock price

$                     21.60

$                     20.95

Tangible equity / tangible assets

10.91%

8.36%

Average tangible equity / average tangible assets

11.14%

8.74%

Number of full time equivalent employees

113

95

# Full service branch offices

6

6



(1)

Amounts for all periods presented are adjusted to reflect a 5% stock dividend effective April 30, 2018

 

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SOURCE MainStreet Bancshares, Inc.

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