Press Release

MainStreet Bancshares, Inc. Reports Record Annual Earnings for 2019

Company Release - 1/21/2020 8:00 AM ET

FAIRFAX, Va., Jan. 21, 2020 /PRNewswire/ -- MainStreet Bancshares, Inc. (Nasdaq: MNSB) reported net income of $14.0 million for 2019, which represents a 1.19% return on average assets, a 10.79% return on average equity and which equates to $1.69 per share of common stock.  

MainStreet Bancshares, Inc. Logo

Net interest income was $39.4 million for the twelve months ended December 31, 2019, up 27% from the twelve months ended December 31, 2018.  Noninterest income of $4.9 million for the year ended December 31, 2019 saw an increase of 50% from the year ending December 31, 2018.  The increase is due to an increase in deposit account fees, interest rate swap fees related to loan transactions, and gains recorded for the sale of the guaranteed portion of Small Business Administration ("SBA") loans.  We anticipate that these sources should continue in a similar manner going forward.

Loan loss provisions of $1.6 million for the year ended December 31, 2019 are down 48% from the year ended December 31, 2018. The decrease in loan loss provisions was consistent with the Company's strategic decision to moderate net loan growth to 12% for 2019 as compared to 40% net loan growth in 2018. 

Total assets were $1.3 billion at December 31, 2019, up 16% from the previous year-end. Net loans at December 31, 2019 total $1.0 billion and asset quality remains solid with non-performing assets to total assets at 0.09% as of December 31, 2019.  Capital levels for the Company remain strong. 

Non-interest-bearing deposits increased to $252.7 million as of December 31, 2019, up 19% from December 31, 2018.  Non-interest-bearing deposits represent 24% of total deposits at December 31, 2019.  Total deposits as of December 31, 2019 were $1.1 billion an increase of $152.1 million from December 31, 2018.

As of December 31, 2019, the Company's tangible book value per share was $16.59, up 12% from $14.83 as of December 31, 2018.  According to Nasdaq, there were 7,746 trades during the quarter totaling 792,485 shares traded. The closing share price was $23.00, or 139% of book value. The market cap was $190.0 million as of December 31, 2019.

QUOTES: "We had a fantastic year of good growth and opportunity," says Chris Brockett, President of MainStreet Bancshares, Inc. and MainStreet Bank. "We are excited to bring the branch at 1130 Connecticut Avenue in DC online in February and look forward to developing more business opportunities with some of our new DC partnerships."

"The current rate environment is challenging but it is providing good opportunities for business expansion and development in our market," says Jeff W. Dick, Chairman and CEO of MainStreet Bancshares, Inc. and MainStreet Bank.  "We've been able to sustain a good net interest margin and we are intensely focused on improving both our net interest margin and fee income through the generation of new core deposits and building on our base of transactional payment processing businesses."

ABOUT MAINSTREET BANK:  MainStreet operates six branches in Herndon, Fairfax, Fairfax City, McLean, Leesburg and Clarendon.  A seventh branch on 1130 Connecticut Avenue in Washington, D.C. will open in February 2020. 

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, 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, 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

(Unaudited)

(In thousands, except share data)




December 31,
2019



September 30,
2019



June 30, 2019



March 31,
2019



December 31,
2018


ASSETS





















Cash and cash equivalents





















Cash and due from banks


$

53,376



$

52,580



$

44,976



$

29,741



$

27,886


Federal funds sold



11,468




19,432




19,835




30,034




30,190


Total cash and cash equivalents



64,844




72,012




64,811




59,775




58,076


Investment securities available for sale, at fair value



92,791




88,198




60,079




69,308




55,979


Investment securities held to maturity, at carrying value



23,914




24,410




24,946




25,487




26,178


Restricted equity securities, at cost



6,157




4,882




5,307




5,732




5,894


Loans, net of allowance for loan losses of $9,584, $9,370, $9,185,

$9,189, and $8,831, respectively



1,030,425




992,609




983,574




943,735




917,125


Premises and equipment, net



14,153




14,109




14,208




14,226




14,222


Other real estate owned, net



1,207




1,207




1,207








Accrued interest and other receivables



5,420




5,373




5,681




5,644




5,148


Bank owned life insurance



24,562




19,381




14,275




14,169




14,064


Other assets



14,516




12,095




10,676




8,005




3,927


Total Assets


$

1,277,989



$

1,234,276



$

1,184,764



$

1,146,081



$

1,100,613


LIABILITIES AND STOCKHOLDERS' EQUITY





















Liabilities:





















Non-interest bearing deposits


$

252,707



$

218,087



$

201,405



$

193,744



$

211,749


Interest-bearing DDA deposits



53,707




54,438




65,117




59,639




60,588


Savings and NOW deposits



63,015




63,746




61,945




61,537




51,371


Money market deposits



141,337




125,716




115,641




147,655




138,153


Time deposits



561,488




602,577




567,023




504,252




458,276


Total deposits



1,072,254




1,064,564




1,011,131




966,827




920,137


Federal Home Loan Bank advances and other borrowings



40,000




10,000




20,000




30,000




40,000


Subordinated debt



14,805




14,798




14,791




14,783




14,776


Other liabilities



13,896




11,697




9,806




9,488




4,449


Total Liabilities



1,140,955




1,101,059




1,055,728




1,021,098




979,362


Stockholders' Equity:





















Common stock, par value $4 per share, authorized 10,000,000

   shares; issued and outstanding, 8,260,259 shares at December 31,
2019

   including 160,961 unvested shares, 8,260,259 shares at September
30, 2019

   including 160,961 unvested shares, 8,250,259 shares at June 30,
2019

   including 153,586 unvested shares, 8,249,759 at March 31, 2019

   including 153,086 unvested shares, 8,177,978 shares at

   December 31, 2018 including 133,869 unvested shares.



32,397




32,397




32,387




32,387




32,177


Capital surplus



75,117




74,860




74,609




74,353




74,256


Retained earnings



29,097




25,535




21,826




18,395




15,185


Accumulated other comprehensive gain (loss)



423




425




214




(152)




(367)


Total Stockholders' Equity



137,034




133,217




129,036




124,983




121,251


Total Liabilities and Stockholders' Equity


$

1,277,989



$

1,234,276



$

1,184,764



$

1,146,081



$

1,100,613


 

 

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME INFORMATION

(Unaudited)

(In thousands, except share and per share data)




Year-to-Date



Three Months Ended




December 31,
2019



December 31,
2018



December 31,
2019



September 30,
2019



June 30,
2019



March 31,
2019



December 31,
2018


INTEREST INCOME:





























Interest and fees on loans


$

55,208



$

41,270



$

14,223



$

14,192



$

13,877



$

12,916



$

12,244


Interest on investment securities



2,202




1,470




534




497




615




556




381


Interest on federal funds sold



1,403




1,095




271




412




375




345




457


Total interest income



58,813




43,835




15,028




15,101




14,867




13,817




13,082


INTEREST EXPENSE:





























Interest on interest bearing DDA deposits



998




900




195




275




283




245




269


Interest on savings and NOW deposits



289




251




71




71




74




73




77


Interest on money market deposits



2,379




1,708




489




539




587




763




598


Interest on time deposits



14,196




8,065




3,730




3,900




3,635




2,931




2,784


Interest on Federal Home Loan Bank

   advances and other borrowings



549




776




92




76




162




219




188


Interest on subordinated debt



966




966




244




244




241




238




244


Total interest expense



19,377




12,666




4,821




5,105




4,982




4,469




4,160


Net interest income



39,436




31,169




10,207




9,996




9,885




9,348




8,922


Provision for loan losses



1,618




3,126




358




185




750




325




496


Net interest income after provision
    for loan losses



37,818




28,043




9,849




9,811




9,135




9,023




8,426


NON-INTEREST INCOME:





























Deposit account service charges



1,668




1,103




460




392




446




370




311


Bank owned life insurance income



498




427




180




106




106




105




107


Loan swap fee income



989




713




111




407




181




290




713


Net gain on available-for-sale securities



5













5








Net gains on sale of loans



566










303




263








Other fee income



1,136




995




407




228




340




161




331


Total other income



4,862




3,238




1,158




1,436




1,341




926




1,462


NON-INTEREST EXPENSES:





























Salaries and employee benefits



15,776




11,845




4,179




3,890




3,847




3,860




3,267


Furniture and equipment expenses



1,728




1,859




457




451




435




385




534


Advertising and marketing



906




614




375




235




191




105




146


Occupancy expenses



864




736




221




214




217




213




220


Outside services



863




839




169




306




161




227




164


Administrative expenses



731




575




198




190




176




167




142


Other operating expenses



4,508




3,510




1,104




1,203




1,150




1,051




900


Total other expenses



25,376




19,978




6,703




6,489




6,177




6,008




5,373


INCOME BEFORE INCOME TAXES



17,304




11,303




4,304




4,758




4,299




3,941




4,515


Income tax expense



3,354




2,094




742




1,049




868




694




846


NET INCOME


$

13,950



$

9,209



$

3,562



$

3,709



$

3,431



$

3,247



$

3,669


Net income per common share,

   basic and diluted (1)


$

1.69



$

1.38



$

0.43



$

0.45



$

0.42



$

0.39



$

0.45


Weighted average number of shares,

   basic and diluted (1)



8,248,284




6,652,979




8,260,259




8,251,672




8,250,210




8,242,873




8,178,888



(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)




December 31, 2019



September 30, 2019



December 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


$

272,620




26.2

%


$

207,441




20.7

%


$

183,551




19.8

%



31.4

%



48.5

%

Residential real estate loans



150,848




14.5

%



162,801




16.2

%



149,628




16.2

%



-7.3

%



0.8

%

Commercial real estate loans



421,870




40.5

%



434,735




43.3

%



377,760




40.7

%



-3.0

%



11.7

%

Commercial industrial loans



121,225




11.6

%



115,902




11.5

%



114,221




12.3

%



4.6

%



6.1

%

Consumer loans



75,583




7.2

%



83,013




8.3

%



102,277




11.0

%



-9.0

%



-26.1

%

Total Gross Loans


$

1,042,146




99.9

%


$

1,003,892




100.0

%


$

927,437




100.0

%



3.8

%



12.4

%

Less: Allowance for loan losses



(9,584)








(9,370)








(8,831)














Net deferred loan fees



(2,137)








(1,913)








(1,481)














Net Loans


$

1,030,425







$

992,609







$

917,125














DEPOSITS:

































Non-interest bearing demand deposits


$

252,707




23.6

%


$

218,087




20.5

%


$

211,749




23.0

%



15.9

%



19.3

%

Interest-bearing demand deposits:

































Demand deposits



53,707




5.0

%



54,438




5.1

%



60,588




6.6

%



-1.3

%



-11.4

%

Savings and NOW deposits



63,015




5.9

%



63,746




6.0

%



51,371




5.6

%



-1.1

%



22.7

%

Money market accounts



141,337




13.2

%



125,716




11.8

%



138,152




15.0

%



12.4

%



2.3

%

Certificates of deposit $250,000 or
more



211,935




19.8

%



239,719




22.5

%



111,325




12.1

%



-11.6

%



90.4

%

Certificates of deposit less than
$250,000



349,553




32.5

%



362,858




34.1

%



346,952




37.7

%



-3.7

%



0.7

%

Total Deposits


$

1,072,254




100.0

%


$

1,064,564




100.0

%


$

920,137




100.0

%



0.7

%



16.5

%

BORROWINGS:

































Federal Home Loan Bank advances



40,000




73.0

%



10,000




57.5

%



40,000




73.0

%



300.0

%



0.0

%

Subordinated debt



14,805




27.0

%



14,798




42.5

%



14,776




27.0

%



0.0

%



0.2

%

Total Borrowings


$

54,805




100.0

%


$

24,798




100.0

%


$

54,776




100.0

%



121.0

%



0.1

%

Total Deposits and Borrowings


$

1,127,059







$

1,089,362







$

974,913








3.5

%



15.6

%


































Core customer funding sources (1)


$

654,213




58.1

%


$

655,631




60.2

%


$

586,001




60.1

%



-0.2

%



11.6

%

Brokered and listing service sources (2)



418,041




37.1

%



408,933




37.5

%



334,136




34.3

%



2.2

%



25.1

%

Federal Home Loan Bank advances



40,000




3.5

%



10,000




0.9

%



40,000




4.1

%



300.0

%



0.0

%

Subordinated debt (3)



14,805




1.3

%



14,798




1.4

%



14,776




1.5

%



0.0

%



0.2

%

Total Funding Sources


$

1,127,059




100.0

%


$

1,089,362




100.0

%


$

974,913




100.0

%



3.5

%



15.6

%


(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)




For the three months ended December 31, 2019



For the three months ended December 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)


$

1,023,614



$

14,223




5.56

%


$

893,352



$

12,244




5.48

%

Investment securities



71,387




534




2.99

%



55,642




381




2.74

%

Federal funds and interest-bearing deposits



74,519




271




1.45

%



90,092




457




2.03

%

Total interest earning assets


$

1,169,520



$

15,028




5.14

%


$

1,039,086



$

13,082




5.03

%

Other assets



55,251












37,855










Total assets


$

1,224,771











$

1,076,941










Liabilities and Stockholders' Equity:

























Interest-bearing liabilities:

























Interest-bearing demand deposits


$

54,176



$

195




1.44

%


$

58,233



$

269




1.85

%

Money market deposit accounts



134,011




489




1.46

%



130,892




598




1.83

%

Savings and NOW deposits



63,916




71




0.44

%



52,249




77




0.59

%

Time deposits



570,794




3,730




2.61

%



470,738




2,784




2.37

%

Total interest-bearing deposits


$

822,897



$

4,485




2.18

%


$

712,112



$

3,728




2.09

%

Federal funds and repos purchased



11




-




0.00

%


$

32



$

-




0.00

%

Subordinated debt



14,802




244




6.59

%



14,773




244




6.61

%

FHLB borrowings



15,370




92




2.39

%



30,826




188




2.44

%

Total interest-bearing liabilities


$

853,080



$

4,821




2.26

%


$

757,743



$

4,160




2.19

%

Demand deposits and other liabilities



236,396












198,365










Total liabilities


$

1,089,476











$

956,108










Stockholders' Equity



135,295












120,833










Total Liabilities and Stockholders' Equity


$

1,224,771











$

1,076,941










Interest Rate Spread











2.88

%











2.84

%

Net Interest Income and Margin






$

10,207




3.49

%






$

8,922




3.43

%


(1)  Includes loans classified as non-accrual.

 

 

UNAUDITED AVERAGE BALANCE SHEETS, INTEREST AND RATES

(Unaudited)

(In thousands)




For the year ended December 31, 2019



For the year ended December 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)


$

984,014



$

55,208




5.61

%


$

795,130



$

41,270




5.19

%

Investment securities



71,149




2,202




3.09

%



55,219




1,470




2.66

%

Federal funds and interest-bearing deposits



72,643




1,403




1.93

%



63,536




1,095




1.72

%

Total interest earning assets


$

1,127,806



$

58,813




5.21

%


$

913,885



$

43,835




4.80

%

Other assets



45,282












35,159










Total assets


$

1,173,088











$

949,044










Liabilities and Stockholders' Equity:

























Interest-bearing liabilities:

























Interest-bearing demand deposits


$

56,675



$

998




1.76

%


$

57,357



$

900




1.57

%

Money market deposit accounts



129,606




2,379




1.84

%



115,846




1,708




1.47

%

Savings and NOW deposits



62,047




289




0.47

%



50,509




251




0.50

%

Time deposits



544,084




14,196




2.61

%



401,259




8,065




2.01

%

Total interest-bearing deposits


$

792,412



$

17,862




2.25

%


$

624,971



$

10,924




1.75

%

Federal funds and repos purchased



37




1




2.70

%



463




12




2.59

%

Subordinated debt



14,791




966




6.53

%



14,762




966




6.54

%

FHLB borrowings



21,162




548




2.59

%



39,042




764




1.96

%

Total interest-bearing liabilities


$

828,402



$

19,377




2.34

%


$

679,238



$

12,666




1.86

%

Demand deposits and other liabilities



215,405












181,098










Total liabilities


$

1,043,807











$

860,336










Stockholders' Equity



129,281












88,708










Total Liabilities and Stockholders' Equity


$

1,173,088











$

949,044










Interest Rate Spread











2.88

%











2.94

%

Net Interest Income and Margin






$

39,436




3.50

%






$

31,169




3.41

%


(1) Includes loans classified as non-accrual.

 

 

UNAUDITED SUMMARY FINANCIAL DATA

(Unaudited)

(Dollars in thousands except per share data)




At or For the Three Months Ended


At or For the Year Ended




December 31,


December 31,




2019



2018


2019



2018


Per share Data and Shares Outstanding (1)
















Earnings per share – (basic and diluted)


$

0.43



$

0.45


$

1.69



$

1.38


Tangible book value per share


$

16.59



$

14.83


$

16.59



$

14.83


Weighted average common shares (basic and diluted)



8,260,259




8,178,888



8,251,302




6,652,979


Common shares outstanding at end of period



8,260,259




8,177,978



8,260,259




8,177,978


Performance Ratios
















Return on average assets (annualized)



1.16

%



1.36

%


1.19

%



0.97

%

Return on average equity (annualized)



10.53

%



12.15

%


10.79

%



10.38

%

Yield on earning assets (annualized)



5.14

%



5.03

%


5.21

%



4.80

%

Cost of interest bearing liabilities (annualized)



2.26

%



2.19

%


2.34

%



1.86

%

Net interest spread



2.88

%



2.84

%


2.88

%



2.94

%

Net interest margin (annualized)



3.49

%



3.43

%


3.50

%



3.41

%

Noninterest income as a percentage of average assets (annualized)



0.38

%



0.54

%


0.41

%



0.34

%

Noninterest expense to average assets (annualized)



2.19

%



2.00

%


2.16

%



2.11

%

Efficiency ratio



58.98

%



51.75

%


57.28

%



58.07

%

Asset Quality
















Loans 30-89 days past due to total gross loans



0.03

%



0.01

%


0.03

%



0.01

%

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

%



0.21

%


0.00

%



0.21

%

Other real estate owned


$

1,207



$


$

1,207



$


Non-performing assets


$

1,207



$

1,939


$

1,207



$

1,939


Non-performing assets to total assets



0.09

%



0.18

%


0.09

%



0.18

%

Allowance for loan losses to total gross loans



0.92

%



0.95

%


0.92

%



0.95

%

Allowance for loan losses to non-performing assets



7.94




4.53



7.94




4.53


Net loan charge-offs (recoveries)


$

144



$

1


$

865



$

1


Net charge-offs to average loans (annualized)



0.06

%



0.00

%


0.09

%



0.00

%

Troubled debt restructurings (total)
















Performing in accordance with modified terms


$

1,482



$

1,510


$

1,482



$

1,510


Not performing in accordance with modified terms


$



$

1,939


$



$

1,939


Regulatory Capital Ratios (Bank only) (2)
















Total risk-based capital ratio



13.74

%



13.75

%


13.74

%



13.75

%

Tier 1 risk-based capital ratio



12.91

%



12.90

%


12.91

%



12.90

%

Leverage ratio



12.65

%



12.41

%


12.65

%



12.41

%

Common equity tier 1 ratio



12.91

%



12.90

%


12.91

%



12.90

%

Other information
















Closing stock price


$

23.00



$

17.06


$

23.00



$

17.06


Tangible equity / tangible assets



10.73

%



11.02

%


10.73

%



11.02

%

Average tangible equity / average tangible assets



11.05

%



11.22

%


11.02

%



9.35

%

Number of full time equivalent employees



126




110



126




110


# Full service branch offices



6




6



6




6



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

(2) Regulatory capital ratios as of December 31, 2019 are preliminary.

 

Contact:
Jeff W. Dick
(703) 481-4567

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/mainstreet-bancshares-inc-reports-record-annual-earnings-for-2019-300989941.html

SOURCE MainStreet Bancshares, Inc.

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