Press Release

MainStreet Bancshares, Inc. Reports First Quarter Earnings

Company Release - 4/14/2020 8:00 AM ET

FAIRFAX, Va., April 14, 2020 /PRNewswire/ -- MainStreet Bancshares, Inc. (Nasdaq: MNSB) reported net income of $3.5 million for the first quarter of 2020, which represents a 1.04% return on average assets, and a 9.97% return on average equity, or $0.42 per share of common stock (basic and diluted) for the quarter-ended March 31, 2020.  

MainStreet Bank Headquarters 10089 Fairfax Blvd Fairfax, Virginia  22030 (PRNewsfoto/MainStreet Bancshares, Inc.)

Net interest income of $10.3 million and noninterest income of $1.4 million continued to trend favorably and consistently for the quarter ended March 31, 2020.  Loan loss provisions of $350,000 for the quarter ended March 31, 2020 were primarily driven by loan growth. 

Total assets were $1.3 billion and net loans were $1.1 billion as of March 31, 2020.  Asset quality remained solid with non-performing assets to total assets at 0.10% as of March 31, 2020.  Non-interest-bearing deposits were $241.0 million, representing just over 21% of total deposits at March 31, 2020.  Total deposits as of March 31, 2020 were $1.1 billion. Capital levels for the Company remain strong. 

As of March 31, 2020, the Company's tangible book value per share was $16.98, up 12.1% from $15.15 as of March 31, 2019.  According to Nasdaq, there were 12,093 trades during the quarter totaling 749,744 shares traded. The closing share price of the Company's common stock on March 31, 2020 was $16.76, or 98.7% of book value. The market cap was $138.4 million as of March 31, 2020.  In reaction to the significant drop in share price, the Company repurchased 60,000 shares (0.7% of shares outstanding) on March 13, 2020 at a price of $16.54 per share under its previously announced share repurchase program.  The Company does not intend to repurchase additional shares at this time.

COVID-19 Timeline


12/31/2019

1/23/2020

2/29/2020

3/13/2020

3/16/2020

WHO reports mysterious
illness in China

WHO declares global
health emergency

1st death reported in U.S.

President Trump declares
national emergency

MainStreet Bank adopts
work from home strategy

The coronavirus (COVID-19) changed from a relatively unknown status at the start of the year to "pandemic" status in the United States by mid-March.   The Company's first quarter performance was not significantly impacted by the effects of the coronavirus pandemic.

QUOTES: "We had a good first quarter, but from mid-March onward, we've been focused on preventative measures to help our customers," said Chris Brockett, President of MainStreet Bancshares, Inc. and MainStreet Bank. "Our team created meaningful loan forbearance programs for consumers, professionals and small businesses, with the goal of helping to preserve their liquidity.  And, when President Trump signed H.R 748, The CARES Act, into law on March 26th, our team worked around the clock to implement the Paycheck Protection Program for our customers."

"Our technology has been a gamechanger," said Jeff W. Dick, Chairman & CEO of MainStreet Bancshares, Inc. and MainStreet Bank.  "We made the decision to work from home on a Sunday and the next day, Monday March 16th, all but the limited branch team were up and working from home.  Since most of our customers were already comfortable using our online banking platform, we temporarily closed two of our seven locations and reduced the hours of the remaining locations.  We set the loan forbearance documents and Paycheck Protection Program documents up for DocuSign digital signature(s) for ease of execution, and we hold all meetings by video calls to keep our teams 'in the know'.  Finally, we increased the average hourly wage of our dedicated customer-facing branch staff by upwards of 50% as they are literally on the front line of this pandemic."

ABOUT MAINSTREET BANK:  MainStreet operates seven branches in Herndon, Fairfax, Fairfax City, McLean, Leesburg, Clarendon and Washington D.C. 

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

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

MainStreet Bank has a robust line of business and professional lending products, including government contracting lines of credit, commercial lines and term loans, residential and commercial construction and commercial real estate.  MainStreet Bank is an SBA Preferred Lender, offering SBA 7(a) 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 up to $55 million in 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)

 




March 31,
2020



December 31,
2019



September 30,
2019



June 30, 2019



March 31,
2019


ASSETS





















Cash and cash equivalents





















Cash and due from banks


$

62,098



$

53,376



$

52,580



$

44,976



$

29,741


Federal funds sold



10,677




11,468




19,432




19,835




30,034


Total cash and cash equivalents



72,775




64,844




72,012




64,811




59,775


Investment securities available for sale, at fair value



102,191




92,791




88,198




60,079




69,308


Investment securities held to maturity, at carrying value



23,878




23,914




24,410




24,946




25,487


Restricted equity securities, at cost



5,041




6,157




4,882




5,307




5,732


Loans, net of allowance for loan losses of $9,898, $9,584, $9,370,

$9,185, and $9,189, respectively



1,059,628




1,030,425




992,609




983,574




943,735


Premises and equipment, net



14,666




14,153




14,109




14,208




14,226


Other real estate owned, net



1,207




1,207




1,207




1,207





Accrued interest and other receivables



4,809




5,420




5,373




5,681




5,644


Bank owned life insurance



24,761




24,562




19,381




14,275




14,169


Other assets



20,786




13,885




11,414




9,945




7,824


Total Assets


$

1,329,742



$

1,277,358



$

1,233,595



$

1,184,033



$

1,145,900


LIABILITIES AND STOCKHOLDERS' EQUITY





















Liabilities:





















Non-interest bearing deposits


$

240,979



$

252,707



$

218,087



$

201,405



$

193,744


Interest-bearing DDA deposits



16,846




53,707




54,438




65,117




59,639


Savings and NOW deposits



60,454




63,015




63,746




61,945




61,537


Money market deposits



265,443




141,337




125,716




115,641




147,655


Time deposits



559,489




560,857




601,896




566,292




504,071


Total deposits



1,143,211




1,071,623




1,063,883




1,010,400




966,646


Federal Home Loan Bank advances and other borrowings



10,000




40,000




10,000




20,000




30,000


Subordinated debt



14,812




14,805




14,798




14,791




14,783


Other liabilities



21,424




13,896




11,697




9,806




9,488


Total Liabilities



1,189,447




1,140,324




1,100,378




1,054,997




1,020,917


Stockholders' Equity:





















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

   shares; issued and outstanding, 8,260,231 shares at March 31, 2020

   including 155,742 unvested shares, 8,260,259 shares at

   December 31, 2019 including 160,961 unvested shares,

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

   unvested shares, 8,250,259 at June 30, 2019 including
 153,586 unvested shares, 8,249,759 shares at March 31, 2019         
  including 153,086 unvested shares.



32,418




32,397




32,397




32,387




32,387


Capital surplus



74,482




75,117




74,860




74,609




74,353


Retained earnings



32,567




29,097




25,535




21,826




18,395


Accumulated other comprehensive gain (loss)



828




423




425




214




(152)


Total Stockholders' Equity



140,295




137,034




133,217




129,036




124,983


Total Liabilities and Stockholders' Equity


$

1,329,742



$

1,277,358



$

1,233,595



$

1,184,033



$

1,145,900


 

 

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME INFORMATION

(Unaudited)

(In thousands, except share and per share data)




Year-to-Date



Three Months Ended




March 31,
2020



March 31,
2019



March 31,
2020



December 31,
2019



September 30,
2019



June 30,
2019



March 31,
2019


INTEREST INCOME:





























Interest and fees on loans


$

14,220



$

12,916



$

14,220



$

14,223



$

14,192



$

13,877



$

12,916


Interest on investment securities



501




556




501




534




497




615




556


Interest on federal funds sold



395




345




395




271




412




375




345


Total interest income



15,116




13,817




15,116




15,028




15,101




14,867




13,817


INTEREST EXPENSE:





























Interest on interest bearing DDA deposits



117




245




117




195




275




283




245


Interest on savings and NOW deposits



64




73




64




71




71




74




73


Interest on money market deposits



778




763




778




489




539




587




763


Interest on time deposits



3,566




2,931




3,566




3,730




3,900




3,635




2,931


Interest on Federal Home Loan Bank

   advances and other borrowings



50




219




50




92




76




162




219


Interest on subordinated debt



241




238




241




244




244




241




238


Total interest expense



4,816




4,469




4,816




4,821




5,105




4,982




4,469


Net interest income



10,300




9,348




10,300




10,207




9,996




9,885




9,348


Provision for loan losses



350




325




350




358




185




750




325


Net interest income after provision
for loan losses



9,950




9,023




9,950




9,849




9,811




9,135




9,023


NON-INTEREST INCOME:





























Deposit account service charges



487




370




487




460




392




446




370


Bank owned life insurance income



199




105




199




181




106




106




105


Loan swap fee income



403




290




403




111




407




181




290


Net gain on available-for-sale securities


















5





Net gains on sale of loans















303




263





Other fee income



325




161




325




407




228




340




161


Total other income



1,414




926




1,414




1,158




1,436




1,341




926


NON-INTEREST EXPENSES:





























Salaries and employee benefits



4,433




3,860




4,433




4,179




3,890




3,847




3,860


Furniture and equipment expenses



454




385




454




457




451




435




385


Advertising and marketing



256




105




256




375




235




191




105


Occupancy expenses



267




213




267




221




214




217




213


Outside services



276




227




276




169




306




161




227


Administrative expenses



164




167




164




198




190




176




167


Other operating expenses



1,293




1,051




1,293




1,104




1,203




1,150




1,051


Total other expenses



7,143




6,008




7,143




6,703




6,489




6,177




6,008


INCOME BEFORE INCOME TAXES



4,221




3,941




4,221




4,304




4,758




4,299




3,941


Income tax expense



751




694




751




742




1,049




868




694


NET INCOME


$

3,470



$

3,247



$

3,470



$

3,562



$

3,709



$

3,431



$

3,247


Net income per common share,

   basic and diluted


$

0.42



$

0.39



$

0.42



$

0.43



$

0.45



$

0.42



$

0.39


Weighted average number of shares,

   basic and diluted



8,287,317




8,242,873




8,287,317




8,260,259




8,251,672




8,250,210




8,242,873


 

 

UNAUDITED LOAN, DEPOSIT AND BORROWING DETAIL
(Unaudited)
(In thousands)




March 31, 2020



December 31, 2019



March 31, 2019



Percentage Change




$ Amount



% of

Total



$ Amount



% of

Total



$ Amount



% of

Total



Last

3 Mos



Last

12 Mos


LOANS:

































Construction and land development
loans


$

286,756




26.7

%


$

272,620




26.2

%


$

192,494




20.2

%



5.2

%



49.0

%

Residential real estate loans



149,173




13.9

%



150,848




14.5

%



151,884




15.9

%



-1.1

%



-1.8

%

Commercial real estate loans



449,786




42.0

%



421,870




40.5

%



409,522




42.9

%



6.6

%



9.8

%

Commercial industrial loans



118,258




11.0

%



121,225




11.6

%



105,391




11.0

%



-2.4

%



12.2

%

Consumer loans



68,159




6.4

%



75,583




7.2

%



95,299




10.0

%



-9.8

%



-28.5

%

Total Gross Loans


$

1,072,132




100.0

%


$

1,042,146




100.0

%


$

954,590




100.0

%



2.9

%



12.3

%

Less: Allowance for loan losses



(9,898)








(9,584)








(9,189)














Net deferred loan fees



(2,606)








(2,137)








(1,666)














Net Loans


$

1,059,628







$

1,030,425







$

943,735














DEPOSITS:

































Non-interest bearing demand deposits


$

240,979




21.1

%


$

252,707




23.6

%


$

193,744




20.0

%



-4.6

%



24.4

%

Interest-bearing demand deposits:

































Demand deposits



16,846




1.5

%



53,707




5.0

%



59,639




6.2

%



-68.6

%



-71.8

%

Savings and NOW deposits



60,454




5.3

%



63,015




5.9

%



61,537




6.4

%



-4.1

%



-1.8

%

Money market accounts



265,443




23.2

%



141,337




13.1

%



147,655




15.3

%



87.8

%



79.8

%

Certificates of deposit $250,000 or
more



213,409




18.7

%



217,200




20.3

%



124,921




12.9

%



-1.7

%



70.8

%

Certificates of deposit less than
$250,000



346,080




30.2

%



343,657




32.1

%



379,150




39.2

%



0.7

%



-8.7

%

Total Deposits


$

1,143,211




100.0

%


$

1,071,623




100.0

%


$

966,646




100.0

%



6.7

%



18.3

%

BORROWINGS:

































Federal Home Loan Bank advances



10,000




40.3

%



40,000




73.0

%



30,000




67.0

%



-75.0

%



-66.7

%

Subordinated debt



14,812




59.7

%



14,805




27.0

%



14,783




33.0

%



0.0

%



0.2

%

Total Borrowings


$

24,812




100.0

%


$

54,805




100.0

%


$

44,783




100.0

%



-54.7

%



-44.6

%

Total Deposits and Borrowings


$

1,168,023







$

1,126,428







$

1,011,429








3.7

%



15.5

%


































Core customer funding sources (1)


$

785,661




67.2

%


$

654,213




58.1

%


$

566,398




56.0

%



20.1

%



38.7

%

Brokered and listing service sources (2)



357,550




30.6

%



417,410




37.1

%



400,248




39.6

%



-14.3

%



-10.7

%

Federal Home Loan Bank advances



10,000




0.9

%



40,000




3.6

%



30,000




3.0

%



-75.0

%



-66.7

%

Subordinated debt (3)



14,812




1.3

%



14,805




1.2

%



14,783




1.4

%



0.0

%



0.2

%

Total Funding Sources


$

1,168,023




100.0

%


$

1,126,428




100.0

%


$

1,011,429




100.0

%



3.7

%



15.5

%


(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 March 31, 2020



For the three months ended March 31, 2019




Average

Balance



Interest

Income/

Expense



Average

Yields/ Rate

(annualized)



Average

Balance



Interest

Income/

Expense



Average

Yields/ Rate

(annualized)


ASSETS:

























Interest earning assets:

























Loans (1)


$

1,058,738



$

14,220




5.37

%


$

936,401



$

12,916




5.52

%

Investment securities



73,838




501




2.71

%



68,550




556




3.24

%

Federal funds and interest-bearing deposits



136,314




395




1.16

%



64,944




345




2.12

%

Total interest earning assets


$

1,268,890



$

15,116




4.77

%


$

1,069,895



$

13,817




5.17

%

Other assets



59,363












36,788










Total assets


$

1,328,253











$

1,106,683










Liabilities and Stockholders' Equity:

























Interest-bearing liabilities:

























Interest-bearing demand deposits


$

33,558



$

117




1.39

%


$

56,701



$

245




1.73

%

Money market deposit accounts



230,158




778




1.35

%



143,825




763




2.12

%

Savings and NOW deposits



62,699




64




0.41

%



58,616




73




0.50

%

Time deposits



567,112




3,566




2.52

%



468,009




2,931




2.51

%

Total interest-bearing deposits


$

893,527



$

4,525




2.03

%


$

727,151



$

4,012




2.21

%

Federal funds and repos purchased











$

139



$

1




2.88

%

Subordinated debt



14,809




241




6.51

%



14,780




238




6.44

%

FHLB borrowings



10,330




50




1.94

%



34,111




218




2.56

%

Total interest-bearing liabilities


$

918,666



$

4,816




2.10

%


$

776,181



$

4,469




2.30

%

Demand deposits and other liabilities



270,422












207,180










Total liabilities


$

1,189,088











$

983,361










Stockholders' Equity



139,165












123,322










Total Liabilities and Stockholders' Equity


$

1,328,253











$

1,106,683










Interest Rate Spread











2.67

%











2.87

%

Net Interest Income and Margin






$

10,300




3.25

%






$

9,348




3.50

%


(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




March 31,




2020



2019


Per share Data and Shares Outstanding









Earnings per share (basic and diluted)


$

0.42



$

0.39


Tangible book value per share


$

16.98



$

15.15


Weighted average common shares (basic and diluted)



8,287,317




8,242,873


Common shares outstanding at end of period



8,260,231




8,249,759


Performance Ratios









Return on average assets (annualized)



1.04

%



1.17

%

Return on average equity (annualized)



9.97

%



10.53

%

Yield on earning assets (annualized)



4.77

%



5.17

%

Cost of interest bearing liabilities (annualized)



2.10

%



2.30

%

Net interest spread



2.67

%



2.87

%

Net interest margin (annualized)



3.25

%



3.50

%

Noninterest income as a percentage of average assets (annualized)



0.43

%



0.33

%

Noninterest expense to average assets (annualized)



2.15

%



2.17

%

Efficiency ratio



60.98

%



58.48

%

Asset Quality









Loans 30-89 days past due to total gross loans



0.19

%



0.01

%

Loans 90 days past due to total gross loans



0.01

%



0.00

%

Non-accrual loans to total gross loans



0.01

%



0.20

%

Other real estate owned


$

1,207



$


Non-performing assets


$

1,265



$

1,973


Non-performing assets to total assets



0.10

%



0.17

%

Allowance for loan losses to total gross loans



0.93

%



0.96

%

Allowance for loan losses to non-performing assets



7.82




4.66


Net loan charge-offs (recoveries)


$

36



$

(33)


Net charge-offs to average loans (annualized)



0.01

%



0.00

%

Troubled debt restructurings (total)









Performing in accordance with modified terms


$

1,477



$

1,502


Not performing in accordance with modified terms


$



$

1,939


Regulatory Capital Ratios (Bank only) (1)









Total risk-based capital ratio



12.44

%



13.45

%

Tier 1 risk-based capital ratio



11.68

%



12.61

%

Leverage ratio



11.45

%



12.38

%

Common equity tier 1 ratio



11.68

%



12.61

%

Other information









Closing stock price


$

16.76



$

21.60


Tangible equity / tangible assets



10.55

%



10.91

%

Average tangible equity / average tangible assets



10.48

%



11.14

%

Number of full time equivalent employees



125




113


# Full service branch offices



7




6



(1) Regulatory capital ratios as of March 31, 2020 are preliminary.

 

 

 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/mainstreet-bancshares-inc-reports-first-quarter-earnings-301039827.html

SOURCE MainStreet Bancshares, Inc.

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