Press Release

MainStreet Bancshares, Inc. Reports Record Third Quarter Earnings

Company Release - 10/20/2020 8:00 AM ET

FAIRFAX, Va., Oct. 20, 2020 /PRNewswire/ -- MainStreet Bancshares, Inc. (Nasdaq: MNSB & MNSBP), the holding company for MainStreet Bank, reported record earnings of $5.2 million for the third quarter of 2020.  The quarter was propelled by $2.9 million of non-interest income and a favorable funding trend that produced $11.9 million of net interest income for the quarter.

MainStreet Bancshares, Inc. Logo

We're doing everything we can to work with our customers during this pandemic-induced recession.

Year-to-date September 30, 2020 the Company reported net income of $8.0 million, which represents a 0.74% return on average assets and 7.46% return on average equity, or $0.97 per share of common stock (basic and diluted).  Net interest income and noninterest income for the nine months ended September 30, 2020 increased to $32.9 million and $5.6 million, respectively. Net interest income and noninterest income for the nine months ended September 30, 2020 increased 12.6% and 50.9%, respectively, over the same period in 2019. 

The Company collected $5.8 million from the Paycheck Protection Program (PPP), with $1.2 million realized during the nine months ended September 30, 2020. 

Total assets were $1.6 billion and net loans were $1.3 billion as of September 30, 2020, which included $173.1 million in loans related to the PPP.  Asset quality remains strong with non-performing assets representing only 0.17% of total assets as of September 30, 2020. 

Non-interest-bearing deposits were $416.6 million, representing 29.4% of total deposits as of September 30, 2020.  Total deposits as of September 30, 2020 were $1.4 billion, and core deposits represent 75% of total deposits. 

Starting from a position of strong asset quality, the Company completed a "worst-case" assessment of the loan portfolio assuming unforeseen liquidity issues caused by the pandemic-induced recession.  As a result of the assessment, the Company made a special $4.5 million provision to the Allowance for Loan and Lease Losses (ALLL) in addition to the normal $1.1 million provision as of June 30, 2020, which took earnings negative for the quarter.   The September 30, 2020 ALLL also reflects a strengthened provision, currently at 1.27% of total loans (net of PPP loans).  Capital levels remain strong. 

Pandemic Recession
At the onset of the pandemic, the Company structured two payment deferral programs aimed at preserving borrower liquidity. The first program was offered to all commercial borrowers, no questions asked, on March 24th - at a time where little was known about the state of the pandemic.  The Bank assisted 195 borrowers by deferring two months of principal and interest payments. This represented 22.5% of the total loan portfolio dollars outstanding.

The second program started on May 4, 2020 as a negotiated solution and a maximum deferment of 12-months of principal and interest (consistent with the Federal Reserve Board's, Main Street Lending program).  Borrowers agreed to enact restrictive covenants aimed to preserve liquidity in order to participate.

Of the 42 borrowers (7.4% of net loans) that participated in the second program, 16 remain in deferred status (3.3% of net loans) as of September 30, 2020. 

The Bank's hotel portfolio was initially a significant concern, as the hospitality industry was hit particularly hard by the recession.  However, the portfolio is faring well, with average occupancy data for the hotels approximating 50% during August, up significantly from March and April.  Only 5 of the 14 operating hotels in the portfolio remain in payment deferral status.  Refer to the chart entitled Outstanding Loan Deferments below for additional information.

OutstandingLoan Deferments

Loan Type

Number of Months Deferred

Total
Deferred

Number of
Borrowers

1

2

3

4


(000's)


Residential mortgages

$2,165




$2,165

1

Owner-occupied commercial real estate

$441

$1,747


$235

$2,423

3

Investor-owned commercial real estate

$4,518

$26,924

$7,040


$38,482

8

 - Hotels


22,600

7,040


29,640

5

 - Office

993

4,324



5,317

2

 - Other

3,525




3,525

1

Commercial & industrial

$606


$3,000


$3,606

3

Consumer

$64




$64

1

Total

$7,794

$28,671

$10,040

$235

$46,740

16

"We're doing everything we can to work with our customers during this pandemic-induced recession and it seems to be working so far," said Jeff W. Dick, Chairman & CEO of MainStreet Bancshares, Inc and MainStreet Bank. "With the election just a fortnight away, we are optimistic that the post-election Congress and Administration will take swift action to provide meaningful additional stimulus to continue our path toward economic recovery."

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 solutions for financial technology companies and has nationally known market leaders on-staff ready to create a perfect solution 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 also works with the SBA to offer 7A and 504 lending solutions.  From sophisticated cash management to enhanced mobile banking and instant-issue Debit Cards, MainStreet Bank is always looking for ways to improve our customer's experience.  

MainStreet Bank was the first community bank in the Washington, DC metropolitan area to offer a full online business banking solution.  MainStreet Bank was also the first bank headquartered in the Commonwealth of Virginia to offer CDARS – a solution that provides multi-million-dollar FDIC insurance.  Further information on the Bank can be obtained by visiting its website at mstreetbank.com.

This release contains forward-looking statements, including our expectations with respect to future events that are subject to various risks and uncertainties.  The statements contained in this release that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Words such as "may," "will," "could," "should," "expect," "plan," "project," "intend," "anticipate," "believe," "estimate," "predict," "potential," "pursuant," "target," "continue," and similar expressions are intended to identify such forward-looking statements. Factors that could cause actual results to differ materially from management's projections, forecasts, estimates and expectations include: fluctuation in market rates of interest and loan and deposit pricing, adverse changes in the overall national economy as well as adverse economic conditions in our specific market areas, future impacts of the novel coronavirus (COVID-19) outbreak, maintenance and development of well-established and valued client relationships and referral source relationships, and acquisition or loss of key production personnel.

We caution readers that the list of factors above is not exclusive. The forward-looking statements are made as of the date of this release, and we may not undertake steps to update the forward-looking statements to reflect the impact of any circumstances or events that arise after the date the forward-looking statements are made.  In addition, our past results of operations are not necessarily indicative of future performance.

Contact: Jeff W. Dick, Chairman & CEO
(703) 481-4567

 

UNAUDITED CONSOLIDATED BALANCE SHEET INFORMATION

(In thousands, except share data)




September 30,
2020



June 30,
2020



March 31,
2020



December 31,
2019



September 30,
2019


ASSETS





















Cash and cash equivalents





















Cash and due from banks


$

102,480



$

55,273



$

62,098



$

53,376



$

52,580


Federal funds sold



25,074




21,081




10,677




11,468




19,432


Total cash and cash equivalents



127,554




76,354




72,775




64,844




72,012


Investment securities available for sale, at fair value



118,844




91,823




102,191




92,791




88,198


Investment securities held to maturity, at carrying value



23,114




23,843




23,878




23,914




24,410


Restricted equity securities, at cost



4,616




5,041




5,041




6,157




4,882


Loans, net of allowance for loan losses of $14,346, $13,731, $9,898,

$9,584, and $9,370, respectively



1,279,899




1,259,012




1,059,628




1,030,425




992,609


Premises and equipment, net



14,474




14,416




14,666




14,153




14,109


Other real estate owned, net



1,580




1,175




1,207




1,207




1,207


Accrued interest and other receivables



8,579




7,458




4,809




5,420




5,373


Bank owned life insurance



25,157




24,959




24,761




24,562




19,381


Other assets



26,371




24,786




20,786




13,885




11,414


Total Assets


$

1,630,188



$

1,528,867



$

1,329,742



$

1,277,358



$

1,233,595


LIABILITIES AND STOCKHOLDERS' EQUITY





















Liabilities:





















Non-interest bearing deposits


$

416,648



$

388,104



$

240,979



$

252,707



$

218,087


Interest bearing DDA deposits



72,807




18,266




16,846




53,707




54,438


Savings and NOW deposits



69,015




65,876




60,454




63,015




63,746


Money market deposits



348,146




332,246




265,443




141,337




125,716


Time deposits



510,429




537,840




559,489




560,857




601,896


Total deposits



1,417,045




1,342,332




1,143,211




1,071,623




1,063,883


Federal Home Loan Bank advances and other borrowings






10,000




10,000




40,000




10,000


Subordinated debt



14,827




14,819




14,812




14,805




14,798


Other liabilities



25,055




21,546




21,424




13,896




11,697


Total Liabilities



1,456,927




1,388,697




1,189,447




1,140,324




1,100,378


Stockholders' Equity:





















Preferred stock, $1 par value - 2,000,000 shares authorized





















Non-cumulative perpetual, 28,750 shares issued and outstanding



27,527














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

   shares; issued and outstanding, 8,277,837 shares at September 30,

   2020 including 162,917 unvested shares, 8,263,941 shares at June
   30, 2020 including 155,742 unvested shares, 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.



32,460




32,433




32,418




32,397




32,397


Capital surplus



75,217




74,850




74,482




75,117




74,860


Retained earnings



37,105




31,933




32,567




29,097




25,535


Accumulated other comprehensive income



952




954




828




423




425


Total Stockholders' Equity



173,261




140,170




140,295




137,034




133,217


Total Liabilities and Stockholders' Equity


$

1,630,188



$

1,528,867



$

1,329,742



$

1,277,358



$

1,233,595


 

 

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME INFORMATION

(In thousands, except share and per share data)




Year-to-Date



Three Months Ended




September 30,
2020



September 30,
2019



September 30,
2020



June 30,
2020



March 31,
2020



December 31,
2019



September 30,
2019


INTEREST INCOME:





























Interest and fees on loans


$

43,702



$

40,985



$

15,083



$

14,399



$

14,220



$

14,223



$

14,192


Interest on investment securities



1,488




1,668




491




496




501




534




497


Interest on federal funds sold



416




1,132




12




9




395




271




412


Total interest income



45,606




43,785




15,586




14,904




15,116




15,028




15,101


INTEREST EXPENSE:





























Interest on interest bearing DDA deposits



209




803




56




36




117




195




275


Interest on savings and NOW deposits



169




218




55




50




64




71




71


Interest on money market deposits



1,742




1,889




490




474




778




489




539


Interest on time deposits



9,740




10,466




2,841




3,333




3,566




3,730




3,900


Interest on Federal Home Loan Bank

   advances and other borrowings



107




457




13




44




50




92




76


Interest on subordinated debt



727




723




245




241




241




244




244


Total interest expense



12,694




14,556




3,700




4,178




4,816




4,821




5,105


Net interest income



32,912




29,229




11,886




10,726




10,300




10,207




9,996


Provision for loan losses



6,560




1,260




635




5,575




350




358




185


Net interest income after provision
   for loan losses



26,352




27,969




11,251




5,151




9,950




9,849




9,811


NON-INTEREST INCOME:





























Deposit account service charges



1,407




1,208




487




433




487




460




392


Bank owned life insurance income



596




317




199




198




199




181




106


Loan swap fee income



2,677




878




1,851




423




403




111




407


Net gain on available-for-sale securities






5

















Net gains on sale of loans



33




566




33













303


Other fee income



877




730




288




264




325




407




228


Total other income



5,590




3,704




2,858




1,318




1,414




1,158




1,436


NON-INTEREST EXPENSES:





























Salaries and employee benefits



13,191




11,597




4,495




4,263




4,433




4,179




3,890


Furniture and equipment expenses



1,528




1,271




574




500




454




457




451


Advertising and marketing



713




531




266




191




256




375




235


Occupancy expenses



910




644




332




311




267




221




214


Outside services



696




694




215




205




276




169




306


Administrative expenses



508




533




167




177




164




198




190


Other operating expenses



4,595




3,404




1,589




1,713




1,293




1,104




1,203


Total other expenses



22,141




18,674




7,638




7,360




7,143




6,703




6,489


Income before income tax (benefit)



9,801




12,999




6,471




(891)




4,221




4,304




4,758


Income tax expense (benefit)



1,793




2,612




1,299




(257)




751




742




1,049


Net income (loss) available to common
shareholders


$

8,008



$

10,387



$

5,172



$

(634)



$

3,470



$

3,562



$

3,709


Net income (loss) per common share,
   basic and diluted


$

0.97



$

1.26



$

0.63



$

(0.08)



$

0.42



$

0.43



$

0.45


Weighted average number of common    
   shares, basic and diluted



8,274,419




8,248,284




8,272,570




8,263,370




8,287,317




8,260,259




8,251,672


 

 

UNAUDITED LOAN, DEPOSIT AND BORROWING DETAIL

(In thousands)




September 30, 2020



June 30, 2020



September 30, 2019



Percentage Change




$ Amount



% of

Total



$ Amount



% of

Total



$ Amount



% of

Total



Last

3 Mos



Last

12 Mos


LOANS:

































Construction and land development loans


$

325,516




25.0

%


$

284,843




22.2

%


$

207,441




20.7

%



14.3

%



56.9

%

Residential real estate loans



157,518




12.1

%



169,924




13.3

%



162,801




16.2

%



-7.3

%



-3.2

%

Commercial real estate loans



505,201




38.8

%



497,279




38.8

%



434,735




43.3

%



1.6

%



16.2

%

Commercial industrial loans - Other



88,884




6.8

%



96,640




7.5

%



115,902




11.5

%



-8.0

%



-23.3

%

Commercial industrial loans - PPP Loans



173,075




13.3

%



171,650




13.5

%






0.0

%



0.8

%



100.0

%

Consumer loans



51,505




4.0

%



60,166




4.7

%



83,013




8.3

%



-14.4

%



-38.0

%

Total Gross Loans


$

1,301,699




100.0

%


$

1,280,502




100.0

%


$

1,003,892




100.0

%



1.7

%



29.7

%

Less: Allowance for loan losses



(14,346)








(13,731)








(9,370)














Net deferred loan fees



(7,454)








(7,759)








(1,913)














Net Loans


$

1,279,899







$

1,259,012







$

992,609














DEPOSITS:

































Non-interest bearing demand deposits


$

416,648




29.4

%


$

388,104




28.9

%


$

218,087




20.5

%



7.4

%



91.0

%

Interest-bearing demand deposits:

































Demand deposits



72,807




5.1

%



18,266




1.4

%



54,438




5.1

%



298.6

%



33.7

%

Savings and NOW deposits



69,015




4.9

%



65,876




4.9

%



63,746




6.0

%



4.8

%



8.3

%

Money market accounts



348,146




24.6

%



332,246




24.8

%



125,716




11.8

%



4.8

%



176.9

%

Certificates of deposit $250,000 or more



211,800




14.9

%



213,051




15.9

%



239,719




22.4

%



-0.6

%



-11.6

%

Certificates of deposit less than $250,000



298,629




24.1

%



324,789




24.1

%



362,177




34.2

%



-8.1

%



-17.5

%

Total Deposits


$

1,417,045




100.0

%


$

1,342,332




100.0

%


$

1,063,883




100.0

%



5.6

%



33.2

%

BORROWINGS:

































Federal Home Loan Bank advances






0.0

%



10,000




40.3

%



10,000




40.3

%



-100.0

%



-100.0

%

Subordinated debt



14,827




100.0

%



14,819




59.7

%



14,798




59.7

%



0.1

%



0.2

%

Total Borrowings


$

14,827




100.0

%


$

24,819




100.0

%


$

24,798




100.0

%



-40.3

%



-40.2

%

Total Deposits and Borrowings


$

1,431,872







$

1,367,151







$

1,088,681








4.7

%



31.5

%


































Core customer funding sources (1)


$

1,066,236




74.5

%


$

939,474




68.7

%


$

655,631




60.2

%



13.5

%



62.6

%

Brokered and listing service sources (2)



350,809




24.5

%



402,858




29.5

%



408,252




37.5

%



-12.9

%



-14.1

%

Federal Home Loan Bank advances






0.0

%



10,000




0.7

%



10,000




0.9

%



-100.0

%



-100.0

%

Subordinated debt (3)



14,827




1.0

%



14,819




1.1

%



14,798




1.4

%



0.1

%



0.2

%

Total Funding Sources


$

1,431,872




100.0

%


$

1,367,151




100.0

%


$

1,088,681




100.0

%



4.7

%



31.5

%



(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

(In thousands)




For the three months ended September 30, 2020



For the three months ended September 30, 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)(2)(3)


$

1,292,566



$

15,083




4.67

%


$

996,777



$

14,192




5.70

%

Investment securities



73,486




491




2.67

%



71,182




497




2.79

%

Federal funds and interest-bearing deposits



108,666




12




0.04

%



82,056




412




2.01

%

Total interest earning assets


$

1,474,718



$

15,586




4.23

%


$

1,150,015



$

15,101




5.25

%

Other assets



65,665












43,524










Total assets


$

1,540,383











$

1,193,539










Liabilities and Stockholders' Equity:

























Interest-bearing liabilities:

























Interest-bearing demand deposits


$

26,469



$

56




0.85

%


$

58,510



$

275




1.88

%

Money market deposit accounts



332,750




490




0.59

%



117,717




539




1.83

%

Savings and NOW deposits



62,066




55




0.35

%



62,975




71




0.45

%

Time deposits



522,995




2,841




2.17

%



587,537




3,900




2.66

%

Total interest-bearing deposits


$

944,280



$

3,442




1.46

%


$

826,739



$

4,785




2.32

%

Federal funds and repos purchased



















Subordinated debt



14,823




245




6.61

%



14,795




244




6.60

%

FHLB borrowings



4,511




13




1.15

%



11,522




76




2.64

%

Total interest-bearing liabilities


$

963,614



$

3,700




1.54

%


$

853,056



$

5,105




2.39

%

Demand deposits and other liabilities



428,726












209,125










Total liabilities


$

1,392,340











$

1,062,181










Stockholders' Equity



148,043












131,358










Total Liabilities and Stockholders' Equity


$

1,540,383











$

1,193,539










Interest Rate Spread











2.69

%











2.86

%

Net Interest Income






$

11,886











$

9,996






Net Interest Margin











3.22

%











3.48

%

Net Interest Margin, excluding PPP loans(4)











3.32

%











3.48

%



(1)

Includes loans classified as non-accrual

(2)

Includes average PPP balances of $172.7 million and related interest income of approximately $432,000 for the three months ended September 30, 2020

(3)

Total loan interest income includes amortization of deferred loan fees, net of deferred loan costs

(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, 2020



For the nine months ended September 30, 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)(2)(3)


$

1,188,565



$

43,702




4.90

%


$

970,708



$

40,985




5.63

%

Investment securities



73,504




1,488




2.70

%



71,069




1,668




3.13

%

Federal funds and interest-bearing deposits



123,217




416




0.45

%



72,011




1,132




2.10

%

Total interest earning assets


$

1,385,286



$

45,606




4.39

%


$

1,113,788



$

43,785




5.24

%

Other assets



65,368












41,883










Total assets


$

1,450,654











$

1,155,671










Liabilities and Stockholders' Equity:

























Interest-bearing liabilities:

























Interest-bearing demand deposits


$

25,847



$

209




1.08

%


$

57,517



$

803




1.86

%

Money market deposit accounts



288,836




1,742




0.80

%



128,122




1,889




1.97

%

Savings and NOW deposits



64,513




169




0.35

%



61,418




218




0.47

%

Time deposits



543,531




9,740




2.39

%



535,083




10,466




2.61

%

Total interest-bearing deposits


$

922,727



$

11,860




1.71

%


$

782,140



$

13,376




2.28

%

Federal funds and repos purchased









0.00

%



46







0.00

%

Subordinated debt



14,816




727




6.54

%



14,788




723




6.52

%

FHLB borrowings



8,266




107




1.73

%



23,114




457




2.64

%

Total interest-bearing liabilities


$

945,809



$

12,694




1.79

%


$

820,088



$

14,556




2.37

%

Demand deposits and other liabilities



361,771












208,328










Total liabilities


$

1,307,580











$

1,028,416










Stockholders' Equity



143,074












127,255










Total Liabilities and Stockholders' Equity


$

1,450,654











$

1,155,671










Interest Rate Spread











2.60

%











2.87

%

Net Interest Income






$

32,912











$

29,229






Net Interest Margin











3.17

%











3.50

%

Net Interest Margin, excluding PPP loans(4)











3.21

%











3.50

%



(1)

Includes loans classified as non-accrual

(2)

Includes average PPP balances of $102.9 million and related interest income of approximately $772,000 for the three months ended September 30, 2020

(3)

Total loan interest income includes amortization of deferred loan fees, net of deferred loan costs

(4)

Refer to Appendix for reconciliation of non-GAAP measures

 

 

UNAUDITED SUMMARY FINANCIAL DATA

(Dollars in thousands except per share data)




At or For the Three Months Ended


At or For the Nine Months Ended




September 30,


September 30,




2020



2019


2020



2019


Per share Data and Shares Outstanding
















Earnings (losses) per common share (basic and diluted)


$

0.63



$

0.45


$

0.97



$

1.26


Book value per common share


$

17.63



$

16.13


$

17.63



$

16.13


Weighted average common shares (basic and diluted)



8,272,570




8,251,672



8,274,419




8,248,284


Common shares outstanding at end of period



8,277,837




8,260,259



8,277,837




8,260,259


Performance Ratios
















Return on average assets (annualized)



1.34

%



1.24

%


0.74

%



1.20

%

Return on average assets, excluding impact of PPP loans (annualized)(2)



1.20

%



1.24

%


0.59

%



1.20

%

Return on average equity (annualized)



13.97

%



11.29

%


7.46

%



10.88

%

Yield on earning assets (annualized)



4.23

%



5.25

%


4.39

%



5.24

%

Cost of interest bearing liabilities (annualized)



1.54

%



2.39

%


1.79

%



2.37

%

Net interest spread



2.69

%



2.86

%


2.60

%



2.87

%

Net interest margin (annualized)



3.22

%



3.48

%


3.17

%



3.50

%

Net interest margin, excluding PPP loans (annualized)(2)



3.32

%



3.48

%


3.21

%



3.50

%

Noninterest income as a percentage of average assets (annualized)



0.74

%



0.48

%


0.51

%



0.43

%

Noninterest expense to average assets (annualized)



1.98

%



2.17

%


2.03

%



2.15

%

Efficiency ratio(3)



51.80

%



56.76

%


57.50

%



56.70

%

Asset Quality
















Loans 30-89 days past due to total gross loans



0.08

%



0.01

%


0.08

%



0.01

%

Loans 90 days past due to total gross loans



0.08

%



0.00

%


0.08

%



0.00

%

Non-accrual loans to total gross loans



0.10

%



0.00

%


0.10

%



0.00

%

Other real estate owned


$

1,580



$

1,207


$

1,580



$

1,207


Non-performing assets


$

2,822



$

1,220


$

2,822



$

1,220


Non-performing assets to total assets



0.17

%



0.10

%


0.17

%



0.10

%

Non-performing assets to total assets, excluding PPP loans(2)



0.19

%



0.10

%


0.19

%



0.10

%

Allowance for loan losses to total gross loans



1.10

%



0.94

%


1.10

%



0.94

%

Allowance for loan losses to total loans, excluding PPP loans(2)



1.27

%



0.94

%


1.27

%



0.94

%

Allowance for loan losses to non-performing assets



5.08




7.68



5.08




7.68


Net loan charge-offs (recoveries)


$

20



$


$

1,798



$

721


Net charge-offs to average gross loans (annualized)



0.01

%



0.00

%


0.20

%



0.10

%

Net charge-offs to average gross loans, excluding PPP loans (annualized)(2)



0.01

%



0.00

%


0.22

%



0.10

%

Troubled debt restructurings (total)
















Performing in accordance with modified terms


$



$

1,488


$



$

1,488


Not performing in accordance with modified terms


$



$


$



$


Regulatory Capital Ratios (Bank only) (1)
















Total risk-based capital ratio



13.39

%



13.60

%


13.39

%



13.60

%

Tier 1 risk-based capital ratio



12.27

%



12.77

%


12.27

%



12.77

%

Leverage ratio



10.19

%



12.52

%


10.19

%



12.52

%

Common equity tier 1 ratio



12.27

%



12.77

%


12.27

%



12.77

%

Other information
















Closing stock price


$

12.24



$

21.05


$

12.24



$

21.05


Equity / assets



10.63

%



10.79

%


10.63

%



10.79

%

Equity / assets, excluding PPP loans(2)



11.89

%



10.79

%


11.89

%



10.79

%

Average equity / average assets



9.61

%



11.01

%


9.86

%



11.01

%

Average equity / average assets, less average PPP loans(2)



10.82

%



11.01

%


10.62

%



11.01

%

Number of full time equivalent employees



123




118



123




118


# Full service branch offices



7




6



7




6




(1)

Regulatory capital ratios as of September 30, 2020 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

 

 

Reconciliation of Certain Non-GAAP Financial Measures

(In thousands)




For the three months ended
September 30,



For the nine months ended
September 30,





2020




2019




2020




2019


Pre-tax pre-provision earnings

















Net income (GAAP)


$

5,172



$

3,709



$

8,008



$

10,387


Tax expense (benefit)



1,299




1,049




1,793




2,612


Provision for loan losses



635




185




6,560




1,260


Pre-tax pre-provision earnings (non-GAAP)


$

7,106



$

4,943



$

16,361



$

14,259





For the three months ended
September 30,



For the nine months ended
September 30,





2020




2019




2020




2019


Paycheck Protection Program adjustment impact

















Loans held for investment (GAAP)


$

1,301,699



$

1,001,979



$

1,301,699



$

1,001,979


Less: PPP loans



173,075







173,075





Loans held for investment, excluding PPP (non-GAAP)


$

1,128,624



$

1,001,979



$

1,128,624



$

1,001,979



















Average loans held for investment (GAAP)


$

1,292,566



$

996,777



$

1,188,565



$

970,708


Less: Average PPP loans



172,659







102,891





Average loans held for investment, excluding PPP (non-GAAP)


$

1,119,907



$

996,777



$

1,085,674




970,708





For the three months ended
September 30,



For the nine months ended
September 30,





2020




2019




2020




2019


Net interest margin adjustment

















Net interest income (GAAP)


$

11,886



$

9,996



$

32,912



$

29,229


Less: PPP fees recognized



644







1,235





Less: PPP interest income earned



432







772





Net interest income, excluding PPP income (non-GAAP)



10,810




9,996




30,905




29,229



















Average interest earning assets (GAAP)



1,474,718




1,150,015




1,385,286




1,113,788


Less: average PPP loans



172,659







102,891





Average interest earning assets, excluding PPP (non-GAAP)



1,302,059




1,150,015




1,282,395




1,113,788


Net interest margin, excluding PPP (non-GAAP)



3.32

%



3.48

%



3.21

%



3.50

%




For the three months ended
September 30,



For the nine months ended
September 30,





2020




2019




2020




2019


Total asset adjustment

















Total assets (GAAP)


$

1,630,188



$

1,233,595



$

1,630,188



$

1,233,595


Less: PPP loans



173,075







173,075





Total assets, excluding PPP loans (non-GAAP)



1,457,113




1,233,595




1,457,113




1,233,595


Total equity (GAAP)



173,261




133,217




173,261




133,217


Equity / assets, excluding PPP loans (non-GAAP)



11.89

%



10.80

%



11.89

%



10.80

%


















Average asset adjustment

















Average assets (GAAP)



1,540,383




1,193,539




1,450,654




1,155,671


Less: average PPP loans



172,659







102,891





Total average assets, excluding average PPP loans



1,367,724




1,193,539




1,347,763




1,155,671


Total average equity (GAAP)



148,043




131,358




143,074




127,240


Average equity / average assets, excluding average PPP loans (non-
GAAP)



10.82

%



11.01

%



10.62

%



11.01

%




For the three months ended
September 30,



For the nine months ended
September 30,





2020




2019




2020




2019


Return on Average Assets, adjusted

















Net income (GAAP)


$

5,172



$

3,709



$

8,008



$

10,387


Less: PPP fees recognized



644







1,235





Less: PPP interest income



432







772





Net income, excluding PPP income (non-GAAP)



4,096




3,709




6,001




10,387


Average total assets



1,540,383




1,193,539




1,450,654




1,155,671


Less: average PPP loans



172,659







102,891





Average total assets, excluding PPP (non-GAAP)



1,367,724




1,193,539




1,347,763




1,155,671


Return on average assets, excluding PPP (non-GAAP)



1.20

%



1.24

%



0.59

%



1.20

%




For the three months ended
September 30,



For the nine months ended
September 30,





2020




2019




2020




2019


Nonperforming Assets to total assets, adjusted

















Total nonperforming assets (GAAP)


$

2,822



$

1,207



$

2,822



$

1,207


Total assets (GAAP)



1,630,675




1,234,276




1,630,675




1,234,276


Less: PPP loans



173,075







173,075





Total assets, excluding PPP loans (non-GAAP)



1,457,600




1,234,276




1,457,600




1,234,276


Nonperforming assets to total assets, excluding PPP loans (non-
GAAP)



0.19

%



0.10

%



0.19

%



0.10

%




















For the three months ended
September 30,



For the nine months ended
September 30,





2020




2019




2020




2019


Allowance for loan losses, adjusted

















Allowance for loan losses (GAAP)


$

14,346



$

9,370



$

14,346



$

9,370


Total gross loans (GAAP)



1,301,699




1,001,979




1,301,699




1,001,979


Less: PPP loans



173,075







173,075





Total gross loans, excluding PPP loans (non-GAAP)



1,128,624




1,001,979




1,128,624




1,001,979


Allowance for loan losses to total loans, excluding PPP (non-GAAP)



1.27

%



0.94

%



1.27

%



0.94

%




















For the three months ended
September 30,



For the nine months ended
September 30,





2020




2019




2020




2019


Net charge-offs to average loans, adjusted

















Total net charge-offs (GAAP)


$

20






$

1,798



$

721


Total average gross loans (GAAP)



1,284,024




995,972




1,186,289




970,913


Less: average PPP loans



172,659







102,891





Total average gross loans, excluding PPP loans (non-GAAP)



1,111,365




995,972




1,083,398




970,913


Net charge-offs to average gross loans, excluding PPP (annualized)
(non-GAAP)



0.01

%


N/A




0.22

%



0.10

%

 

 

 

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SOURCE MainStreet Bancshares, Inc.

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