Press Release

MainStreet Bancshares, Inc. Reports Record Earnings

Company Release - 1/21/2021 8:00 AM ET

FAIRFAX, Va., Jan. 21, 2021 /PRNewswire/ -- MainStreet Bancshares, Inc. (Nasdaq: MNSB & MNSBP), the holding company for MainStreet Bank, reported record net income of $15.7 million for 2020, which represents a 10.54% Return on Average Equity (ROAE), a 1.05% Return on Average Assets (ROAA) and $1.85 per share of common stock (basic and diluted).

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

The strong year-end results can be attributed to the Bank's breakneck performance in response to the pandemic

Net interest income and noninterest income for the year-ended December 31, 2020 increased to $45.9 million and $7.5 million, respectively. Net interest income and noninterest income for the year-ended December 31, 2020 increased 16.5% and 54%, respectively, over the same period in 2019.  The Company realized $2.6 million of the $5.8 million recognized as fee income from the Paycheck Protection Program (PPP) during the year. 

Total assets were $1.6 billion, an increase of 29% from the previous year-end.  Net loans were $1.3 billion as of December 31, 2020, which included $135 million of the original $173 million in loans related to the PPP (22% were forgiven/repaid during 2020). Asset quality remains strong with non-performing assets and Other Real Estate Owned (OREO) representing only 0.08% of total assets as of December 31, 2020. 

Non-interest-bearing deposits were $371 million, representing 26% of total deposits as of December 31, 2020.  Total deposits as of December 31, 2020 were $1.4 billion, and core deposits represent a healthy 72% of total deposits. 

"The strong year-end results can be attributed to the Bank's breakneck performance in response to the pandemic, both at the start and throughout the entire year," said Abdul Hersiburane, President of MainStreet Bank.  "The Bank worked with all borrowers in order to assist, where prudent, with providing meaningful liquidity through the Paycheck Protection Plan, the Main Street Lending Program, payment deferrals and/or shifting to interest-only payments for a period." 

With the hospitality industry being most hard-hit, the team worked closely throughout the year with the 14 operating hotels in the Bank's portfolio.  Since April 2020, monthly Smith Travel Research (STR) reports for the portfolio of hotels showed favorable trends for occupancy.  As of January 2021, all previously reported borrowers with payment deferrals are scheduled to be back to making monthly payments.

The Company analyzed the loan portfolio and made a special pandemic provision to the Allowance for Loan and Lease Losses (ALLL) on June 30, 2020 in the amount of $4.5 million.  That special provision included a $1.76 million loan outstanding for one Commercial & Industrial (C&I) borrower that was immediately and fully impacted by the pandemic, $2.0 million for commercial borrowers with potential liquidity concerns and $760,000 for the indirect auto portfolio.

"At its outset, we didn't have a good sense of the pandemic's potential to affect the U.S. Economy or our market," said Jeff W. Dick, Chairman & CEO of MainStreet Bancshares Inc. and MainStreet Bank.  "As the year progressed, through a combination of federal programs and regulatory easing, our borrower's collective confidence started to return.  The vaccine approval announcements in December gave confirmation that the end was in sight.  As a result of the significant changes in data and information available, we determined it would be prudent to update our special pandemic loan loss provision."

The Company released $3.15 million from the Allowance for Loan and Lease Losses at year-end, as recapped in the table below.

Fourth Quarter Changes to the Allowance for Loan and Lease Losses

(000's)

Beginning Balance September 30, 2020

$14,345

  + Current Year Recovery (1)

1,498

  - Release of Specific Reserve for Repaid Loan

329

  - Release of Pandemic Provision for indirect loans (2)

500

  - Release of Provision for Loans reclassified as Held for Sale (3)

825

  + Provision for Quarter Growth

186

  - Release of Loss Recovery

1,498

Ending Balance December 31, 2020

$12,877



(1)

The Bank recovered $1.498 million of a loan charged-off earlier in the year.

(2)

The indirect loan portfolio losses for the year were less than previous years, so $500,000 was released from the special pandemic provision for indirect loans.

(3)

The Company reclassified approximately $60 million in investor-owned commercial real estate loans as loans held for sale. The loan sale should take place in the first quarter of 2021 and the Company released the associated provision to the ALLL prior to year-end 2020. 

The $2.0 million that was previously allocated to commercial borrowers remains intact for the pandemic provision to the ALLL as of December 31, 2020.

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 thousands of businesses in the metropolitan area.

MainStreet Bank has a full complement of payment solutions for financial technology companies and has a team 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)



December 31, 2020



September 30, 2020



June 30,

2020



March 31, 2020



December 31, 2019


ASSETS




















Cash and cash equivalents




















Cash and due from banks

$

75,935



$

102,480



$

55,273



$

62,098



$

53,376


Federal funds sold


31,593




25,074




21,081




10,677




11,468


Total cash and cash equivalents


107,528




127,554




76,354




72,775




64,844


Investment securities available for sale, at fair value


147,414




118,844




91,823




102,191




92,791


Investment securities held to maturity, at carrying value


22,520




23,114




23,843




23,878




23,914


Restricted equity securities, at cost


4,616




4,616




5,041




5,041




6,157


Loans held for sale, at carrying value


57,006














Loans, net of allowance for loan losses of $12,877, $14,346, $13,731, $9,898, and $9,584, respectively


1,230,379




1,279,899




1,259,012




1,059,628




1,030,425


Premises and equipment, net


14,289




14,474




14,416




14,666




14,153


Other real estate owned, net


1,180




1,580




1,175




1,207




1,207


Accrued interest and other receivables


9,604




8,579




7,458




4,809




5,420


Bank owned life insurance


25,341




25,157




24,959




24,761




24,562


Other assets


23,288




26,371




24,786




20,786




13,885


Total Assets

$

1,643,165



$

1,630,188



$

1,528,867



$

1,329,742



$

1,277,358


LIABILITIES AND STOCKHOLDERS' EQUITY




















Liabilities:




















Non-interest bearing deposits

$

370,497



$

416,648



$

388,104



$

240,979



$

252,707


Interest bearing DDA deposits


70,307




72,807




18,266




16,846




53,707


Savings and NOW deposits


74,099




69,015




65,876




60,454




63,015


Money market deposits


426,600




348,146




332,246




265,443




141,337


Time deposits


496,743




510,429




537,840




559,489




560,857


Total deposits


1,438,246




1,417,045




1,342,332




1,143,211




1,071,623


Federal Home Loan Bank advances and other borrowings








10,000




10,000




40,000


Subordinated debt


14,834




14,827




14,819




14,812




14,805


Other liabilities


22,420




25,055




21,546




21,424




13,896


Total Liabilities


1,475,500




1,456,927




1,388,697




1,189,447




1,140,324


Stockholders' Equity:




















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




















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


27,263




27,527











Common stock, par value $4 per share, authorized 10,000,000 shares; issued and outstanding, 7,443,842 shares at December 31, 2020 including 161,435 unvested shares, 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.


29,130




32,460




32,433




32,418




32,397


Capital surplus


66,116




75,217




74,850




74,482




75,117


Retained earnings


44,179




37,105




31,933




32,567




29,097


Accumulated other comprehensive income


977




952




954




828




423


Total Stockholders' Equity


167,665




173,261




140,170




140,295




137,034


Total Liabilities and Stockholders' Equity

$

1,643,165



$

1,630,188



$

1,528,867



$

1,329,742



$

1,277,358





UNAUDITED CONSOLIDATED STATEMENTS OF INCOME INFORMATION

(In thousands, except share and per share data)



Year-Ended



Three Months Ended



December 31, 2020



December 31, 2019



December 31, 2020



September 30, 2020



June 30,
2020



March 31, 2020



December 31, 2019


INTEREST INCOME:




























Interest and fees on loans

$

59,634



$

55,208



$

15,933



$

15,083



$

14,399



$

14,220



$

14,223


Interest on investment securities


2,007




2,202




519




491




496




501




534


Interest on federal funds sold


431




1,403




15




12




9




395




271


Total interest income


62,072




58,813




16,467




15,586




14,904




15,116




15,028


INTEREST EXPENSE:




























Interest on interest bearing DDA deposits


317




998




108




56




36




117




195


Interest on savings and NOW deposits


221




289




52




55




50




64




71


Interest on money market deposits


2,162




2,379




418




490




474




778




489


Interest on time deposits


12,322




14,196




2,583




2,841




3,333




3,566




3,730


Interest on Federal Home Loan Bankadvances and other borrowings


107




549







13




44




50




92


Interest on subordinated debt


966




966




240




245




241




241




244


Total interest expense


16,095




19,377




3,401




3,700




4,178




4,816




4,821


Net interest income


45,977




39,436




13,066




11,886




10,726




10,300




10,207


Provision for loan losses


3,610




1,618




(2,950)




635




5,575




350




358


Net interest income after provision for loan losses


42,367




37,818




16,016




11,251




5,151




9,950




9,849


NON-INTEREST INCOME:




























Deposit account service charges


1,916




1,668




509




487




433




487




460


Bank owned life insurance income


779




498




183




199




198




199




181


Loan swap fee income


3,510




989




833




1,851




423




403




111


Net gain on available-for-sale securities





5

















Net gain on sale of loans


33




566







33











Other fee income


1,255




1,136




378




288




264




325




407


Total other income


7,493




4,862




1,903




2,858




1,318




1,414




1,158


NON-INTEREST EXPENSES:




























Salaries and employee benefits


17,937




15,776




4,746




4,495




4,263




4,433




4,179


Furniture and equipment expenses


2,128




1,728




601




574




500




454




457


Advertising and marketing


1,003




906




290




266




191




256




375


Occupancy expenses


1,270




864




360




332




311




267




221


Outside services


959




863




263




215




205




276




169


Administrative expenses


674




731




166




167




177




164




198


Other operating expenses


6,329




4,508




1,732




1,589




1,713




1,293




1,104


Total other expenses


30,300




25,376




8,158




7,638




7,360




7,143




6,703


Income before income tax (benefit)


19,560




17,304




9,761




6,471




(891)




4,221




4,304


Income tax expense (benefit)


3,843




3,354




2,051




1,299




(257)




751




742


Net Income (loss)


15,717




13,950




7,710




5,172




(634)




3,470




3,562


Preferred stock dividends


635







635














Net income (loss) available to common shareholders


15,082



$

13,950



$

7,075



$

5,172



$

(634)



$

3,470



$

3,562


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

$

1.85



$

1.69



$

0.92



$

0.63



$

(0.08)



$

0.42



$

0.43


Weighted average number of common shares, basic and diluted


8,131,334




8,251,302




7,700,470




8,272,570




8,263,370




8,287,317




8,260,259





UNAUDITED LOAN, DEPOSIT AND BORROWING DETAIL

(In thousands)



December 31, 2020



September 30, 2020



December 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

$

324,906




26.0

%


$

325,516




25.0

%


$

272,620




26.2

%



-0.2

%



19.2

%

Residential real estate loans


183,531




14.7

%



157,518




12.1

%



150,848




14.5

%



16.5

%



21.7

%

Commercial real estate loans


466,898




37.4

%



505,201




38.8

%



421,870




40.5

%



-7.6

%



10.7

%

Commercial industrial loans - Other


94,847




7.6

%



88,884




6.8

%



121,225




11.6

%



6.7

%



-21.8

%

Commercial industrial loans - PPP Loans


135,180




10.8

%



173,075




13.3

%






0.0

%



-21.9

%



100.0

%

Consumer loans


44,073




3.5

%



51,505




4.0

%



75,583




7.2

%



-14.4

%



-41.7

%

Total Gross Loans

$

1,249,435




100.0

%


$

1,301,699




100.0

%


$

1,042,146




100.0

%



-4.0

%



19.9

%

Less: Allowance for loan losses


(12,877)








(14,346)








(9,584)














Net deferred loan fees


(6,179)








(7,454)








(2,137)














Net Loans

$

1,230,379







$

1,279,899







$

1,030,425














DEPOSITS:
































Non-interest bearing demand deposits

$

370,497




25.8

%



416,648




29.4

%


$

252,707




23.6

%



-11.1

%



46.6

%

Interest-bearing demand deposits:
































Demand deposits


70,307




4.9

%



72,807




5.1

%



53,707




5.0

%



-3.4

%



30.9

%

Savings and NOW deposits


74,099




5.2

%



69,015




4.9

%



63,015




5.9

%



7.4

%



17.6

%

Money market accounts


426,600




29.7

%



348,146




24.6

%



141,337




13.2

%



22.5

%



201.8

%

Certificates of deposit $250,000 or more


213,077




14.8

%



211,800




14.9

%



211,935




19.8

%



0.6

%



0.5

%

Certificates of deposit less than $250,000


283,666




19.6

%



298,629




21.1

%



348,922




32.5

%



-5.0

%



-18.7

%

Total Deposits

$

1,438,246




100.0

%


$

1,417,045




100.0

%


$

1,071,623




100.0

%



1.5

%



34.2

%

BORROWINGS:
































Federal Home Loan Bank advances





0.0

%






0.0

%



40,000




73.0

%



0.0

%



-100.0

%

Subordinated debt


14,834




100.0

%



14,819




100.0

%



14,805




27.0

%



0.1

%



0.2

%

Total Borrowings

$

14,834




100.0

%


$

14,819




100.0

%


$

54,805




100.0

%



0.1

%



-72.9

%

Total Deposits and Borrowings

$

1,453,080







$

1,431,864







$

1,126,428








1.5

%



29.0

%

































Core customer funding sources (1)

$

1,046,087




72.0

%


$

1,066,236




74.5

%


$

654,213




58.1

%



-1.9

%



59.9

%

Brokered and listing service sources (2)


392,159




27.0

%



350,809




24.5

%



417,410




37.1

%



11.8

%



-6.0

%

Federal Home Loan Bank advances





0.0

%






0.0

%



40,000




3.5

%



0.0

%



-100.0

%

Subordinated debt (3)


14,834




1.0

%



14,819




1.0

%



14,805




1.3

%



0.1

%



0.2

%

Total Funding Sources

$

1,453,080




100.0

%


$

1,431,864




100.0

%


$

1,126,428




100.0

%



1.5

%



29.0

%



(1)

Includes ICS, CDARS, and reciprocal deposits maintained by customers, which represent sweep accounts tied to customer operating accounts

(2)

Consists of certificates of deposit (CD) through multiple listing services and multiple brokered deposit services, as well as ICS and CDARS one-way certificates of deposit and regional money market accounts

(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 December 31, 2020



For the three months ended December 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)(2)(3)

$

1,311,726



$

15,933




4.86

%


$

1,023,614



$

14,223




5.56

%

Investment securities


85,084




519




2.44

%



71,387




534




2.99

%

Federal funds and interest-bearing deposits


171,933




15




0.03

%



74,519




271




1.45

%

Total interest earning assets

$

1,568,743



$

16,467




4.20

%


$

1,169,520



$

15,028




5.14

%

Other assets


71,013












55,251










Total assets

$

1,639,756











$

1,224,771










Liabilities and Stockholders' Equity:
























Interest-bearing liabilities:
























Interest-bearing demand deposits

$

71,906



$

108




0.60

%


$

54,176



$

195




1.44

%

Money market deposit accounts


390,645




418




0.43

%



134,011




489




1.46

%

Savings and NOW deposits


70,542




52




0.29

%



63,916




71




0.44

%

Time deposits


509,963




2,583




2.03

%



570,794




3,730




2.61

%

Total interest-bearing deposits

$

1,043,056



$

3,161




1.21

%


$

822,897



$

4,485




2.18

%

Federal funds and repos purchased











11








Subordinated debt


14,831




240




6.47

%



14,802




244




6.59

%

FHLB borrowings











15,370




92




2.39

%

Total interest-bearing liabilities

$

1,057,887



$

3,401




1.29

%


$

853,080



$

4,821




2.26

%

Demand deposits and other liabilities


414,581












236,396










Total liabilities

$

1,472,468











$

1,089,476










Stockholders' Equity


167,288












135,295










Total Liabilities and Stockholders' Equity

$

1,639,756











$

1,224,771










Interest Rate Spread










2.91

%











2.88

%

Net Interest Income





$

13,066











$

10,207






Net Interest Margin










3.33

%











3.49

%

Net Interest Margin, excluding PPP loans(4)










3.21

%











3.49

%



(1)

Includes loans classified as non-accrual

(2)

Includes average PPP balances of $157.8 million and related interest income of approximately $394,000 for the three months ended December 31, 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 year ended December 31, 2020



For the year ended December 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)(2)(3)

$

1,219,525



$

59,634




4.89

%


$

984,014



$

55,208




5.61

%

Investment securities


76,414




2,007




2.63

%



71,149




2,202




3.09

%

Federal funds and interest-bearing deposits


135,688




431




0.32

%



72,643




1,403




1.93

%

Total interest earning assets

$

1,431,627



$

62,072




4.34

%


$

1,127,806



$

58,813




5.21

%

Other assets


66,561












45,282










Total assets

$

1,498,188











$

1,173,088










Liabilities and Stockholders' Equity:
























Interest-bearing liabilities:
























Interest-bearing demand deposits

$

37,431



$

317




0.85

%


$

56,675



$

998




1.76

%

Money market deposit accounts


314,398




2,162




0.69

%



129,606




2,379




1.84

%

Savings and NOW deposits


66,028




221




0.33

%



62,047




289




0.47

%

Time deposits


535,116




12,322




2.30

%



544,084




14,196




2.61

%

Total interest-bearing deposits

$

952,973



$

15,022




1.58

%


$

792,412



$

17,862




2.25

%

Federal funds and repos purchased











37




1




2.70

%

Subordinated debt


14,820




966




6.52

%



14,791




966




6.53

%

FHLB borrowings


6,189




107




1.73

%



21,162




548




2.59

%

Total interest-bearing liabilities

$

973,982



$

16,095




1.65

%


$

828,402



$

19,377




2.34

%

Demand deposits and other liabilities


375,046












215,405










Total liabilities

$

1,349,028











$

1,043,807










Stockholders' Equity


149,160












129,281










Total Liabilities and Stockholders' Equity

$

1,498,188











$

1,173,088










Interest Rate Spread










2.69

%











2.88

%

Net Interest Income





$

45,977











$

39,436






Net Interest Margin










3.21

%











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 $116.7 million and related interest income of approximately $1.2 million for the year ended December 31, 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 Year Ended



December 31,


December 31,



2020



2019


2020



2019


Per share Data and Shares Outstanding















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

$

0.92



$

0.43


$

1.85



$

1.69


Book value per common share

$

18.86



$

16.59


$

18.86



$

16.59


Weighted average common shares (basic and diluted)


7,700,470




8,260,259



8,131,334




8,251,302


Common shares outstanding at end of period


7,443,842




8,260,259



7,443,842




8,260,259


Performance Ratios















Return on average assets (annualized)


1.88

%



1.16

%


1.05

%



1.19

%

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


1.61

%



1.16

%


0.87

%



1.19

%

Return on average equity (annualized)


18.44

%



10.53

%


10.54

%



10.79

%

Yield on earning assets (annualized)


4.20

%



5.14

%


4.34

%



5.21

%

Cost of interest bearing liabilities (annualized)


1.29

%



2.26

%


1.65

%



2.34

%

Net interest spread


2.91

%



2.88

%


2.69

%



2.88

%

Net interest margin (annualized)


3.33

%



3.49

%


3.21

%



3.50

%

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


3.21

%



3.49

%


3.21

%



3.50

%

Noninterest income as a percentage of average assets (annualized)


0.46

%



0.38

%


0.50

%



0.41

%

Noninterest expense to average assets (annualized)


1.99

%



2.19

%


2.02

%



2.16

%

Efficiency ratio(3)


54.50

%



58.98

%


56.67

%



57.28

%

Asset Quality















Loans 30-89 days past due to total gross loans


0.01

%



0.03

%


0.01

%



0.03

%

Loans 90 days past due to total gross loans


0.00

%



0.00

%


0.00

%



0.00

%

Non-accrual loans to total gross loans


0.01

%



0.00

%


0.01

%



0.00

%

Other real estate owned

$

1,180



$

1,207


$

1,180



$

1,207


Non-performing assets

$

1,330



$

1,207


$

1,330



$

1,207


Non-performing assets to total assets


0.08

%



0.09

%


0.08

%



0.09

%

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


0.09

%



0.09

%


0.09

%



0.09

%

Allowance for loan losses to total gross loans


1.03

%



0.92

%


1.03

%



0.92

%

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


1.16

%



0.92

%


1.16

%



0.92

%

Allowance for loan losses to non-performing assets


9.68




7.94



9.68




7.94


Net loan charge-offs (recoveries)

$

(1,480)



$

144


$

317



$

865


Net charge-offs (recoveries) to average gross loans (annualized)


-0.45

%



0.06

%


0.03

%



0.09

%

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


-0.52

%



0.06

%


0.03

%



0.09

%

Troubled debt restructurings (total)















Performing in accordance with modified terms

$



$

1,482


$



$

1,482


Not performing in accordance with modified terms

$



$


$



$


Regulatory Capital Ratios (Bank only) (1)















Total risk-based capital ratio


12.13

%



13.74

%


12.13

%



13.74

%

Tier 1 risk-based capital ratio


11.00

%



12.91

%


11.00

%



12.91

%

Leverage ratio


10.78

%



12.65

%


10.78

%



12.65

%

Common equity tier 1 ratio


11.00

%



12.91

%


11.00

%



12.91

%

Other information















Closing stock price

$

16.91



$

23.00


$

16.91



$

23.00


Equity / assets


10.20

%



10.73

%


10.20

%



10.73

%

Equity / assets, excluding PPP loans(2)


11.12

%



10.73

%


11.12

%



10.73

%

Average equity / average assets


10.20

%



11.05

%


9.96

%



11.05

%

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


11.29

%



11.05

%


10.80

%



11.05

%

Number of full time equivalent employees


126




126



126




126


# Full service branch offices


7




6



7




6




(1)

Regulatory capital ratios as of December 31, 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
December 31,



For the year ended December 31,




2020




2019




2020




2019


Paycheck Protection Program adjustment impact
















Loans held for investment (GAAP)

$

1,249,435



$

1,042,146



$

1,249,435



$

1,042,146


Less: PPP loans


135,180







135,180





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

$

1,114,255



$

1,042,146



$

1,114,255



$

1,042,146


















Average loans held for investment (GAAP)

$

1,311,726



$

1,023,614



$

1,219,525



$

984,014


Less: Average PPP loans


157,787







116,690





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

$

1,153,939



$

1,023,614



$

1,102,835




984,014









For the three months ended
December 31,



For the year ended December 31,




2020




2019




2020




2019


Net interest margin adjustment
















Net interest income (GAAP)

$

13,066



$

10,207



$

45,977



$

39,436


Less: PPP fees recognized


1,363







2,598





Less: PPP interest income earned


394







1,167





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


11,309




10,207




42,212




39,436


















Average interest earning assets (GAAP)


1,568,743




1,169,520




1,431,627




1,127,806


Less: average PPP loans


157,787







116,690





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


1,410,956




1,169,520




1,314,937




1,127,806


















Net interest margin (GAAP)


3.33

%



3.49

%



3.21

%



3.50

%

Net interest margin, excluding PPP (non-GAAP)


3.21

%



3.49

%



3.21

%



3.50

%




For the three months ended
December 31,



For the year ended December 31,




2020




2019




2020




2019


Total asset adjustment
















Total assets (GAAP)

$

1,643,165



$

1,277,358



$

1,643,165



$

1,277,358


Less: PPP loans


135,180







135,180





Total assets, excluding PPP loans (non-GAAP)


1,507,985




1,277,358




1,507,985




1,277,358


Total equity (GAAP)


167,665




137,034




167,665




137,034


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


11.12

%



10.73

%



11.12

%



10.73

%

















Average asset adjustment
















Average assets (GAAP)


1,639,756




1,224,771




1,498,188




1,173,088


Less: average PPP loans


157,787







116,690





Total average assets, excluding average PPP loans


1,481,969




1,224,771




1,381,498




1,173,088


Total average equity (GAAP)


167,288




135,295




149,160




129,281


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


11.29

%



11.05

%



10.80

%



11.02

%




For the three months ended
December 31,



For the year ended December 31,




2020




2019




2020




2019


Return on Average Assets, adjusted
















Net income (GAAP)

$

7,710



$

3,562



$

15,717



$

13,950


Less: PPP fees recognized


1,363







2,598





Less: PPP interest income


394







1,167





Net income, excluding PPP income (non-GAAP)


5,953




3,562




11,952




13,950


Average total assets


1,639,756




1,224,771




1,498,188




1,173,088


Less: average PPP loans


157,787







116,690





Average total assets, excluding PPP (non-GAAP)


1,481,969




1,224,771




1,381,498




1,173,088


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


1.61

%



1.16

%



0.87

%



1.19

%




For the three months ended
December 31,



For the year ended December 31,




2020




2019




2020




2019


Nonperforming Assets to total assets, adjusted
















Total nonperforming assets (GAAP)

$

1,330



$

1,207



$

1,330



$

1,207


Total assets (GAAP)


1,643,165




1,277,989




1,643,165




1,277,989


Less: PPP loans


135,180







135,180





Total assets, excluding PPP loans (non-GAAP)


1,507,985




1,277,989




1,507,985




1,277,989


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


0.09

%



0.09

%



0.09

%



0.09

%




For the three months ended
December 31,



For the year ended December 31,




2020




2019




2020




2019


Allowance for loan losses, adjusted
















Allowance for loan losses (GAAP)

$

12,877



$

9,584



$

12,877



$

9,584


Total gross loans (GAAP)


1,306,441




1,042,146




1,306,441




1,042,146


Less: PPP loans


135,180







135,180





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


1,171,261




1,042,146




1,171,261




1,042,146


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


1.10

%



0.92

%



1.10

%



0.92

%




For the three months ended
December 31,



For the year ended December 31,



2020




2019




2020




2019

Net charge-offs to average loans, adjusted















Total net charge-offs (GAAP)

$

(1,480)




144



$

317



$

865

Total average gross loans (GAAP)


1,307,267




1,024,602




1,216,699




984,446

Less: average PPP loans


157,787







116,690




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


1,149,480




1,024,602




1,100,009




984,446

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


-0.52

%



0.06

%



0.03

%



0.09

 

 

 

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SOURCE MainStreet Bancshares, Inc.

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