MainStreet Bancshares, Inc. Reports Strong Net Income as Interest Rates Rise

Company Release - 7/25/2022

FAIRFAX, Va., July 25, 2022 /PRNewswire/ -- MainStreet Bancshares, Inc. (Nasdaq: MNSB & MNSBP), the holding company for MainStreet Bank, said its net interest margin widened as rates climbed in recent months, driving strong net income for the second quarter and six months ended June 30, 2022.

The Bank's loan portfolio is well positioned for increasing interest rates. "The FOMC's next announcement is due to be released on July 27 and based upon Street consensus we anticipate continued net interest margin expansion," said Jeff W. Dick, Chairman & CEO of MainStreet Bancshares, Inc. and MainStreet Bank.

"We have been anticipating this trend for some time and we strategically aligned our portfolio to flex as the economy shifts," Dick said. "Even as we focus on maintaining a rigorous credit culture, we are constantly looking to the future, sharpening our understanding of what clients demand in an evolving financial services market, and choosing to innovate."

A focal point of MainStreet Bank's innovation is its Avenu^™ Software as a Service (SaaS) and Banking as a Service (BaaS) platform. Dick and other MainStreet Bank executives will discuss quarterly and half-year earnings and preview business developments at Avenu™ during its virtual webcast and quarterly earnings call at 2 p.m. Eastern time today.

Net income totaled $5.9 million for three months ended June 30, and $11.4 million for the six months ended June 30. Net interest income totaled $16.1 million in the second quarter, 6% higher than the immediately preceding quarter and 24.1% higher than the comparable period in 2021.

Rising interest rates propelled the net interest margin higher by 75 basis points to 3.95% for the quarter ended June 30, versus 3.20% a year earlier, on a tax equivalent basis. The Company's efficiency ratio remains solid at 55%. Total assets reached $1.8 billion in the second quarter, a 5.0% increase from a year earlier.

Quarterly results represent:

12.59% return on average equity
1.39% return on average assets
$0.71 earnings per share of common stock (basic and diluted)
$21.41 per common share book value

The level of Accumulated Other Comprehensive Income (AOCI) for the Company is low at -$6.56 million. The level is consistent with the size and quality of the investment portfolio, as the Bank enjoys consistent strong in-market loan demand.

The average loans outstanding rose just over 4% since the first quarter of 2022, as the bank was able to capitalize on continued demand in a higher interest rate environment. Asset quality remains pristine, as the Company had zero non-performing assets as of quarter ended June 30. Noninterest-bearing deposits represent 36% of the $1.5 billion in total deposits, and 70% of total deposits are core deposits.

"We operate in a robust market in Northern Virginia and the Washington Metropolitan area, and loan demand remains steady," said Abdul Hersiburane, president of MainStreet Bank. "The surge in loan volume that occurred for banks nationwide during the height of the COVID crisis has normalized, and what we are seeing now is solid, steady, organic loan growth that reflects the confidence of businesses in this marketplace that they have opportunities to grow." He noted that federal Paycheck Protection Program loans now represent a negligible 0.3% of the bank's loan portfolio.

Avenu ^™

Avenu^™, a division of MainStreet Bank, that provides Software as a Service (SaaS) and Banking as a Service (BaaS), continued to generate significant customer interest as additional fintechs joined the queue for our proprietary software solution. We are currently onboarding our initial beta customer with an anticipated go-live date in the fourth quarter of 2022.

"Fintechs have a strong need for knowledgeable, credible partners who can help them manage risk and compliance obligations," said Todd Youngren, President of Avenu^™. "Preparing them to become fully compliant is a critical, intensive element of this process, and we are focusing our energy on getting that right. Following the beta stage, we anticipate that onboarding will be streamlined into a 60-day process."

Youngren noted that at the end of the first quarter, Avenu^™ had 10 fintechs queued up at various stages of progress, including four that have indicated they intend to move forward as soon as the beta process is complete. These prospects include entities that serve the domestic needs of foreign nationals and entities that serve the education and nonprofit industries. Avenu has another 36 fintechs that have signed up to be "in the queue," and 128 fintechs that have signed up to receive updates and are actively monitoring our progress.

In addition to serving fintechs, the Avenu^™ team has a robust array of existing customers that include payment processors and money service businesses. These relationships have been integral in identifying the needs and services that fintechs need banks to provide in order to have a successful partnership. These relationships provide the Bank with additional noninterest income and a strong source of low-cost deposits that can be integrated into the Bank's traditional source of income generation, net interest margin. As a benchmark, Youngren noted, Avenu™ is favorably impacting profitability, with its customers providing $70 million in noninterest bearing deposits and $488,000 in noninterest income in the six months ended June 30, 2022.

Refer to our press release on October 25, 2021, for additional information on the Company's proprietary Avenu^™ solution. If you are a fintech looking to add payments and deposits to your solution, go to Avenu.bank and join the queue today.

ABOUT MAINSTREET BANK: MainStreet operates six branches in Herndon, Fairfax, 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 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)

	June 30, 2022		March 31, 2022		December 31, 2021		September 30, 2021		June 30, 2021
ASSETS
Cash and cash equivalents
Cash and due from banks	$	55,636	$	63,986	$	61,827	$	67,992	$	120,121
Federal funds sold		47,013		37,756		31,372		65,725		56,164
Total cash and cash equivalents		102,649		101,742		93,199		133,717		176,285
Investment securities available for sale, at fair value		143,240		123,802		99,913		171,603		165,791
Investment securities held to maturity, at carrying value		17,698		18,769		20,349		21,148		21,181
Restricted equity securities, at cost		16,485		17,209		15,609		9,972		9,994
Loans, net of allowance for loan losses of $12,982, $12,500, $11,697,$11,428, and $11,133, respectively		1,416,875		1,413,238		1,341,760		1,246,331		1,256,436
Premises and equipment, net		14,756		14,833		14,863		14,795		13,929
Other real estate owned, net		—		—		775		1,158		1,158
Accrued interest and other receivables		7,313		6,980		7,701		4,718		8,752
Computer software, net of amortization		4,956		3,906		2,493		1,165		—
Bank owned life insurance		36,742		36,492		36,241		35,987		35,736
Other assets		32,665		24,777		14,499		16,605		18,433
Total Assets	$	1,793,379	$	1,761,748	$	1,647,402	$	1,657,199	$	1,707,695
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Non-interest bearing deposits	$	535,591	$	514,160	$	530,678	$	475,157	$	486,001
Interest bearing DDA deposits		99,223		76,286		69,232		63,622		68,028
Savings and NOW deposits		58,156		81,817		85,175		79,556		72,353
Money market deposits		231,207		301,842		267,730		310,776		310,303
Time deposits		575,950		460,839		459,148		485,255		528,247
Total deposits		1,500,127		1,434,944		1,411,963		1,414,366		1,464,932
Federal Home Loan Bank advances and other borrowings		—		40,000		—		—		—
Subordinated debt		72,047		71,955		29,294		40,635		40,576
Other liabilities		32,801		26,053		17,357		18,169		22,559
Total Liabilities		1,604,975		1,572,952		1,458,614		1,473,170		1,528,067
Stockholders' Equity:
Preferred stock		27,263		27,263		27,263		27,263		27,263
Common stock		29,178		29,642		29,466		29,462		29,446
Capital surplus		64,822		66,798		67,668		67,152		66,667
Retained earnings		73,702		68,691		64,194		59,920		55,676
Accumulated other comprehensive income (loss)		(6,561)		(3,598)		197		232		576
Total Stockholders' Equity		188,404		188,796		188,788		184,029		179,628
Total Liabilities and Stockholders' Equity	$	1,793,379	$	1,761,748	$	1,647,402	$	1,657,199	$	1,707,695

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME INFORMATION
(In thousands, except share and per share data)

	Year-to-Date					Three Months Ended
	June 30, 2022		June 30, 2021		June 30, 2022			March 31, 2022		December 31, 2021		September 30, 2021		June 30, 2021
INTEREST INCOME:
Interest and fees on loans	$	34,639	$	31,049		$	17,954	$	16,685	$	15,532	$	15,162	$	15,257
Interest on investment securities
Taxable securities		758		592			401		357		327		318		332
Tax-exempt securities		535		535			263		272		283		267		265
Interest on federal funds sold		229		35			195		34		61		38		20
Total interest income		36,161		32,211			18,813		17,348		16,203		15,785		15,874
INTEREST EXPENSE:
Interest on interest bearing DDA deposits		170		110			105		65		59		60		55
Interest on savings and NOW deposits		79		89			42		37		38		38		47
Interest on money market deposits		270		497			151		119		127		148		220
Interest on time deposits		2,961		4,244			1,530		1,431		1,574		1,795		1,994
Interest on Federal Home Loan Bank advances and other borrowings		83		—			52		31		—		—		—
Interest on subordinated debt		1,280		805			812		468		539		541		567
Total interest expense		4,843		5,745			2,692		2,151		2,337		2,582		2,883
Net interest income		31,318		26,466			16,121		15,197		13,866		13,203		12,991
Provision for (recovery of) loan losses		1,280		(1,760)			480		800		295		290		(2,080)
Net interest income after provision for (recovery of) loan losses		30,038		28,226			15,641		14,397		13,571		12,913		15,071
NON-INTEREST INCOME:
Deposit account service charges		1,209		1,160			597		611		624		642		621
Bank owned life insurance income		500		395			250		251		253		252		218
Loan swap fee income		100		—			101		—		83		—		—
Net gain on held-to-maturity securities		4		3			4		—		3		—		—
Net gain (loss) on sale of loans		43		474			—		43		413		(40)		130
Other fee income		569		969			312		257		247		632		586
Total other income		2,425		3,001			1,264		1,162		1,623		1,486		1,555
NON-INTEREST EXPENSES:
Salaries and employee benefits		11,152		9,430			5,604		5,548		5,029		4,847		4,663
Furniture and equipment expenses		1,316		1,026			659		657		726		716		500
Advertising and marketing		980		677			574		406		450		438		402
Occupancy expenses		693		693			352		341		449		399		387
Outside services		935		616			567		368		485		292		280
Administrative expenses		405		291			195		210		192		202		141
Other operating expenses		2,976		2,950			1,543		1,433		1,389		1,567		1,500
Total other expenses		18,457		15,683			9,494		8,963		8,720		8,461		7,873
Income before income tax expense		14,006		15,544			7,411		6,596		6,474		5,938		8,753
Income tax expense		2,654		2,969			1,481		1,173		1,660		1,155		1,627
Net Income		11,352		12,575			5,930		5,423		4,814		4,783		7,126
Preferred stock dividends		1,078		1,078			539		539		539		539		539
Net income available to common shareholders	$	10,274	$	11,497		$	5,391	$	4,884	$	4,275	$	4,244	$	6,587
Net income per common share, basic and diluted	$	1.35	$	1.53		$	0.71	$	0.64	$	0.56	$	0.56	$	0.87
Weighted average number of common shares, basic and diluted		7,611,303		7,535,061			7,575,484		7,647,519		7,595,062		7,571,214		7,546,452

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

	June 30, 2022					March 31, 2022					June 30, 2021					Percentage Change
	$ Amount		% of Total			$ Amount		% of Total			$ Amount		% of Total			Last 3 Mos			Last 12 Mos
LOANS:
Construction and land development loans	$	358,062		25.0	%	$	344,605		24.1	%	$	328,480		25.8	%		3.9	%		9.0	%
Residential real estate loans		366,758		25.6	%		367,138		25.7	%		190,426		14.9	%		-0.1	%		92.6	%
Commercial real estate loans		599,683		41.8	%		588,004		41.1	%		503,514		39.5	%		2.0	%		19.1	%
Commercial industrial loans - Other		88,628		6.2	%		92,408		6.5	%		93,837		7.4	%		-4.1	%		-5.6	%
Commercial industrial loans - PPP Loans		4,044		0.3	%		18,776		1.3	%		124,578		9.8	%		-78.5	%		-96.8	%
Consumer loans		17,223		1.1	%		19,711		1.3	%		33,643		2.6	%		-12.6	%		-48.8	%
Total Gross Loans	$	1,434,398		100.0	%	$	1,430,642		100.0	%	$	1,274,478		100.0	%		0.3	%		12.5	%
Less: Allowance for loan losses		(12,982)					(12,500)					(11,133)
Net deferred loan fees		(4,541)					(4,904)					(6,909)
Net Loans	$	1,416,875				$	1,413,238				$	1,256,436
DEPOSITS:
Non-interest bearing demand deposits	$	535,591		35.7	%	$	514,160		35.8	%	$	486,001		33.2	%		4.2	%		10.2	%
Interest-bearing demand deposits:
Demand deposits		99,223		6.6	%		76,286		5.3	%		68,028		4.6	%		30.1	%		45.9	%
Savings and NOW deposits		58,156		3.9	%		81,817		5.7	%		72,353		4.9	%		-28.9	%		-19.6	%
Money market accounts		231,207		15.4	%		301,842		21.0	%		310,303		21.2	%		-23.4	%		-25.5	%
Certificates of deposit $250,000 or more		383,340		25.6	%		292,978		20.4	%		303,769		20.7	%		30.8	%		26.2	%
Certificates of deposit less than $250,000		192,610		12.8	%		167,861		11.8	%		224,478		15.4	%		14.7	%		-14.2	%
Total Deposits	$	1,500,127		100.0	%	$	1,434,944		100.0	%	$	1,464,932		100.0	%		4.5	%		2.4	%
BORROWINGS:
Federal Home Loan Bank advances		—		0.0	%		40,000		35.7	%		—		—			100.0	%		0.0	%
Subordinated debt		72,047		100.0	%		71,955		64.3	%		40,576		100.0	%		0.1	%		77.6	%
Total Borrowings	$	72,047		100.0	%	$	111,955		100.0	%	$	40,576		100.0	%		-35.6	%		77.6	%
Total Deposits and Borrowings	$	1,572,174				$	1,546,899				$	1,505,508					1.6	%		4.4	%

Core customer funding sources (1)	$	1,094,493		69.6	%	$	1,135,503		73.4	%	$	1,118,795		74.3	%		-3.6	%		-2.2	%
Brokered and listing service sources (2)		405,634		25.8	%		299,441		19.4	%		346,137		23.0	%		35.5	%		17.2	%
Federal Home Loan Bank advances		—		0.0	%		40,000		2.6	%		—		—			100.0	%		0.0	%
Subordinated debt (3)		72,047		4.6	%		71,955		4.6	%		40,576		2.7	%		0.1	%		77.6	%
Total Funding Sources	$	1,572,174		100.0	%	$	1,546,899		100.0	%	$	1,505,508		100.0	%		1.6	%		4.4	%


(1)	Includes ICS, CDARS, and reciprocal deposits maintained by customers, which represent sweep accounts tied to customer operating accounts
(2)	Consists of certificates of deposit (CD) through multiple listing services and multiple brokered deposit services, as well as ICS and CDARS one-way certificates of deposit and regional money market accounts
(3)	Subordinated debt obligation qualifies as Tier 2 capital at the holding company and Tier 1 capital at the Bank

UNAUDITED AVERAGE BALANCE SHEETS, INTEREST AND RATES
(In thousands)

	For the three months ended June 30, 2022							For the three months ended June 30, 2021
	Average Balance		Interest Income/ Expense (4)(5)		Average Yields/ Rate (annualized) (4)(5)			Average Balance		Interest Income/ Expense (4)(5)		Average Yields/Rate (annualized) (4)(5)
ASSETS:
Interest earning assets:
Loans (1)(2)(3)	$	1,434,877	$	17,954		5.02	%	$	1,302,722	$	15,257		4.70	%
Securities:
Taxable		73,153		401		2.20	%		54,810		332		2.43	%
Tax-exempt		38,507		333		3.47	%		36,010		335		3.74	%
Federal funds and interest- bearing deposits		98,326		195		0.80	%		245,257		20		0.03	%
Total interest earning assets	$	1,644,863	$	18,883		4.60	%	$	1,638,799	$	15,944		3.90	%
Other assets		65,225							69,950
Total assets	$	1,710,088						$	1,708,749
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing demand deposits	$	96,352	$	105		0.44	%	$	68,714	$	55		0.32	%
Savings and NOW deposits		62,588		42		0.27	%		71,747		47		0.26	%
Money market deposit accounts		234,097		151		0.26	%		322,332		220		0.27	%
Time deposits		499,734		1,530		1.23	%		538,766		1,994		1.48	%
Total interest-bearing deposits	$	892,771	$	1,828		0.82	%	$	1,001,559	$	2,316		0.93	%
Federal funds purchased		1		—		—			1		—		—
Subordinated debt		72,009		812		4.52	%		39,716		567		5.73	%
FHLB borrowings		35,275		52		0.59	%		—		—		—
Total interest-bearing liabilities	$	1,000,056	$	2,692		1.08	%	$	1,041,276	$	2,883		1.11	%
Demand deposits and other liabilities		521,130							491,857
Total liabilities	$	1,521,186						$	1,533,133
Stockholders' Equity		188,902							175,616
Total Liabilities and Stockholders' Equity	$	1,710,088						$	1,708,749
Interest Rate Spread						3.52	%						2.84	%
Net Interest Income			$	16,191						$	13,061
Net Interest Margin						3.95	%						3.20	%

(1)	Includes loans classified as non-accrual
(2)	Includes average PPP balances of $11.4 million, related interest income of approximately $28,000, and $392,000 in PPP fees recognized for the three months ended June 30, 2022. Includes average PPP balances of $161.8 million, related interest income of approximately $404,000, and $1.2 million in PPP fees recognized for the three months ended June 30, 2021
(3)	Total loan interest income includes amortization of deferred loan fees, net of deferred loan costs
(4)	Income and yields for all periods presented are reported on a tax-equivalent basis using the federal statutory rate of 21%
(5)	Refer to Appendix for reconciliation of non-GAAP measures

UNAUDITED AVERAGE BALANCE SHEETS, INTEREST AND RATES
(In thousands)

	For the six months ended June 30, 2022							For the six months ended June 30, 2021
	Average Balance		Interest Income/ Expense (4)(5)		Average Yields/ Rate (annualized) (4)(5)			Average Balance		Interest Income/ Expense (4)(5)		Average Yields/ Rate (annualized) (4)(5)
ASSETS:
Interest earning assets:
Loans (1)(2)(3)	$	1,406,457	$	34,639		4.97	%	$	1,311,085	$	31,049		4.78	%
Securities:
Taxable		73,283		758		2.09	%		54,100		592		2.21	%
Tax-exempt		39,023		677		3.50	%		36,247		677		3.77	%
Federal funds and interest- bearing deposits		91,081		229		0.51	%		219,648		35		0.03	%
Total interest earning assets	$	1,609,844	$	36,303		4.55	%	$	1,621,080	$	32,353		4.02	%
Other assets		76,387							70,337
Total assets	$	1,686,231						$	1,691,417
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing demand deposits	$	83,450	$	170		0.41	%	$	68,556	$	110		0.32	%
Savings and NOW deposits		72,617		79		0.22	%		70,875		89		0.25	%
Money market deposit accounts		250,908		270		0.22	%		367,424		497		0.27	%
Time deposits		478,376		2,961		1.25	%		509,465		4,244		1.68	%
Total interest-bearing deposits	$	885,351	$	3,480		0.79	%	$	1,016,320	$	4,940		0.98	%
Federal funds and repos purchased		1		—		—			—		—		—
Subordinated debt		58,079		1,280		4.44	%		27,346		805		5.94	%
FHLB borrowings		36,215		83		0.46	%		—		—		—
Total interest-bearing liabilities	$	979,646	$	4,843		1.00	%	$	1,043,666	$	5,745		1.11	%
Demand deposits and other liabilities		517,281							474,566
Total liabilities	$	1,496,927						$	1,518,232
Stockholders' Equity		189,304							173,185
Total Liabilities and Stockholders' Equity	$	1,686,231						$	1,691,417
Interest Rate Spread						3.55	%						2.91	%
Net Interest Income			$	31,460						$	26,608
Net Interest Margin						3.94	%						3.31	%


(1)	Includes loans classified as non-accrual
(2)	Includes average PPP balances of $25.2 million, related interest income of approximately $126,000, and $1.7 million in PPP fees recognized for the six months ended June 30, 2022. Includes average PPP balances of $158.0 million, related interest income of approximately $790,000, and $2.8 million in PPP fees recognized for the three months ended June 30, 2021
(3)	Total loan interest income includes amortization of deferred loan fees, net of deferred loan costs
(4)	Income and yields for all periods presented are reported on a tax-equivalent basis using the federal statutory rate of 21%
(5)	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 Six Months Ended
	June 30,						June 30,
	2022			2021			2022			2021
*Per share Data and Shares Outstanding*
Earnings per common share (basic and diluted)	$	0.71		$	0.87		$	1.35		$	1.53
Book value per common share	$	21.41		$	20.18		$	21.41		$	20.18
Tangible book value per common share (2)	$	20.75		$	20.18		$	20.75		$	20.18
Weighted average common shares (basic and diluted)		7,575,484			7,546,452			7,611,303			7,535,061
Common shares outstanding at end of period		7,526,463			7,549,398			7,526,463			7,549,398
*Performance Ratios*
Return on average assets (annualized)		1.39	%		1.67	%		1.36	%		1.50	%
Return on average equity (annualized)		12.59	%		16.28	%		12.09	%		14.64	%
Return on average common equity (annualized)		13.38	%		17.81	%		12.79	%		15.89	%
Yield on earning assets (FTE) (2) (annualized)		4.60	%		3.90	%		4.55	%		4.02	%
Cost of interest bearing liabilities (annualized)		1.08	%		1.11	%		1.00	%		1.11	%
Net interest spread (FTE) (2)		3.52	%		2.84	%		3.55	%		2.91	%
Net interest margin (FTE)(2) (annualized)		3.95	%		3.20	%		3.94	%		3.31	%
Noninterest income as a percentage of average assets (annualized)		0.30	%		0.37	%		0.29	%		0.36	%
Noninterest expense to average assets (annualized)		2.23	%		1.85	%		2.21	%		1.87	%
Efficiency ratio (3)		54.61	%		54.12	%		54.70	%		53.22	%
*Asset Quality*
Commercial real estate loans to total capital (4)		366.10	%		346.23	%		366.10	%		346.23	%
Construction loans to total capital (5)		138.16	%		154.63	%		138.16	%		154.63	%
Loans 30-89 days past due to total gross loans		0.01	%		0.07	%		0.01	%		0.07	%
Loans 90 days past due to total gross loans		0.00	%		0.00	%		0.00	%		0.00	%
Non-accrual loans to total gross loans		0.00	%		0.00	%		0.00	%		0.00	%
Other real estate owned	$	—		$	1,158		$	—		$	1,158
Non-performing assets	$	—		$	1,158		$	—		$	1,158
Non-performing assets to total assets		0.00	%		0.07	%		0.00	%		0.07	%
Allowance for loan losses to total gross loans		0.91	%		0.87	%		0.91	%		0.87	%
Allowance for loan losses to non-performing assets		N/A			9.61			N/A			9.61
Net loan charge-offs (recoveries)	$	(2)		$	2		$	(5)		$	(16)
Net charge-offs (recoveries) to average gross loans (annualized)		N/A			N/A			N/A			N/A
*Regulatory Capital Ratios (Bank only)* *(1)*
Total risk-based capital ratio		16.23	%		16.25	%		16.23	%		16.25	%
Tier 1 risk-based capital ratio		15.42	%		15.40	%		15.42	%		15.40	%
Leverage ratio		14.34	%		11.78	%		14.34	%		11.78	%
Common equity tier 1 ratio		15.42	%		15.40	%		15.42	%		15.40	%
*Other information*
Closing stock price	$	22.77		$	22.58		$	22.77		$	22.58
Equity / assets		10.61	%		10.52	%		10.61	%		10.52	%
Average equity / average assets		11.05	%		10.28	%		11.23	%		10.24	%
Number of full time equivalent employees		146			129			146			129
# Full service branch offices		6			7			6			7


(1)	Regulatory capital ratios as of June 30, 2022 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
(4)	Commercial real estate includes only non-owner occupied and construction loans as a percentage of Bank capital
(5)	Construction loans as a percentage of Bank capital

Unaudited Reconciliation of Certain Non-GAAP Financial Measures
(Dollars In thousands)

	For the three months ended June 30,						For the six months ended June 30,
	2022			2021			2022			2021
Net interest margin (FTE)
Net interest income (GAAP)	$	16,121		$	12,991		$	31,318		$	26,466
FTE adjustment on tax-exempt securities		70			70			142			142
Net interest income (FTE) (non-GAAP)		16,191			13,061			31,460			26,608

Average interest earning assets		1,644,863			1,638,799			1,609,844			1,621,080
Net interest margin (GAAP)		3.93	%		3.18	%		3.92	%		3.29	%
Net interest margin (FTE) (non-GAAP)		3.95	%		3.20	%		3.94	%		3.31	%

	For the three months ended June 30,						For the six months ended June 30,
	2022			2021			2022			2021
Stockholders equity, adjusted
Total stockholders equity (GAAP)	$	188,404		$	179,628		$	188,404		$	179,628
Less: preferred stock		(27,263)			(27,263)			(27,263)			(27,263)
Total common stockholders equity (GAAP)		161,141			152,365		$	161,141		$	152,365
Less: intangible assets		4,956			—			4,956			—
Tangible common stockholders equity (non-GAAP)		156,185			152,365			156,185			152,365

Shares outstanding		7,526,463			7,549,398			7,526,463			7,549,398
Tangible book value per common share (non-GAAP)	$	20.75		$	20.18		$	20.75		$	20.18

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SOURCE MainStreet Bancshares, Inc.

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MainStreet Bancshares, Inc. Reports Strong Net Income as Interest Rates Rise