MainStreet Bancshares Inc. Reports 2024 Results

1/27/25 8:18:00 AM ET

Major Banks

Finance

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A challenging year, ending with strong and stable asset quality and strong capital

FAIRFAX, Va., Jan. 27, 2025 /PRNewswire/ -- MainStreet Bancshares, Inc. (NASDAQ:MNSB, MNSBP)), the financial holding company for MainStreet Bank reported a loss of $9.98 million for 2024 resulting from the nonrecurring impairment of capitalized intangible software and the resolution of nonperforming assets. The Company remains strongly capitalized with good liquidity.

"At the end of 2024, the Company impaired the full value of its capitalized intangible software. Despite this impairment, the software remains a component of our Avenu Banking-as-a-Service solution and will continue to be used to drive fintech partnerships to grow low-cost deposits and fee income," said Jeff W. Dick, Chairman & CEO of MainStreet Bancshares, Inc. and MainStreet Bank. "The end of 2024 was management's first opportunity to review the Avenu platform's performance, as it was only put into production during the fourth quarter. The delays in bringing Avenu to market and subsequent changes in the potential for revenue generation necessitated management's review for impairment and resulting charge to earnings. Management conducted the impairment assessment in accordance with ASC 350-40-35, using the income approach. We remain committed to providing innovative embedded banking services that meet our customers where they do business and that allow developers to focus on providing leading-edge digital financial solutions."

"During 2024, the Company ended the year with a healthy net interest margin of 3.13%," said Alex Vari, Chief Accountant for MainStreet Bank. "Excess liquidity in the fourth quarter gave us the opportunity to exercise call options on higher-yielding term deposits and restructure our wholesale deposit position. This will further reduce our funding costs into 2025, and with expense management efforts will yield positive results for the Company and for our shareholders."

Chief Lending Officer Tom Floyd said, "the lending team worked diligently to grow the loan portfolio by 6% while also resolving 62% of our nonperforming loans and making solid progress on resolving the final $21.7 million in a timely manner."

Total deposits grew 13% from prior year-end to $1.9 billion, with core deposits growing $187 million year on year. Total core deposits at year-end were $1.4 billion, or 75% of total deposits.

"The DC Metropolitan area remains a vibrant market. The interest rate environment is normalizing, with the FOMC cutting rates three times thus far for a total of 1.0%," said Abdul Hersiburane, President of MainStreet Bank. "Our borrowers are benefiting from the declining rate environment with strengthening liquidity."

BACKGROUND: MainStreet Bancshares, Inc. (NASDAQ:MNSB, MNSBP)), is a small-cap financial holding company trading in the Nasdaq Capital Market index. The financial holding company owns 100% of MainStreet Bank, a business-focused community bank headquartered in Fairfax, Virginia. The Bank engages a branch-lite model with six full-service financial centers 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 well over 1,000 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 Bank is an SBA Preferred Lender, offering 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, D.C., metropolitan area to offer a full online business banking solution. MainStreet Bank was also the first bank headquartered in the Commonwealth of Virginia to offer CDARS – a solution that provides multi-million-dollar FDIC insurance. Further information on the Bank can be obtained by visiting its website at mstreetbank.com.

Banking-as-a-Service

In 2021, the Board and management decided to make an investment in technology that would best serve clients requiring Banking-as-a-Service (BaaS). The Avenu BaaS solution officially launched on October 1, 2024. The ability to digitally offer banking services in a safe and compliant manner allows the Company to reach new customer deposit segments, diversify revenue streams and generate additional income. The BaaS market is currently underserved, and the opportunities for a well-developed solution are robust. The Avenu business model is in-line with the Company's physical branch-lite strategy.

Avenu provides a full-stack embedded banking solution that connects our partners and their apps directly and seamlessly to our purpose-built Avenu core. Avenu's clients are fintechs, social media solutions, application developers, money movers, and entrepreneurs. They all have one thing in common: They are in search of a reliable partner to help innovate how money moves - solving real-world issues and helping communities thrive. MainStreet Bank is that reliable partner dedicated to providing a best-in-class solution to sustain long-term business relationships.

MainStreet Bancshares, Inc. has an investment grade rating of "A" from Egan-Jones Rating Company. 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 pandemic outbreaks, maintenance and development of well-established and valued client relationships and referral source relationships, and acquisition or loss of key production personnel. We caution readers that the list of factors above is not exclusive. The forward-looking statements are made as of the date of this release, and we may not undertake steps to update the forward-looking statements to reflect the impact of any circumstances or events that arise after the date the forward-looking statements are made. In addition, our past results of operations are not necessarily indicative of future performance.

UNAUDITED CONSOLIDATED BALANCE SHEET INFORMATION
(In thousands)

	December 31, 2024		September 30, 2024		June 30, 2024		March 31, 2024		December 31, 2023*
ASSETS
Cash and cash equivalents
Cash and due from banks	$	47,553	$	40,955	$	41,697	$	49,208	$	53,581
Federal funds sold		160,155		191,159		49,762		75,533		60,932
Total cash and cash equivalents		207,708		232,114		91,459		124,741		114,513
Investment securities available for sale, at fair value		55,747		58,489		57,605		58,699		59,928
Investment securities held to maturity, at amortized cost, net of allowance for credit losses of $0 for all periods		16,078		16,016		16,036		17,251		17,275
Restricted equity securities, at amortized cost		30,623		26,745		26,797		23,924		24,356
Loans, net of allowance for credit losses of $19,450, $18,327, $17,098, $16,531, and $16,506, respectively		1,810,556		1,775,558		1,778,840		1,727,110		1,705,137
Premises and equipment, net		13,287		13,571		13,787		14,081		13,944
Accrued interest and other receivables		11,311		11,077		11,916		10,727		12,390
Computer software, net of amortization		—		18,881		17,205		15,691		14,657
Bank owned life insurance		39,507		39,203		38,901		38,609		38,318
Other assets		43,281		32,945		41,200		39,182		34,914
Total Assets	$	2,228,098	$	2,224,599	$	2,093,746	$	2,070,015	$	2,035,432
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Non-interest bearing deposits	$	324,307	$	347,575	$	314,636	$	348,945	$	364,606
Interest bearing demand deposits		139,780		197,527		179,513		165,331		137,128
Savings and NOW deposits		64,337		61,893		60,867		46,036		45,878
Money market deposits		560,082		451,936		476,396		446,903		442,179
Time deposits		819,288		834,738		723,951		725,520		696,336
Total deposits		1,907,794		1,893,669		1,755,363		1,732,735		1,686,127
Federal funds purchased		—		—		—		—		15,000
Subordinated debt		73,039		72,940		72,841		72,741		72,642
Other liabilities		39,274		31,939		40,827		41,418		40,146
Total Liabilities		2,020,107		1,998,548		1,869,031		1,846,894		1,813,915
Stockholders' Equity:
Preferred stock		27,263		27,263		27,263		27,263		27,263
Common stock		29,466		29,463		29,452		29,514		29,198
Capital surplus		67,823		67,083		66,392		65,940		65,985
Retained earnings		91,150		108,616		109,651		108,334		106,549
Accumulated other comprehensive loss		(7,711)		(6,374)		(8,043)		(7,930)		(7,478)
Total Stockholders' Equity		207,991		226,051		224,715		223,121		221,517
Total Liabilities and Stockholders' Equity	$	2,228,098	$	2,224,599	$	2,093,746	$	2,070,015	$	2,035,432

*Derived from audited financial statements

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

	Year-to-Date				Three Months Ended
	December 31, 2024		December 31, 2023*		December 31, 2024		September 30, 2024		June 30, 2024		March 31, 2024		December 31, 2023
INTEREST INCOME:
Interest and fees on loans	$	125,177	$	116,482	$	31,323	$	31,615	$	31,655	$	30,582	$	30,951
Interest on investment securities
Taxable securities		1,693		1,836		431		397		430		435		451
Tax-exempt securities		1,093		1,065		262		294		268		270		268
Interest on federal funds sold		6,652		5,038		3,103		1,285		1,083		1,182		1,510
Total interest income		134,615		124,421		35,119		33,591		33,436		32,469		33,180
INTEREST EXPENSE:
Interest on interest bearing demand deposits		8,661		1,786		2,612		2,117		2,118		1,814		1,027
Interest on savings and NOW deposits		754		546		201		206		190		157		146
Interest on money market deposits		21,386		13,631		5,475		5,277		5,542		5,092		5,538
Interest on time deposits		37,364		26,905		10,003		9,543		9,010		8,808		8,187
Interest on federal funds purchased		575		299		—		277		191		107		25
Interest on Federal Home Loan Bank advances		46		1,224		—		—		—		46		118
Interest on subordinated debt		3,255		3,288		787		828		820		820		828
Total interest expense		72,041		47,679		19,078		18,248		17,871		16,844		15,869
Net interest income		62,574		76,742		16,041		15,343		15,565		15,625		17,311
Provision for (recovery of) credit losses		6,763		1,642		3,407		2,913		638		(195)		466
Net interest income after provision for (recovery of) credit losses		55,811		75,100		12,634		12,430		14,927		15,820		16,845
NON-INTEREST INCOME:
Deposit account service charges		1,996		2,149		481		557		490		469		510
Bank owned life insurance income		1,189		1,069		304		302		291		292		283
Net loss on securities called or matured		(48)		—		—		—		(48)		—		—
Other non-interest income (loss)		115		122		22		27		31		35		(34)
Total non-interest income		3,252		3,340		807		886		764		796		759
NON-INTEREST EXPENSES:
Salaries and employee benefits		30,475		28,267		8,253		7,250		7,484		7,488		7,129
Furniture and equipment expenses		3,636		2,787		830		931		940		935		804
Advertising and marketing		2,199		2,343		600		579		566		454		271
Occupancy expenses		1,614		1,684		358		407		415		435		397
Outside services		3,627		2,044		1,168		845		839		774		352
Administrative expenses		929		922		243		215		229		242		219
Computer software intangible impairment		19,721		—		19,721		—		—		—		—
Other operating expenses		10,766		7,569		3,258		2,992		2,362		2,153		2,166
Total non-interest expenses		72,967		45,616		34,431		13,219		12,835		12,481		11,338
Income (loss) before income tax expense (benefit)		(13,904)		32,824		(20,990)		97		2,856		4,135		6,266
Income tax expense (benefit)		(3,924)		6,239		(4,823)		(168)		238		830		1,120
Net income (loss)		(9,980)		26,585		(16,167)		265		2,618		3,305		5,146
Preferred stock dividends		2,156		2,156		539		539		539		539		539
Net income (loss) available to common shareholders	$	(12,136)	$	24,429	$	(16,706)	$	(274)	$	2,079	$	2,766	$	4,607
Earnings (loss) per common share, basic and diluted	$	(1.60)	$	3.25	$	(2.20)	$	(0.04)	$	0.27	$	0.36	$	0.61
Weighted average number of common shares, basic and diluted		7,606,391		7,522,913		7,603,318		7,601,925		7,608,389		7,611,990		7,527,327

*Derived from audited financial statements

UNAUDITED LOAN, DEPOSIT AND BORROWING DETAIL
(In thousands)

	December 31, 2024					September 30, 2024					December 31, 2023					Percentage Change
	$ Amount		% of Total			$ Amount		% of Total			$ Amount		% of Total			Last 3 Mos			Last 12 Mos
LOANS:
Construction and land development loans	$	391,253		21.3	%	$	373,486		20.8	%	$	429,637		24.9	%		4.8	%		-8.9	%
Residential real estate loans		438,745		23.9	%		446,109		24.8	%		474,602		27.5	%		-1.7	%		-7.6	%
Commercial real estate loans		898,204		48.9	%		871,280		48.4	%		743,827		43.1	%		3.1	%		20.8	%
Commercial and industrial loans		105,212		5.7	%		106,249		5.9	%		75,415		4.3	%		-1.0	%		39.5	%
Consumer loans		1,574		0.2	%		1,977		0.1	%		3,610		0.2	%		-20.4	%		-56.4	%
Total Gross Loans	$	1,834,988		100.0	%	$	1,799,101		100.0	%	$	1,727,091		100.0	%		2.0	%		6.2	%
Less: Allowance for credit losses		(19,450)					(18,327)					(16,506)
Net deferred loan fees		(4,982)					(5,216)					(5,448)
Net Loans	$	1,810,556				$	1,775,558				$	1,705,137
DEPOSITS:
Non-interest bearing deposits	$	324,307		17.0	%	$	347,575		18.4	%	$	364,606		21.6	%		-6.7	%		-11.1	%
Interest-bearing deposits:
Demand deposits		139,780		7.3	%		197,527		10.4	%		137,128		8.1	%		-29.2	%		1.9	%
Savings and NOW deposits		64,337		3.4	%		61,893		3.3	%		45,878		2.7	%		3.9	%		40.2	%
Money market deposits		560,082		29.4	%		451,936		23.9	%		442,179		26.2	%		23.9	%		26.7	%
Certificates of deposit $250,000 or more		535,676		28.0	%		532,201		28.0	%		442,662		26.3	%		0.7	%		21.0	%
Certificates of deposit less than $250,000		283,612		14.9	%		302,537		16.0	%		253,674		15.1	%		-6.3	%		11.8	%
Total Deposits	$	1,907,794		100.0	%	$	1,893,669		100.0	%	$	1,686,127		100.0	%		0.7	%		13.1	%
BORROWINGS:
Federal funds purchased		—		0.0	%		—		0.0	%		15,000		17.1	%		0.0	%		-100.0	%
Subordinated debt		73,039		100.0	%		72,940		100.0	%		72,642		82.9	%		0.1	%		0.5	%
Total Borrowings	$	73,039		100.0	%	$	72,940		100.0	%	$	87,642		100.0	%		0.1	%		-16.7	%
Total Deposits and Borrowings	$	1,980,833				$	1,966,609				$	1,773,769					0.7	%		11.7	%

Core customer funding sources ⁽¹⁾	$	1,439,657		72.7	%	$	1,471,350		74.8	%	$	1,252,534		70.7	%		-2.2	%		14.9	%
Brokered and listing service sources ⁽²⁾		468,137		23.6	%		422,319		21.5	%		433,593		24.4	%		10.8	%		8.0	%
Federal funds purchased		—		0.0	%		—		0.0	%		15,000		0.8	%		0.0	%		-100.0	%
Subordinated debt ⁽³⁾		73,039		3.7	%		72,940		3.7	%		72,642		4.1	%		0.1	%		0.5	%
Total Funding Sources	$	1,980,833		100.0	%	$	1,966,609		100.0	%	$	1,773,769		100.0	%		0.7	%		11.7	%


(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.
	Excludes $259.9 million in core deposits placed in reciprocal networks for FDIC insurance coverage that will be classified as brokered deposits on the call report in pursuant to rule 12 CFR 337.6(e) as of December 31, 2024.
(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, 2024							For the three months ended December 31, 2023
	Average Balance		Interest Income/ Expense (3)(4)		Average Yields/ Rate (annualized) (3)(4)			Average Balance		Interest Income/ Expense (3)(4)		Average Yields/ Rate (annualized) (3)(4)
ASSETS:
Interest-earning assets:
Loans ⁽¹⁾⁽²⁾	$	1,808,894	$	31,323		6.87	%	$	1,720,790	$	30,951		7.14	%
Securities:
Taxable		53,566		431		3.19	%		55,646		451		3.22	%
Tax-exempt		35,512		332		3.71	%		37,614		339		3.58	%
Federal funds and interest-bearing deposits		263,595		3,103		4.67	%		114,421		1,510		5.24	%
Total interest-earning assets	$	2,161,567	$	35,189		6.46	%	$	1,928,471	$	33,251		6.84	%
Other assets		129,077							69,725
Total assets	$	2,290,644						$	1,998,196
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing demand deposits	$	231,496	$	2,612		4.48	%	$	98,021	$	1,027		4.16	%
Savings and NOW deposits		64,112		201		1.24	%		47,142		146		1.23	%
Money market deposits		514,235		5,475		4.22	%		477,916		5,538		4.60	%
Time deposits		809,924		10,003		4.90	%		710,026		8,187		4.57	%
Total interest-bearing deposits	$	1,619,767	$	18,291		4.48	%	$	1,333,105	$	14,898		4.43	%
Federal funds purchased		2		—		0.00	%		1,740		25		5.70	%
FHLB advances		—		—		—			8,424		118		5.56	%
Subordinated debt		73,001		787		4.28	%		72,603		828		4.52	%
Total interest-bearing liabilities	$	1,692,770	$	19,078		4.47	%	$	1,415,872	$	15,869		4.45	%
Demand deposits and other liabilities		370,332							365,655
Total liabilities	$	2,063,102						$	1,781,527
Stockholders' Equity		227,542							216,669
Total Liabilities and Stockholders' Equity	$	2,290,644						$	1,998,196
Interest Rate Spread						1.99	%						2.39	%
Net Interest Income			$	16,111						$	17,382
Net Interest Margin						2.96	%						3.58	%


(1)	Includes loans classified as non-accrual
(2)	Total loan interest income includes amortization of deferred loan fees, net of deferred loan costs
(3)	Income and yields for all periods presented are reported on a tax-equivalent basis using the federal statutory rate of 21%
(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, 2024							For the year ended December 31, 2023
	Average Balance		Interest Income/ Expense (3)(4)		Average Yields/ Rate (annualized) (3)(4)			Average Balance		Interest Income/ Expense (3)(4)		Average Yields/ Rate (annualized) (3)(4)
ASSETS:
Interest-earning assets:
Loans ⁽¹⁾⁽²⁾	$	1,782,061	$	125,177		7.02	%	$	1,659,179	$	116,482		7.02	%
Securities:
Taxable		54,935		1,693		3.08	%		57,386		1,836		3.20	%
Tax-exempt		36,379		1,384		3.80	%		37,810		1,348		3.57	%
Federal funds and interest-bearing deposits		137,073		6,652		4.85	%		103,840		5,038		4.85	%
Total interest-earning assets	$	2,010,448	$	134,906		6.71	%	$	1,858,215	$	124,704		6.71	%
Other assets		126,138							73,590
Total assets	$	2,136,586						$	1,931,805
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing demand deposits	$	181,109	$	8,661		4.78	%	$	83,087	$	1,786		2.15	%
Savings and NOW deposits		54,385		754		1.39	%		49,565		546		1.10	%
Money market deposit		464,400		21,386		4.61	%		365,815		13,631		3.73	%
Time deposits		748,938		37,364		4.99	%		702,034		26,905		3.83	%
Total interest-bearing deposits	$	1,448,832	$	68,165		4.70	%	$	1,200,501	$	42,868		3.57	%
Federal funds purchased		9,941		575		5.78	%		5,583		299		5.36	%
FHLB advances		820		46		5.61	%		24,959		1,224		4.90	%
Subordinated debt		72,852		3,255		4.47	%		72,455		3,288		4.54	%
Total interest-bearing liabilities	$	1,532,445	$	72,041		4.70	%	$	1,303,498	$	47,679		3.66	%
Demand deposits and other liabilities		379,510							418,386
Total liabilities	$	1,911,955						$	1,721,884
Stockholders' Equity		224,631							209,921
Total Liabilities and Stockholders' Equity	$	2,136,586						$	1,931,805
Interest Rate Spread						2.01	%						3.05	%
Net Interest Income			$	62,865						$	77,025
Net Interest Margin						3.13	%						4.15	%


(1)	Includes loans classified as non-accrual
(2)	Total loan interest income includes amortization of deferred loan fees, net of deferred loan costs
(3)	Income and yields for all periods presented are reported on a tax-equivalent basis using the federal statutory rate of 21%
(4)	Refer to Appendix for reconciliation of non-GAAP measures

UNAUDITED SUMMARY FINANCIAL DATA
(Dollars in thousands except share and per share data)

	At or For the Three Months Ended						At or For the Year Ended
	December 31,						December 31,
	2024			2023			2024			2023
*Per share Data and Shares Outstanding*
Earnings (loss) per common share (basic and diluted)	$	(2.20)		$	0.61		$	(1.60)		$	3.25
Book value per common share	$	23.77		$	25.81		$	23.77		$	25.81
Tangible book value per common share⁽²⁾	$	23.77		$	23.86		$	23.77		$	23.86
Weighted average common shares (basic and diluted)		7,603,318			7,527,327			7,606,391			7,522,913
Common shares outstanding at end of period		7,603,765			7,527,415			7,603,765			7,527,415
*Performance Ratios*
Return (loss) on average assets (annualized)		(2.80)	%		1.02	%		(0.47)	%		1.38	%
Return (loss) on average equity (annualized)		(28.19)	%		9.42	%		(4.44)	%		12.66	%
Return (loss) on average common equity (annualized)		(33.09)	%		10.28	%		(6.15)	%		13.37	%
Yield on earning assets (FTE) ⁽²⁾ (annualized)		6.46	%		6.84	%		6.71	%		6.71	%
Cost of interest bearing liabilities (annualized)		4.47	%		4.45	%		4.70	%		3.66	%
Net interest spread (FTE)(2) (annualized)		1.99	%		2.39	%		2.01	%		3.05	%
Net interest margin (FTE)⁽²⁾ (annualized)		2.96	%		3.58	%		3.13	%		4.15	%
Non-interest income as a percentage of average assets (annualized)		0.14	%		0.17	%		0.15	%		0.17	%
Non-interest expense to average assets (annualized)		5.96	%		2.21	%		3.42	%		2.36	%
Efficiency ratio⁽³⁾		204.36	%		61.29	%		110.85	%		56.96	%
*Asset Quality*
Allowance for credit losses (ACL)
Beginning balance, ACL - loans	$	18,327		$	15,626		$	16,506		$	14,114
Add: recoveries		9			9			28			22
Less: charge-offs		(2,151)			(137)			(4,569)			(468)
Add: provision for (recovery of) credit losses - loans		3,265			1,008			7,485			1,943
Add: current expected credit losses, nonrecurring adoption		—			—			—			895
Ending balance, ACL - loans	$	19,450		$	16,506		$	19,450		$	16,506

Beginning balance, reserve for unfunded commitment (RUC)	$	145		$	1,552		$	1,009		$	—
Add: current expected credit losses, nonrecurring adoption		—			—			—			1,310
Add: provision for (recovery of) unfunded commitments, net		142			(543)			(722)			(301)
Ending balance, RUC	$	287		$	1,009		$	287		$	1,009
Total allowance for credit losses	$	19,737		$	17,515		$	19,737		$	17,515

Allowance for credit losses on loans to total gross loans		1.06	%		0.96	%		1.06	%		0.96	%
Allowance for credit losses to total gross loans		1.08	%		1.01	%		1.08	%		1.01	%
Allowance for credit losses on loans to non-performing loans		89.84	%		16.44X			89.84	%		16.44X
Net charge-offs (recoveries) to average gross loans (annualized)		0.46	%		0.03	%		0.25	%		0.03	%
*Concentration Ratios*
Commercial real estate loans to total capital ⁽⁴⁾		393.79	%		372.50	%		393.79	%		372.50	%
Construction loans to total capital ⁽⁵⁾		131.92	%		137.67	%		131.92	%		137.67	%
*Non-performing Assets*
Loans 30-89 days past due and accruing to total gross loans		0.00	%		0.04	%		0.00	%		0.04	%
Loans 90 days past due and accruing to total gross loans		0.00	%		0.00	%		0.00	%		0.00	%
Non-accrual loans to total gross loans		1.18	%		0.06	%		1.18	%		0.06	%
Other real estate owned	$	—		$	—		$	—		$	—
Non-performing loans	$	21,650		$	1,004		$	21,650		$	1,004
Non-performing assets to total assets		0.97	%		0.05	%		0.97	%		0.05	%
*Regulatory Capital Ratios (Bank only)* *⁽¹⁾*
Total risk-based capital ratio		15.69	%		17.18	%		15.69	%		17.18	%
Tier 1 risk-based capital ratio		14.64	%		16.22	%		14.64	%		16.22	%
Leverage ratio		12.08	%		14.66	%		12.08	%		14.66	%
Common equity tier 1 ratio		14.64	%		16.22	%		14.64	%		16.22	%
*Other information*
Closing stock price	$	18.10		$	24.81		$	18.10		$	24.81
Tangible equity / tangible assets ⁽²⁾		9.33	%		10.24	%		9.33	%		10.24	%
Average tangible equity / average tangible assets ⁽²⁾		9.21	%		10.22	%		9.80	%		10.31	%
Number of full time equivalent employees		204			186			204			186
Number of full service branch offices		6			6			6			6


(1)	Regulatory capital ratios as of December 31, 2024 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, multifamily, 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 December 31,						For the year ended December 31,
	2024			2023			2024			2023
Net interest margin (FTE)
Net interest income (GAAP)	$	16,041		$	17,311		$	62,574		$	76,742
FTE adjustment on tax-exempt securities		70			71			291			283
Net interest income (FTE) (non-GAAP)		16,111			17,382			62,865			77,025

Average interest earning assets		2,161,567			1,928,471			2,010,448			1,858,215
Net interest margin (GAAP)		2.94	%		3.56	%		3.11	%		4.13	%
Net interest margin (FTE) (non-GAAP)		2.96	%		3.58	%		3.13	%		4.15	%


	For the three months ended December 31,						For the year ended December 31,
	2024			2023			2024			2023
Yield on earning assets (FTE)
Total interest income (GAAP)	$	35,119		$	33,180		$	134,615		$	124,421
FTE adjustment on tax-exempt securities		70			71			291			283
Total interest income (FTE) (non-GAAP)		35,189			33,251			134,906			124,704

Average interest earning assets		2,161,567			1,928,471			2,010,448			1,858,215
Yield on earning assets (GAAP)		6.45	%		6.83	%		6.70	%		6.70	%
Yield on earning assets (FTE) (non-GAAP)		6.46	%		6.84	%		6.71	%		6.71	%

	For the three months ended December 31,						For the year ended December 31,
	2024			2023			2024			2023
Net Income and earnings per share, adjusted
Net Income (loss), as reported	$	(16,167)		$	5,146		$	(9,980)		$	26,585
Less: nonrecurring intangible impairment		(19,721)			—			(19,721)			—
Less: nonrecurring restructuring expenses		(430)			—			(430)			—
Less: nonrecurring other expenses		(296)			—			(890)			—
Related income tax benefit		4,633			—			4,763			—
Net income (loss), adjusted		(353)			5,146			6,298			26,585
Preferred stock dividends		539			539			2,156			2,156
Net income (loss) available to common shareholders, adjusted		(892)			4,607			4,142			24,429

Weighted average shares - basic and diluted		7,603,318			7,527,327			7,606,391			7,522,913

Earnings (loss) per common share, basic and diluted, adjusted
Earnings (loss) per common share, basic and diluted, as reported	$	(2.20)		$	0.61		$	(1.60)		$	3.25
Nonrecurring expenses per share, net of taxes		2.08			—			2.14			—
Earnings (loss) per common share, basic and diluted, adjusted	$	(0.12)		$	0.61		$	0.54		$	3.25

Adjusted Return (loss) on Average Assets (ROAA)
Average assets, as reported		2,290,644			1,998,196			2,136,586			1,931,805

Annualized ROAA, as reported		(2.80)	%		1.02	%		(0.47)	%		1.38	%
Annualized ROAA, as adjusted		(0.06)	%		1.02	%		0.29	%		1.38	%

Adjusted Return (loss) on Average Equity (ROAE)
Average equity, as reported		227,542			216,669			224,631			209,921

Annualized ROAE, as reported		(28.19)	%		9.42	%		(4.44)	%		12.66	%
Annualized ROAE, as adjusted		(0.62)	%		9.42	%		2.80	%		12.66	%

Efficiency Ratio, adjusted
Noninterest expenses, as reported		34,431			11,338			72,967			45,616
Less: nonrecurring intangible impairment		(19,721)			—			(19,721)			—
Less: nonrecurring restructuring expenses		(430)			—			(430)			—
Less: nonrecurring other expenses		(296)			—			(890)			—
Noninterest expenses, adjusted for nonrecurring expenses		13,984			11,338			51,926			45,616

Efficiency ratio, as reported		204.36	%		61.29	%		110.85	%		56.96	%
Efficiency ratio, as adjusted		83.00	%		61.29	%		78.88	%		56.96	%


	For the three months ended December 31,						For the year ended December 31,
	2024			2023			2024			2023
Net interest spread (FTE)
Yield on earning assets (GAAP)		6.45	%		6.83	%	6.70		%	6.70		%
Yield on earning assets (FTE) (non-GAAP)		6.46	%		6.84	%	6.71		%	6.71		%

Yield on interest-bearing liabilities (GAAP)		4.47	%		4.45	%	4.70		%		3.66	%
Net interest spread (GAAP)		1.98	%		2.38	%	1.99		%	3.04		%
Net interest spread (FTE) (non-GAAP)		1.99	%		2.39	%		2.01	%	3.05		%

	As of December 31,						As of December 31,
	2024			2023			2024			2023
Tangible common stockholders' equity
Total stockholders equity (GAAP)	$	207,991		$	221,517		$	207,991		$	221,517
Less: intangible assets		—			(14,657)			—			(14,657)
Tangible stockholders' equity (non-GAAP)		207,991			206,860			207,991			206,860
Less: preferred stock		(27,263)			(27,263)			(27,263)			(27,263)
Tangible common stockholders' equity (non-GAAP)		180,728			179,597			180,728			179,597

Common shares outstanding		7,603,765			7,527,415			7,603,765			7,527,415
Tangible book value per common share (non-GAAP)	$	23.77		$	23.86		$	23.77		$	23.86

	As of December 31,						As of December 31,
	2024			2023			2024			2023
Stockholders equity, adjusted
Total stockholders equity (GAAP)	$	207,991		$	221,517		$	207,991		$	221,517
Less: intangible assets		—			(14,657)			—			(14,657)
Total tangible stockholders equity (non-GAAP)		207,991			206,860			207,991			206,860

	As of December 31,						As of December 31,
	2024			2023			2024			2023
Total tangible assets
Total assets (GAAP)	$	2,228,098		$	2,035,432		$	2,228,098		$	2,035,432
Less: intangible assets		—			(14,657)			—			(14,657)
Total tangible assets (non-GAAP)		2,228,098			2,020,775			2,228,098			2,020,775

	For the three months ended December 31,						For the year ended December 31,
	2024			2023			2024			2023
Average tangible stockholders' equity
Total average stockholders' equity (GAAP)	$	227,542		$	216,669		$	224,631		$	209,921
Less: average intangible assets		(18,327)			(13,929)			(16,989)			(11,996)
Total average tangible stockholders' equity (non-GAAP)		209,215			202,740			207,642			197,925

	For the three months ended December 31,						For the year ended December 31,
	2024			2023			2024			2023
Average tangible assets
Total average assets (GAAP)	$	2,290,644		$	1,998,196		$	2,136,586		$	1,931,805
Less: average intangible assets		(18,327)			(13,929)			(16,989)			(11,996)
Total average tangible assets (non-GAAP)		2,272,317			1,984,267			2,119,597			1,919,809

Contact: Billy Freesmeier

Chief of Staff

Desk (703) 481-4579

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SOURCE MainStreet Bancshares, Inc.

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Date	Price Target	Rating	Analyst
7/25/2023	$24.00	Overweight → Equal-Weight	Stephens
7/22/2021	$25.50 → $26.00	Overweight	Stephens & Co.

MainStreet Bancshares Inc. Reports 2024 Results

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