MainStreet Bancshares Continues Record Growth

FAIRFAX, Va., Jan. 26, 2018 /PRNewswire/ -- MainStreet Bancshares, Inc. (OTCQB: MNSB), the holding company for MainStreet Bank,  today announced year-end 2017 assets reaching $808 million – a 40% increase from year-end 2016 total assets of $576 million.

Net loans outstanding at December 31, 2017 total $654 million against net loans outstanding at December 31, 2016 of $464 million - an increase of 41%.  Asset quality remains very strong with nonperforming loans representing only 0.31% of the total gross loans outstanding on December 31, 2017.

Non-interest-bearing deposits increased $65.5 million during the year to $172 million as of December 31, 2017. This represents an increase of 62% from December 31, 2016.  Non-interest-bearing deposits represent 26% of total deposits at December 31, 2017.  Total deposits as of December 31, 2017 were $668 million an increase of $194 million from December 31, 2016.

MainStreet's net income was impacted by two elements during 2017.  The first was a $1.885 million provision expense, which was necessary to accommodate the $190 million in loan growth.  The second was a $739 thousand expense, which was related to a non-recurring Financial Accounting Standards Board (FASB) adjustment to net deferred tax assets, resulting from a change in the corporate tax rate.  

Inasmuch as the FASB adjustment is a non-recurring expense, for the remainder of this release parenthetical references add back the $739 thousand, which is referred to as "adjusted net income."

Net income of $3.9 million ($4.6 million adjusted net income) for December 31, 2017 is up only marginally from December 31, 2016, however adjusted net income is up 19.25%. 

Net Interest income of $21.48 million reported for December 31, 2017 improved $2.98 million over net interest income from December 31, 2016. The net interest margin of 3.49% for the year remained stable as compared to 3.52% for 2016.

Non-interest income (no securities gains) for the year is $2.3 million compared to $1.5 million for the same period in 2016. This is a 53% increase for the year. Non-interest expense for the year is $15.7 million compared to $13.9 million for 2016. This is aligned with an increase in staff to support our balance sheet growth.

The efficiency ratio continues to improve at 65.9% for 2017 as compared to 69.5% for 2016.

Net income is $0.85 per common share for the year ended December 31, 2017 (adjusted net income is $1.02 per share) as compared to $0.91 per share for 2016.  The share price closed on December 31, 2017 at $17.52 per share. During 2017, there were 1,026 trades for a total of 1,163,326 shares with a dollar value of $19,363,912.

QUOTES: "Our growth is reflective of a strong economy in the Washington, DC metropolitan area," said Jeff W. Dick, Chairman and CEO of MainStreet Bancshares, Inc. and MainStreet Bank.  "Our capital raise was very timely to support growth opportunities."

President Chris Brockett added, "As I celebrate the close of my first year with the Bank, I could not have scripted a better outcome.  The MainStreet team worked very hard to capture opportunities and we are absolutely thrilled with this year's results."

ABOUT MAINSTREET BANK: MainStreet operates five branches in Herndon, Fairfax, Fairfax City, McLean and Clarendon, and will soon be opening a new branch at 307 East Market Street in Leesburg Virginia.  In addition, MainStreet 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 literally "put our bank" in nearly 1,000 businesses in the Metropolitan area.

MainStreet has a full complement of payment system services for third party payment providers.  MainStreet has a nationally known and leading market expert on-staff ready to help payment providers create a solution perfect for their needs.

MainStreet 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 mobile banking and Apple Pay to instant-issue Debit Cards, MainStreet Bank is always looking for ways to improve its customer experience.  Additionally, MainStreet released Aircharity^® in 2012. Aircharity^® is a unique solution that empowers people and organizations to raise money via email, websites and social media.  The product allows a customer to open an account and accept donations from debit cards, credit cards and electronic checks.  

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.  Factors that could cause actual results to differ materially from management's projections, forecasts, estimates and expectations include: fluctuation in market rates of interest and loan and deposit pricing, adverse changes in the overall national economy as well as adverse economic conditions in our specific market areas, maintenance and development of well-established and valued client relationships and referral source relationships, and acquisition or loss of key production personnel. Other risks that can affect the Bank are detailed from time to time in our annual reports.  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
                    [phone]

UNAUDITED CONSOLIDATED BALANCE SHEET INFORMATION
(Unaudited)
(In thousands, except ratios and per share data)
	12/31/17	9/30/17	6/30/17	3/31/17	12/31/16
ASSETS
Cash and cash equivalents
Cash and due from banks	$  37,493	$  20,804	$   14,801	$   11,867	$    17,273
Federal funds sold	―	―	4,674	4,856	797
Total cash and cash equivalents	37,493	20,804	19,475	16,723	18,070
Investment securities available for sale, at fair value	51,314	51,854	37,274	28,889	36,354
Investment securities held to maturity, at carrying value	27,517	27,566	27,615	27,664	27,714
Restricted equity securities, at cost	4,241	3,898	3,895	3,892	3,426
Loans, net of allowance for loan losses	654,339	569,137	525,989	461,768	463,926
Premises and equipment, net	13,965	13,997	12,008	12,132	12,309
Other real estate owned, net	―	―	135	135	135
Accrued interest and other receivables	3,849	3,076	2,737	2,363	2,261
Bank owned life insurance	13,637	13,526	13,417	13,308	10,202
Other assets	1,596	1,687	1,715	1,388	1,314
Total Assets	$  807,951	$  705,545	$ 644,260	$  568,262	$  575,711
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Non-interest bearing deposits	$ 171,572	$  155,586	$ 139,023	$  114,044	$  106,050
Interest bearing DDA deposits	48,432	25,888	27,639	17,443	41,611
Savings and NOW deposits	47,855	42,908	48,268	44,697	44,833
Money market deposits	82,828	69,425	86,009	79,704	75,670
Other time deposits	316,968	302,689	237,853	207,854	205,402
Total deposits	667,655	596,496	538,792	463,742	473,566
Federal Home Loan Bank advances and other borrowings	53,780	42,604	40,167	40,179	40,192
Subordinated Debt	14,747	14,740	14,733	14,726	14,019
Other liabilities	2,968	1,647	1,807	2,011	1,539
Total Liabilities	739,150	655,487	595,499	520,658	529,316
Stockholders' Equity:
Common stock	21,442	16,835	16,808	16,792	16,650
Capital surplus	35,693	22,336	22,229	22,126	22,152
Retained earnings	11,682	10,922	9,777	8,827	7,801
Accumulated other comprehensive income (loss)	(16)	(35)	(53)	(141)	(208)
Total Stockholders' Equity	68,801	50,058	48,761	47,604	46,395
Total Liabilities and Stockholders' Equity	$  807,951	$  705,545	$ 644,260	$  568,262	$  575,711
Other Financial Highlights
Annualized return on average assets	0.60%	0.68%	0.68%	0.73%	0.76%
Annualized return on average equity	7.44%	8.22%	8.26%	8.74%	8.75%
Annualized net interest margin	3.49%	3.52%	3.64%	3.61%	3.78%
Efficiency ratio	66.90%	66.95%	68.47%	69.38%	69.47%
Gross loans to deposits	98.86%	96.25%	98.45%	100.45%	98.80%
Allowance for loan losses to total loans	0.86%	0.87%	0.84%	0.87%	0.85%
Past due loans 30-89 days to total gross loans	0.03%	0.03%	0.37%	0.00%	0.05%
Past due loans 90 days or more to total gross loans	0.00%	0.48%	0.00%	0.00%	0.00%
Non-accrual loans to total gross loans	0.31%	0.35%	0.02%	0.02%	0.04%
Quarterly net loan charge-offs (recoveries)	$           3	$           7	$         39	$       111	$         30
Book value per share	$    12.57	$    11.60	$    11.30	$    11.06	$    10.85
Closing stock price	$    17.52	$    16.30	$    16.05	$    16.55	$    14.20
Regulatory Capital Ratios (Bank Only)
Tier 1 risk-based capital ratio	10.65%	10.08%	10.74%	11.78%	11.74%
Common equity tier 1 capital ratio	10.65%	10.08%	10.74%	11.78%	11.74%
Total risk-based capital ratio	11.43%	10.88%	11.52%	12.57%	12.53%
Leverage ratio	10.42%	9.43%	10.32%	10.69%	10.95%

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME INFORMATION
(Unaudited)
(In thousands, except share and per share data)
	Year-to-Date		Three Months Ended
	12/31/17	12/31/16	12/31/17		9/30/17		6/30/17		3/31/17		12/31/16
INTEREST INCOME:
Interest and fees on loans	$  25,080	$  20,192	$    7,437		$    6,573		$    5,717		$    5,353		$    5,267
Interest on investment securities	1,576	1,287	343		424		413		396		351
Interest on federal funds sold	297	93	122		88		47		40		19
Total interest income	26,953	21,572	7,902		7,085		6,177		5,789		5,637
INTEREST EXPENSE:
Interest on interest bearing DDA deposits	194	11	70		40		43		41		11
Interest on savings and NOW deposits	182	167	42		50		47		43		44
Interest on money market deposits	565	300	151		148		150		116		96
Interest on other time deposits	3,114	2,327	1,109		875		594		536		579
Interest on Federal Home Loan Bank        Advances and other borrowings	452	266	141		119		108		84		74
Interest on Subordinated Debt	964		239		243		241		241		―
Total interest expense	5,471	3,071	1,752		1,475		1,183		1,061		804
Net interest income	21,482	18,501	6,150		5,610		4,994		4,728		4,833
Provision for loan losses	1,885	645	715		550		425		195		335
Net interest income after provision         for loan losses	19,597	17,856	5,435		5,060		4,569		4,533		4,498
OTHER INCOME:
Deposit account service charges	836	736	221		221		202		192		183
Bank owned life insurance income	435	202	111		108		110		106		76
Other fee income	1,006	589	174		237		246		349		194
Total other income	2,277	1,527	506		566		558		647		453
OTHER EXPENSES:
Salaries and employee benefits	9,652	8,588	2,400		2,431		2,449		2,372		2,038
Furniture and equipment expenses	1,272	1,143	347		333		306		286		301
Advertising and marketing	264	276	127		80		26		31		56
Occupancy expenses	605	734	143		138		153		171		158
Outside services	663	615	209		212		113		129		202
Administrative expenses	448	350	145		115		98		90		89
Other operating expenses	2,753	2,209	838		657		608		650		595
Total other expenses	15,657	13,915	4,209		3,966		3,753		3,729		3,439
INCOME BEFORE INCOME TAXES	6,217	5,468	1,732		1,660		1,374		1,451		1,512
Income tax expense	2,335	1,593	971		516		427		421		436
NET INCOME	$  3,882	$  3,875	$     761		$  1,144		$     947		$  1,030		$  1,076
Net income per common share,    basic and diluted	$    0.85	$    0.91	$    0.14		$    0.27		$    0.22		$    0.24		$     0.25
Weighted average number of shares,    basic and diluted	4,551,189	4,256,442	5,234,392		4,315,675		4,315,591		4,304,852		4,260,232

 

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SOURCE MainStreet Bancshares, Inc.