MainStreet Bank Announces Profitable 2008

HERNDON, Va., Feb. 27 /PRNewswire-FirstCall/ -- MainStreet Bank (OTC Bulletin Board: MNSB) reported a $100 thousand net income for the year-ended December 31, 2008.

Chairman, President & CEO Jeff W. Dick said, "We are extremely pleased with our operating results -- especially given our tumultuous economy. The corporate growth strategy that we implemented during 2007 allowed us to build a strong balance sheet and a solid foundation. We are particularly proud of the fact that we are a community bank, that we take a conservative approach to managing the risks within our business, and that we did not participate in any of the subprime lending debacle."

The bank's balance sheet continues on a good growth track, with total assets at $186.3 million, which is an increase of 28% over the same period last year. Gross loans are now at $143.3 million, which represents an increase of more than $30 million in new loans to borrowers in our community. Total deposits are at $142.5 million, an increase of 23% for the year.

After over four years of operations, asset quality remains strong. Total non-performing loans as of December 31, 2008 were $403,712 or 0.28% of gross loans, and consists of a two loans -- one of which represents the 75% guarantee portion of a Small Business Administration loan which is in the process of collection. Loans past due between 30 - 89 days were $800,881 or 0.56% of gross loans. There are no performing loans past due over 90 days.

With our robust and easy-to-use online banking technology, we have now put our bank in well over 250 businesses in the Metropolitan area and across the United States. We are not bounded by a conventional branching system, as we can offer business customers the ability to Put Our Bank in Your Office(R). Using MainStreet Bank's secure website, business customers can do everything they can do in a branch, including: managing accounts, paying bills, transferring funds, initiating ACH and wire transfers, sweeping funds, making loan payments, advancing from lines of credit, and depositing cash. The technology interfaces with Intuit(R) and Microsoft(R) accounting software for greater efficiency in accounting and finance operations. For accounts payable, customers can also build in reminders, customize loan payments, and set up regular funds transfers.

The Bank has offices located at 727 Elden Street in Herndon, Virginia and 4029 Chain Bridge Road in Fairfax, Virginia. MainStreet Bank is 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 FDIC insurance on deposits up to $50 million. Further information on the Bank can be obtained by visiting its website at

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 quarterly and annual reports filed with the Board of Governors of the Federal Reserve System. 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
    (703) 481-4567
                                     MAINSTREET BANK
                             FINANCIAL HIGHLIGHTS (Unaudited)

                         Quarter Ended               Year to-Date
                    (000's except share data)  (000's except share data)
                      12/31/08   12/31/07     %   12/31/08  12/31/07    %
      Operations                            Change                    Change
    Interest income     $2,544     $2,652   (4.1)  $10,178    $9,668    5.3
    Interest expense     1,150      1,258   (8.6)    4,693     4,414    6.3
    Net interest income  1,394      1,394    0.0     5,485     5,254    4.4
    Provision for
     loan losses           109         16  581.3       385       328   17.4
    Net interest income
     after provision
     for loan losses     1,285      1,378   (6.7)    5,100     4,926    3.5
    Other income            79         55   43.6       328       197   66.5
    Operating expenses   1,267      1,516  (16.4)    5,328     5,619   (5.2)
    Income (loss) before
     income taxes           97        (83)    nm       100      (496)    nm
    Income taxes             -          -      -         -         -      -
    Net income (loss)      $97       $(83)    nm      $100     $(496)    nm

      Per Share Data
    Earnings (loss)
     per share
     (basic and
     diluted)            $0.04     ($0.03)    nm     $0.04    ($0.20)    nm
    Book value per
     share, exclusive
     of nonvested
     shares              $8.82      $8.73    1.0     $8.82     $8.73    1.0
    Closing stock
     Price               $5.00      $8.25  (39.4)    $5.00     $8.25  (39.4)
    Weighted average
     shares (basic
     and diluted)    2,430,187  2,425,893        2,425,603 2,426,764

      Selected Balance
       Sheet Data
    Investments        $30,464    $27,636   10.2
    Gross Loans       $143,298   $113,022   26.8
    Total Assets      $186,326   $146,064   27.6
    Deposits          $142,458   $115,466   23.4
    Federal Funds and
     Agreements         $1,289     $2,997  (57.0)
    Borrowings         $20,592     $5,642  265.0
     Equity            $21,429    $21,266    0.8

    Return (loss) on
     average assets       0.05%     (0.06%)           0.06%    (0.39%)
    Return (loss) on
     average equity       0.45%     (0.39%)           0.47%    (2.31%)
    Gross loans to
     Deposits           100.59%     97.88%
    Net interest margin   3.21%      3.90%            3.33%     4.17%
    Efficiency ratio     86.02%    104.62%           91.65%   103.09%
    Allowance for loan
     losses to total
     loans                1.13%      1.14%
    Past due loans 30-89
     days to total
     gross loans          0.56%      2.21%
    Past due loans 90
     days or more to
     total gross loans    0.00%      0.00%
    Non-accrual loans
     to total gross
     loans                0.28%      0.22%

      Regulatory Capital
    Tier 1 risk-based
     capital ratio       15.03%     18.03%
    Total risk-based
     capital ratio       16.11%     19.07%
    Leverage ratio       12.49%     15.55%

      Balance Sheet
    Investments        $28,564    $13,549  110.8   $26,151   $13,838   89.0
    Gross Loans       $139,510   $111,301   25.3  $128,939   $99,565   29.5
    Total Assets      $181,475   $144,286   25.8  $169,004  $128,480   31.5
    Deposits          $137,342   $113,453   21.1  $127,210   $98,587   29.0
    Borrowings         $20,599     $8,781  134.6   $17,708    $7,857  125.4
     Equity            $21,492    $21,318    0.8   $21,342   $21,480   (0.6)

    Nm = not material

SOURCE MainStreet Bank


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