MainStreet Bank Profitable Through Third Quarter

HERNDON, Va., Oct. 16 /PRNewswire-FirstCall/ -- MainStreet Bank (OTC Bulletin Board: MNSB) reported net income of $257 thousand for the nine months ended September 30, 2009.

Chairman, President & CEO Jeff W. Dick said, "We are having our best year ever. We continue to grow a strong balance sheet and we are starting to branch out into strong Northern Virginia markets."

The bank's balance sheet continues on a good growth track, with total assets at $212 million, which is an increase of 20% over the same period last year. Gross loans are now at $167 million, which represents an increase of approximately $31 million in new loans to borrowers in our community. Total deposits are at $167 million, an increase of 26% over the same time period.

After five years of operations, asset quality remains exceptionally strong. Total non-performing loans as of September 30, 2009 were 0.11% of gross loans, and consist of one loan. Loans past due between 30 - 89 days were 0.79% of gross loans.

MainStreet has received regulatory approval to expand into the McLean and Arlington markets. Plans are to open the McLean branch in the fourth quarter of 2009 and the Arlington branch in the first quarter of 2010.

The Bank is headquartered at 727 Elden Street in Herndon, Virginia and has a full service branch at 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 www.mstreetbank.com.

MainStreet Bank also offers business customers the ability to Put Our Bank in Your Office®. Business customers can accomplish everything in their office that they would normally 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® and Microsoft® 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.

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)

                                          %                              %
    Operations   9/30/09    9/30/08     Change   9/30/09   9/30/08     Change
    ----------   -------    -------     ------   -------   -------     ------
    Interest
     income       $2,783     $2,623       6.1     $7,913     $7,634       3.7
    Interest
     expense       1,186      1,180       0.5      3,534      3,543      (0.3)
                   -----      -----       ---      -----      -----      ----
    Net interest
     income        1,597      1,443      10.7      4,379      4,091       7.0
    Provision for
     loan losses      75        105     (28.6)       333        276      20.7
                      --        ---     -----        ---        ---      ----
    Net interest
     income after
     provision for
     loan losses   1,522      1,338      13.8      4,046      3,815       6.1
    Other income      87        116     (25.0)       589        249     136.5
    Operating
     expenses      1,490      1,367       9.0      4,378      4,060       7.8
                   -----      -----       ---      -----      -----       ---
    Income (loss)
     before income
     taxes           119         87      36.8        257          4        nm
    Income taxes       -          -         -          -          -         -
    Net income
     (loss)         $119        $87      36.8       $257         $4        nm
                    ====        ===      ====       ====         ==        ==

    Per Share
     Data
    ---------
    Earnings
     (loss)
     per share
    (basic and
     diluted)      $0.05      $0.03      66.7      $0.10      $0.00        nm
    Book value
     per share,
     exclusive
     of nonvested
     shares        $8.90      $8.72       2.1      $8.90      $8.72       2.1
    Closing
     stock
     price         $6.00      $6.00       0.0      $6.00      $6.00       0.0
    Weighted
     average
     shares
    (basic
     and
     diluted)  2,567,319  2,429,648            2,564,604  2,425,598

    Selected
     Balance
     Sheet
     Data
    --------
    Investments  $31,442    $24,837      26.6
    Gross Loans $166,803   $136,154      22.5
    Total
     Assets     $212,297   $177,343      19.7
    Deposits    $167,436   $132,994      25.9
    Federal
     Funds and
     Repurchase
     Agreements   $1,916     $2,031      (5.7)
    Borrowings   $20,554    $20,604      (0.2)
    Stockholders'
     Equity      $21,746    $21,158       2.8

    Ratios
    ------
    Return (loss)
     on average
     assets        0.06%      0.05%                0.13%      0.00%
    Return (loss)
     on average
     equity        0.54%      0.41%                1.19%      0.02%
    Gross loans
     to deposits  99.62%    102.38%
    Net interest
     margin        3.25%      3.33%                3.15%      3.36%
    Efficiency
     ratio        88.50%     87.67%               88.12%     93.56%
    Allowance
     for loan
     losses to
     total loans   1.17%      1.11%
    Past due
     loans 30-89
     days to
     total gross
     loans         0.79%      0.12%
    Past due
     loans 90
     days or more
     to total
     gross loans   0.00%      0.00%
    Non-accrual
     loans to
     total gross
     loans         0.11%      0.13%

    Regulatory
     Capital
     Ratios
    ----------
    Tier 1
     risk-based
     capital
     ratio        13.07%     15.02%
    Total
     risk-based
     capital
     ratio        14.18%     16.03%
    Leverage
     ratio        11.01%     12.94%

    Balance
     Sheet
     (averages)
    -----------
    Investments  $31,464    $28,003      12.4    $31,858    $25,340      25.7
    Gross Loans $160,892   $134,167      19.9   $151,955   $125,390      21.2
    Total
     Assets     $208,256   $174,400      19.4   $203,142   $164,817      23.3
    Deposits    $163,329   $129,834      25.8   $158,666   $123,808      28.2
    Borrowings   $20,562    $20,612      (0.2)   $20,574    $16,737      22.9
    Stockholders'
     Equity      $21,795    $21,333       2.2    $21,684    $21,292       1.8

    Nm = not material


SOURCE MainStreet Bank



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