MainStreet Bank Reports Continuing Profitability

HERNDON, Va., Aug. 5 /PRNewswire-FirstCall/ -- MainStreet Bank (OTC Bulletin Board: MNSB) reported net income of $138 thousand for the six months ended June 30, 2009.

Chairman, President & CEO Jeff W. Dick said, "In this economy, our primary objective is to remain profitable, while maintaining a well-managed balance sheet. In the meantime, we continue our efforts to position the bank to respond favorably when interest rates start to rise."

The bank's balance sheet continues on a good growth track, with total assets at $205 million, which is an increase of 17% over the same period last year. Gross loans are now at $159 million, which represents an increase of more than $27 million in new loans to borrowers in our community. Total deposits are at $160 million, an increase of 22% over the same time period.

After five years of operations, asset quality remains exceptionally strong. Total non-performing loans as of June 30, 2009 were 0.64% of gross loans, and consist of six loans -- one of which represents the 75% guarantee portion of a Small Business Administration loan which is still in the process of collection. Loans past due between 30 - 89 days were 1.86% of gross loans.

MainStreet is in the process of expanding to a new location in Arlington, Virginia, and has identified veteran Banker Nancy Hong to manage that office. Nancy will be joined by Art Smith, a senior commercial lender with extensive experience lending in the DC Metropolitan market.

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((R)). 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((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.

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.

                                   MAINSTREET BANK
                           FINANCIAL HIGHLIGHTS (Unaudited)

                     Quarter Ended                   Year to-Date
                 (000's except share data)     (000's except share data)
                 -------------------------     -------------------------
                                            %                             %
                                           ---                           ---
       Operations   6/30/09  6/30/08      Change  6/30/09  6/30/08     Change
       ----------   -------  -------      ------  -------  -------     ------
    Interest
     income         $2,632    $2,519       4.5    $5,130    $5,011       2.4
    Interest
     expense         1,187     1,153       2.9     2,348     2,363      (0.6)
                     -----     -----       ---     -----     -----      ----
    Net interest
     income          1,445     1,366       5.8     2,782     2,648       5.1
    Provision
     for loan losses    45        97     (53.6)      258       171      50.9
                        --        --     -----       ---       ---      ----
    Net interest
     income after
     provision for
     loan losses     1,400     1,269      10.3     2,524     2,477       1.9
    Other income       189        62     204.8       502       132     280.3
    Operating
     expenses        1,517     1,326      14.4     2,888     2,693       7.2
                     -----     -----      ----     -----     -----       ---
    Income (loss)
     before income
     taxes              72         5   1,340.0       138       (84)       nm
    Income taxes         -         -         -         -         -         -
                       ---       ---       ---       ---       ---       ---

    Net income
     (loss)            $72        $5   1,340.0      $138      $(84)       nm
                       ===        ==   =======      ====      ====        ==

       Per Share Data
       --------------
    Earnings (loss)
     per share,
     basic           $0.03     $0.00        nm     $0.05    ($0.03)       nm
    Book value per
     share, exclusive
     of nonvested
     shares          $8.77     $8.16       7.5     $8.77     $8.16       7.5
    Closing stock
     price           $5.03     $7.00     (28.1)    $5.03     $7.00     (28.1)
    Weighted
     average
     shares,
     basic       2,566,477 2,555,467           2,563,224 2,554,989

       Selected Balance Sheet Data
       ---------------------------
    Investments    $29,905   $39,393     (24.1)
    Gross Loans   $158,636  $131,602      20.5
    Total Assets  $204,900  $175,414      16.8
    Deposits      $160,138  $131,269      22.0
    Federal Funds
     and Repurchase
     Agreements     $2,165    $2,228      (2.8)
    Borrowings     $20,567   $20,617      (0.2)
    Stockholders'
     Equity        $21,396   $20,858       2.6

       Ratios
       ------
    Return (loss)
     on average
     assets          0.04%     0.00%               0.07%    (0.05%)
    Return (loss)
     on average
     equity          0.33%     0.02%               0.64%    (0.39%)
    Gross loans
     to deposits    99.06%   100.25%
    Net interest
     margin          3.13%     3.33%               3.09%     3.38%
    Efficiency
     ratio          94.02%    92.87%              95.74%    96.86%
    Allowance for
     loan losses
     to total loans  1.19%     1.11%
    Past due loans
     30-89 days
     to total gross
     loans           1.86%     0.38%
    Past due loans
     90 days or more
     to total gross
     loans           0.00%     0.00%
    Non-accrual loans
     to total gross
     loans           0.64%     0.17%

       Regulatory Capital Ratios
       -------------------------
    Tier 1
     risk-based
     capital ratio  13.68%    15.38%
    Total
     risk-based
     capital ratio  14.81%    16.37%
    Leverage ratio  11.06%    13.42%

       Balance Sheet (averages)
       ------------------------
    Investments    $32,565   $29,528      10.3   $32,058   $23,995      33.6
    Gross Loans   $150,534  $125,401      20.0  $147,413  $120,953      21.9
    Total Assets  $206,279  $167,364      23.3  $200,542  $159,972      25.4
    Deposits      $162,009  $122,600      32.1  $156,296  $120,761      29.4
    Borrowings     $20,574   $20,624      (0.2)  $20,580   $14,779      39.3
    Stockholders'
     Equity        $21,673   $21,274       1.9   $21,627   $21,272       1.7

    Nm = not material
    Contact: Jeff W. Dick
             (703) 481-4567

SOURCE MainStreet Bank



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