Main Street Banks Records First Quarter Net Income Of $0.26 Per Diluted Share

Apr 19, 2001, 01:00 ET from Main Street Banks, Inc.

    ATLANTA, April 19 /PRNewswire/ -- Main Street Banks, Inc. (Nasdaq: MSBK)
 today announced first quarter 2001 earnings of $4.2 million, or $0.26 per
 diluted share, excluding $1.5 million, or $0.09 per diluted share, of
 nonrecurring merger expenses.  For the quarter, the Company's earnings
 increased 16.7 percent over net income of $3.6 million, or $0.23 per diluted
 share, for the first quarter of 2000.  The nonrecurring expenses relate to
 merger expenses and integration costs of recent acquisitions.  Net earnings
 for the quarter were $2.7 million or $0.17 per diluted share.  All prior-
 period financial data have been restated for the January 2001 pooling of
 interests between the Company and Walton Bank and Trust.
     Main Street's first quarter recurring performance produced an annualized
 return on average assets of 1.61 percent and an annualized return on average
 shareholder's equity of 17.8 percent.  This compares with 1.58 percent and
 18.8 percent, respectively, for the year-earlier period.  Total assets were
 $1.06 billion as of March 31, 2001.  Average loans grew 9.6 percent from the
 same period a year ago, while average deposits increased 14.7 percent from the
 first quarter of 2000.
     "We are gratified by the performance of the Company during the first
 quarter, at a time when the overall economy provided a difficult operating
 environment for many banks," said Edward C. Milligan, chief executive officer.
 "Our performance was the result of our efforts to focus on non-interest income
 and non-interest expense as net interest margins came under pressure.
 Specifically, we made substantial progress in our cross-selling efforts among
 our fee income businesses, including our insurance, investment and mortgage
 services."
     Net interest margin for the first quarter was 4.99 percent, compared to
 5.63 percent in the first quarter of 2000.  Non-interest income totaled $3.2
 million, compared with $2.6 million in the same period in the prior year.
 Recurring non-interest expense as a percentage of total revenue (cash basis
 efficiency ratio) was 54.4 percent, compared with 56.3 percent for the same
 period a year ago.  In addition, non-interest expense (excluding merger
 expenses) was $8.3 million in both the first quarter of 2001 and the first
 quarter of 2000.  First quarter 2001 non-interest expense decreased 5.7
 percent from $8.8 million in the fourth quarter of 2000.  The $0.5 million
 reduction in quarter-to-quarter expenses is attributable to economies
 resulting from the consolidation of the Company's banking charters on January
 2, 2001.
     "We continued to maintain solid credit quality during the first three
 months of 2001," said Milligan.  Main Street's net annualized charge-offs as a
 percentage of average loans for the quarter were 0.09 percent, compared with
 0.09 percent in the same period last year.  Nonperforming assets comprised
 0.38 percent of total assets, below the 0.45 percent level at year-end 2000,
 while reserves for loan losses stood at 1.50 percent of total loans, compared
 to 1.47 percent at March 31, 2000.
     Main Street declared a regular quarterly dividend of $0.09 per share of
 common stock payable May 9, 2001 to shareholders of record at the close of
 business on April 25, 2001.
     "Looking forward, we anticipate full-year 2001 diluted earnings-per-share
 growth in the 10 to 15 percent range, which is consistent with published
 analyst estimates of $1.08 to $1.10," Milligan said.
 
     About Main Street
     Main Street Banks, Inc., a $1.0 billion-asset community banking
 organization based in metropolitan Atlanta, provides a broad range of banking,
 brokerage, insurance, and mortgage products and services through its 21 branch
 offices located in twelve of Georgia's fastest growing communities.  The
 Company was created through the May 24, 2000 merger of First Sterling Banks,
 Inc. and Main Street Banks Incorporated in a pooling of interests transaction,
 creating the largest and highest performing community banking company in the
 greater Atlanta area.
 
     Safe Harbor
     Statements made in this press release, other than those containing
 historical information, are forward-looking statements made pursuant to the
 safe harbor provisions of the Private Securities Litigation Act of 1995.  Such
 statements involve risks and uncertainties that may cause results to differ
 materially from those set forth in these statements.  Main Street cautions
 readers that results and events subject to forward-looking statements could
 differ materially due to the following factors:  possible changes in economic
 and business conditions; the ability of Main Street to integrate recent
 acquisitions and attract new customers; possible changes in monetary and
 fiscal policies, laws and regulations; the effects of easing of restrictions
 on participants in the financial services industry; the cost and other effects
 of legal and administrative cases; possible changes in the credit worthiness
 of customers and the possible impairment of loans; the effects of changing
 interest rates and other risks and factors identified in the company's filings
 with the Securities and Exchange Commission.
 
 
                      MAIN STREET BANKS, INC. AND SUBSIDIARIES
                                FINANCIAL HIGHLIGHTS
                                    (Unaudited)
 
                                    First           Fourth        First
                                   Quarter         Quarter       Quarter
                                    2001             2000          2000
     INCOME DATA
 
      Net interest income        $11,807,965     $12,462,004   $11,716,277
      Net interest income
       (tax equivalent)           12,009,048      12,662,763    11,897,899
      Provision for possible
       loan losses                   530,000         615,000       580,000
      Non-interest income
       (exclusive of securities
       transactions and other
       onetime items)              3,167,131       2,883,734     2,642,878
      Securities transactions          3,655           4,236        (3,149)
      Non-interest expense
       (exclusive of onetime
       items)                      8,318,206       8,761,736     8,302,321
      Merger expense               1,648,974         112,317           ---
      Net income                  $2,658,841      $3,945,279    $3,577,982
 
     Core net income, excluding
      merger expense, securities
      transactions and other
      non-recurring items         $4,163,624      $3,944,512    $3,577,982
 
     AVERAGE BALANCE SHEET DATA
      Loans                     $749,995,877    $730,939,171  $684,447,117
      Investment securities      161,939,523     163,312,501   135,844,697
      Earning assets             976,938,152     997,656,212   849,340,993
      Total assets             1,045,712,437   1,067,584,113   911,604,068
      Deposits                   884,740,339     908,970,161   771,174,443
      Shareholders' equity        95,122,646      89,046,573    76,565,317
 
     PER SHARE DATA
      Basic                            $0.17           $0.25         $0.23
      Diluted                          $0.17           $0.25         $0.23
      Core basic                       $0.27           $0.26         $0.23
      Core diluted                     $0.26           $0.26         $0.23
      Book value per share,
       end of period                   $6.18           $6.05         $5.48
      Closing stock price            $13.500         $12.375        $8.625
      Cash dividends per share         $0.09           $0.08         $0.04
 
     RATIOS
      Core return on average assets    1.61%           1.47%         1.58%
      Core return on average
       shareholders' equity            17.8%           17.6%         18.8%
      Net interest margin              4.99%           5.05%         5.63%
      Average loans as a percentage
       of average deposits            84.77%          80.41%        88.75%
      Non-interest expense as
       a percentage of total revenue
       (tax equivalent and excluding
       securities transactions and
       onetime items)                  54.8%           56.4%         57.1%
      Non-interest income
       (excluding onetime items) as
       a percentage of total revenue  20.87%          18.55%        18.18%
      Reserve for possible loan
       losses as a percentage of
       loans, at end of period         1.50%           1.48%         1.47%
      Non-performing assets as a
       percentage of loans plus
       foreclosed assets and surplus
       property, at EOP                0.38%           0.45%         0.35%
      Shareholders' equity as a
       percentage of total assets,
       at end of period                9.13%           8.76%         8.75%
 
     OTHER PERFORMANCE MEASURES
 
      Core net income *           $4,163,624      $3,944,512    $3,577,982
      Purchased intangible
       amortization, net of tax       48,493          81,344        81,344
      Earnings before tax-effected
       purchased intangibles
       amortization               $4,212,117      $4,025,856    $3,659,326
 
      Core earnings per share
       before tax-effected
       purchased intangibles
       amortization
       Basic                           $0.27           $0.26         $0.24
       Diluted                         $0.26           $0.25         $0.23
 
      Core return on average
       assets before purchased
       intangibles balances and
       tax-effected amortization       1.64%           1.50%         1.62%
 
      Core return on average
       shareholders' equity before
       tax-effected purchased
       intangibles amortization        18.1%           18.2%         19.6%
 
      Non-interest expense before
       purchased intangibles
       amortization as a percentage
       of total revenue (tax
       equivalent and excluding
       securities transactions
       and onetime items)              54.4%           55.7%         56.3%
 
     *Excluding onetime merger expenses, investment transactions and other
        onetime items.
 
 
                      MAIN STREET BANKS, INC. AND SUBSIDIARIES
                                FINANCIAL HIGHLIGHTS
                                    (Unaudited)
 
                                                      Three Months Ended
                                                           March 31,
                                                     2001            2000
 
     INCOME DATA
      Net interest income                         $11,807,965    $11,716,277
      Net interest income (tax equivalent)         12,009,048     11,897,899
      Provision for possible loan losses              530,000        580,000
      Non-interest income (exclusive of securities
       transactions and other onetime items)        3,167,131      2,642,878
      Securities transactions                           3,655        (3,149)
      Non-interest expense (exclusive of
       onetime items)                               8,318,206      8,302,321
      Merger expense                                1,648,974            ---
      Net income                                   $2,658,841     $3,577,982
 
      Core net income, excluding merger
       expense, securities transactions and
       other non-recurring items                   $4,163,624     $3,577,982
 
     AVERAGE BALANCE SHEET DATA
      Loans                                      $749,995,877   $684,447,117
      Investment securities                       161,939,523    135,844,697
      Earning assets                              976,938,152    849,340,993
      Total assets                              1,045,712,437    911,604,068
      Deposits                                    884,740,339    771,174,443
      Shareholders' equity                         95,122,646     76,565,317
 
     PER SHARE DATA
      Basic                                             $0.17          $0.23
      Diluted                                           $0.17          $0.23
      Core basic                                        $0.27          $0.23
      Core diluted                                      $0.26          $0.23
      Book value per share, end of period               $6.18          $5.48
      Closing stock price                             $13.500         $8.625
      Cash dividends per share                          $0.09          $0.04
 
     RATIOS
      Core return on average assets                     1.61%          1.58%
      Core return on average shareholders' equity       17.8%          18.8%
      Net interest margin                               4.99%          5.63%
      Average loans as a percentage of
       average deposits                                84.77%         88.75%
      Non-interest expense as a percentage
       of total revenue (tax equivalent and
       excluding securities transactions and
       onetime items)                                   54.8%          57.1%
      Non-interest income (excluding onetime items)
       as a percentage of total revenue                20.87%         18.18%
      Reserve for possible loan losses as a
       percentage of loans, at end of period            1.50%          1.47%
      Non-performing assets as a percentage of loans
       plus foreclosed assets and surplus property,
       at EOP                                           0.38%          0.35%
      Shareholders' equity as a percentage
       of total assets, at end of period                9.13%          8.75%
 
 
     OTHER PERFORMANCE MEASURES
      Core net income *                            $4,163,624     $3,577,982
      Purchased intangible amortization,
       net of tax                                      48,493         81,344
      Earnings before tax-effected purchased
       intangibles amortization                    $4,212,117     $3,659,326
 
      Core earnings per share before tax-effected
       purchased intangibles amortization
       Basic                                            $0.27          $0.24
       Diluted                                          $0.26          $0.23
 
      Core return on average assets before purchased
       intangibles balances and tax-effected
       amortization                                     1.64%          1.62%
 
      Core return on average shareholders' equity
       before tax-effected purchased intangibles
       amortization                                     18.1%          19.6%
 
      Non-interest expense before purchased intangibles
       amortization as a percentage of total revenue
       (tax equivalent and excluding securities
       transactions and onetime items)                  54.4%          56.3%
 
 
     *Excluding onetime merger expenses, investment transactions and other
        onetime items.
 
 
                      MAIN STREET BANKS, INC. AND SUBSIDIARIES
                            SUMMARY OF FINANCIAL RESULTS
                                    (Unaudited)
 
                                         First         Fourth         First
                                        Quarter        Quarter       Quarter
                                         2001           2000           2000
 
               INCOME DATA
 
     Net income                        $2,658,841     $3,945,279    $3,577,982
     Core net income excluding
      onetime items                    $4,163,624     $3,944,512    $3,577,982
     Net interest income               11,807,965     12,462,004    11,716,277
     Net interest income (tax-
      equivalent)                      12,009,048     12,662,763    11,897,899
     Provision for loan losses            530,000        615,000       580,000
 
              PER SHARE DATA
 
     Earnings per share, basic              $0.17          $0.25         $0.23
     Earnings per share, diluted            $0.17          $0.25         $0.23
     Core earnings per share,
      basic                                 $0.27          $0.26         $0.23
     Core earnings per share,
      diluted                               $0.26          $0.26         $0.23
     Cash dividends per share               $0.09          $0.08         $0.04
     Dividend payout ratio                  34.54%         31.16%        17.64%
     Book value per share, end of
      period                                $6.18          $6.05         $5.48
     High stock price                     $14.688        $12.438       $12.125
     Low stock price                      $12.250        $11.125        $7.750
     Closing stock price                  $13.500        $12.375        $8.625
     Trading volume                       337,200        254,000       259,300
 
        AVERAGE BALANCE SHEET DATA
 
     Loans                           $749,995,877   $730,939,171  $684,447,117
     Investment in securities         161,939,523    163,312,501   135,844,697
     Earning assets                   976,938,152    997,656,212   849,340,993
     Total assets                   1,045,712,437  1,067,584,113   911,604,068
     Deposits                         884,740,339    908,970,161   771,174,443
     Shareholders' equity              95,122,646     89,046,573    76,565,317
 
 
                      MAIN STREET BANKS, INC. AND SUBSIDIARIES
                            SUMMARY OF FINANCIAL RESULTS
                                    (Unaudited)
 
                                                   Three months ended
                                                        March 31,
                                                 2001               2000
 
                   INCOME DATA
 
     Net income                                   $2,658,841        $3,577,982
     Core net income excluding onetime items      $4,163,624        $3,577,982
     Net interest income                          11,807,965        11,716,277
     Net interest income (tax-equivalent)         12,009,048        11,897,899
     Provision for loan losses                       530,000           580,000
 
                 PER SHARE DATA
 
     Earnings per share, basic                         $0.17             $0.23
     Earnings per share, diluted                       $0.17             $0.23
     Core earnings per share, basic                    $0.27             $0.23
     Core earnings per share, diluted                  $0.26             $0.23
     Cash dividends per share                          $0.09             $0.04
     Dividend payout ratio                             34.54%            17.64%
     Book value per share, end of period               $6.18             $5.48
     High stock price                                $14.688           $12.125
     Low stock price                                 $12.250            $7.750
     Closing stock price                             $13.500            $8.625
     Trading volume                                  337,200           259,300
 
           AVERAGE BALANCE SHEET DATA
 
     Loans                                      $749,995,877      $684,447,117
     Investment in securities                    161,939,523       135,844,697
     Earning assets                              976,938,152       849,340,993
     Total assets                              1,045,712,437       911,604,068
     Deposits                                    884,740,339       771,174,443
     Shareholders' equity                         95,122,646        76,565,317
 
 
                    MAIN STREET BANKS, INC. AND SUBSIDIARIES
                               PERFORMANCE RATIOS
                                  (Unaudited)
 
                                                                 Three months
                                        First   Fourth  First       ended
                                       Quarter Quarter Quarter    March 31,
                                         2001    2000    2000    2001    2000
 
     Core return on average assets       1.61%   1.47%   1.58%   1.61%   1.58%
 
     Core return on average
      stockholders' equity               17.8%   17.6%   18.8%   17.8%   18.8%
 
 
     Net interest margin                 4.99%   5.05%   5.63%   4.99%   5.63%
 
     Yield on earning assets less
      cost of interest bearing
      liabilities                        4.05%   4.06%   4.74%   4.05%   4.74%
 
     Average loans as a percentage
      of average deposits               84.77%  80.41%  88.75%  84.77%  88.75%
 
     Non-interest expense as a
      percentage of total revenue
      (tax-equivalent and excluding
      securities transactions and
      onetime items)                     54.8%   56.4%   57.1%   54.8%   57.1%
 
     Non-interest income (excluding
      onetime items) as a percentage
      of total revenue                  20.87%  18.55%  18.18%  20.87%  18.18%
 
     Reserve for possible loan
      losses as a percentage of loans,
      at end of period                   1.50%   1.48%   1.47%   1.50%   1.47%
 
     Non-performing assets as a
      percentage of loans plus
      foreclosed assets and
      surplus property                   0.38%   0.45%   0.35%   0.38%   0.35%
 
     Shareholders' equity as a
      percentage of total assets,
      at end of period                   9.13%   8.76%   8.75%   9.13%   8.75%
 
 
                         MAIN STREET BANKS, INC. AND SUBSIDIARIES
                   DAILY AVERAGE CONSOLIDATED BALANCE SHEETS
                                  (Unaudited)
 
                                   First           Fourth         First
                                  Quarter          Quarter       Quarter
                                    2001            2000          2000
        ASSETS
     EARNING ASSETS
       Interest bearing due
        from banks                $1,613,554      $1,132,616    $1,137,388
       Loans, net of unearned
        income                   749,995,877     730,939,171   684,447,117
       Investment securities     161,939,523     163,312,501   135,844,697
       Federal funds sold         40,569,851      59,618,841    16,311,795
       Securities purchased under
        agreement to resell       19,665,880      40,573,494     9,693,407
       Other earning assets        3,153,467       2,079,589     1,906,589
        Total earning assets     976,938,152     997,656,212   849,340,993
     NON-EARNING ASSETS
       Cash and due from banks    37,911,133      40,389,782    35,170,728
       Other real estate owned     2,087,435       1,793,982       275,376
       Unrealized gain (loss)
        on investment securities     890,892      (1,700,680)   (5,022,700)
       Reserve for possible
        loan losses               11,137,599      10,713,073     9,966,919
       Other assets               39,022,424      40,157,890    41,806,590
        Total assets          $1,045,712,437  $1,067,584,113  $911,604,068
 
        LIABILITIES
     INTEREST-BEARING LIABILITIES
       Interest-bearing
        deposits
       Certificates of deposit  $450,711,435    $440,616,011  $351,455,353
       Individual retirement
        accounts                  53,164,151      52,338,432    47,025,305
       Savings                    44,522,821      45,518,502    42,957,886
       Interest-bearing demand   100,893,850     109,672,566    91,904,962
       Money market accounts      96,527,894     105,165,889    89,121,092
        Total interest-bearing
         deposits                745,820,151     753,311,400   622,464,598
 
       Federal Home Loan Bank
        advances                  52,126,458      52,618,519    49,731,618
       Federal funds purchased       544,257         364,493     3,524,652
       Securities sold under
        agreement to repurchase    5,721,737       8,232,105     5,790,940
         Total interest-bearing
          liabilities            804,212,603     814,526,517   681,511,808
 
     NON-INTEREST-BEARING LIABILITIES
       Non-interest bearing
        deposits                 138,920,188     155,658,761   148,709,845
       Other liabilities           7,457,000       8,352,262     4,817,098
        Total liabilities        950,589,791     978,537,540   835,038,751
       SHAREHOLDERS' EQUITY       95,122,646      89,046,573    76,565,317
        Total liabilities and
         shareholders'
         equity               $1,045,712,437  $1,067,584,113  $911,604,068
 
    EARNING ASSETS LESS
     INTEREST BEARING
     LIABILITIES                $172,725,549    $183,129,695   $167,829,185
 
 
 
 
                                                     Three months ended
                                                           March 31,
                                                     2001            2000
        ASSETS
     EARNING ASSETS
       Interest bearing due from banks             $1,613,554     $1,137,388
       Loans, net of unearned income              749,995,877    684,447,117
       Investment securities                      161,939,523    135,844,697
       Federal funds sold                          40,569,851     16,311,795
       Securities purchased under agreement
        to resell                                  19,665,880      9,693,407
       Other earning assets                         3,153,467      1,906,589
        Total earning assets                      976,938,152    849,340,993
     NON-EARNING ASSETS
       Cash and due from banks                     37,911,133     35,170,728
       Other real estate owned                      2,087,435        275,376
       Unrealized gain (loss) on investment
        securities                                    890,892     (5,022,700)
       Reserve for possible loan losses            11,137,599      9,966,919
       Other assets                                39,022,424     41,806,590
        Total assets                           $1,045,712,437   $911,604,068
 
       LIABILITIES
     INTEREST-BEARING LIABILITIES
       Interest-bearing deposits
       Certificates of deposit                   $450,711,435   $351,455,353
       Individual retirement accounts              53,164,151     47,025,305
       Savings                                     44,522,821     42,957,886
       Interest-bearing demand                    100,893,850     91,904,962
       Money market accounts                       96,527,894     89,121,092
        Total interest-bearing deposits           745,820,151    622,464,598
 
       Federal Home Loan Bank advances             52,126,458     49,731,618
       Federal funds purchased                        544,257      3,524,652
       Securities sold under agreement to
        repurchase                                  5,721,737      5,790,940
        Total interest-bearing liabilities        804,212,603    681,511,808
     NON-INTEREST-BEARING LIABILITIES
       Non-interest bearing deposits              138,920,188    148,709,845
       Other liabilities                            7,457,000      4,817,098
        Total liabilities                         950,589,791    835,038,751
       SHAREHOLDERS' EQUITY                        95,122,646     76,565,317
        Total liabilities and shareholders'
         equity                                $1,045,712,437   $911,604,068
 
     EARNING ASSETS LESS
       INTEREST BEARING LIABILITIES              $172,725,549   $167,829,185
 
 
                      MAIN STREET BANKS, INC. AND SUBSIDIARIES
                            CONSOLIDATED BALANCE SHEETS
                                    (Unaudited)
 
                                     March 31      December 31      March 31
                                       2001            2000           2000
                 ASSETS
       Cash and due from
        financial institutions       $50,668,342     $40,960,712   $40,377,166
       Investment in securities
         Securities available for
          sale                       156,303,713     153,002,656   115,325,987
         Securities held to
          maturity                       686,573      18,803,265    14,996,528
           Total investment in
            securities               156,990,286     171,805,921   130,322,515
       Federal funds sold and
        other short-term
        investments                   66,200,970      88,436,897    42,155,000
       Mortgage loans held for
        sale                           5,709,639       2,248,415     2,410,005
       Loans                         749,801,123     736,011,198   693,128,089
         Reserve for possible
          loan losses                 11,278,977      10,907,424    10,175,828
           Net loans                 738,522,146     725,103,774   682,952,261
       Bank premises and
        equipment                     26,977,765      27,034,149    27,510,829
       Other real estate owned         1,054,317       2,122,802     1,044,600
       Accrued interest
        receivable                     6,861,207       7,139,716     4,734,808
       Intangible assets                 885,617         945,534     1,274,608
       Other assets                    4,409,915       4,781,221     8,598,503
           Total assets           $1,058,280,204  $1,070,579,141  $941,380,295
 
              LIABILITIES
       Non-interest bearing
        demand deposits              145,302,675     139,235,155   155,653,094
       Interest bearing deposits     748,474,660     746,674,351   627,667,674
           Total deposits            893,777,335     885,909,506   783,320,768
       Federal Home Loan Bank
        advances                      52,139,718      52,130,171    52,138,750
       Federal funds purchased
        and securities sold
         under agreement to
          resell                       6,320,548      32,615,659    16,558,836
       Accrued interest payable        6,953,224       5,652,685     2,219,828
       Other liabilities               2,487,781         496,859     4,800,050
           Total liabilities         961,678,606     976,804,880   859,038,232
          STOCKHOLDERS' EQUITY
       Common stock, no par value
         Authorized - 50,000,000
          shares
         Outstanding - 15,621,755     28,930,320      28,579,332    28,103,429
       Retained earnings              67,398,386      66,290,657    58,478,214
       Accumulated other
        comprehensive income           1,306,767         (61,853)   (3,205,705)
       Treasury stock at cost -
        169,082 shares                (1,033,875)     (1,033,875)   (1,033,875)
           Total shareholders'
            equity                    96,601,598      93,774,261    82,342,063
           Total liabilities and
            shareholders' equity  $1,058,280,204  $1,070,579,141  $941,380,295
 
 
                     MAIN STREET BANKS, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                                    (Unaudited)
 
                                            First       Fourth        First
                                           Quarter      Quarter      Quarter
                                            2001         2000         2000
     INTEREST INCOME
       Interest and fees on loans        $18,868,499  $19,385,391  $16,966,567
       Interest bearing deposits in
        banks                                 14,562       24,429       22,737
       Interest and dividends on
        investments                        2,449,673    2,458,368    1,982,086
       Interest on federal funds sold
        and other
        short-term investments               917,835    1,615,484      383,700
         Total interest income            22,250,569   23,483,672   19,355,090
     INTEREST EXPENSE
       Interest on deposits                9,539,649   10,061,896    6,813,796
       Interest on Federal Home Loan
        Bank advances                        810,602      828,964      705,943
       Interest on federal funds
        purchased and other
         short- term borrowings               87,493      125,955      114,999
       Other interest expense                  4,860        4,853        4,075
         Total interest expense           10,442,604   11,021,668    7,638,813
     NET INTEREST INCOME                  11,807,965   12,462,004   11,716,277
     PROVISION FOR POSSIBLE LOAN LOSSES      530,000      615,000      580,000
     NET INTEREST INCOME AFTER PROVISION
       FOR POSSIBLE LOAN LOSSES           11,277,965   11,847,004   11,136,277
     NON-INTEREST INCOME
       Service charges on deposit
        accounts                           1,311,672    1,324,217    1,249,638
       Gains (losses) on investment
        securities                             3,655        4,236       (3,149)
       Gains (losses) on sales of assets      (4,224)      18,961        2,767
       Gains (losses) on sales of loans      241,748       29,555       26,772
       Other income                        1,617,935    1,511,001    1,363,701
         Total non-interest income         3,170,786    2,887,970    2,639,729
     NON-INTEREST EXPENSE
       Employee compensation               4,104,564    4,168,728    4,135,843
       Employee benefits                     676,715      657,141      530,393
         Total personnel expense           4,781,279    4,825,869    4,666,236
       Net occupancy and equipment
        expense                            1,178,294    1,227,456    1,192,277
       Professional services                 377,307      224,246      132,975
       Regulatory agency assessments          74,377       93,734       33,849
       Amortization of intangibles            59,917      109,691      109,692
       Merger expense                      1,648,974      112,317          ---
       Other expense                       1,847,032    2,280,740    2,167,292
         Total non-interest expense        9,967,180    8,874,053    8,302,321
     INCOME BEFORE INCOME TAXES            4,481,571    5,860,921    5,473,685
     INCOME TAX EXPENSE                    1,822,730    1,915,642    1,895,703
     NET INCOME                           $2,658,841   $3,945,279   $3,577,982
 
     EARNINGS PER SHARE
       Basic                                   $0.17        $0.25        $0.23
       Diluted                                 $0.17        $0.25        $0.23
 
     CORE EARNINGS PER SHARE *
       Basic                                   $0.27        $0.26        $0.23
       Diluted                                 $0.26        $0.26        $0.23
 
     WEIGHTED AVERAGE SHARES OUTSTANDING
       Basic                              15,602,414   15,505,660   15,445,220
       Diluted                            15,979,368   15,795,771   15,776,941
 
     CASH DIVIDENDS PER SHARE                  $0.09        $0.08        $0.04
 
     * Excluding onetime merger expenses, investment transactions and other
       non-recurring items
 
 
 
                     MAIN STREET BANKS, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                                    (Unaudited)
 
                                                    Three months ended
                                                        March 31,
                                                  2001              2000
     INTEREST INCOME
       Interest and fees on loans               $18,868,499       $16,966,567
       Interest bearing deposits in banks            14,562            22,737
       Interest and dividends on
        investments                               2,449,673         1,982,086
       Interest on federal funds sold and
        other
        short-term investments                      917,835           383,700
         Total interest income                   22,250,569        19,355,090
     INTEREST EXPENSE
       Interest on deposits                       9,539,649         6,813,796
       Interest on Federal Home Loan Bank
        advances                                    810,602           705,943
       Interest on federal funds purchased
        and other
         short- term borrowings                      87,493           114,999
       Other interest expense                         4,860             4,075
         Total interest expense                  10,442,604         7,638,813
     NET INTEREST INCOME                         11,807,965        11,716,277
     PROVISION FOR POSSIBLE LOAN LOSSES             530,000           580,000
     NET INTEREST INCOME AFTER PROVISION
       FOR POSSIBLE LOAN LOSSES                  11,277,965        11,136,277
     NON-INTEREST INCOME
       Service charges on deposit accounts        1,311,672         1,249,638
       Gains (losses) on investment
        securities                                    3,655            (3,149)
       Gains (losses) on sales of assets             (4,224)            2,767
       Gains (losses) on sales of loans             241,748            26,772
       Other income                               1,617,935         1,363,701
         Total non-interest income                3,170,786         2,639,729
     NON-INTEREST EXPENSE
       Employee compensation                      4,104,564         4,135,843
       Employee benefits                            676,715           530,393
         Total personnel expense                  4,781,279         4,666,236
       Net occupancy and equipment expense        1,178,294         1,192,277
       Professional services                        377,307           132,975
       Regulatory agency assessments                 74,377            33,849
       Amortization of intangibles                   59,917           109,692
       Merger expense                             1,648,974               ---
       Other expense                              1,847,032         2,167,292
         Total non-interest expense               9,967,180         8,302,321
     INCOME BEFORE INCOME TAXES                   4,481,571         5,473,685
     INCOME TAX EXPENSE                           1,822,730         1,895,703
     NET INCOME                                  $2,658,841        $3,577,982
 
     EARNINGS PER SHARE
       Basic                                          $0.17             $0.23
       Diluted                                        $0.17             $0.23
 
     CORE EARNINGS PER SHARE *
       Basic                                          $0.27             $0.23
       Diluted                                        $0.26             $0.23
 
     WEIGHTED AVERAGE SHARES OUTSTANDING
       Basic                                     15,602,414        15,445,220
       Diluted                                   15,979,368        15,776,941
 
     CASH DIVIDENDS PER SHARE                         $0.09             $0.04
 
     * Excluding onetime merger expenses, investment transactions and other
       non-recurring items
 
                      MAIN STREET BANKS, INC. AND SUBSIDIARIES
                    SUMMARY OF INTEREST RATES (TAX-EQUIVALENT)*
                                   (Unaudited)
 
 
 
                                                 First       Fourth      First
                                                Quarter     Quarter     Quarter
                                                 2001        2000        2000
                 EARNINGS ASSETS
        Loans**                                 10.22%      10.57%       9.99%
        Investment securities                    6.55%       6.39%       6.29%
        Federal funds sold and other short
          term investments                       6.18%       6.41%       5.93%
            Total interest-earning assets        9.32%       9.44%       9.25%
 
           INTEREST-BEARING LIABILITIES
        Interest-bearing deposits
          Interest checking and money
           market deposits                       2.54%       3.29%       2.62%
          Savings deposits                       2.39%       2.62%       1.68%
          Time deposits                          6.47%       6.60%       5.51%
            Total interest bearing deposits      5.19%       5.31%       4.40%
 
        Short-term borrowings                    5.98%       6.05%       5.14%
        Federal Home Loan Bank advances          6.31%       6.27%       5.71%
            Total interest-bearing
             liabilities                         5.27%       5.38%       4.51%
 
       NET INTEREST SPREAD (tax equivalent)
        Yield on earning assets less cost
         of interest
          bearing liabilities                    4.05%       4.06%       4.74%
 
       NET INTEREST MARGIN (tax equivalent)
        Net interest income (tax
         equivalent) as a
          percentage of average earning
           assets                                4.99%       5.05%       5.63%
 
                  COST OF FUNDS
        Interest expense as a percentage of
         average interest-
          bearing liabilities plus
           interest-free funds                   4.49%       4.52%       3.70%
 
        *  Based on a 34% tax rate.
        ** Net of unearned income, prior to deduction of reserve for possible
           loan losses and including loans accounted for on a non-accrual
           basis.
 
 
 
                      MAIN STREET BANKS, INC. AND SUBSIDIARIES
                    SUMMARY OF INTEREST RATES (TAX-EQUIVALENT)*
                                   (Unaudited)
 
 
 
                                                      Three months ended
                                                           March 31,
                                                     2001              2000
                 EARNINGS ASSETS
        Loans**                                      10.22%             9.99%
        Investment securities                         6.55%             6.29%
        Federal funds sold and other short
          term investments                            6.18%             5.93%
            Total interest-earning assets             9.32%             9.25%
 
          INTEREST-BEARING LIABILITIES
        Interest-bearing deposits
          Interest checking and money
           market deposits                            2.61%             2.62%
          Savings deposits                            2.39%             1.68%
          Time deposits                               6.47%             5.49%
            Total interest bearing
             deposits                                 5.19%             4.40%
 
        Short-term borrowings                         5.98%             5.14%
        Federal Home Loan Bank advances               6.31%             5.71%
            Total interest-bearing
             liabilities                              5.27%             4.51%
 
            NET INTEREST SPREAD (tax
                   equivalent)
        Yield on earning assets less cost
         of interest
          bearing liabilities                         4.05%             4.74%
 
            NET INTEREST MARGIN (tax
                   equivalent)
        Net interest income (tax
         equivalent) as a
          percentage of average earning
           assets                                     4.99%             5.63%
 
                  COST OF FUNDS
        Interest expense as a percentage
         of average interest-
          bearing liabilities plus
           interest-free funds                        4.49%             3.70%
 
        *  Based on a 34% tax rate.
        ** Net of unearned income, prior to deduction of reserve for possible
           loan losses and including loans accounted for on a non-accrual
           basis.
 
 
                    MAIN STREET BANKS, INC. AND SUBSIDIARIES
                                  LOAN QUALITY
                                   (Unaudited)
 
                                            First       Fourth        First
                                           Quarter      Quarter      Quarter
                                            2001         2000         2000
       RESERVE FOR POSSIBLE LOAN LOSSES
       Reserve for possible loan losses
        at beginning of period           $10,907,424  $11,018,516   $9,743,922
       Provision for possible loan
        losses                               530,000      615,000      580,000
       Loans charged off during period       233,787      789,392      249,943
       Recoveries on loans previously
        charged off                           75,340       63,300      101,849
         Net loans charged off
          (recovered) during period          158,447      726,092      148,094
       Reserve for possible loan losses
        at end of period                 $11,278,977  $10,907,424  $10,175,828
 
       Net annualized charge-offs
        (recoveries) as a percentage
         of average loans                      0.09%        0.40%        0.09%
 
       Gross annualized charge-offs as a
        percentage of
         average loans                         0.13%        0.43%        0.15%
 
       Recoveries as a percentage of
        gross charge-offs                     32.23%        8.02%       40.75%
 
       Reserve for possible loans losses
        as a percentage
         of loans, at end of period            1.50%        1.48%        1.47%
 
 
                    MAIN STREET BANKS, INC. AND SUBSIDIARIES
                                  LOAN QUALITY
                                   (Unaudited)
 
                                                      Three months ended
                                                           March 31,
                                                     2001              2000
        RESERVE FOR POSSIBLE LOAN LOSSES
       Reserve for possible loan losses at
        beginning of period                     $10,907,424        $9,743,922
       Provision for possible loan losses           530,000           580,000
       Loans charged off during period              233,787           249,943
       Recoveries on loans previously
        charged off                                  75,340           101,849
         Net loans charged off (recovered)
          during period                             158,447           148,094
       Reserve for possible loan losses at
        end of period                           $11,278,977       $10,175,828
 
       Net annualized charge-offs
        (recoveries) as a percentage
         of average loans                             0.09%             0.09%
 
       Gross annualized charge-offs as a
        percentage of
         average loans                                0.13%             0.15%
 
       Recoveries as a percentage of gross
        charge-offs                                  32.23%            40.75%
 
       Reserve for possible loans losses
        as a percentage
         of loans, at end of period                   1.50%             1.47%
 
 
 
                                             March 31  December 31  March  31
                                               2001        2000        2000
       NON-PERFORMING ASSETS
 
       Loans accounted for on a non-accrual
        basis                               $1,817,265  $1,179,436  $1,390,043
       Restructured loans                          ---         ---         ---
         Total non-performing loans         $1,817,265  $1,179,436  $1,390,043
       Foreclosed assets and surplus
        property                             1,055,677   2,131,394   1,073,889
         Total non-performing assets        $2,872,942  $3,310,830  $2,463,932
 
       Non-performing assets as a
        percentage of loans plus
         foreclosed assets and surplus
          property, at end of period             0.38%       0.45%       0.35%
 
       Non-performing assets as a
        percentage of total
         assets, at end of period                0.27%       0.31%       0.26%
 
       Reserve for possible loan losses as
        a percentage of
         non-performing assets, at end of
          period                               392.59%     329.45%     412.99%
 
       Loans 90 days past due and still
        accruing                              $555,666  $1,398,091    $318,078
 
       Loans 90 days past due and still
        accruing as a
         percentage of loans, at end of
          period                                 0.07%       0.19%       0.05%
 
 

SOURCE Main Street Banks, Inc.
    ATLANTA, April 19 /PRNewswire/ -- Main Street Banks, Inc. (Nasdaq: MSBK)
 today announced first quarter 2001 earnings of $4.2 million, or $0.26 per
 diluted share, excluding $1.5 million, or $0.09 per diluted share, of
 nonrecurring merger expenses.  For the quarter, the Company's earnings
 increased 16.7 percent over net income of $3.6 million, or $0.23 per diluted
 share, for the first quarter of 2000.  The nonrecurring expenses relate to
 merger expenses and integration costs of recent acquisitions.  Net earnings
 for the quarter were $2.7 million or $0.17 per diluted share.  All prior-
 period financial data have been restated for the January 2001 pooling of
 interests between the Company and Walton Bank and Trust.
     Main Street's first quarter recurring performance produced an annualized
 return on average assets of 1.61 percent and an annualized return on average
 shareholder's equity of 17.8 percent.  This compares with 1.58 percent and
 18.8 percent, respectively, for the year-earlier period.  Total assets were
 $1.06 billion as of March 31, 2001.  Average loans grew 9.6 percent from the
 same period a year ago, while average deposits increased 14.7 percent from the
 first quarter of 2000.
     "We are gratified by the performance of the Company during the first
 quarter, at a time when the overall economy provided a difficult operating
 environment for many banks," said Edward C. Milligan, chief executive officer.
 "Our performance was the result of our efforts to focus on non-interest income
 and non-interest expense as net interest margins came under pressure.
 Specifically, we made substantial progress in our cross-selling efforts among
 our fee income businesses, including our insurance, investment and mortgage
 services."
     Net interest margin for the first quarter was 4.99 percent, compared to
 5.63 percent in the first quarter of 2000.  Non-interest income totaled $3.2
 million, compared with $2.6 million in the same period in the prior year.
 Recurring non-interest expense as a percentage of total revenue (cash basis
 efficiency ratio) was 54.4 percent, compared with 56.3 percent for the same
 period a year ago.  In addition, non-interest expense (excluding merger
 expenses) was $8.3 million in both the first quarter of 2001 and the first
 quarter of 2000.  First quarter 2001 non-interest expense decreased 5.7
 percent from $8.8 million in the fourth quarter of 2000.  The $0.5 million
 reduction in quarter-to-quarter expenses is attributable to economies
 resulting from the consolidation of the Company's banking charters on January
 2, 2001.
     "We continued to maintain solid credit quality during the first three
 months of 2001," said Milligan.  Main Street's net annualized charge-offs as a
 percentage of average loans for the quarter were 0.09 percent, compared with
 0.09 percent in the same period last year.  Nonperforming assets comprised
 0.38 percent of total assets, below the 0.45 percent level at year-end 2000,
 while reserves for loan losses stood at 1.50 percent of total loans, compared
 to 1.47 percent at March 31, 2000.
     Main Street declared a regular quarterly dividend of $0.09 per share of
 common stock payable May 9, 2001 to shareholders of record at the close of
 business on April 25, 2001.
     "Looking forward, we anticipate full-year 2001 diluted earnings-per-share
 growth in the 10 to 15 percent range, which is consistent with published
 analyst estimates of $1.08 to $1.10," Milligan said.
 
     About Main Street
     Main Street Banks, Inc., a $1.0 billion-asset community banking
 organization based in metropolitan Atlanta, provides a broad range of banking,
 brokerage, insurance, and mortgage products and services through its 21 branch
 offices located in twelve of Georgia's fastest growing communities.  The
 Company was created through the May 24, 2000 merger of First Sterling Banks,
 Inc. and Main Street Banks Incorporated in a pooling of interests transaction,
 creating the largest and highest performing community banking company in the
 greater Atlanta area.
 
     Safe Harbor
     Statements made in this press release, other than those containing
 historical information, are forward-looking statements made pursuant to the
 safe harbor provisions of the Private Securities Litigation Act of 1995.  Such
 statements involve risks and uncertainties that may cause results to differ
 materially from those set forth in these statements.  Main Street cautions
 readers that results and events subject to forward-looking statements could
 differ materially due to the following factors:  possible changes in economic
 and business conditions; the ability of Main Street to integrate recent
 acquisitions and attract new customers; possible changes in monetary and
 fiscal policies, laws and regulations; the effects of easing of restrictions
 on participants in the financial services industry; the cost and other effects
 of legal and administrative cases; possible changes in the credit worthiness
 of customers and the possible impairment of loans; the effects of changing
 interest rates and other risks and factors identified in the company's filings
 with the Securities and Exchange Commission.
 
 
                      MAIN STREET BANKS, INC. AND SUBSIDIARIES
                                FINANCIAL HIGHLIGHTS
                                    (Unaudited)
 
                                    First           Fourth        First
                                   Quarter         Quarter       Quarter
                                    2001             2000          2000
     INCOME DATA
 
      Net interest income        $11,807,965     $12,462,004   $11,716,277
      Net interest income
       (tax equivalent)           12,009,048      12,662,763    11,897,899
      Provision for possible
       loan losses                   530,000         615,000       580,000
      Non-interest income
       (exclusive of securities
       transactions and other
       onetime items)              3,167,131       2,883,734     2,642,878
      Securities transactions          3,655           4,236        (3,149)
      Non-interest expense
       (exclusive of onetime
       items)                      8,318,206       8,761,736     8,302,321
      Merger expense               1,648,974         112,317           ---
      Net income                  $2,658,841      $3,945,279    $3,577,982
 
     Core net income, excluding
      merger expense, securities
      transactions and other
      non-recurring items         $4,163,624      $3,944,512    $3,577,982
 
     AVERAGE BALANCE SHEET DATA
      Loans                     $749,995,877    $730,939,171  $684,447,117
      Investment securities      161,939,523     163,312,501   135,844,697
      Earning assets             976,938,152     997,656,212   849,340,993
      Total assets             1,045,712,437   1,067,584,113   911,604,068
      Deposits                   884,740,339     908,970,161   771,174,443
      Shareholders' equity        95,122,646      89,046,573    76,565,317
 
     PER SHARE DATA
      Basic                            $0.17           $0.25         $0.23
      Diluted                          $0.17           $0.25         $0.23
      Core basic                       $0.27           $0.26         $0.23
      Core diluted                     $0.26           $0.26         $0.23
      Book value per share,
       end of period                   $6.18           $6.05         $5.48
      Closing stock price            $13.500         $12.375        $8.625
      Cash dividends per share         $0.09           $0.08         $0.04
 
     RATIOS
      Core return on average assets    1.61%           1.47%         1.58%
      Core return on average
       shareholders' equity            17.8%           17.6%         18.8%
      Net interest margin              4.99%           5.05%         5.63%
      Average loans as a percentage
       of average deposits            84.77%          80.41%        88.75%
      Non-interest expense as
       a percentage of total revenue
       (tax equivalent and excluding
       securities transactions and
       onetime items)                  54.8%           56.4%         57.1%
      Non-interest income
       (excluding onetime items) as
       a percentage of total revenue  20.87%          18.55%        18.18%
      Reserve for possible loan
       losses as a percentage of
       loans, at end of period         1.50%           1.48%         1.47%
      Non-performing assets as a
       percentage of loans plus
       foreclosed assets and surplus
       property, at EOP                0.38%           0.45%         0.35%
      Shareholders' equity as a
       percentage of total assets,
       at end of period                9.13%           8.76%         8.75%
 
     OTHER PERFORMANCE MEASURES
 
      Core net income *           $4,163,624      $3,944,512    $3,577,982
      Purchased intangible
       amortization, net of tax       48,493          81,344        81,344
      Earnings before tax-effected
       purchased intangibles
       amortization               $4,212,117      $4,025,856    $3,659,326
 
      Core earnings per share
       before tax-effected
       purchased intangibles
       amortization
       Basic                           $0.27           $0.26         $0.24
       Diluted                         $0.26           $0.25         $0.23
 
      Core return on average
       assets before purchased
       intangibles balances and
       tax-effected amortization       1.64%           1.50%         1.62%
 
      Core return on average
       shareholders' equity before
       tax-effected purchased
       intangibles amortization        18.1%           18.2%         19.6%
 
      Non-interest expense before
       purchased intangibles
       amortization as a percentage
       of total revenue (tax
       equivalent and excluding
       securities transactions
       and onetime items)              54.4%           55.7%         56.3%
 
     *Excluding onetime merger expenses, investment transactions and other
        onetime items.
 
 
                      MAIN STREET BANKS, INC. AND SUBSIDIARIES
                                FINANCIAL HIGHLIGHTS
                                    (Unaudited)
 
                                                      Three Months Ended
                                                           March 31,
                                                     2001            2000
 
     INCOME DATA
      Net interest income                         $11,807,965    $11,716,277
      Net interest income (tax equivalent)         12,009,048     11,897,899
      Provision for possible loan losses              530,000        580,000
      Non-interest income (exclusive of securities
       transactions and other onetime items)        3,167,131      2,642,878
      Securities transactions                           3,655        (3,149)
      Non-interest expense (exclusive of
       onetime items)                               8,318,206      8,302,321
      Merger expense                                1,648,974            ---
      Net income                                   $2,658,841     $3,577,982
 
      Core net income, excluding merger
       expense, securities transactions and
       other non-recurring items                   $4,163,624     $3,577,982
 
     AVERAGE BALANCE SHEET DATA
      Loans                                      $749,995,877   $684,447,117
      Investment securities                       161,939,523    135,844,697
      Earning assets                              976,938,152    849,340,993
      Total assets                              1,045,712,437    911,604,068
      Deposits                                    884,740,339    771,174,443
      Shareholders' equity                         95,122,646     76,565,317
 
     PER SHARE DATA
      Basic                                             $0.17          $0.23
      Diluted                                           $0.17          $0.23
      Core basic                                        $0.27          $0.23
      Core diluted                                      $0.26          $0.23
      Book value per share, end of period               $6.18          $5.48
      Closing stock price                             $13.500         $8.625
      Cash dividends per share                          $0.09          $0.04
 
     RATIOS
      Core return on average assets                     1.61%          1.58%
      Core return on average shareholders' equity       17.8%          18.8%
      Net interest margin                               4.99%          5.63%
      Average loans as a percentage of
       average deposits                                84.77%         88.75%
      Non-interest expense as a percentage
       of total revenue (tax equivalent and
       excluding securities transactions and
       onetime items)                                   54.8%          57.1%
      Non-interest income (excluding onetime items)
       as a percentage of total revenue                20.87%         18.18%
      Reserve for possible loan losses as a
       percentage of loans, at end of period            1.50%          1.47%
      Non-performing assets as a percentage of loans
       plus foreclosed assets and surplus property,
       at EOP                                           0.38%          0.35%
      Shareholders' equity as a percentage
       of total assets, at end of period                9.13%          8.75%
 
 
     OTHER PERFORMANCE MEASURES
      Core net income *                            $4,163,624     $3,577,982
      Purchased intangible amortization,
       net of tax                                      48,493         81,344
      Earnings before tax-effected purchased
       intangibles amortization                    $4,212,117     $3,659,326
 
      Core earnings per share before tax-effected
       purchased intangibles amortization
       Basic                                            $0.27          $0.24
       Diluted                                          $0.26          $0.23
 
      Core return on average assets before purchased
       intangibles balances and tax-effected
       amortization                                     1.64%          1.62%
 
      Core return on average shareholders' equity
       before tax-effected purchased intangibles
       amortization                                     18.1%          19.6%
 
      Non-interest expense before purchased intangibles
       amortization as a percentage of total revenue
       (tax equivalent and excluding securities
       transactions and onetime items)                  54.4%          56.3%
 
 
     *Excluding onetime merger expenses, investment transactions and other
        onetime items.
 
 
                      MAIN STREET BANKS, INC. AND SUBSIDIARIES
                            SUMMARY OF FINANCIAL RESULTS
                                    (Unaudited)
 
                                         First         Fourth         First
                                        Quarter        Quarter       Quarter
                                         2001           2000           2000
 
               INCOME DATA
 
     Net income                        $2,658,841     $3,945,279    $3,577,982
     Core net income excluding
      onetime items                    $4,163,624     $3,944,512    $3,577,982
     Net interest income               11,807,965     12,462,004    11,716,277
     Net interest income (tax-
      equivalent)                      12,009,048     12,662,763    11,897,899
     Provision for loan losses            530,000        615,000       580,000
 
              PER SHARE DATA
 
     Earnings per share, basic              $0.17          $0.25         $0.23
     Earnings per share, diluted            $0.17          $0.25         $0.23
     Core earnings per share,
      basic                                 $0.27          $0.26         $0.23
     Core earnings per share,
      diluted                               $0.26          $0.26         $0.23
     Cash dividends per share               $0.09          $0.08         $0.04
     Dividend payout ratio                  34.54%         31.16%        17.64%
     Book value per share, end of
      period                                $6.18          $6.05         $5.48
     High stock price                     $14.688        $12.438       $12.125
     Low stock price                      $12.250        $11.125        $7.750
     Closing stock price                  $13.500        $12.375        $8.625
     Trading volume                       337,200        254,000       259,300
 
        AVERAGE BALANCE SHEET DATA
 
     Loans                           $749,995,877   $730,939,171  $684,447,117
     Investment in securities         161,939,523    163,312,501   135,844,697
     Earning assets                   976,938,152    997,656,212   849,340,993
     Total assets                   1,045,712,437  1,067,584,113   911,604,068
     Deposits                         884,740,339    908,970,161   771,174,443
     Shareholders' equity              95,122,646     89,046,573    76,565,317
 
 
                      MAIN STREET BANKS, INC. AND SUBSIDIARIES
                            SUMMARY OF FINANCIAL RESULTS
                                    (Unaudited)
 
                                                   Three months ended
                                                        March 31,
                                                 2001               2000
 
                   INCOME DATA
 
     Net income                                   $2,658,841        $3,577,982
     Core net income excluding onetime items      $4,163,624        $3,577,982
     Net interest income                          11,807,965        11,716,277
     Net interest income (tax-equivalent)         12,009,048        11,897,899
     Provision for loan losses                       530,000           580,000
 
                 PER SHARE DATA
 
     Earnings per share, basic                         $0.17             $0.23
     Earnings per share, diluted                       $0.17             $0.23
     Core earnings per share, basic                    $0.27             $0.23
     Core earnings per share, diluted                  $0.26             $0.23
     Cash dividends per share                          $0.09             $0.04
     Dividend payout ratio                             34.54%            17.64%
     Book value per share, end of period               $6.18             $5.48
     High stock price                                $14.688           $12.125
     Low stock price                                 $12.250            $7.750
     Closing stock price                             $13.500            $8.625
     Trading volume                                  337,200           259,300
 
           AVERAGE BALANCE SHEET DATA
 
     Loans                                      $749,995,877      $684,447,117
     Investment in securities                    161,939,523       135,844,697
     Earning assets                              976,938,152       849,340,993
     Total assets                              1,045,712,437       911,604,068
     Deposits                                    884,740,339       771,174,443
     Shareholders' equity                         95,122,646        76,565,317
 
 
                    MAIN STREET BANKS, INC. AND SUBSIDIARIES
                               PERFORMANCE RATIOS
                                  (Unaudited)
 
                                                                 Three months
                                        First   Fourth  First       ended
                                       Quarter Quarter Quarter    March 31,
                                         2001    2000    2000    2001    2000
 
     Core return on average assets       1.61%   1.47%   1.58%   1.61%   1.58%
 
     Core return on average
      stockholders' equity               17.8%   17.6%   18.8%   17.8%   18.8%
 
 
     Net interest margin                 4.99%   5.05%   5.63%   4.99%   5.63%
 
     Yield on earning assets less
      cost of interest bearing
      liabilities                        4.05%   4.06%   4.74%   4.05%   4.74%
 
     Average loans as a percentage
      of average deposits               84.77%  80.41%  88.75%  84.77%  88.75%
 
     Non-interest expense as a
      percentage of total revenue
      (tax-equivalent and excluding
      securities transactions and
      onetime items)                     54.8%   56.4%   57.1%   54.8%   57.1%
 
     Non-interest income (excluding
      onetime items) as a percentage
      of total revenue                  20.87%  18.55%  18.18%  20.87%  18.18%
 
     Reserve for possible loan
      losses as a percentage of loans,
      at end of period                   1.50%   1.48%   1.47%   1.50%   1.47%
 
     Non-performing assets as a
      percentage of loans plus
      foreclosed assets and
      surplus property                   0.38%   0.45%   0.35%   0.38%   0.35%
 
     Shareholders' equity as a
      percentage of total assets,
      at end of period                   9.13%   8.76%   8.75%   9.13%   8.75%
 
 
                         MAIN STREET BANKS, INC. AND SUBSIDIARIES
                   DAILY AVERAGE CONSOLIDATED BALANCE SHEETS
                                  (Unaudited)
 
                                   First           Fourth         First
                                  Quarter          Quarter       Quarter
                                    2001            2000          2000
        ASSETS
     EARNING ASSETS
       Interest bearing due
        from banks                $1,613,554      $1,132,616    $1,137,388
       Loans, net of unearned
        income                   749,995,877     730,939,171   684,447,117
       Investment securities     161,939,523     163,312,501   135,844,697
       Federal funds sold         40,569,851      59,618,841    16,311,795
       Securities purchased under
        agreement to resell       19,665,880      40,573,494     9,693,407
       Other earning assets        3,153,467       2,079,589     1,906,589
        Total earning assets     976,938,152     997,656,212   849,340,993
     NON-EARNING ASSETS
       Cash and due from banks    37,911,133      40,389,782    35,170,728
       Other real estate owned     2,087,435       1,793,982       275,376
       Unrealized gain (loss)
        on investment securities     890,892      (1,700,680)   (5,022,700)
       Reserve for possible
        loan losses               11,137,599      10,713,073     9,966,919
       Other assets               39,022,424      40,157,890    41,806,590
        Total assets          $1,045,712,437  $1,067,584,113  $911,604,068
 
        LIABILITIES
     INTEREST-BEARING LIABILITIES
       Interest-bearing
        deposits
       Certificates of deposit  $450,711,435    $440,616,011  $351,455,353
       Individual retirement
        accounts                  53,164,151      52,338,432    47,025,305
       Savings                    44,522,821      45,518,502    42,957,886
       Interest-bearing demand   100,893,850     109,672,566    91,904,962
       Money market accounts      96,527,894     105,165,889    89,121,092
        Total interest-bearing
         deposits                745,820,151     753,311,400   622,464,598
 
       Federal Home Loan Bank
        advances                  52,126,458      52,618,519    49,731,618
       Federal funds purchased       544,257         364,493     3,524,652
       Securities sold under
        agreement to repurchase    5,721,737       8,232,105     5,790,940
         Total interest-bearing
          liabilities            804,212,603     814,526,517   681,511,808
 
     NON-INTEREST-BEARING LIABILITIES
       Non-interest bearing
        deposits                 138,920,188     155,658,761   148,709,845
       Other liabilities           7,457,000       8,352,262     4,817,098
        Total liabilities        950,589,791     978,537,540   835,038,751
       SHAREHOLDERS' EQUITY       95,122,646      89,046,573    76,565,317
        Total liabilities and
         shareholders'
         equity               $1,045,712,437  $1,067,584,113  $911,604,068
 
    EARNING ASSETS LESS
     INTEREST BEARING
     LIABILITIES                $172,725,549    $183,129,695   $167,829,185
 
 
 
 
                                                     Three months ended
                                                           March 31,
                                                     2001            2000
        ASSETS
     EARNING ASSETS
       Interest bearing due from banks             $1,613,554     $1,137,388
       Loans, net of unearned income              749,995,877    684,447,117
       Investment securities                      161,939,523    135,844,697
       Federal funds sold                          40,569,851     16,311,795
       Securities purchased under agreement
        to resell                                  19,665,880      9,693,407
       Other earning assets                         3,153,467      1,906,589
        Total earning assets                      976,938,152    849,340,993
     NON-EARNING ASSETS
       Cash and due from banks                     37,911,133     35,170,728
       Other real estate owned                      2,087,435        275,376
       Unrealized gain (loss) on investment
        securities                                    890,892     (5,022,700)
       Reserve for possible loan losses            11,137,599      9,966,919
       Other assets                                39,022,424     41,806,590
        Total assets                           $1,045,712,437   $911,604,068
 
       LIABILITIES
     INTEREST-BEARING LIABILITIES
       Interest-bearing deposits
       Certificates of deposit                   $450,711,435   $351,455,353
       Individual retirement accounts              53,164,151     47,025,305
       Savings                                     44,522,821     42,957,886
       Interest-bearing demand                    100,893,850     91,904,962
       Money market accounts                       96,527,894     89,121,092
        Total interest-bearing deposits           745,820,151    622,464,598
 
       Federal Home Loan Bank advances             52,126,458     49,731,618
       Federal funds purchased                        544,257      3,524,652
       Securities sold under agreement to
        repurchase                                  5,721,737      5,790,940
        Total interest-bearing liabilities        804,212,603    681,511,808
     NON-INTEREST-BEARING LIABILITIES
       Non-interest bearing deposits              138,920,188    148,709,845
       Other liabilities                            7,457,000      4,817,098
        Total liabilities                         950,589,791    835,038,751
       SHAREHOLDERS' EQUITY                        95,122,646     76,565,317
        Total liabilities and shareholders'
         equity                                $1,045,712,437   $911,604,068
 
     EARNING ASSETS LESS
       INTEREST BEARING LIABILITIES              $172,725,549   $167,829,185
 
 
                      MAIN STREET BANKS, INC. AND SUBSIDIARIES
                            CONSOLIDATED BALANCE SHEETS
                                    (Unaudited)
 
                                     March 31      December 31      March 31
                                       2001            2000           2000
                 ASSETS
       Cash and due from
        financial institutions       $50,668,342     $40,960,712   $40,377,166
       Investment in securities
         Securities available for
          sale                       156,303,713     153,002,656   115,325,987
         Securities held to
          maturity                       686,573      18,803,265    14,996,528
           Total investment in
            securities               156,990,286     171,805,921   130,322,515
       Federal funds sold and
        other short-term
        investments                   66,200,970      88,436,897    42,155,000
       Mortgage loans held for
        sale                           5,709,639       2,248,415     2,410,005
       Loans                         749,801,123     736,011,198   693,128,089
         Reserve for possible
          loan losses                 11,278,977      10,907,424    10,175,828
           Net loans                 738,522,146     725,103,774   682,952,261
       Bank premises and
        equipment                     26,977,765      27,034,149    27,510,829
       Other real estate owned         1,054,317       2,122,802     1,044,600
       Accrued interest
        receivable                     6,861,207       7,139,716     4,734,808
       Intangible assets                 885,617         945,534     1,274,608
       Other assets                    4,409,915       4,781,221     8,598,503
           Total assets           $1,058,280,204  $1,070,579,141  $941,380,295
 
              LIABILITIES
       Non-interest bearing
        demand deposits              145,302,675     139,235,155   155,653,094
       Interest bearing deposits     748,474,660     746,674,351   627,667,674
           Total deposits            893,777,335     885,909,506   783,320,768
       Federal Home Loan Bank
        advances                      52,139,718      52,130,171    52,138,750
       Federal funds purchased
        and securities sold
         under agreement to
          resell                       6,320,548      32,615,659    16,558,836
       Accrued interest payable        6,953,224       5,652,685     2,219,828
       Other liabilities               2,487,781         496,859     4,800,050
           Total liabilities         961,678,606     976,804,880   859,038,232
          STOCKHOLDERS' EQUITY
       Common stock, no par value
         Authorized - 50,000,000
          shares
         Outstanding - 15,621,755     28,930,320      28,579,332    28,103,429
       Retained earnings              67,398,386      66,290,657    58,478,214
       Accumulated other
        comprehensive income           1,306,767         (61,853)   (3,205,705)
       Treasury stock at cost -
        169,082 shares                (1,033,875)     (1,033,875)   (1,033,875)
           Total shareholders'
            equity                    96,601,598      93,774,261    82,342,063
           Total liabilities and
            shareholders' equity  $1,058,280,204  $1,070,579,141  $941,380,295
 
 
                     MAIN STREET BANKS, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                                    (Unaudited)
 
                                            First       Fourth        First
                                           Quarter      Quarter      Quarter
                                            2001         2000         2000
     INTEREST INCOME
       Interest and fees on loans        $18,868,499  $19,385,391  $16,966,567
       Interest bearing deposits in
        banks                                 14,562       24,429       22,737
       Interest and dividends on
        investments                        2,449,673    2,458,368    1,982,086
       Interest on federal funds sold
        and other
        short-term investments               917,835    1,615,484      383,700
         Total interest income            22,250,569   23,483,672   19,355,090
     INTEREST EXPENSE
       Interest on deposits                9,539,649   10,061,896    6,813,796
       Interest on Federal Home Loan
        Bank advances                        810,602      828,964      705,943
       Interest on federal funds
        purchased and other
         short- term borrowings               87,493      125,955      114,999
       Other interest expense                  4,860        4,853        4,075
         Total interest expense           10,442,604   11,021,668    7,638,813
     NET INTEREST INCOME                  11,807,965   12,462,004   11,716,277
     PROVISION FOR POSSIBLE LOAN LOSSES      530,000      615,000      580,000
     NET INTEREST INCOME AFTER PROVISION
       FOR POSSIBLE LOAN LOSSES           11,277,965   11,847,004   11,136,277
     NON-INTEREST INCOME
       Service charges on deposit
        accounts                           1,311,672    1,324,217    1,249,638
       Gains (losses) on investment
        securities                             3,655        4,236       (3,149)
       Gains (losses) on sales of assets      (4,224)      18,961        2,767
       Gains (losses) on sales of loans      241,748       29,555       26,772
       Other income                        1,617,935    1,511,001    1,363,701
         Total non-interest income         3,170,786    2,887,970    2,639,729
     NON-INTEREST EXPENSE
       Employee compensation               4,104,564    4,168,728    4,135,843
       Employee benefits                     676,715      657,141      530,393
         Total personnel expense           4,781,279    4,825,869    4,666,236
       Net occupancy and equipment
        expense                            1,178,294    1,227,456    1,192,277
       Professional services                 377,307      224,246      132,975
       Regulatory agency assessments          74,377       93,734       33,849
       Amortization of intangibles            59,917      109,691      109,692
       Merger expense                      1,648,974      112,317          ---
       Other expense                       1,847,032    2,280,740    2,167,292
         Total non-interest expense        9,967,180    8,874,053    8,302,321
     INCOME BEFORE INCOME TAXES            4,481,571    5,860,921    5,473,685
     INCOME TAX EXPENSE                    1,822,730    1,915,642    1,895,703
     NET INCOME                           $2,658,841   $3,945,279   $3,577,982
 
     EARNINGS PER SHARE
       Basic                                   $0.17        $0.25        $0.23
       Diluted                                 $0.17        $0.25        $0.23
 
     CORE EARNINGS PER SHARE *
       Basic                                   $0.27        $0.26        $0.23
       Diluted                                 $0.26        $0.26        $0.23
 
     WEIGHTED AVERAGE SHARES OUTSTANDING
       Basic                              15,602,414   15,505,660   15,445,220
       Diluted                            15,979,368   15,795,771   15,776,941
 
     CASH DIVIDENDS PER SHARE                  $0.09        $0.08        $0.04
 
     * Excluding onetime merger expenses, investment transactions and other
       non-recurring items
 
 
 
                     MAIN STREET BANKS, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                                    (Unaudited)
 
                                                    Three months ended
                                                        March 31,
                                                  2001              2000
     INTEREST INCOME
       Interest and fees on loans               $18,868,499       $16,966,567
       Interest bearing deposits in banks            14,562            22,737
       Interest and dividends on
        investments                               2,449,673         1,982,086
       Interest on federal funds sold and
        other
        short-term investments                      917,835           383,700
         Total interest income                   22,250,569        19,355,090
     INTEREST EXPENSE
       Interest on deposits                       9,539,649         6,813,796
       Interest on Federal Home Loan Bank
        advances                                    810,602           705,943
       Interest on federal funds purchased
        and other
         short- term borrowings                      87,493           114,999
       Other interest expense                         4,860             4,075
         Total interest expense                  10,442,604         7,638,813
     NET INTEREST INCOME                         11,807,965        11,716,277
     PROVISION FOR POSSIBLE LOAN LOSSES             530,000           580,000
     NET INTEREST INCOME AFTER PROVISION
       FOR POSSIBLE LOAN LOSSES                  11,277,965        11,136,277
     NON-INTEREST INCOME
       Service charges on deposit accounts        1,311,672         1,249,638
       Gains (losses) on investment
        securities                                    3,655            (3,149)
       Gains (losses) on sales of assets             (4,224)            2,767
       Gains (losses) on sales of loans             241,748            26,772
       Other income                               1,617,935         1,363,701
         Total non-interest income                3,170,786         2,639,729
     NON-INTEREST EXPENSE
       Employee compensation                      4,104,564         4,135,843
       Employee benefits                            676,715           530,393
         Total personnel expense                  4,781,279         4,666,236
       Net occupancy and equipment expense        1,178,294         1,192,277
       Professional services                        377,307           132,975
       Regulatory agency assessments                 74,377            33,849
       Amortization of intangibles                   59,917           109,692
       Merger expense                             1,648,974               ---
       Other expense                              1,847,032         2,167,292
         Total non-interest expense               9,967,180         8,302,321
     INCOME BEFORE INCOME TAXES                   4,481,571         5,473,685
     INCOME TAX EXPENSE                           1,822,730         1,895,703
     NET INCOME                                  $2,658,841        $3,577,982
 
     EARNINGS PER SHARE
       Basic                                          $0.17             $0.23
       Diluted                                        $0.17             $0.23
 
     CORE EARNINGS PER SHARE *
       Basic                                          $0.27             $0.23
       Diluted                                        $0.26             $0.23
 
     WEIGHTED AVERAGE SHARES OUTSTANDING
       Basic                                     15,602,414        15,445,220
       Diluted                                   15,979,368        15,776,941
 
     CASH DIVIDENDS PER SHARE                         $0.09             $0.04
 
     * Excluding onetime merger expenses, investment transactions and other
       non-recurring items
 
                      MAIN STREET BANKS, INC. AND SUBSIDIARIES
                    SUMMARY OF INTEREST RATES (TAX-EQUIVALENT)*
                                   (Unaudited)
 
 
 
                                                 First       Fourth      First
                                                Quarter     Quarter     Quarter
                                                 2001        2000        2000
                 EARNINGS ASSETS
        Loans**                                 10.22%      10.57%       9.99%
        Investment securities                    6.55%       6.39%       6.29%
        Federal funds sold and other short
          term investments                       6.18%       6.41%       5.93%
            Total interest-earning assets        9.32%       9.44%       9.25%
 
           INTEREST-BEARING LIABILITIES
        Interest-bearing deposits
          Interest checking and money
           market deposits                       2.54%       3.29%       2.62%
          Savings deposits                       2.39%       2.62%       1.68%
          Time deposits                          6.47%       6.60%       5.51%
            Total interest bearing deposits      5.19%       5.31%       4.40%
 
        Short-term borrowings                    5.98%       6.05%       5.14%
        Federal Home Loan Bank advances          6.31%       6.27%       5.71%
            Total interest-bearing
             liabilities                         5.27%       5.38%       4.51%
 
       NET INTEREST SPREAD (tax equivalent)
        Yield on earning assets less cost
         of interest
          bearing liabilities                    4.05%       4.06%       4.74%
 
       NET INTEREST MARGIN (tax equivalent)
        Net interest income (tax
         equivalent) as a
          percentage of average earning
           assets                                4.99%       5.05%       5.63%
 
                  COST OF FUNDS
        Interest expense as a percentage of
         average interest-
          bearing liabilities plus
           interest-free funds                   4.49%       4.52%       3.70%
 
        *  Based on a 34% tax rate.
        ** Net of unearned income, prior to deduction of reserve for possible
           loan losses and including loans accounted for on a non-accrual
           basis.
 
 
 
                      MAIN STREET BANKS, INC. AND SUBSIDIARIES
                    SUMMARY OF INTEREST RATES (TAX-EQUIVALENT)*
                                   (Unaudited)
 
 
 
                                                      Three months ended
                                                           March 31,
                                                     2001              2000
                 EARNINGS ASSETS
        Loans**                                      10.22%             9.99%
        Investment securities                         6.55%             6.29%
        Federal funds sold and other short
          term investments                            6.18%             5.93%
            Total interest-earning assets             9.32%             9.25%
 
          INTEREST-BEARING LIABILITIES
        Interest-bearing deposits
          Interest checking and money
           market deposits                            2.61%             2.62%
          Savings deposits                            2.39%             1.68%
          Time deposits                               6.47%             5.49%
            Total interest bearing
             deposits                                 5.19%             4.40%
 
        Short-term borrowings                         5.98%             5.14%
        Federal Home Loan Bank advances               6.31%             5.71%
            Total interest-bearing
             liabilities                              5.27%             4.51%
 
            NET INTEREST SPREAD (tax
                   equivalent)
        Yield on earning assets less cost
         of interest
          bearing liabilities                         4.05%             4.74%
 
            NET INTEREST MARGIN (tax
                   equivalent)
        Net interest income (tax
         equivalent) as a
          percentage of average earning
           assets                                     4.99%             5.63%
 
                  COST OF FUNDS
        Interest expense as a percentage
         of average interest-
          bearing liabilities plus
           interest-free funds                        4.49%             3.70%
 
        *  Based on a 34% tax rate.
        ** Net of unearned income, prior to deduction of reserve for possible
           loan losses and including loans accounted for on a non-accrual
           basis.
 
 
                    MAIN STREET BANKS, INC. AND SUBSIDIARIES
                                  LOAN QUALITY
                                   (Unaudited)
 
                                            First       Fourth        First
                                           Quarter      Quarter      Quarter
                                            2001         2000         2000
       RESERVE FOR POSSIBLE LOAN LOSSES
       Reserve for possible loan losses
        at beginning of period           $10,907,424  $11,018,516   $9,743,922
       Provision for possible loan
        losses                               530,000      615,000      580,000
       Loans charged off during period       233,787      789,392      249,943
       Recoveries on loans previously
        charged off                           75,340       63,300      101,849
         Net loans charged off
          (recovered) during period          158,447      726,092      148,094
       Reserve for possible loan losses
        at end of period                 $11,278,977  $10,907,424  $10,175,828
 
       Net annualized charge-offs
        (recoveries) as a percentage
         of average loans                      0.09%        0.40%        0.09%
 
       Gross annualized charge-offs as a
        percentage of
         average loans                         0.13%        0.43%        0.15%
 
       Recoveries as a percentage of
        gross charge-offs                     32.23%        8.02%       40.75%
 
       Reserve for possible loans losses
        as a percentage
         of loans, at end of period            1.50%        1.48%        1.47%
 
 
                    MAIN STREET BANKS, INC. AND SUBSIDIARIES
                                  LOAN QUALITY
                                   (Unaudited)
 
                                                      Three months ended
                                                           March 31,
                                                     2001              2000
        RESERVE FOR POSSIBLE LOAN LOSSES
       Reserve for possible loan losses at
        beginning of period                     $10,907,424        $9,743,922
       Provision for possible loan losses           530,000           580,000
       Loans charged off during period              233,787           249,943
       Recoveries on loans previously
        charged off                                  75,340           101,849
         Net loans charged off (recovered)
          during period                             158,447           148,094
       Reserve for possible loan losses at
        end of period                           $11,278,977       $10,175,828
 
       Net annualized charge-offs
        (recoveries) as a percentage
         of average loans                             0.09%             0.09%
 
       Gross annualized charge-offs as a
        percentage of
         average loans                                0.13%             0.15%
 
       Recoveries as a percentage of gross
        charge-offs                                  32.23%            40.75%
 
       Reserve for possible loans losses
        as a percentage
         of loans, at end of period                   1.50%             1.47%
 
 
 
                                             March 31  December 31  March  31
                                               2001        2000        2000
       NON-PERFORMING ASSETS
 
       Loans accounted for on a non-accrual
        basis                               $1,817,265  $1,179,436  $1,390,043
       Restructured loans                          ---         ---         ---
         Total non-performing loans         $1,817,265  $1,179,436  $1,390,043
       Foreclosed assets and surplus
        property                             1,055,677   2,131,394   1,073,889
         Total non-performing assets        $2,872,942  $3,310,830  $2,463,932
 
       Non-performing assets as a
        percentage of loans plus
         foreclosed assets and surplus
          property, at end of period             0.38%       0.45%       0.35%
 
       Non-performing assets as a
        percentage of total
         assets, at end of period                0.27%       0.31%       0.26%
 
       Reserve for possible loan losses as
        a percentage of
         non-performing assets, at end of
          period                               392.59%     329.45%     412.99%
 
       Loans 90 days past due and still
        accruing                              $555,666  $1,398,091    $318,078
 
       Loans 90 days past due and still
        accruing as a
         percentage of loans, at end of
          period                                 0.07%       0.19%       0.05%
 
 SOURCE  Main Street Banks, Inc.