MainStreet Bank Reports Profitable First Quarter

Apr 17, 2009, 12:39 ET from MainStreet Bank

HERNDON, Va., April 17 /PRNewswire-FirstCall/ -- MainStreet Bank (OTC Bulletin Board: MNSB) reported a $67 thousand net profit for the quarter-ended March 31, 2009.

Chairman, President & CEO Jeff W. Dick said, "I am pleased to be able to report continued solid progress along with sustained profitability. Without a doubt, we are operating in one of the worst financial markets in history, which has provided many extraordinary challenges for us and for our customers."

The bank's balance sheet continues on a good growth track, with total assets at $200 million, which is an increase of 25% over the first quarter last year. Gross loans are now at $147 million, which represents an increase of more than $25 million in new loans to borrowers in our community. Total deposits are at $155 million, an increase of 36% over the same time period.

After nearly five years of operations, asset quality remains exceptionally strong. Total non-performing loans as of March 31, 2009 were less than 1/2 of one percent of gross loans, and consists of four loans -- one of which represents the 75% guarantee portion of a Small Business Administration loan which is still in the process of collection. Loans past due between 30 - 89 days were 1/10 of one percent of gross loans. There are no performing loans past due over 90 days.

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

The Bank has offices located at 727 Elden Street in Herndon, Virginia and 4029 Chain Bridge Road in Fairfax, Virginia. MainStreet Bank is the first community bank in the Washington, DC Metropolitan area to offer a full online business banking solution. MainStreet Bank was also the first bank headquartered in the Commonwealth of Virginia to offer CDARS -- a solution that provides FDIC insurance on deposits up to $50 million. Further information on the Bank can be obtained by visiting its website at

This release contains forward-looking statements, including our expectations with respect to future events, that are subject to various risks and uncertainties. Factors that could cause actual results to differ materially from management's projections, forecasts, estimates and expectations include: fluctuation in market rates of interest and loan and deposit pricing, adverse changes in the overall national economy as well as adverse economic conditions in our specific market areas, maintenance and development of well-established and valued client relationships and referral source relationships, and acquisition or loss of key production personnel. Other risks that can affect the Bank are detailed from time to time in our quarterly and annual reports filed with the Board of Governors of the Federal Reserve System. We caution readers that the list of factors above is not exclusive. The forward-looking statements are made as of the date of this release, and we may not undertake steps to update the forward-looking statements to reflect the impact of any circumstances or events that arise after the date the forward-looking statements are made. In addition, our past results of operations are not necessarily indicative of future performance.

                                   MAINSTREET BANK
                          FINANCIAL HIGHLIGHTS (Unaudited)

                                               Quarter Ended
                                          (000's except share data)
                                           3/31/09       3/31/08       %
          Operations                       -------       -------       -
          ----------                                                Change
       Interest income                     $2,498        $2,492        0.2
       Interest expense                     1,161         1,209       (4.0)
                                            -----         -----       -----
       Net interest income                  1,337         1,283        4.2
       Provision for loan losses              213            74      187.8
                                            -----         -----       -----
       Net interest income after
        provision for loan losses           1,124         1,209       (7.0)
       Other income                           313            70      347.1
       Operating expenses                   1,370         1,367        0.2
                                            -----         -----       -----
       Income (loss) before income taxes       67           (88)       nm
       Income taxes                            --            --        --
                                            -----         -----       -----
       Net income (loss)                      $67          $(88)       nm
                                            =====         =====       =====

       Per Share Data
       Earnings (loss) per share (basic
        and diluted)                        $0.03        ($0.04)       nm
       Book value per share, exclusive of
        nonvested shares                    $8.84         $8.69        1.7
       Closing stock price                  $3.70         $7.50      (50.7)
       Weighted average shares (basic and
        diluted)                        2,438,530     2,442,012

       Selected Balance Sheet Data
       Investments                        $32,294       $34,632       (6.8)
       Gross Loans                       $146,894      $121,866       20.5
       Total Assets                      $199,882      $160,259       24.7
       Deposits                          $155,578      $114,846       35.5
       Federal Funds and Repurchase
        Agreements                         $1,486        $2,990      (50.3)
       Borrowings                         $20,579       $20,629       (0.2)
       Stockholders' Equity               $21,585       $21,237        1.6

       Return (loss) on average assets      0.03%       (0.06%)
       Return (loss) on average equity      0.31%       (0.42%)
       Gross loans to deposits             94.42%       106.11%
       Net interest margin                  3.04%         3.44%
       Efficiency ratio                    97.60%       101.07%
       Allowance for loan losses to total
        loans                               1.23%         1.12%
       Past due loans 30-89 days to total
        gross loans                         0.10%         1.05%
       Past due loans 90 days or more to
        total gross loans                   0.00%         0.00%
       Non-accrual loans to total gross
        loans                               0.47%         0.19%

       Regulatory Capital Ratios
       Tier 1 risk-based capital ratio     14.36%        16.82%
       Total risk-based capital ratio      15.52%        17.84%
       Leverage ratio                      11.68%        14.71%

       Balance Sheet (averages)
       Investments                        $31,546       $18,461       70.9
       Gross Loans                       $144,256      $116,504       23.8
       Total Assets                      $194,741      $152,581       27.6
       Deposits                          $150,520      $118,923       26.6
       Borrowings                         $20,587        $8,933      130.5
       Stockholders' Equity               $21,581       $21,269        1.5

    Nm = not material

    Contact: Jeff W. Dick
           (703) 481-4567

SOURCE MainStreet Bank