MainStreet Bank Reports Record First Quarter Performance

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Apr 25, 2016, 08:00 ET

FAIRFAX, Va., April 25, 2016 /PRNewswire/ -- MainStreet Bank (OTCQB: MNSB) reported a 97% increase in first quarter 2016 earnings - nearly double the level of first quarter 2015 earnings. The share price closed the quarter at $11.95 with a high of $12.35 during the first quarter and an average daily volume of 3,713 shares. MainStreet was recently awarded the OTCQX Top Performing Bank award.

MainStreet's first quarter 2016 balance sheet improved 38% from the first quarter of 2015 with total assets of $498 million against total assets of $359 million respectively.

Net interest income of $4.46 million reported for March 31, 2016 improved $911 thousand over net interest income from March 31, 2015. The net interest margin shifted to 3.84% largely due to the indirect consumer loan portfolio, which is a lower-yielding short-term asset play.

Net loans outstanding for the first quarter of 2016 totaled $413 million against net loans outstanding for the first quarter of 2015 of $287 million, an increase of $126 million.

Total deposits as of March 31, 2016 were $403 million; or $86 million over total deposits of $317 million at March 31, 2015. During those same periods, demand account balances increased $16 million and interest checking accounts increased by $21 million. Time deposits increased by $49 million.

Asset quality remains very strong. Nonperforming loans were 0.17 percent of total loans on March 31, 2016.

Non-interest income was $219 thousand for the first quarter of 2016 compared to $211 thousand (net of security gains) for the same period in 2015. Non-interest expense for the first quarter of 2016 was $3.3 million, compared to $3 million for the same period in 2015. The increase is primarily in salaries.

QUOTES: "MainStreet ended the quarter just shy of $500 million in total assets, with quality growth metrics in every area. The MainStreet team is producing at strong levels and the balance sheet continues to see good diversification," says Jeff W. Dick, Chairman, CEO and President of MainStreet Bank. "Earnings are strengthening through the combined efforts of growing earning assets and managing operating expenses."

ABOUT MAINSTREET BANK: MainStreet operates five branches in Herndon, Fairfax, Fairfax City, McLean and Clarendon. In addition, MainStreet has 55,000 free ATMs and a fully integrated online banking solution. The Bank is not restricted by a conventional branching system, as it can offer business customers the ability to Put Our Bank in Your Office^®. With robust and easy-to-use online business banking technology, MainStreet has literally "put our bank" in well over 750 businesses in the Metropolitan area.

MainStreet Bank is always looking for ways to improve its customer experience, and now has the ability to instantly issue new and replacement Debit Cards - which is especially important for customers if their Cards are compromised or lost.

MainStreet Bank also continues to refine and improve its mobile banking App for iPads, iPhones and Androids. Additionally, MainStreet Bank released Aircharity^® in 2012. Aircharity^® is a unique solution that empowers people and organizations to raise money via email, websites and social media. The product allows a customer to open an account and accept donations from debit cards, credit cards and electronic checks.

MainStreet Bank was 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 multi-million-dollar FDIC insurance. Further information on the Bank can be obtained by visiting its website at mstreetbank.com.

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 annual reports. 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.


BALANCE SHEETS
*(Unaudited)*
(In thousands, except ratios)

	3/31/16	12/31/15	9/30/15	6/30/15	3/31/15
ASSETS
Cash and cash equivalents
Cash and due from banks	$ 9,463	$ 7,211	$ 17,736	$ 7,283	$ 11,082
Federal funds sold	805	―	779	―	803
Total cash and cash equivalents	10,268	7,211	18,515	7,283	11,885
Investment securities available for sale, at fair value	33,111	33,657	36,317	29,852	27,582
Investment securities held to maturity	21,955	19,857	17,282	15,910	15,934
Restricted equity securities, at cost	3,843	3,508	3,718	1,596	1,594
Loans, net of allowance for loan losses	412,685	398,291	389,327	305,401	287,111
Premises and equipment, net	12,449	12,526	12,616	12,796	12,918
Other real estate owned, net	135	135	234	234	234
Accrued interest and other receivables	2,076	1,857	1,411	1,306	1,185
Other assets	1,286	1,208	1,552	1,201	830
Total Assets	$ 497,808	$ 478,250	$ 480,972	$ 375,579	$ 359,273

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Non-interest bearing deposits	$ 81,072	$ 68,409	$ 72,659	$ 72,244	$ 65,178
Savings and NOW deposits	38,877	38,770	37,683	38,364	35,963
Money market deposits	54,455	59,580	58,023	47,387	36,774
Other time deposits	228,819	218,795	220,057	174,698	179,354
Total deposits	403,223	385,554	388,422	332,693	317,269
Securities sold under agreements to repurchase	―	19	521	717	495
Federal Home Loan Bank advances and other borrowings	50,229	49,509	50,254	455	279
Other liabilities	1,209	1,044	660	1,055	1,020
Total Liabilities	454,661	436,126	439,857	334,920	319,063

Stockholders' Equity:
Common stock	16,624	16,515	16,508	16,491	16,491
Capital surplus	21,814	21,837	21,757	21,690	21,602
Retained earnings	4,839	3,924	2,980	2,626	2,221
Accumulated other comprehensive income (loss)	(130)	(152)	(130)	(148)	(104)
Total Stockholders' Equity	43,147	42,124	41,115	40,659	40,210

Total Liabilities and Stockholders' Equity	$ 497,808	$ 478,250	$ 480,972	$ 375,579	$ 359,273


Other Financial Highlights
Annualized return on average assets	0.76%	0.53%	0.42%	0.49%	0.53%
Annualized return on average equity	8.56%	5.33%	4.01%	4.33%	4.65%
Annualized net interest margin	3.84%	3.96%	4.03%	4.25%	4.32%
Efficiency ratio	70.06%	73.01%	73.99%	75.95%	74.91%
Gross loans to deposits	103.52%	104.57%	101.54%	92.79%	91.47%
Allowance for loan losses to total loans	0.88%	0.91%	0.95%	0.99%	1.00%
Past due loans 30-89 days to total gross loans	0.01%	0.03%	0.03%	0.00%	0.00%
Past due loans 90 days or more to total gross loans	0.01%	0.00%	0.00%	0.00%	0.00%
Non-accrual loans to total gross loans	0.17%	0.17%	0.21%	0.14%	0.14%
Quarterly net loan charge-offs (recoveries)	$ 97	$ 208	$ 91	$ 105	$ 172
Book value per share	$ 10.16	$ 10.00	$ 9.78	$ 9.64	$ 9.52
Closing stock price	$ 11.95	$ 12.35	$ 11.59	$ 10.20	$ 9.40

Regulatory Capital Ratios
Tier 1 risk-based capital ratio	10.23%	10.27%	10.29%	13.30%	14.34%
Common equity tier 1 capital ratio	10.23%	10.27%	10.29%	13.30%	14.34%
Total risk-based capital ratio	11.10%	11.17%	11.22%	14.30%	15.37%
Leverage ratio	8.98%	8.90%	9.12%	11.14%	11.54%

STATEMENTS OF INCOME
*(Unaudited)*
(In thousands, except share data)

	Year-to-Date		Three Months Ended
	3/31/16	3/31/15	3/31/16	12/31/15	9/30/15	6/30/15	3/31/15
INTEREST INCOME:
Interest and fees on loans	$ 4,842	$ 3,855	$ 4,842	$ 4,793	$ 4,438	$ 3,924	$ 3,855
Interest on investment securities	305	236	305	245	231	220	236
Interest on federal funds sold	24	7	24	15	14	9	7
Total interest income	5,171	4,098	5,171	5,053	4,683	4,153	4,098

INTEREST EXPENSE:
Interest on savings and NOW deposits	39	34	39	40	40	36	34
Interest on money market deposits	59	29	59	55	52	34	29
Interest on other time deposits	554	479	554	528	478	444	479
Interest on Federal Home Loan Bank advances and other borrowings	56	4	56	45	41	3	4
Total interest expense	708	546	708	668	611	517	546
Net interest income	4,463	3,552	4,463	4,385	4,072	3,636	3,552
Provision for loan losses	85	302	85	145	775	278	302
Net interest income after provision for loan losses	4,378	3,250	4,378	4,240	3,297	3,358	3,250
OTHER INCOME:
Deposit account service charges	133	99	133	135	130	123	99
Gain on securities available for sale	―	214	―	―	―	―	214
Other fee income	86	112	86	125	232	95	112
Total other income	219	425	219	260	362	218	425
OTHER EXPENSES:
Salaries and employee benefits	2,101	1,866	2,101	1,873	1,965	1,822	1,866
Furniture and equipment expenses	278	265	278	290	282	277	265
Advertising and marketing	40	57	40	157	99	81	57
Occupancy expenses	173	191	173	162	162	169	191
Outside services	110	78	110	156	74	79	78
Administrative expenses	69	77	69	84	87	79	77
Other operating expenses	509	445	509	549	458	462	445
Total other expenses	3,280	2,979	3,280	3,271	3,127	2,969	2,979
INCOME BEFORE INCOME TAXES	1,317	696	1,317	1,229	532	607	696
Income tax expense	403	231	403	283	179	201	231
NET INCOME	$ 914	$ 465	$ 914	$ 946	$ 353	$ 406	$ 465


Net income per common share, basic and diluted	$ 0.22	$ 0.11	$ 0.22	$ 0.22	$ 0.08	$ 0.10	$ 0.11
Weighted average number of shares, basic and diluted	4,244,104	4,226,685	4,244,104	4,226,098	4,232,811	4,235,755	4,226,685