MainStreet Bank Reports Record Mid-Year Performance

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Jul 29, 2016, 08:00 ET

FAIRFAX, Va., July 29, 2016 /PRNewswire/ -- MainStreet Bank (OTCQB: MNSB) more than doubled mid-year 2016 earnings over mid-year 2015. The share price closed on June 30, 2016 at $11.90 per share. During the second quarter of 2016, there were 198 trades for a total of 220,745 shares with a dollar value of $2,561,339. The high share price for the second quarter of 2016 was $12.10 per share.

MainStreet's mid-year 2016 balance sheet improved 37% from mid-year 2015 with total assets of $513 million against total assets of $376 million respectively.

Net interest income of $8.99 million reported for June 30, 2016 improved $1.8 million over net interest income from June 30, 2015. The June 30, 2016 net interest margin is 3.82% and the earnings per share is $.042.

Net loans outstanding for the first half of 2016 totaled $418 million against net loans outstanding for the first half of 2015 of $305 million, an increase of $113 million.

Total deposits as of June 30, 2016 were $423 million; or $90 million over total deposits of $333 million at June 30, 2015. During those same periods, demand account balances increased $26 million and interest checking accounts increased by $14 million. Time deposits increased by $50 million.

Asset quality remains very strong. Nonperforming loans were a mere nine basis points of total gross loans on June 30, 2016.

Non-interest income was $638 thousand for the first half of 2016 compared to $429 thousand (net of securities gains) for the same period in 2015. Non-interest expense for the first half of 2016 was $6.8 million, compared to $5.9 million for the same period in 2015. The increase is primarily in salaries.

QUOTES: "MainStreet is maintaining a healthy net interest margin in spite of the ongoing low interest rate environment." says Jeff W. Dick, Chairman, CEO and President of MainStreet Bank. "MainStreet is able to achieve better-than-average loan yields largely because of the quality of customer service provided. In addition, MainStreet is focused on increasing non-interest or low-interest bearing balances on deposits. Apart from the net interest margin, MainStreet has also been able to grow fee income significantly from prior quarters."

ABOUT MAINSTREET BANK: MainStreet operates five branches in Herndon, Fairfax, Fairfax City, McLean and Clarendon. In addition, MainStreet has 55,000 free ATMs and fully integrated mobile and online banking solutions. 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 nearly 1,000 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 provides an excellent mobile banking app (with finger print authentication) 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)

ASSETS	6/30/16	3/31/16	12/31/15	9/30/15	6/30/15

Cash and cash equivalents
Cash and due from banks	$ 17,483	$ 9,463	$ 7,211	$ 17,736	$ 7,283
Federal funds sold	―	805	―	779	―
Total cash and cash equivalents	17,483	10,268	7,211	18,515	7,283
Investment securities available for sale, at fair value	25,869	33,111	33,657	36,317	29,852
Investment securities held to maturity	24,357	21,955	19,857	17,282	15,910
Restricted equity securities, at cost	3,420	3,843	3,508	3,718	1,596
Loans, net of allowance for loan losses	417,640	412,685	398,291	389,327	305,401
Premises and equipment, net	12,339	12,449	12,526	12,616	12,796
Other real estate owned, net	135	135	135	234	234
Accrued interest and other receivables	2,194	2,076	1,857	1,411	1,306
Bank owned life insurance	8,051	―	―	―	―
Other assets	1,437	1,286	1,208	1,552	1,201
Total Assets	$ 512,925	$ 497,808	$ 478,250	$ 480,972	$ 375,579

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Non-interest bearing deposits	$ 98,505	$ 81,072	$ 68,409	$ 72,659	$ 72,244
Savings and NOW deposits	40,243	38,877	38,770	37,683	38,364
Money market deposits	59,906	54,455	59,580	58,023	47,387
Other time deposits	224,753	228,819	218,795	220,057	174,698
Total deposits	423,407	403,223	385,554	388,422	332,693
Securities sold under agreements to repurchase	―	―	19	521	717
Federal Home Loan Bank advances and other borrowings	44,409	50,229	49,509	50,254	455
Other liabilities	957	1,209	1,044	660	1,055
Total Liabilities	468,773	454,661	436,126	439,857	334,920

Stockholders' Equity:
Common stock	16,634	16,624	16,515	16,508	16,491
Capital surplus	21,913	21,814	21,837	21,757	21,690
Retained earnings	5,712	4,839	3,924	2,980	2,626
Accumulated other comprehensive income (loss)	(107)	(130)	(152)	(130)	(148)
Total Stockholders' Equity	44,152	43,147	42,124	41,115	40,659

Total Liabilities and Stockholders' Equity	$ 512,925	$ 497,808	$ 478,250	$ 480,972	$ 375,579


Other Financial Highlights
Annualized return on average assets	0.73%	0.76%	0.53%	0.42%	0.49%
Annualized return on average equity	8.25%	8.56%	5.33%	4.01%	4.33%
Annualized net interest margin	3.82%	3.84%	3.96%	4.03%	4.25%
Efficiency ratio	71.02%	70.06%	73.01%	73.99%	75.95%
Gross loans to deposits	99.74%	103.52%	104.57%	101.54%	92.79%
Allowance for loan losses to total loans	0.87%	0.88%	0.91%	0.95%	0.99%
Past due loans 30-89 days to total gross loans	0.01%	0.01%	0.03%	0.03%	0.00%
Past due loans 90 days or more to total gross loans	0.00%	0.01%	0.00%	0.00%	0.00%
Non-accrual loans to total gross loans	0.09%	0.17%	0.17%	0.21%	0.14%
Quarterly net loan charge-offs (recoveries)	$ 111	$ 97	$ 208	$ 91	$ 105
Book value per share	$ 10.39	$ 10.16	$ 10.00	$ 9.78	$ 9.64
Closing stock price	$ 11.90	$ 11.95	$ 12.35	$ 11.59	$ 10.20

Regulatory Capital Ratios
Tier 1 risk-based capital ratio	10.02%	10.22%	10.27%	10.29%	13.30%
Common equity tier 1 capital ratio	10.02%	10.22%	10.27%	10.29%	13.30%
Total risk-based capital ratio	10.86%	11.09%	11.17%	11.22%	14.30%
Leverage ratio	8.91%	8.98%	8.90%	9.12%	11.14%

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

	Year-to-Date		Three Months Ended
	6/30/16	6/30/15	6/30/16	3/31/16	12/31/15	9/30/15	6/30/15
INTEREST INCOME:
Interest and fees on loans	$ 9,814	$ 7,779	$ 4,969	$ 4,845	$ 4,793	$ 4,438	$ 3,924
Interest on investment securities	597	456	292	305	245	231	220
Interest on federal funds sold	45	16	21	24	15	14	9
Total interest income	10,456	8,251	5,282	5,174	5,053	4,683	4,153

INTEREST EXPENSE:
Interest on savings and NOW deposits	80	70	41	39	40	40	36
Interest on money market deposits	121	63	62	59	55	52	34
Interest on other time deposits	1,143	923	589	554	528	478	444
Interest on Federal Home Loan Bank advances and other borrowings	121	7	65	56	45	41	3
Total interest expense	1,465	1,063	757	708	668	611	517
Net interest income	8,991	7,188	4,525	4,466	4,385	4,072	3,636
Provision for loan losses	220	580	135	85	145	775	278
Net interest income after provision for loan losses	8,771	6,608	4,390	4,381	4,240	3,297	3,358
OTHER INCOME:
Deposit account service charges	348	222	218	130	135	130	123
Gain on securities available for sale	―	214	―	―	―	―	―
Bank owned life insurance income	51	―	51	―	―	―	―
Other fee income	239	207	153	86	125	232	95
Total other income	638	643	422	216	260	362	218
OTHER EXPENSES:
Salaries and employee benefits	4,342	3,688	2,241	2,101	1,873	1,965	1,822
Furniture and equipment expenses	545	542	267	278	290	282	277
Advertising and marketing	118	138	78	40	157	99	81
Occupancy expenses	376	360	203	173	162	162	169
Outside services	246	157	136	110	156	74	79
Administrative expenses	168	156	99	69	84	87	79
Other operating expenses	1,043	907	534	509	549	458	462
Total other expenses	6,838	5,948	3,558	3,280	3,271	3,127	2,969
INCOME BEFORE INCOME TAXES	2,571	1,303	1,254	1,317	1,229	532	607
Income tax expense	784	432	381	403	283	179	201
NET INCOME	$ 1,787	$ 871	$ 873	$ 914	$ 946	$ 353	$ 406


Net income per common share, basic and diluted	$ 0.42	$ 0.21	$ 0.20	$ 0.22	$ 0.22	$ 0.08	$ 0.10
Weighted average number of shares, basic and diluted	4,252,611	4,231,245	4,261,118	4,244,104	4,226,098	4,232,811	4,235,755