MainStreet Bank Reports Solid Performance for First Half of 2015

Jul 21, 2015, 17:55 ET from MainStreet Bank

FAIRFAX, Va., July 21, 2015 /PRNewswire/ -- MainStreet Bank (OTCQB: MNSB) completed the first half of 2015 with net income of $871 thousand, up 63% from the first half of 2014 reported earnings of $536 thousand.  The increase was primarily driven by an increase in net interest income as a result of period-over-period growth. Fully diluted earnings per share for the first half of 2015 were 21 cents as compared with 20 cents for the first half of 2014.  However, the weighted average shares outstanding increased by 1,531,203 between the two periods, largely due to a capital raise that occurred at the end of 2014.

Net interest income increased by approximately $1.4 million during the first half of 2015 compared to 2014. Net interest income totaled approximately $7.2 million during the period, representing a net interest margin of 4.25%.

Total assets on June 30, 2015 were $375.6 million, compared to $345 million at the end of 2014.

Loans outstanding increased by $36.3 million during the first half, from $269.1 million on Dec. 31, 2014 to $305.4 million on June 30, 2015. Loans have increased by $58.2 million in the year since June 30, 2014.

Total deposits increased by $30.3 million during the first half of 2015 reaching $332.7 million. Total deposits increased by $44.5 million, or 15%, since the same period in 2014. Year over year demand account balances increased by $20.7 million, while money market and interest checking accounts increased by $14.5 million, increases of 55% and 20% respectively.  Conversely, time deposits only increased by $4.2 million, or 2%, during the same period.

MainStreet recorded a loan loss provision of $580 thousand in the first half of 2015, compared to $123 thousand in 2014. The difference is primarily attributable to loan growth and the balance has remained consistently near 1% with only nominal losses.

Asset quality remains very strong. Nonperforming loans were 0.14 percent of total loans on June 30, 2015. As a comparison, the average for the 1,239 banks in MainStreet's national peer group is 1.05% as of March 31, 2015, or 7.5 times higher than MainStreet's loan portfolio.

For the first half of 2015, non-interest income was $643 thousand, compared to $387 thousand for the same period in 2014. Non-interest expense in the first half of 2015 was $5.9 million, compared to $4.9 million in the first half of 2014. The increase was driven primarily by personnel related expenses associated with the growth and expansion during 2014, which allowed the company to experience high quality growth.

QUOTES: "We have made solid progress during the past two years. We are a bank that has an established infrastructure that can support good quality growth going forward," says Jeff W. Dick, Chairman, CEO and President of MainStreet Bank. "As we grow, we will reap the benefits of that infrastructure and continue to improve the efficiency of the organization."

ABOUT MAINSTREET BANK:   MainStreet operates five branches in Herndon, Fairfax, Fairfax City, McLean and Clarendon.  In addition, MainStreet has 55,000 free ATMs and an online banking solution called "Airbanking®".  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 600 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, which works on 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)








6/30/15

3/31/15

12/31/14

9/30/14

6/30/14

ASSETS






Cash and cash equivalents






  Cash and due from banks

$      7,283

$    11,082

$      7,171

$      8,863

$      8,015

  Federal funds sold

           ―

803

           ―

           ―

50

      Total cash and cash equivalents

7,283

11,885

7,171

8,863

8,065

Investment securities available for sale, at fair value

29,852

27,582

38,643

32,703

35,781

Investment securities held to maturity

15,910

15,934

13,866

11,876

8,949

Restricted equity securities, at cost

1,596

1,594

1,166

1,165

1,151

Loans, net of allowance for loan losses

305,401

287,111

269,094

253,164

247,230

Premises and equipment, net

12,796

12,918

12,902

12,456

12,477

Other real estate owned, net

234

234

234

234

234

Accrued interest and other receivables

1,306

1,185

1,143

990

1,022

Other assets

1,201

830

757

913

952

   Total Assets

$  375,579

$  359,273

$  344,976

$  322,364

$  315,861







LIABILITIES AND STOCKHOLDERS' EQUITY






Liabilities:






Non-interest bearing deposits

$    72,244

$    65,178

$    51,562

$    49,047

$    46,419

Savings and NOW deposits

38,364

35,963

34,208

36,900

36,132

Money market deposits

47,387

36,774

34,741

38,280

35,133

Other time deposits

174,698

179,354

181,844

164,170

170,511

   Total deposits

332,693

317,269

302,355

288,397

288,195

Securities sold under agreements to repurchase

717

495

411

378

477

Federal Home Loan Bank advances and other borrowings

455

279

1,493

5,923

518

Other liabilities

1,055

1,020

954

821

458

   Total Liabilities

334,920

319,063

305,213

295,519

289,648







Stockholders' Equity:






Common stock

16,491

16,491

16,391

10,379

10,379

Capital surplus

21,690

21,602

21,626

15,426

15,378

Retained earnings

2,626

2,221

1,755

1,167

539

Accumulated other comprehensive income (loss)

(148)

(104)

(9)

(127)

(83)

   Total Stockholders' Equity

40,659

40,210

39,763

26,845

26,213







   Total Liabilities and Stockholders' Equity

$  375,579

$  359,273

$  344,976

$  322,364

$  315,861













Other Financial Highlights






   Annualized return on average assets

0.49%

0.53%

0.56%

0.51%

0.36%

   Annualized return on average equity

4.33%

4.65%

6.62%

8.97%

4.18%

   Annualized net interest margin

4.25%

4.32%

4.13%

4.12%

4.18%

   Efficiency ratio

75.95%

74.91%

77.17%

78.61%

79.38%

   Gross loans to deposits

92.79%

91.47%

90.00%

88.73%

86.73%

   Allowance for loan losses to total loans

0.99%

1.00%

1.01%

1.05%

1.07%

   Past due loans 30-89 days to total gross loans

0.00%

0.00%

0.00%

0.00%

0.00%

   Past due loans 90 days or more to total gross loans

0.00%

0.00%

0.00%

0.00%

0.00%

   Non-accrual loans to total gross loans

0.14%

0.14%

0.19%

0.82%

0.85%

   Quarterly net loan charge-offs (recoveries)

$       105

$       172

$         46

$           3

$       248

   Book value per share

$      9.64

$      9.52

$      9.44

$      9.98

$      9.74

   Closing stock price

$    10.20

$      9.40

$      8.90

$      8.00

$      8.50







Regulatory Capital Ratios






   Tier 1 risk-based capital ratio

13.30%

14.34%

13.68%

9.69%

9.93%

   Common equity tier 1 capital ratio

13.30%

14.34%

13.68%

9.69%

9.93%

   Total risk-based capital ratio

14.30%

15.37%

14.63%

10.66%

10.94%

   Leverage ratio

11.14%

11.54%

13.68%

9.76%

9.76%



 


 



STATEMENTS OF INCOME

(Unaudited)

(In thousands, except share data)





Six Months Ended

Three Months Ended


6/30/15

6/30/14

6/30/15

3/31/15

12/31/14

9/30/14

6/30/14

INTEREST INCOME:








Interest and fees on loans

$    7,779

$    6,371

$    3,924

$    3,855

$    3,601

$    3,353

$    3,364

Interest on investment securities

456

435

220

236

244

212

238

Interest on federal funds sold

16

14

9

7

5

6

8

   Total interest income

8,251

6,820

4,153

4,098

3,850

3,571

3,610









INTEREST EXPENSE:








Interest on savings and NOW deposits

70

67

36

34

37

37

34

Interest on money market deposits

63

49

34

29

29

27

25

Interest on other time deposits

923

871

444

479

478

459

457

Interest on Federal Home Loan Bank    

   advances and other  borrowings

 

7

 

9

 

3

 

4

 

5

 

4

 

4

     Total interest expense

1,063

996

517

546

549

527

520

 

Net interest income

7,188

5,824

3,636

3,552

3,301

3,044

 

3,090

Provision for loan losses

580

464

278

302

123

          ―

75

     Net interest income after provision

        for loan losses

 

6,608

 

5,360

 

3,358

 

3,250

 

3,178

 

3,044

 

3,015

OTHER INCOME:








Deposit account service charges

222

213

123

99

107

109

113

Gain on securities available for sale

214

          ―

          ―

214

          ―

105

          ―

Other fee income

207

174

95

112

79

231

118

     Total other income

643

387

218

425

186

445

231

OTHER EXPENSES:








Salaries and employee benefits

3,688

2,741

1,822

1,866

1,445

1,493

1,427

Furniture and equipment expenses

542

499

277

265

281

269

246

Advertising and marketing

138

53

81

57

71

46

27

Occupancy expenses

360

476

169

191

154

203

236

Outside services

157

139

79

78

93

90

69

Administrative expenses

156

158

79

77

98

89

83

Other operating expenses

907

864

462

445

411

423

445

     Total other expenses

5,948

4,930

2,969

2,979

2,553

2,613

2,533

 

INCOME BEFORE INCOME TAXES

 

 

1,303

 

817

 

607

 

696

 

811

 

876

 

713

Income tax expense

432

281

201

231

223

248

244

NET INCOME

$     871

$     536

$     406

$     465

$     588

$     628

$     469

















Net income per common share,

   basic and diluted

$    0.21

$    0.20

$     0.10

$     0.11

$     0.21

$     0.23

$     0.17

Weighted average number of shares,

   basic and diluted

4,231,245

2,700,042

4,235,755

4,226,685

2,803,216

2,701,107

2,700,938

 

Contact: Jeff W. Dick 
(703) 481-4567

SOURCE MainStreet Bank



RELATED LINKS

http://www.mstreetbank.com