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Net interest margin fueled record financial performance as measured by multiple 3rd quarter 2022 key metrics:
FAIRFAX, Va., Oct. 17, 2022 /PRNewswire/ -- MainStreet Bancshares, Inc. (Nasdaq: MNSB & MNSBP), the holding company for MainStreet Bank, reported continued strong financial performance through the third quarter as earnings on its floating-rate loans rose in-sync with FOMC interest rate increases.
Rising rates on a loan portfolio largely designed to flex with market rates sent loan interest income to $20.3 million in the third quarter. This is 13% higher than the second quarter of 2022 and 34% higher than the third quarter of 2021.
The Company recorded net income of $7.2 million for the quarter ending September 30, 2022. Net income was up 34% from the second quarter and 62% from the year-earlier third quarter. The net interest margin widened to 4.14%, at September 30, 2022, up 84 basis points from a year earlier. The Company's efficiency ratio was stellar at 50.88%.
"Year-to-date earnings per share are $2.31, and we are forecasting $3.25 for the year, assuming loan growth remains consistent with previous quarters," said Jeff W. Dick, Chairman and CEO of MainStreet Bancshares, Inc. and MainStreet Bank. "Although the Company benefits from a rising interest rate environment, we remain hopeful that the FOMC will react quickly as and when they identify and achieve the neutral rate."
The loan portfolio has grown 8% since the beginning of 2022, and total assets are approaching $1.9 billion. Asset quality remains pristine, with zero non-performing assets as of quarter-ended September 30. Noninterest-bearing deposits represent 36% of the $1.6 billion in total deposits, and 71% of total deposits are core deposits.
"We continue to experience solid organic growth in deposits to support our lending," said Abdul Hersiburane, President of MainStreet Bank. "The Washington, D.C., branch has proven to be a particularly strong funnel for new business - especially construction lending and government contract lending opportunities," Hersiburane added.
The level of Accumulated Other Comprehensive Income (AOCI) for the Company remains low at -5.13% of total capital.
The Company will discuss quarterly and year-to-date earnings and preview business developments with Avenu™ during their virtual quarterly earnings call at 2 p.m. Eastern time today.
Avenu™ - Banking DeliveredAvenu™ offers the only embedded banking solution that connects our partners and their app's directly and seamlessly to a banking core -- our banking core. We are not a sponsor bank without our own technology, and we are not a middleware software company (aggregator) without our own bank. We are Avenu, a leading financial technology company backed by an established community business bank in the heart of Washington, DC.
Avenu™ - Serving a Community of InnovationOur clients are fintechs, application developers, money movers, and entrepreneurs. They all have one thing in common - they are innovating how money moves to solve real-world issues and help communities thrive. We are focused on serving our community and long-term business relationships.
"We are currently onboarding our initial beta customers with an anticipated go-live date around year-end 2022," said Todd Youngren, President of Avenu™. "Clients are telling us they see unique value in our risk- and compliance-centric approach, which is a critical consideration whenever handling other people's money," he added.
To learn more about Avenu™, visit Avenu.bank and join the queue today.
ABOUT MAINSTREET BANK: MainStreet operates six branches in Herndon, Fairfax, McLean, Leesburg, Clarendon, and Washington DC. MainStreet Bank has 55,000 free ATMs and a fully integrated online and mobile 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 "put our bank" in thousands of businesses in the metropolitan area.
MainStreet Bank has a robust line of business and professional lending products, including government contracting lines of credit, commercial lines and term loans, residential and commercial construction, and commercial real estate. MainStreet also works with the SBA to offer 7A and 504 lending solutions. From sophisticated cash management to enhanced mobile banking and instant-issue Debit Cards, MainStreet Bank is always looking for ways to improve our customer's experience.
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. The statements contained in this release that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Words such as "may," "will," "could," "should," "expect," "plan," "project," "intend," "anticipate," "believe," "estimate," "predict," "potential," "pursuant," "target," "continue," and similar expressions are intended to identify such forward-looking statements. 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, future impacts of the novel coronavirus (COVID-19) outbreak, maintenance and development of well-established and valued client relationships and referral source relationships, and acquisition or loss of key production personnel. 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.
UNAUDITED CONSOLIDATED BALANCE SHEET INFORMATION | ||||||||||||||||||||
(In thousands) | ||||||||||||||||||||
September 30, 2022 | June30, 2022 | March 31, 2022 | December 31, 2021 | September 30, 2021 | ||||||||||||||||
ASSETS | ||||||||||||||||||||
Cash and cash equivalents | ||||||||||||||||||||
Cash and due from banks | $ | 50,636 | $ | 55,636 | $ | 63,986 | $ | 61,827 | $ | 67,992 | ||||||||||
Federal funds sold | 54,098 | 47,013 | 37,756 | 31,372 | 65,725 | |||||||||||||||
Total cash and cash equivalents | 104,734 | 102,649 | 101,742 | 93,199 | 133,717 | |||||||||||||||
Investment securities available for sale, at fair value | 162,319 | 143,240 | 123,802 | 99,913 | 171,603 | |||||||||||||||
Investment securities held to maturity, at carrying value | 17,670 | 17,698 | 18,769 | 20,349 | 21,148 | |||||||||||||||
Restricted equity securities, at cost | 16,436 | 16,485 | 17,209 | 15,609 | 9,972 | |||||||||||||||
Loans, net of allowance for loan losses of $12,994, $12,982, $12,500,$11,697, and $11,428, respectively | 1,448,071 | 1,416,875 | 1,413,238 | 1,341,760 | 1,246,331 | |||||||||||||||
Premises and equipment, net | 14,523 | 14,756 | 14,833 | 14,863 | 14,795 | |||||||||||||||
Other real estate owned, net | — | — | — | 775 | 1,158 | |||||||||||||||
Accrued interest and other receivables | 8,273 | 7,313 | 6,980 | 7,701 | 4,718 | |||||||||||||||
Computer software, net of amortization | 7,258 | 4,956 | 3,906 | 2,493 | 1,165 | |||||||||||||||
Bank owned life insurance | 36,996 | 36,742 | 36,492 | 36,241 | 35,987 | |||||||||||||||
Other assets | 43,835 | 32,665 | 24,777 | 14,499 | 16,605 | |||||||||||||||
Total Assets | $ | 1,860,115 | $ | 1,793,379 | $ | 1,761,748 | $ | 1,647,402 | $ | 1,657,199 | ||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||||||||
Liabilities: | ||||||||||||||||||||
Non-interest bearing deposits | $ | 566,016 | $ | 535,591 | $ | 514,160 | $ | 530,678 | $ | 475,157 | ||||||||||
Interest bearing DDA deposits | 93,695 | 99,223 | 76,286 | 69,232 | 63,622 | |||||||||||||||
Savings and NOW deposits | 54,240 | 58,156 | 81,817 | 85,175 | 79,556 | |||||||||||||||
Money market deposits | 254,190 | 231,207 | 301,842 | 267,730 | 310,776 | |||||||||||||||
Time deposits | 585,783 | 575,950 | 460,839 | 459,148 | 485,255 | |||||||||||||||
Total deposits | 1,553,924 | 1,500,127 | 1,434,944 | 1,411,963 | 1,414,366 | |||||||||||||||
Federal Home Loan Bank advances and other borrowings | — | — | 40,000 | — | — | |||||||||||||||
Subordinated debt | 72,146 | 72,047 | 71,955 | 29,294 | 40,635 | |||||||||||||||
Other liabilities | 44,045 | 32,801 | 26,053 | 17,357 | 18,169 | |||||||||||||||
Total Liabilities | 1,670,115 | 1,604,975 | 1,572,952 | 1,458,614 | 1,473,170 | |||||||||||||||
Stockholders' Equity: | ||||||||||||||||||||
Preferred stock | 27,263 | 27,263 | 27,263 | 27,263 | 27,263 | |||||||||||||||
Common stock | 28,728 | 29,178 | 29,642 | 29,466 | 29,462 | |||||||||||||||
Capital surplus | 63,231 | 64,822 | 66,798 | 67,668 | 67,152 | |||||||||||||||
Retained earnings | 80,534 | 73,702 | 68,691 | 64,194 | 59,920 | |||||||||||||||
Accumulated other comprehensive income (loss) | (9,756) | (6,561) | (3,598) | 197 | 232 | |||||||||||||||
Total Stockholders' Equity | 190,000 | 188,404 | 188,796 | 188,788 | 184,029 | |||||||||||||||
Total Liabilities and Stockholders' Equity | $ | 1,860,115 | $ | 1,793,379 | $ | 1,761,748 | $ | 1,647,402 | $ | 1,657,199 | ||||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME INFORMATION | ||||||||||||||||||||||||||||
(In thousands, except share and per share data) | ||||||||||||||||||||||||||||
Year-to-Date | Three Months Ended | |||||||||||||||||||||||||||
September 30, 2022 | September 30, 2021 | September 30, 2022 | June 30, 2022 | March 31, 2022 | December31, 2021 | September 30, 2021 | ||||||||||||||||||||||
INTEREST INCOME: | ||||||||||||||||||||||||||||
Interest and fees on loans | $ | 54,900 | $ | 46,211 | $ | 20,261 | $ | 17,954 | $ | 16,685 | $ | 15,532 | $ | 15,162 | ||||||||||||||
Interest on investment securities | ||||||||||||||||||||||||||||
Taxable securities | 1,136 | 910 | 378 | 401 | 357 | 327 | 318 | |||||||||||||||||||||
Tax-exempt securities | 796 | 802 | 261 | 263 | 272 | 283 | 267 | |||||||||||||||||||||
Interest on federal funds sold | 1,241 | 73 | 1,013 | 195 | 34 | 61 | 38 | |||||||||||||||||||||
Total interest income | 58,073 | 47,996 | 21,913 | 18,813 | 17,348 | 16,203 | 15,785 | |||||||||||||||||||||
INTEREST EXPENSE: | ||||||||||||||||||||||||||||
Interest on interest bearing DDA deposits | 345 | 170 | 175 | 105 | 65 | 59 | 60 | |||||||||||||||||||||
Interest on savings and NOW deposits | 122 | 127 | 43 | 42 | 37 | 38 | 38 | |||||||||||||||||||||
Interest on money market deposits | 766 | 645 | 496 | 151 | 119 | 127 | 148 | |||||||||||||||||||||
Interest on time deposits | 5,236 | 6,039 | 2,275 | 1,530 | 1,431 | 1,574 | 1,795 | |||||||||||||||||||||
Interest on Federal Home Loan Bank advances and other borrowings | 83 | — | — | 52 | 31 | — | — | |||||||||||||||||||||
Interest on subordinated debt | 2,108 | 1,346 | 828 | 812 | 468 | 539 | 541 | |||||||||||||||||||||
Total interest expense | 8,660 | 8,327 | 3,817 | 2,692 | 2,151 | 2,337 | 2,582 | |||||||||||||||||||||
Net interest income | 49,413 | 39,669 | 18,096 | 16,121 | 15,197 | 13,866 | 13,203 | |||||||||||||||||||||
Provision for (recovery of) loan losses | 1,280 | (1,470) | — | 480 | 800 | 295 | 290 | |||||||||||||||||||||
Net interest income after provision for (recovery of) loan losses | 48,133 | 41,139 | 18,096 | 15,641 | 14,397 | 13,571 | 12,913 | |||||||||||||||||||||
NON-INTEREST INCOME: | ||||||||||||||||||||||||||||
Deposit account service charges | 1,810 | 1,802 | 601 | 597 | 611 | 624 | 642 | |||||||||||||||||||||
Bank owned life insurance income | 754 | 647 | 254 | 250 | 251 | 253 | 252 | |||||||||||||||||||||
Loan swap fee income | 619 | — | 518 | 101 | — | 83 | — | |||||||||||||||||||||
Net gain on held-to-maturity securities | 4 | 3 | — | 4 | — | 3 | — | |||||||||||||||||||||
Net gain (loss) on sale of loans | (168) | 434 | (211) | — | 43 | 413 | (40) | |||||||||||||||||||||
Other fee income | 754 | 1,601 | 186 | 312 | 257 | 247 | 632 | |||||||||||||||||||||
Total other income | 3,773 | 4,487 | 1,348 | 1,264 | 1,162 | 1,623 | 1,486 | |||||||||||||||||||||
NON-INTEREST EXPENSES: | ||||||||||||||||||||||||||||
Salaries and employee benefits | 17,025 | 14,276 | 5,874 | 5,604 | 5,548 | 5,029 | 4,847 | |||||||||||||||||||||
Furniture and equipment expenses | 2,076 | 1,743 | 760 | 659 | 657 | 726 | 716 | |||||||||||||||||||||
Advertising and marketing | 1,684 | 1,115 | 704 | 574 | 406 | 450 | 438 | |||||||||||||||||||||
Occupancy expenses | 1,093 | 1,092 | 400 | 352 | 341 | 449 | 399 | |||||||||||||||||||||
Outside services | 1,545 | 908 | 611 | 567 | 368 | 485 | 292 | |||||||||||||||||||||
Administrative expenses | 658 | 493 | 253 | 195 | 210 | 192 | 202 | |||||||||||||||||||||
Other operating expenses | 4,268 | 4,517 | 1,291 | 1,543 | 1,433 | 1,389 | 1,567 | |||||||||||||||||||||
Total other expenses | 28,349 | 24,144 | 9,893 | 9,494 | 8,963 | 8,720 | 8,461 | |||||||||||||||||||||
Income before income tax expense | 23,557 | 21,482 | 9,551 | 7,411 | 6,596 | 6,474 | 5,938 | |||||||||||||||||||||
Income tax expense | 4,462 | 4,124 | 1,808 | 1,481 | 1,173 | 1,660 | 1,155 | |||||||||||||||||||||
Net income | 19,095 | 17,358 | 7,743 | 5,930 | 5,423 | 4,814 | 4,783 | |||||||||||||||||||||
Preferred stock dividends | 1,617 | 1,617 | 539 | 539 | 539 | 539 | 539 | |||||||||||||||||||||
Net income available to common shareholders | $ | 17,478 | $ | 15,741 | $ | 7,204 | $ | 5,391 | $ | 4,884 | $ | 4,275 | $ | 4,244 | ||||||||||||||
Net income per common share, basic and diluted | $ | 2.31 | $ | 2.09 | $ | 0.97 | $ | 0.71 | $ | 0.64 | $ | 0.56 | $ | 0.56 | ||||||||||||||
Weighted average number of common shares, basic and diluted | 7,561,567 | 7,547,254 | 7,463,719 | 7,575,484 | 7,647,519 | 7,595,062 | 7,571,214 | |||||||||||||||||||||
UNAUDITED LOAN, DEPOSIT AND BORROWING DETAIL | ||||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
September 30, 2022 | June 30, 2022 | September 30, 2021 | Percentage Change | |||||||||||||||||||||||||||||
$ Amount | % of Total | $ Amount | % of Total | $ Amount | % of Total | Last 3 Mos | Last 12 Mos | |||||||||||||||||||||||||
LOANS: | ||||||||||||||||||||||||||||||||
Construction and land development loans | $ | 366,689 | 25.0 | % | $ | 358,062 | 25.0 | % | $ | 327,004 | 25.9 | % | 2.4 | % | 12.1 | % | ||||||||||||||||
Residential real estate loans | 373,056 | 25.4 | % | 366,758 | 25.6 | % | 223,029 | 17.6 | % | 1.7 | % | 67.3 | % | |||||||||||||||||||
Commercial real estate loans | 638,110 | 43.5 | % | 599,683 | 41.8 | % | 494,766 | 39.1 | % | 6.4 | % | 29.0 | % | |||||||||||||||||||
Commercial industrial loans - Other | 74,482 | 5.1 | % | 92,672 | 6.5 | % | 191,281 | 15.1 | % | -19.6 | % | -61.1 | % | |||||||||||||||||||
Consumer loans | 13,628 | 1.0 | % | 17,223 | 1.1 | % | 27,740 | 2.3 | % | -20.9 | % | -50.9 | % | |||||||||||||||||||
Total Gross Loans | $ | 1,465,965 | 100.0 | % | $ | 1,434,398 | 100.0 | % | $ | 1,263,820 | 100.0 | % | 2.2 | % | 16.0 | % | ||||||||||||||||
Less: Allowance for loan losses | (12,994) | (12,982) | (11,428) | |||||||||||||||||||||||||||||
Net deferred loan fees | (4,900) | (4,541) | (6,061) | |||||||||||||||||||||||||||||
Net Loans | $ | 1,448,071 | $ | 1,416,875 | $ | 1,246,331 | ||||||||||||||||||||||||||
DEPOSITS: | ||||||||||||||||||||||||||||||||
Non-interest bearing demand deposits | $ | 566,016 | 36.4 | % | $ | 535,591 | 35.7 | % | $ | 475,157 | 33.6 | % | 5.7 | % | 19.1 | % | ||||||||||||||||
Interest-bearing demand deposits: | ||||||||||||||||||||||||||||||||
Demand deposits | 93,695 | 6.0 | % | 99,223 | 6.6 | % | 63,622 | 4.5 | % | -5.6 | % | 47.3 | % | |||||||||||||||||||
Savings and NOW deposits | 54,240 | 3.5 | % | 58,156 | 3.9 | % | 79,556 | 5.6 | % | -6.7 | % | -31.8 | % | |||||||||||||||||||
Money market accounts | 254,190 | 16.4 | % | 231,207 | 15.4 | % | 310,776 | 22.0 | % | 9.9 | % | -18.2 | % | |||||||||||||||||||
Certificates of deposit $250,000 or more | 371,739 | 23.9 | % | 383,340 | 25.6 | % | 295,454 | 20.9 | % | -3.0 | % | 25.8 | % | |||||||||||||||||||
Certificates of deposit less than $250,000 | 214,044 | 13.8 | % | 192,610 | 12.8 | % | 189,801 | 15.4 | % | 11.1 | % | 12.8 | % | |||||||||||||||||||
Total Deposits | $ | 1,553,924 | 100.0 | % | $ | 1,500,127 | 100.0 | % | $ | 1,414,366 | 100.0 | % | 3.6 | % | 9.9 | % | ||||||||||||||||
BORROWINGS: | ||||||||||||||||||||||||||||||||
Subordinated debt | 72,146 | 100.0 | % | 72,047 | 100.0 | % | 40,635 | 100.0 | % | 0.1 | % | 77.5 | % | |||||||||||||||||||
Total Borrowings | $ | 72,146 | 100.0 | % | $ | 72,047 | 100.0 | % | $ | 40,635 | 100.0 | % | 0.1 | % | 77.5 | % | ||||||||||||||||
Total Deposits and Borrowings | $ | 1,626,070 | $ | 1,572,174 | $ | 1,455,001 | 3.4 | % | 11.8 | % | ||||||||||||||||||||||
Core customer funding sources (1) | $ | 1,156,862 | 71.1 | % | $ | 1,094,493 | 69.6 | % | $ | 1,097,948 | 75.5 | % | 5.7 | % | 5.4 | % | ||||||||||||||||
Brokered and listing service sources (2) | 397,062 | 24.4 | % | 405,634 | 25.8 | % | 316,418 | 21.7 | % | -2.1 | % | 25.5 | % | |||||||||||||||||||
Subordinated debt (3) | 72,146 | 4.4 | % | 72,047 | 4.6 | % | 40,635 | 2.8 | % | 0.1 | % | 77.5 | % | |||||||||||||||||||
Total Funding Sources | $ | 1,626,070 | 100.0 | % | $ | 1,572,174 | 100.0 | % | $ | 1,455,001 | 100.0 | % | 3.4 | % | 11.8 | % | ||||||||||||||||
(1) | Includes ICS, CDARS, and reciprocal deposits maintained by customers, which represent sweep accounts tied to customer operating accounts |
(2) | Consists of certificates of deposit (CD) through multiple listing services and multiple brokered deposit services, as well as ICS and CDARS one-way certificates of deposit and regional money market accounts |
(3) | Subordinated debt obligation qualifies as Tier 2 capital at the holding company and Tier 1 capital at the Bank |
UNAUDITED AVERAGE BALANCE SHEETS, INTEREST AND RATES | ||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
For the three months ended September 30, 2022 | For the three months ended September 30, 2021 | |||||||||||||||||||||||
Average Balance | Interest Income/ Expense(3)(4) | Average Yields/ Rate(annualized)(3)(4) | Average Balance | Interest Income/ Expense (3)(4) | Average Yields/ Rate (annualized) (3)(4) | |||||||||||||||||||
ASSETS: | ||||||||||||||||||||||||
Interest earning assets: | ||||||||||||||||||||||||
Loans (1)(2) | $ | 1,446,679 | $ | 20,261 | 5.56 | % | $ | 1,258,485 | $ | 15,162 | 4.78 | % | ||||||||||||
Securities: | ||||||||||||||||||||||||
Taxable | 73,914 | 378 | 2.03 | % | 66,309 | 318 | 1.90 | % | ||||||||||||||||
Tax-exempt | 38,074 | 330 | 3.44 | % | 36,584 | 338 | 3.67 | % | ||||||||||||||||
Federal funds and interest-bearing deposits | 182,331 | 1,013 | 2.20 | % | 234,363 | 38 | 0.06 | % | ||||||||||||||||
Total interest earning assets | $ | 1,740,998 | $ | 21,982 | 5.01 | % | $ | 1,595,741 | $ | 15,856 | 3.94 | % | ||||||||||||
Other assets | 61,479 | 88,521 | ||||||||||||||||||||||
Total assets | $ | 1,802,477 | $ | 1,684,262 | ||||||||||||||||||||
Liabilities and Stockholders' Equity: | ||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||
Interest-bearing demand deposits | $ | 93,569 | $ | 175 | 0.74 | % | $ | 64,966 | $ | 60 | 0.37 | % | ||||||||||||
Savings and NOW deposits | 55,100 | 43 | 0.31 | % | 75,968 | 38 | 0.20 | % | ||||||||||||||||
Money market deposit accounts | 257,091 | 496 | 0.77 | % | 302,848 | 148 | 0.19 | % | ||||||||||||||||
Time deposits | 575,832 | 2,275 | 1.57 | % | 507,254 | 1,795 | 1.40 | % | ||||||||||||||||
Total interest-bearing deposits | $ | 981,592 | $ | 2,989 | 1.21 | % | $ | 951,036 | $ | 2,041 | 0.85 | % | ||||||||||||
Federal funds purchased | 2 | — | — | 2 | — | — | ||||||||||||||||||
Subordinated debt | 72,107 | 828 | 4.56 | % | 40,609 | 541 | 5.29 | % | ||||||||||||||||
Total interest-bearing liabilities | $ | 1,053,701 | $ | 3,817 | 1.44 | % | $ | 991,647 | $ | 2,582 | 1.03 | % | ||||||||||||
Demand deposits and other liabilities | 558,337 | 510,008 | ||||||||||||||||||||||
Total liabilities | $ | 1,612,038 | $ | 1,501,655 | ||||||||||||||||||||
Stockholders' Equity | 190,439 | 182,607 | ||||||||||||||||||||||
Total Liabilities and Stockholders' Equity | $ | 1,802,477 | $ | 1,684,262 | ||||||||||||||||||||
Interest Rate Spread | 3.59 | % | 2.91 | % | ||||||||||||||||||||
Net Interest Income | $ | 18,165 | $ | 13,274 | ||||||||||||||||||||
Net Interest Margin | 4.14 | % | 3.30 | % | ||||||||||||||||||||
(1) | Includes loans classified as non-accrual |
(2) | Total loan interest income includes amortization of deferred loan fees, net of deferred loan costs |
(3) | Income and yields for all periods presented are reported on a tax-equivalent basis using the federal statutory rate of 21% |
(4) | Refer to Appendix for reconciliation of non-GAAP measures |
UNAUDITED AVERAGE BALANCE SHEETS, INTEREST AND RATES | ||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
For the nine months ended September30, 2022 | For the nine months ended September30, 2021 | |||||||||||||||||||||||
Average Balance | Interest Income/ Expense(3)(4) | Average Yields/ Rate (annualized) (3)(4) | Average Balance | Interest Income/ Expense (3)(4) | Average Yields/ Rate(annualized) (3)(4) | |||||||||||||||||||
ASSETS: | ||||||||||||||||||||||||
Interest earning assets: | ||||||||||||||||||||||||
Loans (1)(2) | $ | 1,420,013 | $ | 54,900 | 5.17 | % | $ | 1,293,359 | $ | 46,211 | 4.78 | % | ||||||||||||
Securities: | ||||||||||||||||||||||||
Taxable | 73,496 | 1,136 | 2.07 | % | 57,838 | 910 | 2.10 | % | ||||||||||||||||
Tax-exempt | 38,703 | 1,008 | 3.48 | % | 36,737 | 1,015 | 3.69 | % | ||||||||||||||||
Federal funds and interest-bearing deposits | 121,832 | 1,241 | 1.36 | % | 224,521 | 73 | 0.04 | % | ||||||||||||||||
Total interest earning assets | $ | 1,654,044 | $ | 58,285 | 4.71 | % | $ | 1,612,455 | $ | 48,209 | 4.00 | % | ||||||||||||
Other assets | 71,361 | 76,758 | ||||||||||||||||||||||
Total assets | $ | 1,725,405 | $ | 1,689,213 | ||||||||||||||||||||
Liabilities and Stockholders' Equity: | ||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||
Interest-bearing demand deposits | $ | 86,836 | $ | 345 | 0.53 | % | $ | 67,345 | $ | 170 | 0.34 | % | ||||||||||||
Savings and NOW deposits | 66,714 | 122 | 0.24 | % | 72,591 | 127 | 0.23 | % | ||||||||||||||||
Money market deposit accounts | 252,992 | 766 | 0.40 | % | 345,662 | 645 | 0.25 | % | ||||||||||||||||
Time deposits | 511,242 | 5,236 | 1.37 | % | 508,722 | 6,039 | 1.59 | % | ||||||||||||||||
Total interest-bearing deposits | $ | 917,784 | $ | 6,469 | 0.94 | % | $ | 994,320 | $ | 6,981 | 0.94 | % | ||||||||||||
Federal funds and repos purchased | 2 | — | — | 1 | — | — | ||||||||||||||||||
Subordinated debt | 62,807 | 2,108 | 4.49 | % | 31,815 | 1,346 | 5.66 | % | ||||||||||||||||
FHLB borrowings | 24,011 | 83 | 0.46 | % | — | — | — | |||||||||||||||||
Total interest-bearing liabilities | $ | 1,004,604 | $ | 8,660 | 1.15 | % | $ | 1,026,136 | $ | 8,327 | 1.08 | % | ||||||||||||
Demand deposits and other liabilities | 531,115 | 486,510 | ||||||||||||||||||||||
Total liabilities | $ | 1,535,719 | $ | 1,512,646 | ||||||||||||||||||||
Stockholders' Equity | 189,686 | 176,567 | ||||||||||||||||||||||
Total Liabilities and Stockholders' Equity | $ | 1,725,405 | $ | 1,689,213 | ||||||||||||||||||||
Interest Rate Spread | 3.58 | % | 2.92 | % | ||||||||||||||||||||
Net Interest Income | $ | 49,625 | $ | 39,882 | ||||||||||||||||||||
Net Interest Margin | 4.01 | % | 3.31 | % | ||||||||||||||||||||
(1) | Includes loans classified as non-accrual |
(2) | Total loan interest income includes amortization of deferred loan fees, net of deferred loan costs |
(3) | Income and yields for all periods presented are reported on a tax-equivalent basis using the federal statutory rate of 21% |
(4) | Refer to Appendix for reconciliation of non-GAAP measures |
UNAUDITED SUMMARY FINANCIAL DATA | ||||||||||||||||
(Dollars in thousands except per share data) | ||||||||||||||||
At or For the Three Months Ended | At or For the Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Per share Data and Shares Outstanding | ||||||||||||||||
Earnings per common share (basic and diluted) | $ | 0.97 | $ | 0.56 | $ | 2.31 | $ | 2.09 | ||||||||
Book value per common share | $ | 21.92 | $ | 20.64 | $ | 21.92 | $ | 20.64 | ||||||||
Tangible book value per common share(2) | $ | 20.94 | $ | 20.64 | $ | 20.94 | $ | 20.64 | ||||||||
Weighted average common shares (basic and diluted) | 7,463,719 | 7,571,214 | 7,561,567 | 7,547,254 | ||||||||||||
Common shares outstanding at end of period | 7,425,432 | 7,593,749 | 7,425,432 | 7,593,749 | ||||||||||||
Performance Ratios | ||||||||||||||||
Return on average assets (annualized) | 1.70 | % | 1.13 | % | 1.48 | % | 1.37 | % | ||||||||
Return on average equity (annualized) | 16.13 | % | 10.39 | % | 13.46 | % | 13.14 | % | ||||||||
Return on average common equity (annualized) | 17.52 | % | 10.84 | % | 14.39 | % | 14.09 | % | ||||||||
Yield on earning assets (FTE) (2) (annualized) | 5.01 | % | 3.94 | % | 4.71 | % | 4.00 | % | ||||||||
Cost of interest bearing liabilities (annualized) | 1.44 | % | 1.03 | % | 1.15 | % | 1.08 | % | ||||||||
Net interest spread (FTE)(2) | 3.59 | % | 2.91 | % | 3.58 | % | 2.92 | % | ||||||||
Net interest margin (FTE)(2) (annualized) | 4.14 | % | 3.30 | % | 4.01 | % | 3.31 | % | ||||||||
Noninterest income as a percentage of average assets (annualized) | 0.30 | % | 0.35 | % | 0.29 | % | 0.36 | % | ||||||||
Noninterest expense to average assets (annualized) | 2.18 | % | 1.99 | % | 2.20 | % | 1.91 | % | ||||||||
Efficiency ratio(3) | 50.88 | % | 57.60 | % | 53.30 | % | 54.68 | % | ||||||||
Asset Quality | ||||||||||||||||
Commercial real estate loans to total capital (4) | 370.05 | % | 341.44 | % | 370.05 | % | 341.44 | % | ||||||||
Construction loans to total capital (5) | 137.51 | % | 150.42 | % | 137.51 | % | 150.42 | % | ||||||||
Loans 30-89 days past due to total gross loans | 0.19 | % | 0.00 | % | 0.19 | % | 0.00 | % | ||||||||
Loans 90 days past due to total gross loans | 0.02 | % | 0.00 | % | 0.02 | % | 0.00 | % | ||||||||
Non-accrual loans to total gross loans | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||
Other real estate owned | $ | — | $ | 1,158 | $ | — | $ | 1,158 | ||||||||
Non-performing assets | $ | — | $ | 1,158 | $ | — | $ | 1,158 | ||||||||
Non-performing assets to total assets | 0.00 | % | 0.07 | % | 0.00 | % | 0.07 | % | ||||||||
Allowance for loan losses to total gross loans | 0.89 | % | 0.90 | % | 0.89 | % | 0.90 | % | ||||||||
Allowance for loan losses to non-performing assets | N/A | 9.87 | N/A | 9.87 | ||||||||||||
Net loan recoveries | $ | (13) | $ | (5) | $ | (18) | $ | (21) | ||||||||
Net charge-offs (recoveries) to average gross loans (annualized) | N/A | 0.00 | % | N/A | 0.00 | % | ||||||||||
Regulatory Capital Ratios (Bank only) (1) | ||||||||||||||||
Total risk-based capital ratio | 15.77 | % | 16.55 | % | 15.77 | % | 16.55 | % | ||||||||
Tier 1 risk-based capital ratio | 15.00 | % | 15.68 | % | 15.00 | % | 15.68 | % | ||||||||
Leverage ratio | 14.70 | % | 12.23 | % | 14.70 | % | 12.23 | % | ||||||||
Common equity tier 1 ratio | 15.00 | % | 15.68 | % | 15.00 | % | 15.68 | % | ||||||||
Other information | ||||||||||||||||
Closing stock price | $ | 22.81 | $ | 23.99 | $ | 22.81 | $ | 23.99 | ||||||||
Equity / assets | 10.25 | % | 11.10 | % | 10.21 | % | 11.10 | % | ||||||||
Average equity / average assets | 10.57 | % | 10.84 | % | 10.99 | % | 10.24 | % | ||||||||
Number of full time equivalent employees | 157 | 128 | 157 | 128 | ||||||||||||
# Full service branch offices | 6 | 6 | 6 | 6 | ||||||||||||
(1) | Regulatory capital ratios as of September 30, 2022 are preliminary |
(2) | Refer to Appendix for reconciliation of non-GAAP measures |
(3) | Efficiency ratio is calculated as non-interest expense as a percentage of net interest income and non-interest income |
(4) | Commercial real estate includes only non-owner occupied and construction loans as a percentage of Bank capital |
(5) | Construction loans as a percentage of Bank capital |
Unaudited Reconciliation of Certain Non-GAAP Financial Measures | ||||||||||||||||
(Dollars In thousands) | ||||||||||||||||
For the three months ended September 30, | For the nine months ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Net interest margin (FTE) | ||||||||||||||||
Net interest income (GAAP) | $ | 18,096 | $ | 13,203 | $ | 49,413 | $ | 39,669 | ||||||||
FTE adjustment on tax-exempt securities | 69 | 71 | 212 | 213 | ||||||||||||
Net interest income (FTE) (non-GAAP) | 18,165 | 13,274 | 49,625 | 39,882 | ||||||||||||
Average interest earning assets | 1,740,998 | 1,595,741 | 1,654,044 | 1,612,455 | ||||||||||||
Net interest margin (GAAP) | 4.12 | % | 3.28 | % | 3.99 | % | 3.29 | % | ||||||||
Net interest margin (FTE) (non-GAAP) | 4.14 | % | 3.30 | % | 4.01 | % | 3.31 | % | ||||||||
For the three months ended September 30, | For the nine months ended September 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
Stockholders equity, adjusted | ||||||||||||||||
Total stockholders equity (GAAP) | $ | 190,000 | $ | 184,029 | $ | 190,000 | $ | 184,029 | ||||||||
Less: preferred stock | (27,263) | (27,263) | (27,263) | (27,263) | ||||||||||||
Total common stockholders equity (GAAP) | 162,737 | 156,766 | $ | 162,737 | $ | 156,766 | ||||||||||
Less: intangible assets | 7,258 | 1,165 | 7,258 | 1,165 | ||||||||||||
Tangible common stockholders equity (non-GAAP) | 155,479 | 155,601 | 155,479 | 155,601 | ||||||||||||
Shares outstanding | 7,425,432 | 7,593,749 | 7,425,432 | 7,593,749 | ||||||||||||
Tangible book value per common share (non-GAAP) | $ | 20.94 | $ | 20.49 | $ | 20.94 | $ | 20.64 | ||||||||
Contact: Debra Cope Director of Corporate Communications(703) 481-4599
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SOURCE MainStreet Bancshares, Inc.
