Mainstreet Bancshares, Inc. · NASDAQ:MNSB
Mainstreet Bancshares — Investor Presentation (November 2024)
55 slides from Mainstreet Bancshares's investor presentation, Nov 13, 2024
Slide 1: MainStreet Bancshares, Inc. – Doing big things
= MainStreetBancshares, Inc. Doing big things. =xAV
Slide 2: Forward-looking statements and additional information
Forward-looking statements and additional information Statements in this presentation which are not historical are “forward-looking statements’ within the meaning of Section 27A of the Secunties Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private
Slide 3: A higher return on relationships
We are reshaping the banking industry by taking ownership of financial innovation and delivering our customers and investors a higher return on relationships. Ahigher return on relationships For over 20 years, MainStreet Bank has led the industry with accountable innovation that challenges legacy ba
Slide 4: MainStreet Bank management
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Slide 5: Thriving DC metro market
Thriving DC metro market Major universities Federal hub . © Defense contracting . * cacl © American © Lockheed Martin © Howard mal * George Mason = salc . laudet . ic © umuc © Marymount Other notable © Historic trend of low unemployment Resident fortune 500 compared to overall US, - even during * Un
Slide 6: Strategic balance sheet growth
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Slide 7: 20+ years of banking innovation
20+ years of banking Innovation 32 2 Bank established: May 26th 2004 t B e Headquarters: Fairfax, VA Total Assets e Number of branches: 6 (as e Full-time employees: 201 6 © Assets per employee: $11.1m Branches ¢ Holding company established: Sept. 18th, 2016 =x AV
Slide 8: Led by innovation, driven by community
We innovate how money moves to benefit the security and prosperity of every dollar entrusted to us and the communities we serve. Led by innovation, driven by community We pride ourselves with the experience required to anticipate market changes and pivot into new ways of thinking and operating. Mone
Slide 9: Go beyond branches
Go beyond branches $i1.1mM Abranch | lly enhanced busine Ng a high touch bs se Assets per employee sae e Herndon, VA McLean, VA e Fairfax, VA Clarendon, VA Leesburg, VA ¢ Washington, DC Branches* “ < AV
Slide 10: Share performance
Share performance Nasdaq capital market: MNSB Close common stock price $18.45 Price / tangible book value 78% Sees 7,602,783 Market capitalization $140 million Tangible book value $23.66 Close preferred stock price $23.49
Slide 11: Avenu: Innovating how money moves
AVENU Innovating how money moves. =x<AV
Slide 12: Traditional deposit growth is a challenge
Traditional deposit growth is a challenge. The full Board is engaged and steadfast in its support of Avenu’s Banking-as-a-Service initiatives to overcome this challenge. Innovating how money moves. Before there was Avenu, there was a department called Payment Systems. It was a small but mighty team
Slide 13: Avenu was created to provide embedded banking services
Avenu was created to provide innovative and reliable embedded banking services allowing developers to focus on what they do best - develop cutting edge digital financial solutions. 0100101 01010100 01101010 A A 0101010 0101010 “ >
Slide 14: Avenu thesis and team
Dan Van Nostrand, MBA AVENU thesis \ a Om : Se Krishna Challa SVP of Engineering e eal : 5 S Sy Todd Youngren, MBA President, A Brian Bretz, MBA, CSM, (fated Director of Product Manager Full bios located in appendix
Slide 15: Avenu technology group
Avenu technology group A high performing team Chief Executive Officer Chief information Sey Ome stele halal re Analysts Analysts pe epiaabraaded 1 Mobile Developer 4 QA Engineers
Slide 16: Put our bank in your app
Put our bank in your app A bank-built and backed solution Avenu offers the only embedded banking solution that connects our clients and their applications directly to our banking core. Avenu allows clients to create any type of deposit account for their customers. For transactional accounts, they ha
Slide 17: Put our bank in your app
Put our bank in your app. A bank-built and backed solution =xAV
Slide 18: Avenu
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Slide 19: An outside perspective | FS Vector
An outside perspective | FS Vector Validating the Avenu solution. =xAV
Slide 20: Validating the Avenu solution
Validating the Avenu solution An independent review of the Avenu banking-as-a-service solution The board engaged the consulting firm FS Vector LLC to: + To determine whether the Avenu solution is fit for purpose given the current regulatory environment, and Provide an overview of the current landsca
Slide 21: A full-stack solution
There is a short list of full-stack banks, including MainStreet Bank, that control the required infrastructure and exercise direct oversight of fintech partners. A full-stack solution »> FS VECTOR Baas partnerships can be divided into three broad categories, differentiated by who owns the key infras
Slide 22: Validating the Avenu solution: FDIC proposed rule
Validating the Avenu solution »» FS VECTOR FDIC proposed deposit insurance recordkeeping rule for banks’ third-party accounts Ostensibly in response to the failure of Synapse and ensuing confusion, the FDIC published a notice of proposed rulemaking in September 2024 that sets specific record keeping
Slide 23: Other banks rely on fintech-owned infrastructure
Other banks rely on fintech-owned infrastructure provided by the partners they oversee. Avenu owns the subledger used by all of Avenu’s clients Validating the Avenu solution FS VECTOR Staying connected and accountable to every dollar that is entrusted to us is key. We are not a sponsor bank without
Slide 24: Avenu's development cost and timeline
Avenu's development cost places it among the most economical of similar bank and nonbank Baas platforms, and its development timeline places it squarely in the middle of the pack. FS Vector report Validating the Avenu solution »» FS VECTOR Noting that there may be meaningful differences, we found th
Slide 25: Summary of projections
Summary of projections Baseline FS Vector projections + existing Avenu ie | ao a | This approach and these (millions) figures is a consistent FS Vector balances! $133 $319 $505 and proven way to think Existing balances $20 $20 $20 about the ultimate Total $153 $339 $525 ace ee ae lean Balance credit
Slide 26: Compliance
Compliance Overview =xAV
Slide 27: Compliance integration requirements
Compliance integration requirements Policies & procoduice Documentation Application =xAV
Slide 28: Avenu platform controls
Avenu platform controls Compliance solutions Fraud enti Real time transaction fraud analysis © CIP / ID verification OFAC search - onboarding BSA/AML Fraud * BSA / AML alerts ¢ Risk rating - onboarding © BSA / AMLcase management © SAR filings Case management ‘¢ OFAC search - ongoing 314 search © Ris
Slide 29: Cybersecurity
Cybersecurity Overview =xAV
Slide 30: Avenu risk management & security
Avenu risk management & security Fintech client or Avenu platform & customer API services ‘* Data protection Security requirements Data residency
Slide 31: Avenu summary of risk & security controls
Avenu summary of risk & security controls Govern: Detect & Enal ig controls Protect ance respond Core bank controls x xX x Bank people & core process x x x Network access x x Authentication & authorization x Confidentiality & encryption x x Configuration & integrity x x Availability x SDLC & applica
Slide 32: Avenu & Google Cloud platform resilience
Avenu & Google Cloud platform resilience Avenu leverages Google Cloud Platform for a highly available and fault tolerant solution Global infrastructure & high availability / fault tolerance ¢ Failover & redundancy ¢ Self-healing Infrastructure # Managed data services Security & operational monitorin
Slide 33: Version of Avenu is now active
Version 1 of Avenu is now active Fintech partners joining Avenu General release in November Production Sandbox Contract Waiting for licenses Pending { 4 { Two in Alpha testing, two connecting to API’s Finishing App Waiting for CA license & debit card functionality In discussion =xAV
Slide 34: Venu
Venu Jame Sloan John Kica Executive Director, Innovation Lab Senior Product and Operations Manager, Venu Fullbios located in apperaix
Slide 35: Cannabis payments: Venu cashless payment solution
Cannabis payments Venu, a cashless payment solution Venu is an end-to-end payment solution delivered on MainStreet Bank's secure private network. The Venu app allows users to open and fund directly from their bank account. Payments are simple, fast and secure via a uniquely generated QR code. hr! Za
Slide 36: Cannabis payments
Cannabis payments An opportunity to serve a diverse community of entrepreneurs Venu helps business owners and customers stay on the safe side of cannabis payments. Many of the current payment methods are grey area solutions that create risk and safety concerns for cannabis business owners, their cus
Slide 37: U.S. cannabis retail sales estimate
For every $10 consumers and patients spend at cannabis retail locations, an additional $18 will be injected into the economy, much of it at the local level. U.S. cannabis retail sales estimate The projected U.S. sales of cannabis through 2028, in billions of dollars from 2023 MJBIZ 2025 2026 2027 20
Slide 38: Venu app experience
Venu app experience Sign up, terms and conditions, account onboarding AV
Slide 39: Profile details
Profile details 9:35 “ee Your account ‘Account details $165.01
Slide 40: Venu app menu
Venu app menu Access profile, terms & conditions, statements In-app features Attach cn externd account ¢ Deposit and withdraw money e View trcnscction history e Dispute atronsaction View cnd download statements ‘@ Change password ‘© Chenge axidress (cfter 90 days) e View terms & conditions © by occo
Slide 41: Venu app experience: make a purchase
Venu app experience Make a purchase AV
Slide 42: Voice authentication
Voice authentication v Voice authentication 458 729 891 it]
Slide 43: Merchant experience
Merchant experience Virtual terminal transaction venu =xAV
Slide 44: Merchant experience
Merchant experience Virtual terminal transaction venu =xAV
Slide 45: Venu customer support portal
Venu customer support portal Search, view activity, record inquiries, issues, concerns Features e View customer account activity # Reset customer passwords e Suspend/close accounts © Capture customer (and non-customer) contacts (email and phone) inquiries e Data source to investigate disputes e Esca
Slide 46: Venu program risk management
Venu program risk management Risk and compliance top of mind since the product was conceived e Governance Risk assessment e Development approach e Third party risk management e Fraud mitigation AV
Slide 47: Venu go to market
Venu go to market Crawl, walk, run Founder-led sales “Friendly” merchant e Small group of consumers e Controlled app distribution Marketing approach e In-store e Website e@ SEO & SEM Digital advertising ] < AV
Slide 48: Bios
Bi o's x AV
Slide 49: Jeff W. Dick, Chairman and CEO
= MainStreetBank Jeff W. Dick Chairman and CEO Jeff is the Chairman and Chief Executive Officer of MainStreet Bancshares, Inc. and MainStreet Bank. Since co-founding the bank in 2004, Jeff has been instrumental in establishing a tech-forward culture, ensuring that MainStreet remains at the forefront
Slide 50: Thomas J. Chmelik, Chief Financial Officer
= MainStreetBank ‘Thomas J.chmelik Chief Financial Officer Tom is a co-founder, Director, and Chief Financial Officer of MainStreet Bancshares, Inc. and MainStreet Bank, where he has expertly guided the bank's financial strategy through periods of sustained growth. His leadership in financial manage
Slide 51: Alex Vari and Thomas Floyd
= MainStreetBank Alex Vari Chief Accounting Officer Alex brings more than 15 years of community banking experience to his role as MainStreet Bank’s Chief Accounting Officer. As a key member of the finance group, Alex works closely with the executive team to shape the financial strategic plan for max
Slide 52: Chris Johnston and Rafael DeLeon
= MainStreetBank Chris Johnston EVP, Chief Credit Officer Chris has over twenty years of banking experience, developing an aptitude in identifying and mitigating credit risk In his role as MainStreet Bank's Chief Credit Officer, he manages a team of seasoned credit professionals overseeing asset qua
Slide 53: Ben Baboval and Matthew McCrory
= MainStreetBank Ben Baboval Chief Risk Officer During a two-decade career in banking, Ben has built @ sophisticated understanding of the risks financial institutions face and has developed protocols for anticipating and addressing these risks, He brings a keenly inquisitive and analytical approach
Slide 54: Avenu leadership
AVENU Todd Youngren, MBA President, Avenu Todd has a demonstrated history in leading businesses that EupportFintechs, Banking as a Service (Baas), Complex Treasury Solutions and Financial Management Services. Todd is skiled in Collaborating across teams to achieve business and financial objectives.
Slide 55: Venu leadership
Venu Jame Sloan Executive Director, Innovation Lab Jame is the Executive Director of the Innovation Lab at Mainstreet Bank, where she leads the development of groundbreaking products and services. With over 20 years of experience as a federal regulator, business executive, and risk leader, Jame comb
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