Mainstreet Bancshares, Inc. · NASDAQ:MNSB
Mainstreet Bancshares — Investor Presentation (September 2020)
29 slides from Mainstreet Bancshares's investor presentation, Sep 10, 2020
Slide 1: Investor Presentation
NASDAQ: MNSB INVESTOR PRESENTATION Exhibit 99.2
Slide 2: Disclaimers
Disclaimers This presentation 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 presentation that are not historical facts are forward-looking statements as defined in th
Slide 3: Terms of Proposed Depositary Offering
Terms of Proposed Depositary Offering Issuer (Exchange: Ticker) MainStreet Bancshares, Inc. (NASDAQ: MNSB) (“MainStreet” or the “Company”) Security Type Depositary shares, each representing a 1/40th interest in a share of Series A Fixed-Rate Non-Cumulative Perpetual Preferred Stock (“Series A Prefer
Slide 4: MainStreet Bancshares, Inc. at a Glance
Leesburg Herndon McClean Arlington Fairfax Washington MainStreet Bancshares, Inc. at a Glance Market data as of September 8, 2020 Non-GAAP measure, see Appendix Bank-level regulatory data Bank Established: May 26, 2004 Holding Company Established July 15, 2016 Headquarters: Fairfax, VA Market Capita
Slide 5: Second Quarter 2020 Highlights
Second Quarter 2020 Highlights Pre-Tax Pre-Provision (PTPP) Income was $4.7 million1 for Q2 2020, representing a 2.5% increase from Q1 2020 MainStreet remains cumulatively profitable for the first half of 2020 but did report a net loss of $634,000 during Q2 2020 which was directly tied to a $5.6 mil
Slide 6: Concentrated COVID-19 Response
Initiated April 3 1,071 PPP loans processed for guaranteed portion and 100% forgiveness from the SBA anticipated $172 million in total PPP loans ~$180 million in new deposits from participants Paycheck Protection Program (“PPP”) Concentrated COVID-19 Response In addition to participating in PPP, the
Slide 7: COVID-19 Industry Exposure
COVID-19 Industry Exposure Total CRE Portfolio: $666.1MM Phase 2 Loan Deferrals Exposure to Selected COVID-19 Impacted Industries1 Note: Information as of June 30, 2020 1Loan-to-value figures are averages from when the loans were made CRE Loans by Industry
Slide 8: Hotel Portfolio Locations and Loan Portfolio
Hotel Portfolio Locations Hotel Loan Portfolio Note: Information as of June 30, 2020 1Data shown for MainStreet’s 14 operating hotel loans Avg. Rooms per Hotel 98 138 103 131 98 58 The borrowers that comprise MainStreet’s hotel loan portfolio seem to be positioned favorably to surmount the challenge
Slide 9: Improving Hotel Occupancy/RevPAR Trends
Improving Hotel Occupancy/RevPAR Trends Notes:Data shown for MainStreet’s 14 operating hotel loans 1RevPAR, or revenue per available room, is a performance metric used by hotels calculated by dividing a hotel’s total guestroom revenue by the room count and the number of days in the period being meas
Slide 10: Investment Highlights
Investment Highlights Strong earnings momentum Superior market performance and demonstrated ability to execute Experienced management team with deep ties to the local business community Well-positioned company residing in a vibrant market with favorable demographics Long history of driving organic g
Slide 11: Experienced Executive Team
Experienced Executive Team Co-Founder, Chairman of the Board and CEO since 2003 37+ years of banking experience Previously an advisor to the Bank of England and the Financial Services Authority Commissioned National Bank Examiner with OCC Co-Founder and Chief Financial Officer since 2003 30+ years o
Slide 12: Experienced Board of Directors
Russell Echlov Board Member Director since 2018 and a Senior PM with Mendon Capital Advisors/RMB Capital Previously worked for Keefe, Bruyette & Woods, FrontPoint Stadia, Columbia Financial Partners and Spring Hill Capital Partners, LLC Experienced Board of Directors Darrell Green Board Member Direc
Slide 13: Significant Insider and Institutional Ownership
Significant Insider and Institutional Ownership 1 MainStreet’s top executives and board of directors have tied themselves closely to the financial success of MainStreet with the top three executives owning nearly 5% of the Company. Along with strong insider ownership, many respected institutions hav
Slide 14: Dynamic Business Strategy / Payment System Solutions
The payments industry is among the largest industries in the United States. The Company has developed and is ramping a platform that will allow it to provide payment processing services to fintech companies and generate incremental core deposit gathering and fee income opportunities Payment System S
Slide 15: Vibrant Market with Favorable Demographics
Vibrant Market with Favorable Demographics Sources: S&P Global Market Intelligence, D.C. Chamber of Commerce, Loudoun County Department of Economic Development #1 Best Cities for Women in Tech, SmartAsset, March 2019 #2 Best Educated Cities in America, CNBC July 2018 #4 Top 20 High-Tech Cities, PC M
Slide 16: Excellent Market Demographics – Washington D.C. MSA
Unemployment Rate (%)1 Median Household Income Excellent Market Demographics – Washington D.C. MSA June 2020 Unemployment Rate (%) Sources: Federal Reserve Bank of St. Louis, S&P Global Market Intelligence 1Shading indicates U.S. recessions MNSB’s branches are located in and around some of the natio
Slide 17: Washington D.C. MSA Highlights and Market Share
5th largest MSA in the U.S. by GDP 6.3 million residents, 6th largest in the U.S. Headquarters of 16 Fortune 500 companies New Amazon HQ building located in Arlington County will add 25,000 tech industry workers to the market On average, these Amazon employees are expected to earn $150,000 annually
Slide 18: Financial Highlights
Financial Highlights 1Non-GAAP measure, see Appendix 3
Slide 19: Strong Organic Growth
Strong Organic Growth May 2004 $12.5M Private Placement of Common Stock August 2005 $12.6M Private Placement of Common Stock & Began trading on OTC Market December 2014 $12.8M Private Placement of Common Stock January 2017 $15M Sub-Debt Offering October 2017 $18.4M Private Placement of Common Stock
Slide 20: Strong Growth in High Quality Loans
Strong Growth in High Quality Loans Acceleration in loan growth driven by lending team expansion in 2017 Note that the 6/20 balance includes $172 million of PPP loans; excluding PPP loans, the gross loan CAGR is 25.1% Gross Loan Growth ($MM) 1Compound annual growth rate between December 31, 2015 and
Slide 21: Focus on Building Core Deposits
14 experienced Business Bankers focused on growing core deposits Advanced technology puts complete branch functionality on Business Banker’s tablet Payment Systems Solution out of Beta and ready to deploy Excellent source of no- and low-cost deposits and fee income Scalable infrastructure in-place S
Slide 22: Operating Efficiency, Margin Trends and Capital
Operating Efficiency, Margin Trends and Capital 1Noninterest income excluding nonrecurring revenue/total revenue excluding nonrecurring revenue 2Non-GAAP measure, see Appendix 3 Efficiency Ratio (%) Net Interest Margin (%) TCE/TA (%)2 Noninterest Income/Operating Revenue (%)1
Slide 23: Demonstrated Ability to Grow Profitability
Demonstrated Ability to Grow Profitability 1Non-GAAP measure, see Appendix 3 Core ROAA (%)1 EPS ($) Core ROATCE (%)1 TBVPS ($)1
Slide 24: Strong Credit Quality
Strong Credit Quality 4 Asset Quality Overview
Slide 25: Conservative Loan Loss Reserve Provisioning
Conservative Loan Loss Reserve Provisioning Trends in Loan Loss Reserve During the quarter ended Q2 2020, the Company had one C&I borrower fully impacted by the pandemic The Company charged-off the $1.7 million balance of the loan during the quarter To address the potential impact of the COVID-19 pa
Slide 26: Appendix
Appendix = MainStreetBancshares, Inc. | 2
Slide 27: Interest Rate Sensitivity
Interest Rate Sensitivity Prudent Balance Sheet Management Investment Portfolio Maturity Composition Total Securities: $115.7MM Change in Net Income (%) Change in Net Interest Income (%)
Slide 28: Robust Liquidity Management
Robust Liquidity Management Total Assets ($000) Total Liabilities and Equity ($000) As of June 30, 2020, MainStreet had $2.1 million of cash and cash equivalents at the holding company In addition to the current sources of liquidity summarized to the left, MainStreet also has the opportunity to draw
Slide 29: Non-GAAP Reconciliation
Non-GAAP Reconciliation 1Assumes income tax rate of 35% from 2015-2017 and 21% from 2018-2020
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