MainStreet Bancshares, Inc. Reports Record Earnings
01/21/2021 - 08:00 AM
FAIRFAX, Va. , Jan. 21, 2021 /PRNewswire/ -- MainStreet Bancshares, Inc. (Nasdaq: MNSB & MNSBP), the holding company for MainStreet Bank, reported record net income of $15.7 million for 2020, which represents a 10.54% Return on Average Equity (ROAE), a 1.05% Return on Average Assets (ROAA) and $1.85 per share of common stock (basic and diluted).
The strong year-end results can be attributed to the Bank's breakneck performance in response to the pandemic
Net interest income and noninterest income for the year-ended December 31, 2020 increased to $45.9 million and $7.5 million , respectively. Net interest income and noninterest income for the year-ended December 31, 2020 increased 16.5% and 54% , respectively, over the same period in 2019. The Company realized $2.6 million of the $5.8 million recognized as fee income from the Paycheck Protection Program (PPP) during the year.
Total assets were $1.6 billion , an increase of 29% from the previous year-end. Net loans were $1.3 billion as of December 31, 2020 , which included $135 million of the original $173 million in loans related to the PPP (22% were forgiven/repaid during 2020). Asset quality remains strong with non-performing assets and Other Real Estate Owned (OREO) representing only 0.08% of total assets as of December 31 , 2020.
Non-interest-bearing deposits were $371 million , representing 26% of total deposits as of December 31 , 2020. Total deposits as of December 31, 2020 were $1.4 billion , and core deposits represent a healthy 72% of total deposits.
"The strong year-end results can be attributed to the Bank's breakneck performance in response to the pandemic, both at the start and throughout the entire year," said Abdul Hersiburane, President of MainStreet Bank. "The Bank worked with all borrowers in order to assist, where prudent, with providing meaningful liquidity through the Paycheck Protection Plan, the Main Street Lending Program, payment deferrals and/or shifting to interest-only payments for a period."
With the hospitality industry being most hard-hit, the team worked closely throughout the year with the 14 operating hotels in the Bank's portfolio. Since April 2020 , monthly Smith Travel Research (STR) reports for the portfolio of hotels showed favorable trends for occupancy. As of January 2021 , all previously reported borrowers with payment deferrals are scheduled to be back to making monthly payments.
The Company analyzed the loan portfolio and made a special pandemic provision to the Allowance for Loan and Lease Losses (ALLL) on June 30, 2020 in the amount of $4.5 million . That special provision included a $1.76 million loan outstanding for one Commercial & Industrial (C&I) borrower that was immediately and fully impacted by the pandemic, $2.0 million for commercial borrowers with potential liquidity concerns and $760,000 for the indirect auto portfolio.
"At its outset, we didn't have a good sense of the pandemic's potential to affect the U.S. Economy or our market," said Jeff W. Dick , Chairman & CEO of MainStreet Bancshares Inc. and MainStreet Bank. "As the year progressed, through a combination of federal programs and regulatory easing, our borrower's collective confidence started to return. The vaccine approval announcements in December gave confirmation that the end was in sight. As a result of the significant changes in data and information available, we determined it would be prudent to update our special pandemic loan loss provision."
The Company released $3.15 million from the Allowance for Loan and Lease Losses at year-end, as recapped in the table below.
Fourth Quarter Changes to the Allowance for Loan and Lease Losses
(000's)
Beginning Balance September 30, 2020
$14,345
+ Current Year Recovery (1)
1,498
- Release of Specific Reserve for Repaid Loan
329
- Release of Pandemic Provision for indirect loans (2)
500
- Release of Provision for Loans reclassified as Held for Sale (3)
825
+ Provision for Quarter Growth
186
- Release of Loss Recovery
1,498
Ending Balance December 31, 2020
$12,877
(1)
The Bank recovered $1.49 8 million of a loan charged-off earlier in the year.
(2)
The indirect loan portfolio losses for the year were less than previous years, so $500,000 was released from the special pandemic provision for indirect loans.
(3)
The Company reclassified approximately $60 million in investor-owned commercial real estate loans as loans held for sale. The loan sale should take place in the first quarter of 2021 and the Company released the associated provision to the ALLL prior to year-end 2020.
The $2.0 million that was previously allocated to commercial borrowers remains intact for the pandemic provision to the ALLL as of December 31, 2020 .
ABOUT MAINSTREET BANK: MainStreet operates seven branches in Herndon , Fairfax , Fairfax City , McLean , Leesburg , Clarendon, and Washington D.C. 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 full complement of payment solutions for financial technology companies and has a team ready to create a perfect solution for their needs.
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.
Contact: Jeff W. Dick , Chairman & CEO (703) 481-4567
UNAUDITED CONSOLIDATED BALANCE SHEET INFORMATION
(In thousands, except share data)
December 31, 2020
September 30, 2020
June 30,
2020
March 31, 2020
December 31, 2019
ASSETS
Cash and cash equivalents
Cash and due from banks
$
75,935
$
102,480
$
55,273
$
62,098
$
53,376
Federal funds sold
31,593
25,074
21,081
10,677
11,468
Total cash and cash equivalents
107,528
127,554
76,354
72,775
64,844
Investment securities available for sale, at fair value
147,414
118,844
91,823
102,191
92,791
Investment securities held to maturity, at carrying value
22,520
23,114
23,843
23,878
23,914
Restricted equity securities, at cost
4,616
4,616
5,041
5,041
6,157
Loans held for sale, at carrying value
57,006
—
—
—
—
Loans, net of allowance for loan losses of $12,877 , $14,346 , $13,731 , $9,898 , and $9,584 , respectively
1,230,379
1,279,899
1,259,012
1,059,628
1,030,425
Premises and equipment, net
14,289
14,474
14,416
14,666
14,153
Other real estate owned, net
1,180
1,580
1,175
1,207
1,207
Accrued interest and other receivables
9,604
8,579
7,458
4,809
5,420
Bank owned life insurance
25,341
25,157
24,959
24,761
24,562
Other assets
23,288
26,371
24,786
20,786
13,885
Total Assets
$
1,643,165
$
1,630,188
$
1,528,867
$
1,329,742
$
1,277,358
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Non-interest bearing deposits
$
370,497
$
416,648
$
388,104
$
240,979
$
252,707
Interest bearing DDA deposits
70,307
72,807
18,266
16,846
53,707
Savings and NOW deposits
74,099
69,015
65,876
60,454
63,015
Money market deposits
426,600
348,146
332,246
265,443
141,337
Time deposits
496,743
510,429
537,840
559,489
560,857
Total deposits
1,438,246
1,417,045
1,342,332
1,143,211
1,071,623
Federal Home Loan Bank advances and other borrowings
—
—
10,000
10,000
40,000
Subordinated debt
14,834
14,827
14,819
14,812
14,805
Other liabilities
22,420
25,055
21,546
21,424
13,896
Total Liabilities
1,475,500
1,456,927
1,388,697
1,189,447
1,140,324
Stockholders' Equity:
Preferred stock, $1 par value - 2,000,000 shares authorized
Non-cumulative perpetual, 28,750 shares issued and outstanding
27,263
27,527
—
—
—
Common stock, par value $4 per share, authorized 10,000,000 shares; issued and outstanding, 7,443,842 shares at December 31, 2020 including 161,435 unvested shares, 8,277,837 shares at September 30, 2020 including 162,917 unvested shares, 8,263,941 shares at June 30, 2020 including 155,742 unvested shares, 8,260,231 shares at March 31,2020 including 155,742 unvested shares, 8,260,259 shares at December 31, 2019 including 160,961 unvested shares.
29,130
32,460
32,433
32,418
32,397
Capital surplus
66,116
75,217
74,850
74,482
75,117
Retained earnings
44,179
37,105
31,933
32,567
29,097
Accumulated other comprehensive income
977
952
954
828
423
Total Stockholders' Equity
167,665
173,261
140,170
140,295
137,034
Total Liabilities and Stockholders' Equity
$
1,643,165
$
1,630,188
$
1,528,867
$
1,329,742
$
1,277,358
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME INFORMATION
(In thousands, except share and per share data)
Year-Ended
Three Months Ended
December 31, 2020
December 31, 2019
December 31, 2020
September 30, 2020
June 30, 2020
March 31, 2020
December 31, 2019
INTEREST INCOME:
Interest and fees on loans
$
59,634
$
55,208
$
15,933
$
15,083
$
14,399
$
14,220
$
14,223
Interest on investment securities
2,007
2,202
519
491
496
501
534
Interest on federal funds sold
431
1,403
15
12
9
395
271
Total interest income
62,072
58,813
16,467
15,586
14,904
15,116
15,028
INTEREST EXPENSE:
Interest on interest bearing DDA deposits
317
998
108
56
36
117
195
Interest on savings and NOW deposits
221
289
52
55
50
64
71
Interest on money market deposits
2,162
2,379
418
490
474
778
489
Interest on time deposits
12,322
14,196
2,583
2,841
3,333
3,566
3,730
Interest on Federal Home Loan Bank advances and other borrowings
107
549
—
13
44
50
92
Interest on subordinated debt
966
966
240
245
241
241
244
Total interest expense
16,095
19,377
3,401
3,700
4,178
4,816
4,821
Net interest income
45,977
39,436
13,066
11,886
10,726
10,300
10,207
Provision for loan losses
3,610
1,618
(2,950)
635
5,575
350
358
Net interest income after provision for loan losses
42,367
37,818
16,016
11,251
5,151
9,950
9,849
NON-INTEREST INCOME:
Deposit account service charges
1,916
1,668
509
487
433
487
460
Bank owned life insurance income
779
498
183
199
198
199
181
Loan swap fee income
3,510
989
833
1,851
423
403
111
Net gain on available-for-sale securities
—
5
—
—
—
—
—
Net gain on sale of loans
33
566
—
33
—
—
—
Other fee income
1,255
1,136
378
288
264
325
407
Total other income
7,493
4,862
1,903
2,858
1,318
1,414
1,158
NON-INTEREST EXPENSES:
Salaries and employee benefits
17,937
15,776
4,746
4,495
4,263
4,433
4,179
Furniture and equipment expenses
2,128
1,728
601
574
500
454
457
Advertising and marketing
1,003
906
290
266
191
256
375
Occupancy expenses
1,270
864
360
332
311
267
221
Outside services
959
863
263
215
205
276
169
Administrative expenses
674
731
166
167
177
164
198
Other operating expenses
6,329
4,508
1,732
1,589
1,713
1,293
1,104
Total other expenses
30,300
25,376
8,158
7,638
7,360
7,143
6,703
Income before income tax (benefit)
19,560
17,304
9,761
6,471
(891)
4,221
4,304
Income tax expense (benefit)
3,843
3,354
2,051
1,299
(257)
751
742
Net Income (loss)
15,717
13,950
7,710
5,172
(634)
3,470
3,562
Preferred stock dividends
635
—
635
—
—
—
—
Net income (loss) available to common shareholders
15,082
$
13,950
$
7,075
$
5,172
$
(634)
$
3,470
$
3,562
Net income (loss) per common share, basic and diluted
$
1.85
$
1.69
$
0.92
$
0.63
$
(0.08)
$
0.42
$
0.43
Weighted average number of common shares, basic and diluted
8,131,334
8,251,302
7,700,470
8,272,570
8,263,370
8,287,317
8,260,259
UNAUDITED LOAN, DEPOSIT AND BORROWING DETAIL
(In thousands)
December 31, 2020
September 30, 2020
December 31, 2019
Percentage Change
$ Amount
% of
Total
$ Amount
% of
Total
$ Amount
% of
Total
Last
3 Mos
Last
12 Mos
LOANS:
Construction and land development loans
$
324,906
26.0
%
$
325,516
25.0
%
$
272,620
26.2
%
-0.2
%
19.2
%
Residential real estate loans
183,531
14.7
%
157,518
12.1
%
150,848
14.5
%
16.5
%
21.7
%
Commercial real estate loans
466,898
37.4
%
505,201
38.8
%
421,870
40.5
%
-7.6
%
10.7
%
Commercial industrial loans - Other
94,847
7.6
%
88,884
6.8
%
121,225
11.6
%
6.7
%
-21.8
%
Commercial industrial loans - PPP Loans
135,180
10.8
%
173,075
13.3
%
—
0.0
%
-21.9
%
100.0
%
Consumer loans
44,073
3.5
%
51,505
4.0
%
75,583
7.2
%
-14.4
%
-41.7
%
Total Gross Loans
$
1,249,435
100.0
%
$
1,301,699
100.0
%
$
1,042,146
100.0
%
-4.0
%
19.9
%
Less: Allowance for loan losses
(12,877)
(14,346)
(9,584)
Net deferred loan fees
(6,179)
(7,454)
(2,137)
Net Loans
$
1,230,379
$
1,279,899
$
1,030,425
DEPOSITS:
Non-interest bearing demand deposits
$
370,497
25.8
%
416,648
29.4
%
$
252,707
23.6
%
-11.1
%
46.6
%
Interest-bearing demand deposits:
Demand deposits
70,307
4.9
%
72,807
5.1
%
53,707
5.0
%
-3.4
%
30.9
%
Savings and NOW deposits
74,099
5.2
%
69,015
4.9
%
63,015
5.9
%
7.4
%
17.6
%
Money market accounts
426,600
29.7
%
348,146
24.6
%
141,337
13.2
%
22.5
%
201.8
%
Certificates of deposit $250,000 or more
213,077
14.8
%
211,800
14.9
%
211,935
19.8
%
0.6
%
0.5
%
Certificates of deposit less than $250,000
283,666
19.6
%
298,629
21.1
%
348,922
32.5
%
-5.0
%
-18.7
%
Total Deposits
$
1,438,246
100.0
%
$
1,417,045
100.0
%
$
1,071,623
100.0
%
1.5
%
34.2
%
BORROWINGS:
Federal Home Loan Bank advances
—
0.0
%
—
0.0
%
40,000
73.0
%
0.0
%
-100.0
%
Subordinated debt
14,834
100.0
%
14,819
100.0
%
14,805
27.0
%
0.1
%
0.2
%
Total Borrowings
$
14,834
100.0
%
$
14,819
100.0
%
$
54,805
100.0
%
0.1
%
-72.9
%
Total Deposits and Borrowings
$
1,453,080
$
1,431,864
$
1,126,428
1.5
%
29.0
%
Core customer funding sources (1)
$
1,046,087
72.0
%
$
1,066,236
74.5
%
$
654,213
58.1
%
-1.9
%
59.9
%
Brokered and listing service sources (2)
392,159
27.0
%
350,809
24.5
%
417,410
37.1
%
11.8
%
-6.0
%
Federal Home Loan Bank advances
—
0.0
%
—
0.0
%
40,000
3.5
%
0.0
%
-100.0
%
Subordinated debt (3)
14,834
1.0
%
14,819
1.0
%
14,805
1.3
%
0.1
%
0.2
%
Total Funding Sources
$
1,453,080
100.0
%
$
1,431,864
100.0
%
$
1,126,428
100.0
%
1.5
%
29.0
%
(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 December 31, 2020
For the three months ended December 31, 2019
Average
Balance
Interest
Income/
Expense
Average
Yields/ Rate
(annualized)
Average
Balance
Interest
Income/
Expense
Average
Yields/ Rate
(annualized)
ASSETS:
Interest earning assets:
Loans (1)(2)(3)
$
1,311,726
$
15,933
4.86
%
$
1,023,614
$
14,223
5.56
%
Investment securities
85,084
519
2.44
%
71,387
534
2.99
%
Federal funds and interest-bearing deposits
171,933
15
0.03
%
74,519
271
1.45
%
Total interest earning assets
$
1,568,743
$
16,467
4.20
%
$
1,169,520
$
15,028
5.14
%
Other assets
71,013
55,251
Total assets
$
1,639,756
$
1,224,771
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing demand deposits
$
71,906
$
108
0.60
%
$
54,176
$
195
1.44
%
Money market deposit accounts
390,645
418
0.43
%
134,011
489
1.46
%
Savings and NOW deposits
70,542
52
0.29
%
63,916
71
0.44
%
Time deposits
509,963
2,583
2.03
%
570,794
3,730
2.61
%
Total interest-bearing deposits
$
1,043,056
$
3,161
1.21
%
$
822,897
$
4,485
2.18
%
Federal funds and repos purchased
—
—
—
11
—
—
Subordinated debt
14,831
240
6.47
%
14,802
244
6.59
%
FHLB borrowings
—
—
—
15,370
92
2.39
%
Total interest-bearing liabilities
$
1,057,887
$
3,401
1.29
%
$
853,080
$
4,821
2.26
%
Demand deposits and other liabilities
414,581
236,396
Total liabilities
$
1,472,468
$
1,089,476
Stockholders' Equity
167,288
135,295
Total Liabilities and Stockholders' Equity
$
1,639,756
$
1,224,771
Interest Rate Spread
2.91
%
2.88
%
Net Interest Income
$
13,066
$
10,207
Net Interest Margin
3.33
%
3.49
%
Net Interest Margin, excluding PPP loans(4)
3.21
%
3.49
%
(1)
Includes loans classified as non-accrual
(2)
Includes average PPP balances of $157.8 million and related interest income of approximately $394,000 for the three months ended December 31, 2020
(3)
Total loan interest income includes amortization of deferred loan fees, net of deferred loan costs
(4)
Refer to Appendix for reconciliation of non-GAAP measures
UNAUDITED AVERAGE BALANCE SHEETS, INTEREST AND RATES
(In thousands)
For the year ended December 31, 2020
For the year ended December 31, 2019
Average
Balance
Interest
Income/
Expense
Average
Yields/ Rate
(annualized)
Average
Balance
Interest
Income/
Expense
Average
Yields/ Rate
(annualized)
ASSETS:
Interest earning assets:
Loans (1)(2)(3)
$
1,219,525
$
59,634
4.89
%
$
984,014
$
55,208
5.61
%
Investment securities
76,414
2,007
2.63
%
71,149
2,202
3.09
%
Federal funds and interest-bearing deposits
135,688
431
0.32
%
72,643
1,403
1.93
%
Total interest earning assets
$
1,431,627
$
62,072
4.34
%
$
1,127,806
$
58,813
5.21
%
Other assets
66,561
45,282
Total assets
$
1,498,188
$
1,173,088
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing demand deposits
$
37,431
$
317
0.85
%
$
56,675
$
998
1.76
%
Money market deposit accounts
314,398
2,162
0.69
%
129,606
2,379
1.84
%
Savings and NOW deposits
66,028
221
0.33
%
62,047
289
0.47
%
Time deposits
535,116
12,322
2.30
%
544,084
14,196
2.61
%
Total interest-bearing deposits
$
952,973
$
15,022
1.58
%
$
792,412
$
17,862
2.25
%
Federal funds and repos purchased
—
—
—
37
1
2.70
%
Subordinated debt
14,820
966
6.52
%
14,791
966
6.53
%
FHLB borrowings
6,189
107
1.73
%
21,162
548
2.59
%
Total interest-bearing liabilities
$
973,982
$
16,095
1.65
%
$
828,402
$
19,377
2.34
%
Demand deposits and other liabilities
375,046
215,405
Total liabilities
$
1,349,028
$
1,043,807
Stockholders' Equity
149,160
129,281
Total Liabilities and Stockholders' Equity
$
1,498,188
$
1,173,088
Interest Rate Spread
2.69
%
2.88
%
Net Interest Income
$
45,977
$
39,436
Net Interest Margin
3.21
%
3.50
%
Net Interest Margin, excluding PPP loans(4)
3.21
%
3.50
%
(1)
Includes loans classified as non-accrual
(2)
Includes average PPP balances of $116.7 million and related interest income of approximately $1.2 million for the year ended December 31, 2020
(3)
Total loan interest income includes amortization of deferred loan fees, net of deferred loan costs
(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 Year Ended
December 31,
December 31,
2020
2019
2020
2019
Per share Data and Shares Outstanding
Earnings (losses) per common share (basic and diluted)
$
0.92
$
0.43
$
1.85
$
1.69
Book value per common share
$
18.86
$
16.59
$
18.86
$
16.59
Weighted average common shares (basic and diluted)
7,700,470
8,260,259
8,131,334
8,251,302
Common shares outstanding at end of period
7,443,842
8,260,259
7,443,842
8,260,259
Performance Ratios
Return on average assets (annualized)
1.88
%
1.16
%
1.05
%
1.19
%
Return on average assets, excluding impact of PPP loans (annualized)(2)
1.61
%
1.16
%
0.87
%
1.19
%
Return on average equity (annualized)
18.44
%
10.53
%
10.54
%
10.79
%
Yield on earning assets (annualized)
4.20
%
5.14
%
4.34
%
5.21
%
Cost of interest bearing liabilities (annualized)
1.29
%
2.26
%
1.65
%
2.34
%
Net interest spread
2.91
%
2.88
%
2.69
%
2.88
%
Net interest margin (annualized)
3.33
%
3.49
%
3.21
%
3.50
%
Net interest margin, excluding PPP loans (annualized)(2)
3.21
%
3.49
%
3.21
%
3.50
%
Noninterest income as a percentage of average assets (annualized)
0.46
%
0.38
%
0.50
%
0.41
%
Noninterest expense to average assets (annualized)
1.99
%
2.19
%
2.02
%
2.16
%
Efficiency ratio(3)
54.50
%
58.98
%
56.67
%
57.28
%
Asset Quality
Loans 30-89 days past due to total gross loans
0.01
%
0.03
%
0.01
%
0.03
%
Loans 90 days past due to total gross loans
0.00
%
0.00
%
0.00
%
0.00
%
Non-accrual loans to total gross loans
0.01
%
0.00
%
0.01
%
0.00
%
Other real estate owned
$
1,180
$
1,207
$
1,180
$
1,207
Non-performing assets
$
1,330
$
1,207
$
1,330
$
1,207
Non-performing assets to total assets
0.08
%
0.09
%
0.08
%
0.09
%
Non-performing assets to total assets, excluding PPP loans(2)
0.09
%
0.09
%
0.09
%
0.09
%
Allowance for loan losses to total gross loans
1.03
%
0.92
%
1.03
%
0.92
%
Allowance for loan losses to total loans, excluding PPP loans(2)
1.16
%
0.92
%
1.16
%
0.92
%
Allowance for loan losses to non-performing assets
9.68
7.94
9.68
7.94
Net loan charge-offs (recoveries)
$
(1,480)
$
144
$
317
$
865
Net charge-offs (recoveries) to average gross loans (annualized)
-0.45
%
0.06
%
0.03
%
0.09
%
Net charge-offs (recoveries) to average gross loans, excluding PPP loans (annualized)(2)
-0.52
%
0.06
%
0.03
%
0.09
%
Troubled debt restructurings (total)
Performing in accordance with modified terms
$
—
$
1,482
$
—
$
1,482
Not performing in accordance with modified terms
$
—
$
—
$
—
$
—
Regulatory Capital Ratios (Bank only) (1)
Total risk-based capital ratio
12.13
%
13.74
%
12.13
%
13.74
%
Tier 1 risk-based capital ratio
11.00
%
12.91
%
11.00
%
12.91
%
Leverage ratio
10.78
%
12.65
%
10.78
%
12.65
%
Common equity tier 1 ratio
11.00
%
12.91
%
11.00
%
12.91
%
Other information
Closing stock price
$
16.91
$
23.00
$
16.91
$
23.00
Equity / assets
10.20
%
10.73
%
10.20
%
10.73
%
Equity / assets, excluding PPP loans(2)
11.12
%
10.73
%
11.12
%
10.73
%
Average equity / average assets
10.20
%
11.05
%
9.96
%
11.05
%
Average equity / average assets, less average PPP loans(2)
11.29
%
11.05
%
10.80
%
11.05
%
Number of full time equivalent employees
126
126
126
126
# Full service branch offices
7
6
7
6
(1)
Regulatory capital ratios as of December 31, 2020 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
Reconciliation of Certain Non-GAAP Financial Measures
(In thousands)
For the three months ended December 31,
For the year ended December 31,
2020
2019
2020
2019
Paycheck Protection Program adjustment impact
Loans held for investment (GAAP)
$
1,249,435
$
1,042,146
$
1,249,435
$
1,042,146
Less: PPP loans
135,180
—
135,180
—
Loans held for investment, excluding PPP (non-GAAP)
$
1,114,255
$
1,042,146
$
1,114,255
$
1,042,146
Average loans held for investment (GAAP)
$
1,311,726
$
1,023,614
$
1,219,525
$
984,014
Less: Average PPP loans
157,787
—
116,690
—
Average loans held for investment, excluding PPP (non-GAAP)
$
1,153,939
$
1,023,614
$
1,102,835
984,014
For the three months ended December 31,
For the year ended December 31,
2020
2019
2020
2019
Net interest margin adjustment
Net interest income (GAAP)
$
13,066
$
10,207
$
45,977
$
39,436
Less: PPP fees recognized
1,363
—
2,598
—
Less: PPP interest income earned
394
—
1,167
—
Net interest income, excluding PPP income (non-GAAP)
11,309
10,207
42,212
39,436
Average interest earning assets (GAAP)
1,568,743
1,169,520
1,431,627
1,127,806
Less: average PPP loans
157,787
—
116,690
—
Average interest earning assets, excluding PPP (non-GAAP)
1,410,956
1,169,520
1,314,937
1,127,806
Net interest margin (GAAP)
3.33
%
3.49
%
3.21
%
3.50
%
Net interest margin, excluding PPP (non-GAAP)
3.21
%
3.49
%
3.21
%
3.50
%
For the three months ended December 31,
For the year ended December 31,
2020
2019
2020
2019
Total asset adjustment
Total assets (GAAP)
$
1,643,165
$
1,277,358
$
1,643,165
$
1,277,358
Less: PPP loans
135,180
—
135,180
—
Total assets, excluding PPP loans (non-GAAP)
1,507,985
1,277,358
1,507,985
1,277,358
Total equity (GAAP)
167,665
137,034
167,665
137,034
Equity / assets, excluding PPP loans (non-GAAP)
11.12
%
10.73
%
11.12
%
10.73
%
Average asset adjustment
Average assets (GAAP)
1,639,756
1,224,771
1,498,188
1,173,088
Less: average PPP loans
157,787
—
116,690
—
Total average assets, excluding average PPP loans
1,481,969
1,224,771
1,381,498
1,173,088
Total average equity (GAAP)
167,288
135,295
149,160
129,281
Average equity / average assets, excluding average PPP loans (non-GAAP)
11.29
%
11.05
%
10.80
%
11.02
%
For the three months ended December 31,
For the year ended December 31,
2020
2019
2020
2019
Return on Average Assets, adjusted
Net income (GAAP)
$
7,710
$
3,562
$
15,717
$
13,950
Less: PPP fees recognized
1,363
—
2,598
—
Less: PPP interest income
394
—
1,167
—
Net income, excluding PPP income (non-GAAP)
5,953
3,562
11,952
13,950
Average total assets
1,639,756
1,224,771
1,498,188
1,173,088
Less: average PPP loans
157,787
—
116,690
—
Average total assets, excluding PPP (non-GAAP)
1,481,969
1,224,771
1,381,498
1,173,088
Return on average assets, excluding PPP (non-GAAP)
1.61
%
1.16
%
0.87
%
1.19
%
For the three months ended December 31,
For the year ended December 31,
2020
2019
2020
2019
Nonperforming Assets to total assets, adjusted
Total nonperforming assets (GAAP)
$
1,330
$
1,207
$
1,330
$
1,207
Total assets (GAAP)
1,643,165
1,277,989
1,643,165
1,277,989
Less: PPP loans
135,180
—
135,180
—
Total assets, excluding PPP loans (non-GAAP)
1,507,985
1,277,989
1,507,985
1,277,989
Nonperforming assets to total assets, excluding PPP loans (non-GAAP)
0.09
%
0.09
%
0.09
%
0.09
%
For the three months ended December 31,
For the year ended December 31,
2020
2019
2020
2019
Allowance for loan losses, adjusted
Allowance for loan losses (GAAP)
$
12,877
$
9,584
$
12,877
$
9,584
Total gross loans (GAAP)
1,306,441
1,042,146
1,306,441
1,042,146
Less: PPP loans
135,180
—
135,180
—
Total gross loans, excluding PPP loans (non-GAAP)
1,171,261
1,042,146
1,171,261
1,042,146
Allowance for loan losses to total loans, excluding PPP (non-GAAP)
1.10
%
0.92
%
1.10
%
0.92
%
For the three months ended December 31,
For the year ended December 31,
2020
2019
2020
2019
Net charge-offs to average loans, adjusted
Total net charge-offs (GAAP)
$
(1,480)
144
$
317
$
865
Total average gross loans (GAAP)
1,307,267
1,024,602
1,216,699
984,446
Less: average PPP loans
157,787
—
116,690
—
Total average gross loans, excluding PPP loans (non-GAAP)
1,149,480
1,024,602
1,100,009
984,446
Net charge-offs (recoveries) to average gross loans, excluding PPP (annualized) (non-GAAP)
-0.52
%
0.06
%
0.03
%
0.09
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SOURCE MainStreet Bancshares, Inc.