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20.07.2021 14:00:00
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MainStreet Bancshares, Inc. Reports Record Second Quarter 2021 Earnings
FAIRFAX, Va., July 20, 2021 /PRNewswire/ -- MainStreet Bancshares, Inc. (Nasdaq: MNSB & MNSBP), the holding company for MainStreet Bank, reported net income of $7.1 million for the second quarter of 2021. This represents a 16.3% Return on Average Equity, a 1.7% Return on Average Assets, $0.87 per share of common stock (basic and diluted), and a book value of $20.18 per common share.
Net interest income of $13.0 million and noninterest income of $1.6 million for the quarter-ended June 30, 2021 are up 21% and 18% respectively from the same period in 2020.
The Company's cost of funds for the quarter-ended June 30, 2021 is 1.1%, which is improved 37% from the same period a year earlier. The Company remains focused on reducing funding costs, increasing fee income, and improving operating efficiency. The Company's efficiency ratio is 54% for the quarter-ended June 30, 2021, an 11% improvement from the 61% efficiency ratio reported for the same period a year ago.
Total assets were $1.7 billion on June 30, 2021, an increase of 12% from June 30, 2020. Net loans were $1.3 billion on June 30, 2021, which includes the SBA forgiveness of $55 million of Paycheck Protection Program loan balances during the quarter. Asset quality continues to be strong with non-performing assets representing 0.07% of total assets on June 30, 2021.
Non-interest bearing deposits represent a solid one-third of the $1.5 billion in total deposits as of June 30, 2021. In addition, 74% of the Company's total deposits are designated as "core deposits".
A year ago, the Company made a special provision to the Allowance for Loan and Lease Losses (ALLL) based upon an assessment of the potential impact from the COVID 19 pandemic. At that time little was known about the pandemic. A year later and despite the pandemic, the loan portfolio remains strong and continues to perform well. The local economy also continues to be robust and is quickly recovering from the effects of the pandemic. The Company updated its assessment as of June 30, 2021 and decided to release $2.1 million of that special provision. The table below provides a recap of activities relating to the special COVID provision over the past 12 months ending June 30, 2021.
June 30, 2020 Special COVID Provision Adjustments | |
(000's) | |
Starting Balance June 30, 2020 | $4,522 |
+ COVID Provision for loans originated between 6/30/2020 and 6/30/2021 | 658 |
- Release for recovered/repaid loan 12/31/2020 | 1,460 |
- Charged off loan 12/31/2020 | 300 |
- Release for indirect loans 03/31/2021 | 760 |
- Release for commercial portfolio 6/30/2021 | 2,135 |
Ending Balance June 30, 2021 | $525 |
The $525,000 ending balance represents a 40 basis-point special COVID provision for the portfolio of hotel loans. The portfolio of hotel loans is experiencing month-on-month improvements in occupancy rates and room rates, but the Company determined that it is prudent to maintain a special provision for the portfolio of hotel loans.
"Our mid-year performance is the result of a strong effort across every part of the Company," said Abdul Hersiburane, President of MainStreet Bank. "We continue to work very closely with our customers; as a community bank, our success is a direct reflection of our customer's success. To that end, we are focused on growing new client relationships who appreciate the high level of quality and service that comes standard from MainStreet Bank."
"As a Company that embraced leading-edge technology from the start, I am pleased to report that we performed exceptionally well throughout the pandemic," said Jeff W. Dick, Chairman & CEO of MainStreet Bancshares, Inc. and MainStreet Bank. "That same focus on technology provides us with a platform to scale the delivery of our products and services as we grow, and to continue to improve upon our operating efficiency. But the true value of our Company is derived from the team of people who bring that technology to life each day – whether from home or at the office."
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) | ||||||||||||||||||||
June 30, 2021 | March 31, | December 31, | September 30, | June 30, 2020 | ||||||||||||||||
ASSETS | ||||||||||||||||||||
Cash and cash equivalents | ||||||||||||||||||||
Cash and due from banks | $ | 120,121 | $ | 118,399 | $ | 75,935 | $ | 102,480 | $ | 55,273 | ||||||||||
Federal funds sold | 56,164 | 51,598 | 31,593 | 25,074 | 21,081 | |||||||||||||||
Total cash and cash equivalents | 176,285 | 169,997 | 107,528 | 127,554 | 76,354 | |||||||||||||||
Investment securities available for sale, at fair value | 165,791 | 180,028 | 147,414 | 118,844 | 91,823 | |||||||||||||||
Investment securities held to maturity, at carrying value | 26,136 | 26,427 | 22,520 | 23,114 | 23,843 | |||||||||||||||
Restricted equity securities, at cost | 5,039 | 4,664 | 4,616 | 4,616 | 5,041 | |||||||||||||||
Loans held for sale | — | — | 57,006 | — | — | |||||||||||||||
Loans, net of allowance for loan losses of $11,133, $13,215, $12,877, $14,346, and $13,731, respectively | 1,256,436 | 1,299,169 | 1,230,379 | 1,279,899 | 1,259,012 | |||||||||||||||
Premises and equipment, net | 13,929 | 13,975 | 14,289 | 14,474 | 14,416 | |||||||||||||||
Other real estate owned, net | 1,158 | 1,180 | 1,180 | 1,580 | 1,175 | |||||||||||||||
Accrued interest and other receivables | 8,752 | 9,349 | 9,604 | 8,579 | 7,458 | |||||||||||||||
Bank owned life insurance | 35,736 | 25,518 | 25,341 | 25,157 | 24,959 | |||||||||||||||
Other assets | 18,433 | 12,722 | 23,288 | 26,371 | 24,786 | |||||||||||||||
Total Assets | $ | 1,707,695 | $ | 1,743,029 | $ | 1,643,165 | $ | 1,630,188 | $ | 1,528,867 | ||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||||||||
Liabilities: | ||||||||||||||||||||
Non-interest bearing deposits | $ | 486,001 | $ | 492,463 | $ | 370,497 | $ | 416,648 | $ | 388,104 | ||||||||||
Interest bearing DDA deposits | 68,028 | 69,180 | 70,307 | 72,807 | 18,266 | |||||||||||||||
Savings and NOW deposits | 72,353 | 72,259 | 74,099 | 69,015 | 65,876 | |||||||||||||||
Money market deposits | 310,303 | 342,468 | 426,600 | 348,146 | 332,246 | |||||||||||||||
Time deposits | 528,247 | 561,772 | 496,743 | 510,429 | 537,840 | |||||||||||||||
Total deposits | 1,464,932 | 1,538,142 | 1,438,246 | 1,417,045 | 1,342,332 | |||||||||||||||
Federal Home Loan Bank advances and other borrowings | — | — | — | — | 10,000 | |||||||||||||||
Subordinated debt | 40,576 | 14,841 | 14,834 | 14,827 | 14,819 | |||||||||||||||
Other liabilities | 22,559 | 17,868 | 22,420 | 25,055 | 21,546 | |||||||||||||||
Total Liabilities | 1,528,067 | 1,570,851 | 1,475,500 | 1,456,927 | 1,388,697 | |||||||||||||||
Stockholders' Equity: | ||||||||||||||||||||
Preferred stock | 27,263 | 27,263 | 27,263 | 27,527 | — | |||||||||||||||
Common stock | 29,446 | 29,437 | 29,130 | 32,460 | 32,433 | |||||||||||||||
Capital surplus | 66,667 | 66,233 | 66,116 | 75,217 | 74,850 | |||||||||||||||
Retained earnings | 55,676 | 49,090 | 44,179 | 37,105 | 31,933 | |||||||||||||||
Accumulated other comprehensive income | 576 | 155 | 977 | 952 | 954 | |||||||||||||||
Total Stockholders' Equity | 179,628 | 172,178 | 167,665 | 173,261 | 140,170 | |||||||||||||||
Total Liabilities and Stockholders' Equity | $ | 1,707,695 | $ | 1,743,029 | $ | 1,643,165 | $ | 1,630,188 | $ | 1,528,867 | ||||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME INFORMATION (In thousands, except share and per share data) | ||||||||||||||||||||||||||||
Year-to-Date | Three Months Ended | |||||||||||||||||||||||||||
June 30, | June 30, | June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||||||||
INTEREST INCOME: | ||||||||||||||||||||||||||||
Interest and fees on loans | $ | 31,049 | $ | 28,619 | $ | 15,257 | $ | 15,792 | $ | 15,933 | $ | 15,083 | $ | 14,399 | ||||||||||||||
Interest on investment securities | 1,127 | 997 | 597 | 530 | 519 | 491 | 496 | |||||||||||||||||||||
Interest on federal funds sold | 35 | 404 | 20 | 15 | 15 | 12 | 9 | |||||||||||||||||||||
Total interest income | 32,211 | 30,020 | 15,874 | 16,337 | 16,467 | 15,586 | 14,904 | |||||||||||||||||||||
INTEREST EXPENSE: | ||||||||||||||||||||||||||||
Interest on interest bearing DDA deposits | 110 | 153 | 55 | 55 | 108 | 56 | 36 | |||||||||||||||||||||
Interest on savings and NOW deposits | 89 | 114 | 47 | 42 | 52 | 55 | 50 | |||||||||||||||||||||
Interest on money market deposits | 497 | 1,252 | 220 | 277 | 418 | 490 | 474 | |||||||||||||||||||||
Interest on time deposits | 4,244 | 6,900 | 1,994 | 2,250 | 2,583 | 2,841 | 3,333 | |||||||||||||||||||||
Interest on Federal Home Loan Bank advances and other borrowings | — | 94 | — | — | — | 13 | 44 | |||||||||||||||||||||
Interest on subordinated debt | 805 | 482 | 567 | 238 | 240 | 245 | 241 | |||||||||||||||||||||
Total interest expense | 5,745 | 8,995 | 2,883 | 2,862 | 3,401 | 3,700 | 4,178 | |||||||||||||||||||||
Net interest income | 26,466 | 21,025 | 12,991 | 13,475 | 13,066 | 11,886 | 10,726 | |||||||||||||||||||||
Provision for (recovery of) loan losses | (1,760) | 5,925 | (2,080) | 320 | (2,950) | 635 | 5,575 | |||||||||||||||||||||
Net interest income after provision for (recovery of) loan losses | 28,226 | 15,100 | 15,071 | 13,155 | 16,016 | 11,251 | 5,151 | |||||||||||||||||||||
NON-INTEREST INCOME: | ||||||||||||||||||||||||||||
Deposit account service charges | 1,160 | 920 | 621 | 539 | 509 | 487 | 433 | |||||||||||||||||||||
Bank owned life insurance income | 395 | 397 | 218 | 177 | 183 | 199 | 198 | |||||||||||||||||||||
Loan swap fee income | — | 826 | — | — | 833 | 1,851 | 423 | |||||||||||||||||||||
Net gain on held-to-maturity securities | 3 | — | — | 3 | — | — | — | |||||||||||||||||||||
Net gain on sale of loans | 474 | — | 130 | 344 | — | 33 | — | |||||||||||||||||||||
Other fee income | 969 | 589 | 586 | 383 | 378 | 288 | 264 | |||||||||||||||||||||
Total other income | 3,001 | 2,732 | 1,555 | 1,446 | 1,903 | 2,858 | 1,318 | |||||||||||||||||||||
NON-INTEREST EXPENSES: | ||||||||||||||||||||||||||||
Salaries and employee benefits | 9,430 | 8,696 | 4,663 | 4,767 | 4,746 | 4,495 | 4,263 | |||||||||||||||||||||
Furniture and equipment expenses | 1,026 | 954 | 500 | 526 | 601 | 574 | 500 | |||||||||||||||||||||
Advertising and marketing | 677 | 447 | 402 | 275 | 290 | 266 | 191 | |||||||||||||||||||||
Occupancy expenses | 693 | 578 | 387 | 306 | 360 | 332 | 311 | |||||||||||||||||||||
Outside services | 616 | 481 | 280 | 336 | 263 | 215 | 205 | |||||||||||||||||||||
Administrative expenses | 291 | 341 | 141 | 150 | 166 | 167 | 177 | |||||||||||||||||||||
Other operating expenses | 2,950 | 3,005 | 1,500 | 1,449 | 1,732 | 1,589 | 1,713 | |||||||||||||||||||||
Total other expenses | 15,683 | 14,502 | 7,873 | 7,809 | 8,158 | 7,638 | 7,360 | |||||||||||||||||||||
Income before income tax expense (benefit) | 15,544 | 3,330 | 8,753 | 6,792 | 9,761 | 6,471 | (891) | |||||||||||||||||||||
Income tax expense (benefit) | 2,969 | 494 | 1,627 | 1,342 | 2,051 | 1,299 | (257) | |||||||||||||||||||||
Net Income (loss) | 12,575 | 2,836 | 7,126 | 5,450 | 7,710 | 5,172 | (634) | |||||||||||||||||||||
Preferred stock dividends | 1,078 | — | 539 | 539 | 635 | — | — | |||||||||||||||||||||
Net income (loss) available to common shareholders | 11,497 | $ | 2,836 | $ | 6,587 | $ | 4,911 | $ | 7,075 | $ | 5,172 | $ | (634) | |||||||||||||||
Net income (loss) per common share, basic and diluted | 1.53 | $ | 0.34 | $ | 0.87 | $ | 0.65 | $ | 0.92 | $ | 0.63 | $ | (0.08) | |||||||||||||||
Weighted average number of common shares, basic and diluted | 7,535,061 | 8,275,344 | 7,546,452 | 7,523,547 | 7,700,470 | 8,272,570 | 8,263,370 | |||||||||||||||||||||
UNAUDITED LOAN, DEPOSIT AND BORROWING DETAIL (In thousands) | ||||||||||||||||||||||||||||||||
June 30, 2021 | March 31, 2021 | June 30, 2020 | Percentage Change | |||||||||||||||||||||||||||||
$ Amount | % of Total | $ Amount | % of Total | $ Amount | % of Total | Last 3 Mos | Last 12 Mos | |||||||||||||||||||||||||
LOANS: | ||||||||||||||||||||||||||||||||
Construction and land development loans | $ | 328,480 | 25.8 | % | $ | 327,393 | 24.8 | % | $ | 283,971 | 22.2 | % | 0.3 | % | 15.7 | % | ||||||||||||||||
Residential real estate loans | 190,426 | 14.9 | % | 181,649 | 13.8 | % | 171,411 | 13.4 | % | 4.8 | % | 11.1 | % | |||||||||||||||||||
Commercial real estate loans | 503,514 | 39.5 | % | 499,133 | 37.8 | % | 497,279 | 38.8 | % | 0.9 | % | 1.3 | % | |||||||||||||||||||
Commercial industrial loans - Other | 93,837 | 7.4 | % | 92,680 | 7.0 | % | 96,640 | 7.6 | % | 1.2 | % | -2.9 | % | |||||||||||||||||||
Commercial industrial loans - PPP Loans | 124,578 | 9.8 | % | 179,835 | 13.6 | % | 171,650 | 13.4 | % | -30.7 | % | -27.4 | % | |||||||||||||||||||
Consumer loans | 33,643 | 2.6 | % | 39,564 | 3.0 | % | 59,551 | 4.6 | % | -15.0 | % | -43.5 | % | |||||||||||||||||||
Total Gross Loans | $ | 1,274,478 | 100.0 | % | $ | 1,320,254 | 100.0 | % | $ | 1,280,502 | 100.0 | % | -3.5 | % | -0.5 | % | ||||||||||||||||
Less: Allowance for loan losses | (11,133) | (13,215) | (13,731) | |||||||||||||||||||||||||||||
Net deferred loan fees | (6,909) | (7,870) | (7,759) | |||||||||||||||||||||||||||||
Net Loans | $ | 1,256,436 | $ | 1,299,169 | $ | 1,259,012 | ||||||||||||||||||||||||||
DEPOSITS: | ||||||||||||||||||||||||||||||||
Non-interest bearing demand deposits | $ | 486,001 | 33.2 | % | 492,463 | 32.0 | % | $ | 388,104 | 28.9 | % | -1.3 | % | 25.2 | % | |||||||||||||||||
Interest-bearing demand deposits: | ||||||||||||||||||||||||||||||||
Demand deposits | 68,028 | 4.6 | % | 69,180 | 4.5 | % | 18,266 | 1.4 | % | -1.7 | % | 272.4 | % | |||||||||||||||||||
Savings and NOW deposits | 72,353 | 4.9 | % | 72,259 | 4.7 | % | 65,876 | 4.9 | % | 0.1 | % | 9.8 | % | |||||||||||||||||||
Money market accounts | 310,303 | 21.2 | % | 342,468 | 22.3 | % | 332,246 | 24.8 | % | -9.4 | % | -6.6 | % | |||||||||||||||||||
Certificates of deposit $250,000 or more | 303,769 | 20.7 | % | 287,154 | 18.7 | % | 213,051 | 15.9 | % | 5.8 | % | 42.6 | % | |||||||||||||||||||
Certificates of deposit less than $250,000 | 224,478 | 15.4 | % | 274,618 | 17.8 | % | 324,789 | 24.1 | % | -18.3 | % | -30.9 | % | |||||||||||||||||||
Total Deposits | $ | 1,464,932 | 100.0 | % | $ | 1,538,142 | 100.0 | % | $ | 1,342,332 | 100.0 | % | -4.8 | % | 9.1 | % | ||||||||||||||||
BORROWINGS: | ||||||||||||||||||||||||||||||||
Federal Home Loan Bank advances | — | 0.0 | % | — | 0.0 | % | 10,000 | 40.3 | % | 0.0 | % | -100.0 | % | |||||||||||||||||||
Subordinated debt | 40,576 | 100.0 | % | 14,841 | 100.0 | % | 14,819 | 59.7 | % | 173.4 | % | 173.8 | % | |||||||||||||||||||
Total Borrowings | $ | 40,576 | 100.0 | % | $ | 14,841 | 100.0 | % | $ | 24,819 | 100.0 | % | 173.4 | % | 63.5 | % | ||||||||||||||||
Total Deposits and Borrowings | $ | 1,505,508 | $ | 1,552,983 | $ | 1,367,151 | -3.1 | % | 10.1 | % | ||||||||||||||||||||||
Core customer funding sources (1) | $ | 1,118,795 | 74.3 | % | $ | 1,159,207 | 74.6 | % | $ | 939,474 | 68.7 | % | -3.5 | % | 19.1 | % | ||||||||||||||||
Brokered and listing service sources (2) | 346,137 | 23.0 | % | 378,935 | 24.4 | % | 402,858 | 29.5 | % | -8.7 | % | -14.1 | % | |||||||||||||||||||
Federal Home Loan Bank advances | — | 0.0 | % | — | 0.0 | % | 10,000 | 0.7 | % | 0.0 | % | -100.0 | % | |||||||||||||||||||
Subordinated debt (3) | 40,576 | 2.7 | % | 14,841 | 1.0 | % | 14,819 | 1.1 | % | 173.4 | % | 173.8 | % | |||||||||||||||||||
Total Funding Sources | $ | 1,505,508 | 100.0 | % | $ | 1,552,983 | 100.0 | % | $ | 1,367,151 | 100.0 | % | -3.1 | % | 10.1 | % | ||||||||||||||||
(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 June 30, 2021 | For the three months ended June 30, 2020 | |||||||||||||||||||||||
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) | $ | 1,302,722 | $ | 15,257 | 4.70 | % | $ | 1,213,250 | $ | 14,399 | 4.76 | % | ||||||||||||
Investment securities | 90,820 | 597 | 2.64 | % | 73,186 | 496 | 2.72 | % | ||||||||||||||||
Federal funds and interest-bearing deposits | 245,257 | 20 | 0.03 | % | 126,164 | 9 | 0.03 | % | ||||||||||||||||
Total interest earning assets | $ | 1,638,799 | $ | 15,874 | 3.89 | % | $ | 1,412,600 | $ | 14,904 | 4.23 | % | ||||||||||||
Other assets | 69,950 | 69,741 | ||||||||||||||||||||||
Total assets | $ | 1,708,749 | $ | 1,482,341 | ||||||||||||||||||||
Liabilities and Stockholders' Equity: | ||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||
Interest-bearing demand deposits | $ | 68,714 | $ | 55 | 0.32 | % | $ | 17,507 | $ | 36 | 0.82 | % | ||||||||||||
Money market deposit accounts | 322,332 | 220 | 0.27 | % | 303,118 | 474 | 0.63 | % | ||||||||||||||||
Savings and NOW deposits | 71,747 | 47 | 0.26 | % | 62,733 | 50 | 0.32 | % | ||||||||||||||||
Time deposits | 538,766 | 1,994 | 1.48 | % | 548,728 | 3,333 | 2.44 | % | ||||||||||||||||
Total interest-bearing deposits | $ | 1,001,559 | $ | 2,316 | 0.93 | % | $ | 932,086 | $ | 3,893 | 1.68 | % | ||||||||||||
Federal funds and repos purchased | 1 | — | — | 1 | — | — | ||||||||||||||||||
Subordinated debt | 39,716 | 567 | 5.73 | % | 14,816 | 241 | 6.52 | % | ||||||||||||||||
FHLB borrowings | — | — | — | 10,000 | 44 | 1.76 | % | |||||||||||||||||
Total interest-bearing liabilities | $ | 1,041,276 | $ | 2,883 | 1.11 | % | $ | 956,903 | $ | 4,178 | 1.75 | % | ||||||||||||
Demand deposits and other liabilities | 491,857 | 383,480 | ||||||||||||||||||||||
Total liabilities | $ | 1,533,133 | $ | 1,340,383 | ||||||||||||||||||||
Stockholders' Equity | 175,616 | 141,958 | ||||||||||||||||||||||
Total Liabilities and Stockholders' Equity | $ | 1,708,749 | $ | 1,482,341 | ||||||||||||||||||||
Interest Rate Spread | 2.78 | % | 2.48 | % | ||||||||||||||||||||
Net Interest Income | $ | 12,991 | $ | 10,726 | ||||||||||||||||||||
Net Interest Margin | 3.18 | % | 3.05 | % | ||||||||||||||||||||
Net Interest Margin, excluding PPP loans(4) | 3.10 | % | 3.08 | % | ||||||||||||||||||||
(1) | Includes loans classified as non-accrual |
(2) | Includes average PPP balances of $161.8 million and related interest income of approximately $404,000 for the three months ended June 30, 2021 |
(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 six months ended June 30, 2021 | For the six months ended June 30, 2020 | |||||||||||||||||||||||
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) | $ | 1,311,085 | $ | 31,049 | 4.78 | % | $ | 1,135,995 | $ | 28,619 | 5.08 | % | ||||||||||||
Investment securities | 90,347 | 1,127 | 2.52 | % | 73,512 | 997 | 2.73 | % | ||||||||||||||||
Federal funds and interest-bearing deposits | 219,648 | 35 | 0.03 | % | 131,239 | 404 | 0.62 | % | ||||||||||||||||
Total interest earning assets | $ | 1,621,080 | $ | 32,211 | 4.01 | % | $ | 1,340,746 | $ | 30,020 | 4.52 | % | ||||||||||||
Other assets | 70,337 | 64,550 | ||||||||||||||||||||||
Total assets | $ | 1,691,417 | $ | 1,405,296 | ||||||||||||||||||||
Liabilities and Stockholders' Equity: | ||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||
Interest-bearing demand deposits | $ | 68,556 | $ | 110 | 0.32 | % | $ | 25,532 | $ | 153 | 1.21 | % | ||||||||||||
Money market deposit accounts | 367,424 | 497 | 0.27 | % | 266,638 | 1,252 | 0.95 | % | ||||||||||||||||
Savings and NOW deposits | 70,875 | 89 | 0.25 | % | 62,716 | 114 | 0.37 | % | ||||||||||||||||
Time deposits | 509,465 | 4,244 | 1.68 | % | 557,921 | 6,900 | 2.49 | % | ||||||||||||||||
Total interest-bearing deposits | $ | 1,016,320 | $ | 4,940 | 0.98 | % | $ | 912,807 | $ | 8,419 | 1.86 | % | ||||||||||||
Federal funds and repos purchased | — | — | — | 1 | — | — | ||||||||||||||||||
Subordinated debt | 27,346 | 805 | 5.94 | % | 14,813 | 482 | 6.56 | % | ||||||||||||||||
FHLB borrowings | — | — | — | 10,165 | 94 | 1.86 | % | |||||||||||||||||
Total interest-bearing liabilities | $ | 1,043,666 | $ | 5,745 | 1.11 | % | $ | 937,786 | $ | 8,995 | 1.93 | % | ||||||||||||
Demand deposits and other liabilities | 474,566 | 326,949 | ||||||||||||||||||||||
Total liabilities | $ | 1,518,232 | $ | 1,264,735 | ||||||||||||||||||||
Stockholders' Equity | 173,185 | 140,561 | ||||||||||||||||||||||
Total Liabilities and Stockholders' Equity | $ | 1,691,417 | $ | 1,405,296 | ||||||||||||||||||||
Interest Rate Spread | 2.90 | % | 2.59 | % | ||||||||||||||||||||
Net Interest Income | $ | 26,466 | $ | 21,025 | ||||||||||||||||||||
Net Interest Margin | 3.29 | % | 3.16 | % | ||||||||||||||||||||
Net Interest Margin, excluding PPP loans(4) | 3.15 | % | 3.18 | % | ||||||||||||||||||||
(1) | Includes loans classified as non-accrual and loans held for sale |
(2) | Includes average PPP balances of $158.0 million and related interest income of approximately $709,000 for the three months ended June 30, 2021 |
(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 Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
Per share Data and Shares Outstanding | |||||||||||||||
Earnings per common share (basic and diluted) | $ | 0.87 | $ | (0.08) | $ | 1.53 | $ | 0.34 | |||||||
Book value per common share | $ | 20.18 | $ | 16.96 | $ | 20.18 | $ | 16.96 | |||||||
Weighted average common shares (basic and diluted) | 7,546,452 | 8,263,370 | 7,535,061 | 8,275,344 | |||||||||||
Common shares outstanding at end of period | 7,549,398 | 8,263,941 | 7,549,398 | 8,263,941 | |||||||||||
Performance Ratios | |||||||||||||||
Return on average assets (annualized) | 1.67 | % | (0.17) | % | 1.50 | % | 0.41 | % | |||||||
Return on average assets, excluding impact of PPP loans (annualized)(2) | 1.44 | % | (0.47) | % | 1.18 | % | 0.29 | % | |||||||
Return on average equity (annualized) | 16.28 | % | (1.79) | % | 14.64 | % | 4.07 | % | |||||||
Return on average common equity (annualized) | 17.81 | % | (1.79) | % | 15.89 | % | 4.07 | % | |||||||
Yield on earning assets (annualized) | 3.89 | % | 4.23 | % | 4.01 | % | 4.52 | % | |||||||
Cost of interest bearing liabilities (annualized) | 1.11 | % | 1.75 | % | 1.11 | % | 1.93 | % | |||||||
Net interest spread | 2.78 | % | 2.48 | % | 2.90 | % | 2.59 | % | |||||||
Net interest margin (annualized) | 3.18 | % | 3.05 | % | 3.29 | % | 3.16 | % | |||||||
Net interest margin, excluding PPP loans (annualized)(2) | 3.10 | % | 3.08 | % | 3.15 | % | 3.18 | % | |||||||
Noninterest income as a percentage of average assets (annualized) | 0.37 | % | 0.36 | % | 0.36 | % | 0.39 | % | |||||||
Noninterest expense to average assets (annualized) | 1.85 | % | 1.99 | % | 1.87 | % | 2.08 | % | |||||||
Efficiency ratio(3) | 54.12 | % | 61.11 | % | 53.22 | % | 61.04 | % | |||||||
Asset Quality | |||||||||||||||
Commercial real estate loans to total capital (4) | 346.23 | % | 405.25 | % | 346.23 | % | 405.25 | % | |||||||
Construction loans to total capital (5) | 154.63 | % | 170.04 | % | 154.63 | % | 170.04 | % | |||||||
Loans 30-89 days past due to total gross loans | 0.07 | % | 0.01 | % | 0.07 | % | 0.01 | % | |||||||
Loans 90 days past due to total gross loans | 0.00 | % | 0.23 | % | 0.00 | % | 0.23 | % | |||||||
Non-accrual loans to total gross loans | 0.00 | % | 0.24 | % | 0.00 | % | 0.24 | % | |||||||
Other real estate owned | $ | 1,158 | $ | 1,175 | $ | 1,158 | $ | 1,175 | |||||||
Non-performing assets | $ | 1,158 | $ | 4,225 | $ | 1,158 | $ | 4,225 | |||||||
Non-performing assets to total assets | 0.07 | % | 0.28 | % | 0.07 | % | 0.28 | % | |||||||
Non-performing assets to total assets, excluding PPP loans(2) | 0.07 | % | 0.31 | % | 0.07 | % | 0.31 | % | |||||||
Allowance for loan losses to total gross loans | 0.87 | % | 1.21 | % | 0.87 | % | 1.21 | % | |||||||
Allowance for loan losses to total loans, excluding PPP loans(2) | 0.97 | % | 1.24 | % | 0.97 | % | 1.24 | % | |||||||
Allowance for loan losses to non-performing assets | 9.61 | 3.66 | 9.61 | 3.66 | |||||||||||
Net loan charge-offs (recoveries) | $ | 2 | $ | 1,742 | $ | (16) | $ | 1,778 | |||||||
Net charge-offs (recoveries) to average gross loans (annualized) | 0.00 | % | 0.58 | % | 0.00 | % | 0.30 | % | |||||||
Net charge-offs (recoveries) to average gross loans, excluding PPP loans | 0.00 | % | 0.65 | % | 0.00 | % | 0.32 | % | |||||||
Troubled debt restructurings (total) | |||||||||||||||
Performing in accordance with modified terms | $ | — | $ | — | $ | — | $ | — | |||||||
Not performing in accordance with modified terms | $ | — | $ | — | $ | — | $ | — | |||||||
Regulatory Capital Ratios (Bank only) (1) | |||||||||||||||
Total risk-based capital ratio | 16.25 | % | 13.26 | % | 16.25 | % | 13.26 | % | |||||||
Tier 1 risk-based capital ratio | 15.40 | % | 12.16 | % | 15.40 | % | 12.16 | % | |||||||
Leverage ratio | 11.78 | % | 10.23 | % | 11.78 | % | 10.23 | % | |||||||
Common equity tier 1 ratio | 15.40 | % | 12.16 | % | 15.40 | % | 12.16 | % | |||||||
Other information | |||||||||||||||
Closing stock price | $ | 22.58 | $ | 13.20 | $ | 22.58 | $ | 13.20 | |||||||
Equity / assets | 10.52 | % | 9.17 | % | 10.52 | % | 9.17 | % | |||||||
Equity / assets, excluding PPP loans(2) | 11.34 | % | 10.33 | % | 11.34 | % | 10.33 | % | |||||||
Average equity / average assets | 10.28 | % | 9.58 | % | 10.24 | % | 10.00 | % | |||||||
Average equity / average assets, less average PPP loans(2) | 11.35 | % | 10.54 | % | 11.29 | % | 10.51 | % | |||||||
Number of full time equivalent employees | 129 | 121 | 129 | 121 | |||||||||||
# Full service branch offices | 7 | 7 | 7 | 7 | |||||||||||
(1) | Regulatory capital ratios as of June 30, 2021 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 non-owner occupied and construction loans as a percentage of Bank capital |
(5) | Construction loans as a percentage of Bank capital |
Reconciliation of Certain Non-GAAP Financial Measures (Dollars In thousands) | ||||||||||||||||
For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Paycheck Protection Program adjustment impact | ||||||||||||||||
Loans held for investment (GAAP) | $ | 1,274,478 | $ | 1,280,502 | $ | 1,274,478 | $ | 1,280,502 | ||||||||
Less: PPP loans | 124,578 | 171,650 | 124,578 | 171,650 | ||||||||||||
Loans held for investment, excluding PPP (non-GAAP) | $ | 1,149,900 | $ | 1,108,852 | $ | 1,149,900 | $ | 1,108,852 | ||||||||
Average loans held for investment (GAAP) | $ | 1,302,722 | $ | 1,213,250 | $ | 1,311,085 | $ | 1,135,995 | ||||||||
Less: Average PPP loans | 161,784 | 135,247 | 158,029 | 67,623 | ||||||||||||
Average loans held for investment, excluding PPP (non-GAAP) | $ | 1,140,938 | $ | 1,078,003 | $ | 1,153,056 | 1,068,372 | |||||||||
For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Net interest margin adjustment | ||||||||||||||||
Net interest income (GAAP) | $ | 12,991 | $ | 10,726 | $ | 26,466 | $ | 21,025 | ||||||||
Less: PPP fees recognized | 1,180 | 591 | 2,821 | 591 | ||||||||||||
Less: PPP interest income earned | 404 | 337 | 790 | 337 | ||||||||||||
Net interest income, excluding PPP income (non-GAAP) | 11,407 | 9,798 | 22,855 | 20,097 | ||||||||||||
Average interest earning assets (GAAP) | 1,638,799 | 1,412,600 | 1,621,080 | 1,340,746 | ||||||||||||
Less: average PPP loans | 161,784 | 135,247 | 158,029 | 67,623 | ||||||||||||
Average interest earning assets, excluding PPP (non-GAAP) | 1,477,015 | 1,277,353 | 1,463,051 | 1,273,123 | ||||||||||||
Net interest margin (GAAP) | 3.18 | % | 3.05 | % | 3.29 | % | 3.16 | % | ||||||||
Net interest margin, excluding PPP (non-GAAP) | 3.10 | % | 3.08 | % | 3.15 | % | 3.18 | % | ||||||||
For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Total asset adjustment | ||||||||||||||||
Total assets (GAAP) | $ | 1,707,695 | $ | 1,528,867 | $ | 1,707,695 | $ | 1,528,867 | ||||||||
Less: PPP loans | 124,578 | 171,650 | 124,578 | 171,650 | ||||||||||||
Total assets, excluding PPP loans (non-GAAP) | 1,583,117 | 1,357,217 | 1,583,117 | 1,357,217 | ||||||||||||
Total equity (GAAP) | 179,628 | 140,170 | 179,628 | 140,170 | ||||||||||||
Equity / assets, excluding PPP loans (non-GAAP) | 11.35 | % | 10.33 | % | 11.35 | % | 10.33 | % | ||||||||
Average asset adjustment | ||||||||||||||||
Average assets (GAAP) | 1,708,749 | 1,482,341 | 1,691,417 | 1,405,297 | ||||||||||||
Less: average PPP loans | 161,784 | 135,247 | 158,029 | 67,623 | ||||||||||||
Total average assets, excluding average PPP loans | 1,546,965 | 1,347,094 | 1,533,388 | 1,337,674 | ||||||||||||
Total average equity (GAAP) | 175,616 | 141,958 | 173,185 | 140,561 | ||||||||||||
Average equity / average assets, excluding average PPP loans (non-GAAP) | 11.35 | % | 10.54 | % | 11.29 | % | 10.51 | % | ||||||||
For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Return on Average Assets, adjusted | ||||||||||||||||
Net income (loss) (GAAP) | $ | 7,126 | $ | (634) | $ | 12,575 | $ | 2,836 | ||||||||
Less: PPP fees recognized | 1,180 | 591 | 2,821 | 591 | ||||||||||||
Less: PPP interest income earned | 404 | 337 | 790 | 337 | ||||||||||||
Net income (loss), excluding PPP income (non-GAAP) | 5,542 | (1,562) | 8,964 | 1,908 | ||||||||||||
Average total assets | 1,708,749 | 1,482,341 | 1,691,417 | 1,405,297 | ||||||||||||
Less: average PPP loans | 161,784 | 135,247 | 158,029 | 67,623 | ||||||||||||
Average total assets, excluding PPP (non-GAAP) | 1,546,965 | 1,347,094 | 1,533,388 | 1,337,674 | ||||||||||||
Return on average assets, excluding PPP (non-GAAP) | 1.44 | % | (0.47) | % | 1.18 | % | 0.29 | % | ||||||||
For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Nonperforming Assets to total assets, adjusted | ||||||||||||||||
Total nonperforming assets (GAAP) | $ | 1,158 | $ | 4,225 | $ | 1,158 | $ | 4,225 | ||||||||
Total assets (GAAP) | 1,707,695 | 1,528,867 | 1,707,695 | 1,528,867 | ||||||||||||
Less: PPP loans | 124,578 | 171,650 | 124,578 | 171,650 | ||||||||||||
Total assets, excluding PPP loans (non-GAAP) | 1,583,117 | 1,357,217 | 1,583,117 | 1,357,217 | ||||||||||||
Nonperforming assets to total assets, excluding PPP loans (non-GAAP) | 0.07 | % | 0.31 | % | 0.07 | % | 0.31 | % | ||||||||
For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Allowance for loan losses, adjusted | ||||||||||||||||
Allowance for loan losses (GAAP) | $ | 11,133 | $ | 13,731 | $ | 11,133 | $ | 13,731 | ||||||||
Total gross loans (GAAP) | 1,274,478 | 1,280,502 | 1,274,478 | 1,280,502 | ||||||||||||
Less: PPP loans | 124,578 | 171,650 | 124,578 | 171,650 | ||||||||||||
Total gross loans, excluding PPP loans (non-GAAP) | 1,149,900 | 1,108,852 | 1,149,900 | 1,108,852 | ||||||||||||
Allowance for loan losses to total loans, excluding PPP (non-GAAP) | 0.97 | % | 1.24 | % | 0.97 | % | 1.24 | % | ||||||||
For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Net charge-offs to average loans, adjusted | ||||||||||||||||
Total net charge-offs (recoveries) (GAAP) | $ | 2 | 1,742 | $ | (16) | $ | 1,778 | |||||||||
Total average gross loans (GAAP) | 1,302,722 | 1,213,250 | 1,311,085 | 1,136,885 | ||||||||||||
Less: average PPP loans | 161,784 | 135,247 | 158,029 | 67,623 | ||||||||||||
Total average gross loans, excluding PPP loans (non-GAAP) | 1,140,938 | 1,078,003 | 1,153,056 | 1,069,262 | ||||||||||||
Net charge-offs (recoveries) to average gross loans, excluding PPP (annualized) (non-GAAP) | 0.00 | % | 0.65 | % | 0.00 | % | 0.32 | % | ||||||||
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SOURCE MainStreet Bancshares, Inc.
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