FAIRFAX, Va., Jan. 18, 2017 /PRNewswire/ -- MainStreet Bancshares, Inc. (OTCQB: MNSB), the holding company for MainStreet Bank, reported record performance for the Bank's year-end 2016 earnings. Net income of $3.9 million for 2016 was 77% higher than 2015 net income of $2.2 million. Earnings per share for year-end 2016 is $0.91 versus $0.51 for 2015.
Net Interest income of $18.5 million for 2016 improved $2.9 million over net interest income for 2015. The net interest margin for 2016 held strong at 3.78% compared to 3.96% for 2015, only a 4.5% decline, due mainly to continued industry interest rate compression.
Non-interest income increased 45% for the year. Non-interest income (no securities gains) was $1.53 million for 2016 compared to $1.05 million (net of securities gains) for 2015. This increase is attributable primarily to the new payment systems group and secondarily to increased fee income on deposit accounts.
Non-interest expense for 2016 was $13.9 million compared to $12.4 million for 2015. This is primarily due to an increase in salaries in support of balance sheet growth. The efficiency ratio continues to show marked improvement, trending down to 69% for 2016 compared to 73% for 2015. The efficiency ratio continues to improve each month for the Bank.
MainStreet Bancshares's balance sheet grew 20% to $576 million during 2016, against December 2015 total assets of $478 million.
Net loans outstanding at year-end 2016 total $464 million against net loans outstanding at year-end 2015 of $398 million, an increase of $66 million, or a nearly 17% improvement. Asset quality remains very strong. Nonperforming loans were a mere four basis points of total gross loans on December 31, 2016.
Non-interest bearing deposits increased to $107.7 million as of year-end 2016, with another $41.6 million of very low cost deposits. This is up substantially from the balance of $68.4 million of no-cost deposits carried at year-end 2015. Non-interest deposits represent 23% of total deposits and very low cost deposits represent another 8.8% of total deposits. Total deposits as of year-end 2016 were $475.2 million an increase of $89.6 million from year-end 2015 deposits of $385.6 million.
MainStreet Bancshares successfully issued $14.3 million in Subordinated Debt as of December 31, 2016. The holding company immediately down streamed $12.5 million to the Bank which is treated as Tier one capital. This capital will be used for general corporate purposes to and support the future growth of the Bank.
The book value per common share was $10.85 as of December 31, 2016. According to OTC Markets, the share price closed on December 31, 2016 at $14.20 per share, or 131% of book value. During 2016, there were 753 trades totaling 987,141 shares with a dollar value of $12,131,702. The high share price for 2016 was $14.20 and the low was $11.02 per share. The mean price was $12.30 and the median was $12.20.
QUOTES: "We had another great year of growth and opportunity," says Jeff W. Dick, Chairman and CEO of MainStreet Bank. "We experienced a significant improvement in non-or-low interest bearing deposit account balances, which aid greatly in funding our balance sheet growth. We continue to make headway in our assets per employee, which is a direct correlation to efficiency. This continuous improvement, combined with the improvements made in fee income and other revenue streams, will make MainStreet an even stronger and higher performing community bank going forward."
Chris Brockett, MainStreet Bank President added, "I spent several months evaluating the local banking market and the various institutions within it. I couldn't be more pleased to be a part of MainStreet Bank - especially with where we are today. The current momentum of the Bank, the additional capital, and the market disruption created by mergers should allow us to further bolster growth and profitability."
ABOUT MAINSTREET BANK: MainStreet operates five branches in Herndon, Fairfax, Fairfax City, McLean and Clarendon. In addition, MainStreet 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((R)). With robust and easy-to-use online business banking technology, MainStreet has literally "put our bank" in well over 800 businesses in the Metropolitan area.
MainStreet also offers a full complement of payment system services for third party payment providers. MainStreet has a nationally known and leading market expert on-staff ready to help payment providers create a solution perfect for their needs.
MainStreet offers a full complement 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 mobile banking and Apple Pay to instant-issue Debit Cards, MainStreet Bank is always looking for ways to improve its customer experience. Additionally, MainStreet released Aircharity((R)) in 2012. Aircharity((R)) is a unique solution that empowers people and organizations to raise money via email, websites and social media. The product allows a customer to open an account and accept donations from debit cards, credit cards and electronic checks.
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.
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This release contains forward-looking statements, including our expectations with respect to future events that are subject to various risks and uncertainties. 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, maintenance and development of well-established and valued client relationships and referral source relationships, and acquisition or loss of key production personnel. Other risks that can affect the Bank are detailed from time to time in our annual reports. 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.
BALANCE SHEETS
(Bank-only Unaudited)
(In thousands, except ratios)
12/31/16 9/30/16 6/30/16 3/31/16 12/31/15
-------- ------- ------- ------- --------
ASSETS
Cash and cash equivalents
Cash and due from banks $17,273 $13,142 $17,483 $9,463 $7,211
Federal funds sold 797 797 805
--- --- --- --- ---
Total cash and cash
equivalents 18,070 13,939 17,483 10,268 7,211
Investment securities
available for sale, at
fair value 37,354 26,434 25,869 33,111 33,657
Investment securities held
to maturity 26,714 26,518 24,357 21,955 19,857
Restricted equity
securities, at cost 3,426 3,423 3,420 3,843 3,508
Loans, net of allowance for
loan losses 463,926 441,335 417,640 412,685 398,291
Premises and equipment, net 12,309 12,500 12,339 12,449 12,526
Other real estate owned,
net 135 135 135 135 135
Accrued interest and other
receivables 2,261 2,265 2,194 2,076 1,857
Bank owned life insurance 10,202 8,126 8,051
Other assets 1,314 1,234 1,437 1,286 1,208
----- ----- ----- ----- -----
Total Assets $575,711 $535,909 $512,925 $497,808 $478,250
======== ======== ======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Non-interest bearing
deposits $107,669 $114,128 $98,505 $81,072 $68,409
Interest bearing DDA
deposits 41,611
Savings and NOW deposits 44,833 41,896 40,243 38,877 38,770
Money market deposits 75,670 76,152 59,906 54,455 59,580
Other time deposits 205,402 214,636 224,753 228,819 218,795
------- ------- ------- ------- -------
Total deposits 475,185 446,812 423,407 403,223 385,554
Securities sold under
agreements to repurchase 2,736 19
Federal Home Loan Bank
advances and other
borrowings 40,192 40,204 44,409 50,229 49,509
Other liabilities 1,540 872 957 1,209 1,044
----- --- --- ----- -----
Total Liabilities 516,917 490,624 468,773 454,661 436,126
Stockholders' Equity:
Common stock 16,650 16,645 16,634 16,624 16,515
Capital surplus 34,652 21,995 21,913 21,814 21,837
Retained earnings 7,700 6,724 5,712 4,839 3,924
Accumulated other
comprehensive income
(loss) (208) (79) (107) (130) (152)
---- --- ---- ---- ----
Total Stockholders' Equity 58,794 45,285 44,152 43,147 42,124
------ ------ ------ ------ ------
Total Liabilities and
Stockholders' Equity $575,511 $535,909 $512,925 $497,808 $478,250
======== ======== ======== ======== ========
Other Financial Highlights
Annualized return on
average assets 0.76% 0.75% 0.73% 0.76% 0.53%
Annualized return on
average equity 8.72% 8.52% 8.25% 8.56% 5.33%
Annualized net interest
margin 3.78% 3.79% 3.82% 3.84% 3.96%
Efficiency ratio 69.47% 71.09% 71.02% 70.06% 73.01%
Gross loans to deposits 98.58% 99.16% 99.74% 103.52% 104.57%
Allowance for loan losses
to total loans 0.85% 0.82% 0.87% 0.88% 0.91%
Past due loans 30-89 days
to total gross loans 0.07% 0.02% 0.01% 0.01% 0.03%
Past due loans 90 days or
more to total gross loans 0.00% 0.00% 0.00% 0.01% 0.00%
Non-accrual loans to total
gross loans 0.04% 0.09% 0.09% 0.17% 0.17%
Quarterly net loan charge-
offs (recoveries) $30 $109 $111 $97 $208
Book value per share $10.85 $10.65 $10.39 $10.16 $10.00
Closing stock price $14.20 $12.60 $11.90 $11.95 $12.35
Regulatory Capital Ratios
Tier 1 risk-based capital
ratio 11.74% 9.67% 10.02% 10.22% 10.27%
Common equity tier 1
capital ratio 11.74% 9.67% 10.02% 10.22% 10.27%
Total risk-based capital
ratio 12.53% 10.46% 10.86% 11.09% 11.17%
Leverage ratio 10.95% 8.66% 8.91% 8.98% 8.90%
STATEMENTS OF INCOME
(Bank-only)
Year-to-Date Three Months Ended
------------ ------------------
12/31/16 12/31/15 12/31/16 9/30/16 6/30/16 3/31/16 12/31/15
-------- -------- -------- ------- ------- ------- --------
INTEREST INCOME:
Interest and fees on
loans $20,192 $17,010 $5,267 $5,111 $4,969 $4,845 $4,793
Interest on
investment
securities 1,287 932 351 339 292 305 245
Interest on federal
funds sold 93 45 19 29 21 24 15
--- --- --- --- --- --- ---
Total interest
income 21,572 17,987 5,637 5,479 5,282 5,174 5,053
INTEREST EXPENSE:
Interest on interest
bearing DDA
deposits 11 11
Interest on savings
and NOW deposits 167 150 44 43 41 39 40
Interest on money
market deposits 300 170 96 83 62 59 55
Interest on other
time deposits 2,327 1,929 579 605 589 554 528
Interest on Federal Home Loan Bank
advances and other
borrowings 266 93 74 71 65 56 45
--- --- --- --- --- --- ---
Total interest
expense 3,071 2,342 804 802 757 708 668
----- ----- --- --- --- --- ---
Net interest income 18,501 15,645 4,833 4,677 4,525 4,466 4,385
Provision for loan
losses 645 1,500 335 90 135 85 145
--- ----- --- --- --- --- ---
Net interest income after provision
for loan losses 17,856 14,145 4,498 4,587 4,390 4,381 4,240
OTHER INCOME:
Deposit account
service charges 736 487 183 205 218 130 135
Gain on securities
available for sale 214
Bank owned life
insurance income 202 76 75 51
Other fee income 589 564 194 156 153 86 125
--- --- --- --- --- --- ---
Total other income 1,527 1,265 453 436 422 216 260
OTHER EXPENSES:
Salaries and
employee benefits 8,588 7,526 2,038 2,208 2,241 2,101 1,873
Furniture and
equipment expenses 1,143 1,114 301 297 267 278 290
Advertising and
marketing 276 394 56 102 78 40 157
Occupancy expenses 734 684 158 200 203 173 162
Outside services 615 387 202 167 136 110 156
Administrative
expenses 350 327 89 93 99 69 84
Other operating
expenses 2,209 1,914 595 571 534 509 549
----- ----- --- --- --- --- ---
Total other expenses 13,915 12,346 3,439 3,638 3,558 3,280 3,271
------ ------ ----- ----- ----- ----- -----
INCOME BEFORE INCOME
TAXES 5,468 3,064 1,512 1,385 1,254 1,317 1,229
Income tax expense 1,593 894 436 373 381 403 283
----- --- --- --- --- --- ---
NET INCOME $3,875 $2,170 $1,076 $1,012 $873 $914 $946
====== ====== ====== ====== ==== ==== ====
Net income per
common share, $0.91 $0.51 $0.25 $0.24 $0.20 $0.22 $0.22
basic and diluted
Weighted average
number of shares, 4,256,442 4,230,717 4,260,232 4,260,232 4,261,118 4,244,104 4,226,098
basic and diluted
Contact:
Jeff W. Dick
(703) 481-4567
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SOURCE MainStreet Bancshares, Inc.
