MainStreet Bank (MNSB) could be a solid addition to your portfolio given its recent upgrade to a Zacks Rank #1 (Strong Buy). An upward trend in earnings estimates -- one of the most powerful forces impacting stock prices -- has triggered this rating change.A company's changing earnings picture is at the core of the Zacks rating. The system tracks the Zacks Consensus Estimate -- the consensus measure of EPS estimates from the sell-side analysts covering the stock -- for the current and following years.The po ...

Jeff Dick Everyone and thank you for joining our earnings webcast. My name is Jeff Dick and I'm the Chairman and CEO of MainStreet Bancshares Inc and MainStreet Bank. I'm joined here today with our Chief Accountant, Alex Vari; our Chief Lending Officer, Tom Floyd; and our Chief Financial Officer, Tom Chmelik. As you can see, we're off camera today, but everything else is the same. Chris Marinac, Director of Research for Janney Montgomery Scott, will join us at the end of the call today with his questions. I ...

2025 First Quarter April 21, 2025 Investors are cautioned that forward-looking statements, which are not historical fact, involve risks, assumptions and uncertainties that change over time, including those detailed in Form 10-K under the section, "Risk Factors". As such, actual results could differ materially from those expressed or implied by forward-looking statements made in this presentation. Management believes that the expectations in these forward- looking statements are based upon reasonable assumpt ...

MainStreet Bank (MNSB) came out with quarterly earnings of $0.25 per share, beating the Zacks Consensus Estimate of $0.21 per share. This compares to earnings of $0.36 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 19.05%. A quarter ago, it was expected that this company would post earnings of $0.23 per share when it actually produced a loss of $0.12, delivering a surprise of -152.17%.Over the last four quarters, the company ...

Financial Performance - MainStreet Bancshares reported a net income of $2.5 million for Q1 2025, with earnings per share at $0.25[1] - Net income available to common shareholders was $1,914 million, a recovery from a loss of $16,706 million in the previous quarter[12] - Earnings per common share for the quarter was $0.25, compared to a loss of $2.20 in the previous quarter[12] - Earnings per common share (basic and diluted) decreased to $0.25 in Q1 2025 from $0.36 in Q1 2024, a decline of approximately 30.6%[20] - The return on average assets (annualized) was 0.46% for Q1 2025, down from 0.65% in Q1 2024[20] Interest Income and Margin - Total interest income for the three months ended March 31, 2025, was $32,963 million, a decrease from $35,119 million in the previous quarter[12] - Net interest income after provision for credit losses was $16,510 million, compared to $12,634 million in the previous quarter, reflecting a significant recovery[12] - For the three months ended March 31, 2025, net interest income was $16,580,000, compared to $15,697,000 for the same period in 2024, reflecting an increase in net interest margin to 3.30% from 3.29%[18] - Net interest income (GAAP) for Q1 2025 was $16,510 million, an increase from $15,625 million in Q1 2024, representing a growth of 5.67%[23] - Total interest income (GAAP) for Q1 2025 reached $32,963 million, compared to $32,469 million in Q1 2024, reflecting an increase of 1.52%[23] - Net interest margin (GAAP) improved to 3.28% in Q1 2025 from 3.27% in Q1 2024[23] - The net interest margin increased to 3.30%, up 34 basis points from the previous quarter, driven by the replacement of higher-cost deposits[2] Loans and Deposits - Total deposits remained stable at $1.9 billion, with funding costs improving by 24 basis points to 3.49%[2] - The loan-to-deposit ratio was 96%, indicating efficient utilization of deposit funds for lending[2] - Total gross loans increased slightly to $1,835,928 million, with commercial real estate loans growing by 4.3% quarter-over-quarter[14] - Total deposits remained stable at $1,908,325 million, with a notable increase in savings and NOW deposits by 92.8% compared to the previous quarter[14] - Nonperforming loans held steady at $21.7 million, with an additional $11.2 million expected to pay off in Q2 2025[3] - Non-performing loans rose to $21,665,000 in Q1 2025, compared to $9,263,000 in Q1 2024, marking an increase of 134.5%[20] Assets and Capital - Total assets were reported at $2.2 billion, with gross loans stable at $1.8 billion[3] - The total assets as of March 31, 2025, were $2,155,461,000, up from $2,037,469,000 in 2024, indicating a growth of approximately 5.8%[18] - Total assets (GAAP) grew to $2,222,845 million as of March 31, 2025, compared to $2,070,015 million in 2024, indicating an increase of 7.37%[23] - The total risk-based capital ratio decreased to 15.83% as of March 31, 2025, from 17.05% in the previous year[20] Expenses and Efficiency - Total non-interest expenses decreased significantly to $14,314 million from $34,431 million in the previous quarter, indicating improved cost management[12] - The efficiency ratio increased to 82.03% in Q1 2025 from 76.01% in Q1 2024, indicating a decline in operational efficiency[20] Strategic Initiatives - The Avenu technology initiative was discontinued due to an extended timeline for expected returns on invested capital[4] - MainStreet Bank operates six branches and offers a fully integrated online and mobile banking solution[4] - The bank continues to focus on enhancing customer experience through various lending products and services[5] - MainStreet Bank was the first community bank in the D.C. area to provide a full online business banking solution[6]

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Financial Position and Capital Management - As of December 31, 2024, the legal lending limit for loans to one borrower was approximately $46.8 million[48]. - The held-to-maturity portfolio totaled $16.1 million, primarily composed of municipal securities and subordinated debt[55]. - The available-for-sale portfolio totaled $55.7 million, including collateralized mortgage-backed securities and U.S. Government agency securities[55]. - The Company issued $30 million in fixed-to-floating subordinated notes in April 2021, with a fixed interest rate of 3.75% until April 2026[56]. - The Company completed the issuance of $43.8 million in fixed-to-floating rate subordinated notes in March 2022, with a fixed interest rate of 4.00% until March 2027[57]. - The Company is classified as a "small bank holding company" with total consolidated assets of less than $3 billion, allowing for capital adequacy evaluation at the bank level[110]. - The capital restoration plan for undercapitalized banks requires guarantees from the bank holding company, with liability limited to the lesser of 5% of the bank's assets or the amount needed for adequate capitalization[112]. - Under Basel III, the Bank must maintain a common equity Tier 1 capital ratio of at least 4.5%, a Tier 1 capital ratio of at least 6%, and a total capital ratio of at least 8%[125]. - As of December 31, 2024, the Bank was classified as "well-capitalized," meeting all regulatory capital standards[130]. - The Company has opted not to utilize the Community Bank Leverage Ratio (CBLR) framework, despite qualifying for it as of December 31, 2024[128]. Regulatory Compliance and Oversight - The company is subject to extensive regulation under the Bank Holding Company Act and other federal laws, impacting its operations and financial condition[99][101]. - The Economic Growth Act increased the asset threshold for certain regulatory benefits from $1 billion to $3 billion, affecting the company's examination cycle[105]. - The Federal Reserve must approve any acquisition of more than 5% of voting stock in other banks or bank holding companies, considering factors such as competition and financial condition[113]. - The Company is subject to restrictions on dividends, requiring net income to cover dividends and maintaining minimum regulatory capital adequacy ratios[115]. - The Volcker Rule generally prohibits bank holding companies from engaging in proprietary trading and certain investment fund activities, but the Company is exempt due to its asset size[119]. - The Federal Reserve has broad authority to restrict activities of bank holding companies that are deemed unsafe or unsound, including dividend payments[120]. - The Bank is subject to certain restrictions on dividends under federal and state laws, requiring regulatory approval for dividends exceeding net undivided profits[137]. - The Bank may not pay any dividend if it is undercapitalized or if the payment would cause it to become undercapitalized[138]. - The Bank's ability to engage in transactions with affiliates is limited to 10% of its capital stock and surplus for any one affiliate[134]. Interest Rate Risk Management - The company's net interest income for a 12-month period is projected to be $69,874,000 at current interest rates, with potential increases of 7.57% to $75,167,000 if rates rise by 400 basis points[446]. - A 100 basis point increase in interest rates would result in a net interest income of $71,964,000, reflecting a 2.99% increase from the current level[446]. - The economic value of equity (EVE) is estimated at $315,663,000 at current interest rates, with a potential decrease of 18.00% to $258,851,000 if rates increase by 400 basis points[447]. - The company is asset sensitive as of December 31, 2024, indicating a potential impact from interest rate fluctuations on net interest income[451]. - The company utilizes interest rate swaps to manage interest rate risk, allowing customers to pay a fixed rate while the company receives a floating rate[452]. - The company has established policies to manage market risk, focusing on minimizing adverse effects from changes in interest rates on net interest income[442]. - The company’s interest rate risk management is overseen by its Asset/Liability Committee, which meets regularly to formulate strategies[443]. - The company’s financial instruments are influenced by changes in interest rates, with various assumptions made regarding loan prepayment speeds and deposit maturity[444]. Employee Diversity and Community Engagement - As of December 31, 2024, the company employed 204 full-time employees, with 73% self-identifying as either female or ethnically diverse[82][84]. - Approximately 12% of employees work remotely full-time, contributing to a broader recruitment pool and reduced carbon footprint[79]. - The company established MainStreet Community Capital in 2022 to support ESG initiatives, focusing on distressed, low-income communities in the Washington, D.C. area[81]. - The company had 25 promotions in 2024, with 5 promotions for ethnically diverse females and 6 for white females[95]. - The age distribution of employees shows 29% are aged 50-59, while 10% are aged 20-29[91]. - The board consists of 9 directors, with 7 being independent, including one female and one African-American male[87][89]. - The company is focused on equal pay for equal work and developing all employees to reach their full potential[90]. - The company has applied for New Markets Tax Credits through the CDFI Fund to support its community development initiatives[81]. Sustainability and ESG Initiatives - The Company aims to support the FinTech industry by providing Banking-as-a-Service (BaaS) solutions to access untapped markets[62]. - The Company has a goal of reducing carbon emissions each year as part of its Environmental, Social, and Governance (ESG) initiatives[75]. - The Company has converted all lighting to LED and added charging stations for electric vehicles to enhance sustainability efforts[77]. Compliance and Legal Risks - The company must comply with federal laws and regulations regarding privacy and information security, impacting how consumer information is handled[155][156]. - The company is subject to regulatory scrutiny regarding compliance with anti-money laundering programs and OFAC sanctions, which could have legal and financial consequences[154]. CRA Performance - The Bank received an "Outstanding" rating in its most recent CRA examination in 2022[145]. FDIC and CFPB Regulations - The FDIC issued a final rule in October 2022 increasing deposit insurance assessments on all financial institutions beginning in the first quarterly assessment period of 2023[141]. - The CFPB finalized a rule in December 2024 requiring financial institutions with over $10 billion in assets to cap overdraft fees at $5.00 or follow TILA requirements[148]. - The Dodd-Frank Act requires incentive compensation rules to be issued jointly by six federal agencies, with the original proposal still pending[140]. - The Federal Reserve must appoint a receiver or conservator for an institution that is critically undercapitalized[131].

Investors might want to bet on MainStreet Bank (MNSB) , as it has been recently upgraded to a Zacks Rank #2 (Buy). This upgrade is essentially a reflection of an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estimate.The power of a ch ...

Group 1 - MainStreet Bank reported a quarterly loss of $0.12 per share, missing the Zacks Consensus Estimate of $0.23, and down from earnings of $0.61 per share a year ago, representing an earnings surprise of -152.17% [1] - The company posted revenues of $16.85 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 0.84%, and down from $17.87 million year-over-year [2] - MainStreet Bank shares have declined approximately 3.3% since the beginning of the year, while the S&P 500 has gained 3.7% [3] Group 2 - The earnings outlook for MainStreet Bank is mixed, with the current consensus EPS estimate for the coming quarter at $0.20 on revenues of $17.03 million, and $1.02 on revenues of $71.35 million for the current fiscal year [7] - The Zacks Industry Rank for Banks - Northeast is currently in the top 11% of over 250 Zacks industries, indicating a favorable outlook for the industry [8] - The estimate revisions trend for MainStreet Bank is currently a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market in the near future [6]

Core Insights - MainStreet Bancshares, Inc. reported a loss of $9.98 million for 2024 due to nonrecurring impairment of capitalized intangible software and resolution of nonperforming assets, but remains strongly capitalized with good liquidity [1][2][3] - The company ended 2024 with a net interest margin of 3.13% and total deposits grew by 13% year-over-year to $1.9 billion, with core deposits making up 75% of total deposits [2][3][4] Financial Performance - The total interest income for the year was $134.615 million, an increase from $124.421 million in 2023, while total interest expense rose to $72.041 million from $47.679 million, resulting in a net interest income of $62.574 million [11][12] - The company resolved 62% of its nonperforming loans and grew its loan portfolio by 6%, with total gross loans reaching $1.835 billion [2][13] Business Strategy - The Avenu Banking-as-a-Service (BaaS) solution launched in October 2024 aims to diversify revenue streams and reach new customer segments, aligning with the company's branch-lite strategy [6][7] - MainStreet Bank focuses on providing innovative embedded banking services and has established fintech partnerships to enhance low-cost deposits and fee income [2][6] Market Position - MainStreet Bank operates in the DC Metropolitan area, which is described as a vibrant market, benefiting from a normalizing interest rate environment with the FOMC cutting rates by a total of 1.0% [3][4] - The bank has a robust line of business and professional lending products, including government contracting lines of credit and commercial real estate loans, and is an SBA Preferred Lender [4][5]