Core Viewpoint - The article emphasizes the importance of confirming the sustainability of stock trends for profitable short-term investing, highlighting the need for sound fundamentals and positive earnings estimates to maintain momentum. Group 1: Trend Analysis - The trend in short-term investing is crucial, and confirming its sustainability is essential for profitability [1][2] - A predefined "Recent Price Strength" screen can help identify stocks on an uptrend supported by strong fundamentals [3] Group 2: Company Spotlight - MainStreet Bank (MNSB) - MNSB has shown a solid price increase of 18.5% over the past 12 weeks, indicating investor confidence in its potential upside [4] - The stock has maintained a price increase of 1.8% over the last four weeks, suggesting the trend is still intact [5] - MNSB is trading at 83.8% of its 52-week High-Low Range, indicating a potential breakout [5] Group 3: Fundamental Strength - MNSB holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises [6] - The stock has an Average Broker Recommendation of 1 (Strong Buy), reflecting high optimism from the brokerage community regarding its near-term performance [7] Group 4: Additional Insights - The price trend for MNSB is expected to remain positive, and there are other stocks that also meet the "Recent Price Strength" criteria [8] - The Zacks Research Wizard can assist in backtesting stock-picking strategies to ensure past profitability [9]

Core Viewpoint - The sustainability of a trend is crucial for successful short-term investing, and confirming fundamental factors is essential to maintain momentum in stocks [1][2]. Group 1: Trend Analysis - Timing entries into a trend significantly impacts investment success, as trends can reverse before exiting a trade [1][2]. - A predefined "Recent Price Strength" screen helps identify stocks with strong fundamentals that can sustain their upward momentum [3]. Group 2: Company Spotlight - MainStreet Bank (MNSB) - MNSB has shown a solid price increase of 24.1% over the past 12 weeks, indicating investor confidence in its potential upside [4]. - The stock has also increased by 11.8% over the last four weeks, suggesting that the upward trend is still intact [5]. - MNSB is trading at 95% of its 52-week high-low range, indicating a potential breakout [5]. Group 3: Fundamental Strength - MNSB holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises [6]. - The stock's Average Broker Recommendation is also 1 (Strong Buy), reflecting high optimism from the brokerage community regarding its near-term performance [7]. - The historical performance of Zacks Rank 1 stocks shows an average annual return of +25% since 1988, reinforcing the potential for MNSB [7]. Group 4: Investment Strategy - In addition to MNSB, there are other stocks that meet the criteria of the "Recent Price Strength" screen, suggesting further investment opportunities [8]. - The effectiveness of stock-picking strategies can be backtested using tools like the Zacks Research Wizard, which can help identify profitable investment strategies [9].

PART I – FINANCIAL INFORMATION [Item 1 – Consolidated Financial Statements](index=3&type=section&id=Item%201%20%E2%80%93%20Consolidated%20Financial%20Statements) This section presents the unaudited consolidated financial statements, including the Statements of Financial Condition, Income, Comprehensive Income, Stockholders' Equity, and Cash Flows, highlighting a decrease in total assets and deposits, a significant increase in net income and EPS for the quarter, and a shift in investing activities from cash usage to provision [Consolidated Statements of Financial Condition](index=4&type=section&id=Consolidated%20Statements%20of%20Financial%20Condition) This chapter details the company's financial position, showing a decrease in total assets, cash and cash equivalents, and total deposits Total Assets: | Date | Amount (in thousands) | | :--- | :--- | | June 30, 2025 | $2,114,781 | | December 31, 2024 | $2,228,098 | | **Change** | **-$113,317 (-5.1%)** | Cash and Cash Equivalents: | Date | Amount (in thousands) | | :--- | :--- | | June 30, 2025 | $133,284 | | December 31, 2024 | $207,708 | | **Change** | **-$74,424 (-35.8%)** | Total Deposits: | Date | Amount (in thousands) | | :--- | :--- | | June 30, 2025 | $1,798,547 | | December 31, 2024 | $1,907,794 | | **Change** | **-$109,247 (-5.7%)** | [Unaudited Consolidated Statements of Income](index=5&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Income) This chapter presents the company's income performance, indicating a substantial increase in net income and earnings per common share for the three months ended June 30, 2025 Net Income (Three Months Ended June 30): | Period | Amount (in thousands) | | :--- | :--- | | 2025 | $4,590 | | 2024 | $2,618 | | **Change** | **+$1,972 (+75.3%)** | Net Income (Six Months Ended June 30): | Period | Amount (in thousands) | | :--- | :--- | | 2025 | $7,043 | | 2024 | $5,923 | | **Change** | **+$1,120 (+18.9%)** | Earnings Per Common Share - Basic (Three Months Ended June 30): | Period | EPS | | :--- | :--- | | 2025 | $0.53 | | 2024 | $0.27 | | **Change** | **+$0.26 (+96.3%)** | [Unaudited Consolidated Statements of Comprehensive Income](index=7&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Comprehensive%20Income) This chapter outlines the company's comprehensive income, showing a significant increase for the three months ended June 30, 2025, and a positive shift in unrealized gains on available-for-sale securities Comprehensive Income (Three Months Ended June 30): | Period | Amount (in thousands) | | :--- | :--- | | 2025 | $4,498 | | 2024 | $2,505 | | **Change** | **+$1,993 (+79.6%)** | Unrealized gain (loss) on available for sale securities (Six Months Ended June 30): | Period | Amount (in thousands) | | :--- | :--- | | 2025 | $247 | | 2024 | $(565) | | **Change** | **+$812 (Shift from loss to gain)** | [Unaudited Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) This chapter details changes in stockholders' equity, reflecting an increase primarily driven by net income and stock-based compensation Total Stockholders' Equity: | Date | Amount (in thousands) | | :--- | :--- | | June 30, 2025 | $213,470 | | December 31, 2024 | $207,991 | | **Change** | **+$5,479 (+2.6%)** | - Net income for the six months ended June 30, 2025, was **$7.0 million**, contributing to the increase in equity[13](index=13&type=chunk) - Stock-based compensation expense for the six months ended June 30, 2025, was **$1.2 million**[13](index=13&type=chunk) [Unaudited Consolidated Statements of Cash Flows](index=10&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Cash%20Flows) This chapter analyzes the company's cash movements, showing decreased cash from operating activities, a shift to cash provided by investing activities, and increased cash used in financing activities Net cash provided by operating activities (Six Months Ended June 30): | Period | Amount (in thousands) | | :--- | :--- | | 2025 | $2,645 | | 2024 | $4,817 | | **Change** | **-$2,172 (-45.1%)** | Net cash provided by (used in) investing activities (Six Months Ended June 30): | Period | Amount (in thousands) | | :--- | :--- | | 2025 | $37,104 (provided) | | 2024 | $(78,784) (used) | | **Change** | **+$115,888 (Shift from use to provide)** | Net cash (used in) provided by financing activities (Six Months Ended June 30): | Period | Amount (in thousands) | | :--- | :--- | | 2025 | $(114,173) (used) | | 2024 | $50,913 (provided) | | **Change** | **-$165,086 (Shift from provide to use)** | [Notes to Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed notes to the unaudited consolidated financial statements, covering organizational structure, accounting policies, investment securities, loans, derivatives, fair value measurements, earnings per share, accumulated other comprehensive loss, property held for sale, and segment reporting, highlighting the Company's transition to an accelerated filer, changes in investment and loan portfolios, and the impact of strategic shifts in the Financial Technology segment [Note 1. Organization, Basis of Presentation and Impact of Recently Issued Accounting Pronouncements](index=12&type=section&id=Note%201.%20Organization%2C%20Basis%20of%20Presentation%20and%20Impact%20of%20Recently%20Issued%20Accounting%20Pronouncements) This note describes the company's structure, accounting basis, and the impact of recent accounting pronouncements, including its transition to an accelerated filer and adoption of new segment reporting standards - MainStreet Bancshares, Inc. is a financial holding company, parent to MainStreet Bank and MainStreet Community Capital, LLC[16](index=16&type=chunk) - The Company transitioned from an 'emerging growth company' to an 'accelerated filer' effective December 31, 2024, and remains a 'smaller reporting company'[17](index=17&type=chunk) - ASU 2023-07, 'Segment Reporting,' was adopted on December 31, 2024, leading to updated interim disclosures in Note 9[25](index=25&type=chunk) [Note 2. Investment Securities](index=16&type=section&id=Note%202.%20Investment%20Securities) This note details the company's investment securities portfolio, showing a slight decrease in total investment securities and significant unrealized losses on available-for-sale securities due to interest rate changes Total Investment Securities (Fair Value for AFS, Amortized Cost for HTM): | Date | Amount (in thousands) | | :--- | :--- | | June 30, 2025 | $71,000 | | December 31, 2024 | $71,825 | | **Change** | **-$825 (-1.1%)** | Investment Securities Held-to-Maturity (HTM) Amortized Cost: | Date | Amount (in thousands) | | :--- | :--- | | June 30, 2025 | $14,846 | | December 31, 2024 | $16,078 | | **Change** | **-$1,232 (-7.7%)** | - Unrealized losses on available-for-sale securities at June 30, 2025, totaled **$9.7 million**, primarily due to changes in interest rates rather than credit deterioration[35](index=35&type=chunk)[40](index=40&type=chunk) [Note 3. Loans Receivable](index=20&type=section&id=Note%203.%20Loans%20Receivable) This note provides details on the company's loan portfolio, indicating a decrease in net loans and a significant reduction in nonaccrual loans Net Loans: | Date | Amount (in thousands) | | :--- | :--- | | June 30, 2025 | $1,767,432 | | December 31, 2024 | $1,810,556 | | **Change** | **-$43,124 (-2.4%)** | Nonaccrual Loans: | Date | Amount (in thousands) | | :--- | :--- | | June 30, 2025 | $7,169 | | December 31, 2024 | $21,650 | | **Change** | **-$14,481 (-66.9%)** | - Loan modifications for borrowers experiencing financial difficulty during the six months ended June 30, 2025, totaled **$20.4 million** in amortized cost basis, primarily involving extended terms on interest-only payments or interest rate decreases[61](index=61&type=chunk) [Note 3.1 Unfunded Commitments](index=33&type=section&id=Note%203.1%20Unfunded%20Commitments) This note outlines the company's off-balance sheet credit exposure, showing a slight decrease in the allowance for credit losses and a reduced recovery of credit losses Allowance for Credit Losses on Off-Balance Sheet Credit Exposure: | Date | Amount (in thousands) | | :--- | :--- | | June 30, 2025 | $272 | | December 31, 2024 | $287 | | **Change** | **-$15 (-5.2%)** | - The recovery of credit losses on off-balance sheet credit exposure for the six months ended June 30, 2025, was **$(15) thousand**, compared to **$(652) thousand** in 2024, indicating a reduced recovery[73](index=73&type=chunk) [Note 4. Derivatives and Risk Management Activities](index=34&type=section&id=Note%204.%20Derivatives%20and%20Risk%20Management%20Activities) This note describes the company's derivative instruments and risk management, specifically detailing a decrease in the notional amount of matched interest rate swaps Notional Amount of Matched Interest Rate Swaps: | Date | Amount (in thousands) | | :--- | :--- | | June 30, 2025 | $210,394 | | December 31, 2024 | $230,417 | | **Change** | **-$20,023 (-8.7%)** | - The Company did not record any interest rate swap fee income for the three and six months ended June 30, 2025 or 2024[77](index=77&type=chunk) [Note 5. Fair Value Presentation](index=35&type=section&id=Note%205.%20Fair%20Value%20Presentation) This note presents assets and liabilities measured at fair value, detailing the valuation levels for investment securities, derivatives, property held for sale, and loans Assets Measured at Fair Value on a Recurring Basis (June 30, 2025): | Asset Type | Level 1 (in thousands) | Level 2 (in thousands) | Level 3 (in thousands) | Total (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Investment securities AFS | $0 | $68,408 | $1,210 | $69,618 | | Derivative asset | $0 | $14,677 | $0 | $14,677 | | **Total** | **$0** | **$83,085** | **$1,210** | **$84,295** | - Property held for sale, valued at **$3.2 million** at June 30, 2025, is measured at fair value on a nonrecurring basis using Level 3 inputs (transaction price and estimated selling costs)[90](index=90&type=chunk) - Loans, net, had an estimated fair value of **$1.78 billion** at June 30, 2025, with significant unobservable (Level 3) inputs[94](index=94&type=chunk) [Note 6. Earnings Per Common Share](index=39&type=section&id=Note%206.%20Earnings%20Per%20Common%20Share) This note calculates earnings per common share, showing a significant increase in net income available to common shareholders and basic and diluted EPS for the three months ended June 30, 2025 Net Income Available to Common Shareholders (Three Months Ended June 30): | Period | Amount (in thousands) | | :--- | :--- | | 2025 | $4,051 | | 2024 | $2,079 | | **Change** | **+$1,972 (+94.8%)** | Basic and Diluted EPS (Three Months Ended June 30): | Period | EPS | | :--- | :--- | | 2025 | $0.53 | | 2024 | $0.27 | | **Change** | **+$0.26 (+96.3%)** | [Note 7. Accumulated Other Comprehensive Loss](index=39&type=section&id=Note%207.%20Accumulated%20Other%20Comprehensive%20Loss) This note details the components of accumulated other comprehensive loss, indicating a reduction in the total loss and a decrease in unrealized losses on available-for-sale investment securities Total Accumulated Other Comprehensive Loss: | Date | Amount (in thousands) | | :--- | :--- | | June 30, 2025 | $(7,464) | | December 31, 2024 | $(7,711) | | **Change** | **+$247 (+3.2% reduction in loss)** | Unrealized loss on investment securities available-for-sale: | Date | Amount (in thousands) | | :--- | :--- | | June 30, 2025 | $(9,693) | | December 31, 2024 | $(10,014) | | **Change** | **+$321 (Reduction in loss)** | [Note 8. Property Held For Sale](index=40&type=section&id=Note%208.%20Property%20Held%20For%20Sale) This note describes property designated as held for sale, including a recently acquired building complex with two buildings expected to be sold by year-end 2025 - The Company acquired a building complex during the three months ended June 30, 2025, designating two buildings as held for sale with a carrying amount of **$3.2 million**[99](index=99&type=chunk) - The sale of these two buildings is currently expected to close before the end of 2025[99](index=99&type=chunk) [Note 9. Segment Reporting](index=41&type=section&id=Note%209.%20Segment%20Reporting) This note provides financial information by business segment, highlighting increased profit in Core Banking and a larger loss in Financial Technology due to strategic shifts and nonrecurring costs Segment Profit (Loss) (Six Months Ended June 30): | Segment | 2025 (in thousands) | 2024 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | | Core Banking | $12,984 | $8,123 | +$4,861 (+59.8%) | | Financial Technology | $(4,195) | $(1,132) | -$3,063 (-270.6%) | | **Consolidated** | **$8,789** | **$6,991** | **+$1,798 (+25.7%)** | - The Financial Technology segment's increased loss was due to expensing software-related costs after Avenu deployment and nonrecurring costs (contract termination, severance) from pivoting away from certain BaaS services[102](index=102&type=chunk) [Item 2 – Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202%20%E2%80%93%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial performance and condition, covering forward-looking statements, economic impacts, an overview of the Company's operations, critical accounting policies, and detailed comparisons of income statements and financial condition for the three and six months ended June 30, 2025, versus prior periods, with key themes including improved net income driven by lower interest expense, a shift to credit loss recoveries, and strategic adjustments in the Financial Technology segment, alongside a decrease in total assets and deposits [Forward-Looking Statements](index=43&type=section&id=Forward-Looking%20Statements) This chapter discusses potential future events and factors that could materially affect the company's actual results, emphasizing that these statements are subject to risks and uncertainties - Important factors that could cause actual results to differ materially include general economic conditions, competition, inflation, interest rate environment, regulatory changes, cyber threats, and asset quality deterioration[104](index=104&type=chunk) - The Company disclaims any obligation to revise or update any forward-looking statements[106](index=106&type=chunk) [Economic Impact of Federal Spending Reductions and New Legislation](index=45&type=section&id=Economic%20Impact%20of%20Federal%20Spending%20Reductions%20and%20New%20Legislation) This chapter analyzes the potential adverse economic effects of federal spending reductions and new legislation on the company's primary market areas - Federal spending reductions, hiring freezes, and layoffs in the Company's primary market areas may have adverse economic effects, particularly after severance payments expire in late 2025[107](index=107&type=chunk) - The 'One Big Beautiful Bill' signed on July 4, 2025, permanently extended the new market tax credit program and is not expected to have a material impact on the Company's financial condition[108](index=108&type=chunk)[122](index=122&type=chunk) [Overview](index=45&type=section&id=Overview) This chapter provides a general description of the company's business, including its community banking focus, strategic pivot in BaaS services, and Community Development Entity activities - MainStreet Bank is a community commercial bank in the Washington, D.C. metropolitan area, focusing on personalized services and advanced banking technology[112](index=112&type=chunk)[117](index=117&type=chunk) - The Company pivoted away from certain operating BaaS (Banking-as-a-Service) services during the quarter ended March 31, 2025[119](index=119&type=chunk) - MainStreet Community Capital, LLC is a certified Community Development Entity (CDE) focused on New Market Tax Credit allocations for Low-Income Communities[122](index=122&type=chunk) [Critical Accounting Policies](index=47&type=section&id=Critical%20Accounting%20Policies) This chapter outlines the company's significant accounting policies that require complex judgments and estimates, noting their consistency with prior periods except for recently adopted pronouncements - The Company's accounting policies conform to US GAAP and banking industry practices, requiring significant estimates and assumptions[123](index=123&type=chunk) - Critical accounting policies have remained unchanged since the 2024 Form 10-K, except for those noted under 'Recently Adopted Accounting Developments' in Note 1[124](index=124&type=chunk) [Comparison of Statements of Income for the Three Months Ended June 30, 2025 and 2024](index=47&type=section&id=Comparison%20of%20Statements%20of%20Income%20for%20the%20Three%20Months%20Ended%20June%2030%2C%202025%20and%202024) This chapter compares the company's income statement performance for the three-month periods, highlighting increased net income driven by higher net interest income and a shift to credit loss recovery - Net income increased by **$2.0 million** to **$4.6 million**, driven by a **$3.2 million** increase in net interest income and a shift from a provision for credit losses to a recovery[125](index=125&type=chunk)[126](index=126&type=chunk) - Total interest income increased by **$850 thousand** (**2.5%**) to **$34.4 million**, primarily due to a **$788 thousand** increase in interest and fees on loans[127](index=127&type=chunk)[128](index=128&type=chunk) - Total interest expense decreased by **$2.4 million** (**13.3%**) to **$15.5 million**, mainly due to a **$2.2 million** decrease in interest expense on interest-bearing deposits[131](index=131&type=chunk)[132](index=132&type=chunk) - Net interest income increased by **$3.2 million** (**20.6%**) to **$18.9 million**, with the net interest margin rising **55 basis points** to **3.75%** on a tax-equivalent basis[133](index=133&type=chunk) - Non-interest expense increased by **$1.9 million** (**14.9%**) to **$14.7 million**, including **$1.8 million** in non-recurring costs related to pivoting from BaaS services[148](index=148&type=chunk) [Comparison of Statements of Income for the Six Months Ended June 30, 2025 and 2024](index=54&type=section&id=Comparison%20of%20Statements%20of%20Income%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) This chapter compares the company's income statement performance for the six-month periods, showing increased net income due to higher net interest income and lower interest expense - Net income increased by **$1.1 million** to **$7.0 million**, driven by a **$4.1 million** increase in net interest income and a **$2.8 million** decrease in total interest expense[150](index=150&type=chunk) - Total interest income increased by **$1.4 million** (**2.1%**) to **$67.4 million**, primarily due to a **$1.3 million** increase in interest and fees on loans[151](index=151&type=chunk)[152](index=152&type=chunk) - Total interest expense decreased by **$2.8 million** (**8.1%**) to **$31.9 million**, mainly due to a **$2.4 million** decrease in interest expense on interest-bearing deposits[155](index=155&type=chunk)[156](index=156&type=chunk) - Net interest income increased by **$4.1 million** (**13.1%**) to **$35.4 million**, with the net interest margin rising **28 basis points** to **3.52%** on a tax-equivalent basis[157](index=157&type=chunk)[158](index=158&type=chunk) - Non-interest expense increased by **$3.7 million** (**14.8%**) to **$29.1 million**, primarily due to increases in salaries and employee benefits (including severance costs) and outside services related to the BaaS pivot[173](index=173&type=chunk) [Comparison of Statements of Financial Condition at June 30, 2025 and December 31, 2024](index=60&type=section&id=Comparison%20of%20Statements%20of%20Financial%20Condition%20at%20June%2030%2C%202025%20and%20December%2031%2C%202024) This chapter compares the company's financial position, detailing decreases in total assets, net loans, and total deposits, alongside a significant reduction in non-performing assets and strong capital adequacy - Total assets decreased by **$113.3 million** (**5.1%**) to **$2.11 billion**, primarily due to decreases in cash and cash equivalents (**$74.4 million**) and net loans (**$43.1 million**)[175](index=175&type=chunk) - Net loans decreased by **$43.1 million** (**2.4%**) to **$1.77 billion**, driven by significant decreases in construction and land development loans and commercial & industrial loans[177](index=177&type=chunk) - Total non-performing assets decreased significantly by **$14.48 million** (**66.9%**) to **$7.17 million**[202](index=202&type=chunk) - Total deposits decreased by **$109.2 million** (**5.7%**) to **$1.80 billion**, mainly due to decreases in money market and time deposits, partially offset by a significant increase in savings and NOW deposits[203](index=203&type=chunk) - All capital adequacy ratios exceed 'well capitalized' and internal minimum targets, both pre- and post-stress[192](index=192&type=chunk)[218](index=218&type=chunk) [Use of Certain Non-GAAP Financial Measures](index=74&type=section&id=Use%20of%20Certain%20Non-GAAP%20Financial%20Measures) This chapter explains the company's use of non-GAAP financial measures to supplement GAAP performance evaluation and enhance comparability, with provided reconciliations - The Company uses non-GAAP financial measures, such as adjusted net interest income and net interest margin (fully-taxable equivalent), to supplement GAAP performance evaluation and enhance comparability[220](index=220&type=chunk)[221](index=221&type=chunk) - Reconciliations of these non-GAAP measures to the most directly comparable U.S. GAAP financial measures are provided[221](index=221&type=chunk)[222](index=222&type=chunk) [Item 3 – Quantitative and Qualitative Disclosures about Market Risk](index=75&type=section&id=Item%203%20%E2%80%93%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section addresses the Company's market risk exposure, primarily focusing on interest rate risk, managed by the Asset/Liability Committee (ALCO) using simulation models to estimate the impact of interest rate changes on net interest income, indicating a positive impact from both significant increases and decreases in rates over a 12-month period [Market Risk Management](index=75&type=section&id=Market%20Risk%20Management) This chapter describes the company's approach to managing market risk, primarily focusing on interest rate risk and the role of the Asset/Liability Committee - The Company's most significant market risk exposure is interest rate risk in its balance sheet[223](index=223&type=chunk) - The Asset/Liability Committee (ALCO) is responsible for establishing and monitoring policies and strategies to manage interest rate risk[224](index=224&type=chunk) [Interest Rate Market Risk](index=75&type=section&id=Interest%20Rate%20Market%20Risk) This chapter analyzes the company's exposure to interest rate fluctuations, using simulation models to project the impact of rate changes on net interest income Net Interest Income Stress Simulation (June 30, 2025): | Basis Point Change in Interest Rates | Year 1 Change From Level | | :--- | :--- | | +400 | 3.03% | | +300 | 3.36% | | +200 | 2.83% | | +100 | 1.84% | | Level | — | | -100 | (1.48)% | | -200 | (1.42)% | | -300 | 3.29% | | -400 | 8.57% | - Simulation models are used to estimate the impact of immediate and sustained changes in interest rates on net interest income over a 12-month period[225](index=225&type=chunk)[229](index=229&type=chunk) [Item 4 – Controls and Procedures](index=75&type=section&id=Item%204%20%E2%80%93%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the second fiscal quarter of 2025 - The Company's disclosure controls and procedures were evaluated as effectively designed and operating as of June 30, 2025[230](index=230&type=chunk) - No material changes in internal control over financial reporting occurred during the second fiscal quarter of 2025[231](index=231&type=chunk) PART II – OTHER INFORMATION [Item 1 – Legal Proceedings](index=76&type=section&id=Item%201%20%E2%80%93%20Legal%20Proceedings) As of June 30, 2025, the Company was not involved in any material legal proceedings beyond routine business operations, and no material proceedings are pending or threatened by governmental authorities - The Company was not involved in any material legal proceedings as of June 30, 2025[232](index=232&type=chunk) [Item 1A – Risk Factors](index=76&type=section&id=Item%201A%20%E2%80%93%20Risk%20Factors) This section refers readers to the 'Risk Factors' in the Company's Annual Report on Form 10-K for December 31, 2024, and the 'Forward-Looking Statements' in Part I, Item 2 of this 10-Q for a discussion of certain risk factors - For a discussion of risk factors, reference is made to the Annual Report on Form 10-K for the year ended December 31, 2024, and 'Forward-Looking Statements' in Part I, Item 2 of this Form 10-Q[233](index=233&type=chunk) [Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds](index=76&type=section&id=Item%202%20%E2%80%93%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The Company did not repurchase any common shares during the three months ended June 30, 2025, and the maximum approximate dollar value of shares that may yet be purchased under existing plans or programs remains at $3.093 million - No common shares were repurchased during the three months ended June 30, 2025[235](index=235&type=chunk) - The maximum approximate dollar value of shares that may yet be purchased under existing plans or programs is **$3.1 million**[235](index=235&type=chunk) [Item 5 – Other Information](index=76&type=section&id=Item%205%20%E2%80%93%20Other%20Information) During the fiscal quarter ended June 30, 2025, no directors or executive officers informed the Company of the adoption, modification, or termination of any Rule 10b5-1 trading arrangements - No directors or executive officers adopted, modified, or terminated any Rule 10b5-1 trading arrangements during the fiscal quarter ended June 30, 2025[236](index=236&type=chunk) [Item 6 – Exhibits](index=77&type=section&id=Item%206%20%E2%80%93%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including various certifications (Rule 13a-14(a) for CEO and CFO, Section 1350) and Inline XBRL documents for the financial statements - Exhibits include Rule 13a-14(a) Certifications of the Chief Executive Officer and Chief Financial Officer, and Section 1350 Certification[237](index=237&type=chunk) - Inline XBRL documents for the consolidated financial statements are filed herewith[237](index=237&type=chunk) [SIGNATURES](index=78&type=section&id=SIGNATURES) The Quarterly Report on Form 10-Q was signed on August 8, 2025, by Jeff W. Dick, Chairman & Chief Executive Officer, and Thomas J. Chmelik, Senior Executive Vice President and Chief Financial Officer - The report was signed by Jeff W. Dick (Chairman & Chief Executive Officer) and Thomas J. Chmelik (Senior Executive Vice President and Chief Financial Officer) on August 8, 2025[241](index=241&type=chunk)

Group 1: Earnings Performance - MainStreet Bank reported quarterly earnings of $0.53 per share, exceeding the Zacks Consensus Estimate of $0.44 per share, and up from $0.27 per share a year ago, representing an earnings surprise of +20.45% [1] - The company posted revenues of $19.86 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 10.68%, compared to year-ago revenues of $16.16 million [2] - Over the last four quarters, MainStreet Bank has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Group 2: Stock Performance and Outlook - MainStreet Bank shares have increased approximately 10.4% since the beginning of the year, outperforming the S&P 500's gain of 7.2% [3] - The current consensus EPS estimate for the upcoming quarter is $0.53 on revenues of $18.3 million, and for the current fiscal year, it is $1.77 on revenues of $72.04 million [7] - The estimate revisions trend for MainStreet Bank was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market in the near future [6] Group 3: Industry Context - The Banks - Northeast industry, to which MainStreet Bank belongs, is currently in the top 30% of over 250 Zacks industries, suggesting a favorable outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

[Executive Summary & Company Overview](index=1&type=section&id=Executive%20Summary%20%26%20Company%20Overview) This section provides an overview of MainStreet Bancshares Inc.'s strong Q2 2025 financial performance, management insights, company profile, and forward-looking statement disclaimers [Second Quarter 2025 Highlights](index=1&type=section&id=Second%20Quarter%202025%20Highlights) MainStreet Bancshares Inc. reported strong second-quarter earnings for Q2 2025, driven by significant increases in net income and net interest margin, outperforming market expectations. The company also highlighted strong asset quality and capital | Metric | Q2 2025 | Change from Previous Quarter | | :----------------------- | :---------- | :--------------------------- | | Net Income | $4.6 million | +$2.1 million | | Net Interest Margin (NIM) | 3.75% | +45 basis points | | Net Interest Income | $19.3 million | +$2.8 million | | Earnings Per Common Share | $0.53 | - | [Management Commentary](index=1&type=section&id=Management%20Commentary) Management attributed the strong performance to team dedication, credit discipline, and strategic deposit management. They emphasized building the core banking franchise and maintaining a well-utilized loan-to-deposit ratio, which contributed to NIM growth. The company also continues to evaluate share repurchases - CEO Jeff W. Dick highlighted the team's hard work and focus on financial performance, affirming the commitment to building the core banking franchise[2](index=2&type=chunk) - Chief Lending Officer Tom Floyd noted the loan portfolio's excellent condition due to credit discipline and community knowledge[2](index=2&type=chunk) - CFO Alex Vari stated that the loan to deposit ratio remained well utilized at **99%**, with strategic deposit management directly contributing to net interest margin growth[2](index=2&type=chunk) - The Company maintains an active share repurchase plan with approximately **$3.1 million** in available capacity[2](index=2&type=chunk) [About MainStreet Bank](index=1&type=section&id=About%20MainStreet%20Bank) MainStreet Bank operates six branches in the Washington, D.C. metropolitan area, offering extensive online and mobile banking solutions. It provides a robust line of business and professional lending products, including government contracting, commercial real estate, and SBA loans, and was a pioneer in online business banking and multi-million-dollar FDIC insurance solutions - MainStreet Bank operates **six branches** in Herndon, Fairfax, McLean, Leesburg, Clarendon, and Washington, D.C., complemented by **55,000 free ATMs** and integrated online/mobile banking[3](index=3&type=chunk) - The bank offers 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, as well as SBA 7A and 504 lending solutions[4](index=4&type=chunk) - MainStreet Bank was the first community bank in the Washington, D.C. metropolitan area to offer a full online business banking solution and the first in Virginia to offer CDARS for multi-million-dollar FDIC insurance[5](index=5&type=chunk) [Forward-Looking Statements](index=1&type=section&id=Forward-Looking%20Statements) The release contains forward-looking statements subject to various risks and uncertainties, including fluctuations in interest rates, adverse economic conditions, client relationships, and key personnel changes. Readers are cautioned that actual results may differ materially from projections, and the company does not undertake to update these statements - The release includes forward-looking statements, as defined by the Private Securities Litigation Reform Act of 1995, which are subject to various risks and uncertainties[6](index=6&type=chunk) - Factors that could cause actual results to differ materially include fluctuations in market interest rates, adverse economic conditions, maintenance of client relationships, and acquisition or loss of key personnel[6](index=6&type=chunk) - The company cautions readers that the list of factors is not exclusive and does not undertake to update forward-looking statements to reflect future events[6](index=6&type=chunk) [Financial Statements](index=2&type=section&id=Financial%20Statements) This section presents the unaudited consolidated balance sheets and statements of income, detailing asset, liability, equity, revenue, and expense trends for MainStreet Bancshares Inc [Unaudited Consolidated Balance Sheet Information](index=2&type=section&id=UNAUDITED%20CONSOLIDATED%20BALANCE%20SHEET%20INFORMATION) MainStreet Bancshares' balance sheet shows a decrease in total assets and liabilities from March 31, 2025, to June 30, 2025, primarily driven by a reduction in total deposits. Stockholders' equity saw a slight increase over the quarter | Metric (in thousands) | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :-------------------- | :------------ | :------------- | :------------ | | Total Assets | $2,114,781 | $2,222,845 | $2,093,746 | | Total Liabilities | $1,901,311 | $2,013,227 | $1,869,031 | | Total Deposits | $1,798,547 | $1,908,325 | $1,755,363 | | Total Stockholders' Equity | $213,470 | $209,618 | $224,715 | - Total assets decreased by **$108.064 million (4.86%)** from March 31, 2025, to June 30, 2025[8](index=8&type=chunk) - Total deposits decreased by **$109.778 million (5.75%)** from March 31, 2025, to June 30, 2025[8](index=8&type=chunk) [Unaudited Consolidated Statements of Income (Loss) Information](index=3&type=section&id=UNAUDITED%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME%20%28LOSS%29%20INFORMATION) The company reported a significant increase in net income for Q2 2025 compared to the previous quarter and the prior year, driven by higher net interest income and a recovery in credit losses. Total interest income increased, while total interest expense decreased quarter-over-quarter, contributing to a stronger net interest income | Metric (in thousands) | Q2 2025 (3 Months) | Q1 2025 (3 Months) | Q2 2024 (3 Months) | YTD 2025 (6 Months) | YTD 2024 (6 Months) | | :-------------------- | :----------------- | :----------------- | :----------------- | :------------------ | :------------------ | | Total Interest Income | $34,286 | $32,963 | $33,436 | $67,249 | $65,905 | | Total Interest Expense | $15,496 | $16,453 | $17,871 | $31,949 | $34,715 | | Net Interest Income | $18,790 | $16,510 | $15,565 | $35,300 | $31,190 | | Provision for (recovery of) credit losses | ($543) | $0 | $638 | ($543) | $443 | | Net Income | $4,590 | $2,453 | $2,618 | $7,043 | $5,923 | | Net Income Available to Common Shareholders | $4,051 | $1,914 | $2,079 | $5,965 | $4,845 | | EPS (Basic & Diluted) | $0.53 | $0.25 | $0.27 | $0.78 | $0.64 | - Net interest income increased by **$2.28 million (13.81%)** QoQ and **$3.225 million (20.72%)** YoY for the three months ended June 30, 2025[10](index=10&type=chunk) - The company recorded a recovery of credit losses of **$543 thousand** in Q2 2025, compared to a provision of **$638 thousand** in Q2 2024[10](index=10&type=chunk) [Detailed Financial Metrics](index=4&type=section&id=Detailed%20Financial%20Metrics) This section provides detailed insights into MainStreet Bancshares Inc.'s loan, deposit, and borrowing structures, alongside average balance sheets, interest rates, and net interest margin trends [Unaudited Loan, Deposit and Borrowing Detail](index=4&type=section&id=UNAUDITED%20LOAN%2C%20DEPOSIT%20AND%20BORROWING%20DETAIL) Total gross loans and total deposits experienced a quarter-over-quarter decrease, while year-over-year changes were mixed. Commercial real estate loans remain the largest segment, showing growth YoY despite a slight QoQ decline. Deposit composition shifted, with non-interest bearing deposits increasing YoY but decreasing QoQ | Category (in thousands) | June 30, 2025 | March 31, 2025 | June 30, 2024 | Last 3 Mos Change | Last 12 Mos Change | | :---------------------- | :------------ | :------------- | :------------ | :---------------- | :----------------- | | **LOANS:** | | | | | | | Total Gross Loans | $1,790,973 | $1,835,928 | $1,801,219 | -2.4% | -0.6% | | Construction and land development loans | $328,351 | $344,742 | $410,698 | -4.8% | -20.1% | | Commercial real estate loans | $911,390 | $933,947 | $845,030 | -2.4% | 7.9% | | **DEPOSITS:** | | | | | | | Total Deposits | $1,798,547 | $1,908,325 | $1,755,363 | -5.8% | 2.5% | | Non-interest bearing deposits | $330,045 | $345,319 | $314,636 | -4.4% | 4.9% | | Interest-bearing demand deposits | $124,090 | $106,033 | $179,513 | 17.0% | -30.9% | | **BORROWINGS:** | | | | | | | Subordinated debt, net | $71,238 | $72,138 | $72,841 | -1.2% | -2.2% | - Core customer funding sources remained stable QoQ (**0.0%** change) but decreased by **3.4%** YoY[12](index=12&type=chunk) - Brokered and listing service sources decreased by **18.9%** QoQ but increased by **23.9%** YoY[12](index=12&type=chunk) [Unaudited Average Balance Sheets, Interest and Rates (Three Months Ended)](index=5&type=section&id=UNAUDITED%20AVERAGE%20BALANCE%20SHEETS%2C%20INTEREST%20AND%20RATES%20%28Three%20Months%20Ended%29) For the three months ended June 30, 2025, MainStreet Bank significantly expanded its net interest margin and interest rate spread compared to the prior year, primarily due to a decrease in the cost of interest-bearing liabilities, despite a slight dip in the yield on interest-earning assets | Metric (annualized) | Q2 2025 | Q2 2024 | | :------------------ | :------ | :------ | | Yield on earning assets | 6.84% | 6.86% | | Cost of interest-bearing liabilities | 3.97% | 4.83% | | Interest Rate Spread | 2.87% | 2.03% | | Net Interest Margin | 3.75% | 3.20% | - Net Interest Margin increased by **55 basis points** from **3.20%** in Q2 2024 to **3.75%** in Q2 2025[16](index=16&type=chunk) - Interest Rate Spread increased by **84 basis points** from **2.03%** in Q2 2024 to **2.87%** in Q2 2025[16](index=16&type=chunk) [Unaudited Average Balance Sheets, Interest and Rates (Six Months Ended)](index=6&type=section&id=UNAUDITED%20AVERAGE%20BALANCE%20SHEETS%2C%20INTEREST%20AND%20RATES%20%28Six%20Months%20Ended%29) For the six months ended June 30, 2025, the company also demonstrated an improved net interest margin and interest rate spread compared to the same period in the prior year, reflecting effective management of interest-earning assets and interest-bearing liabilities over the longer term | Metric (annualized) | YTD 2025 | YTD 2024 | | :------------------ | :------- | :------- | | Yield on earning assets | 6.69% | 6.84% | | Cost of interest-bearing liabilities | 4.08% | 4.80% | | Interest Rate Spread | 2.61% | 2.04% | | Net Interest Margin | 3.52% | 3.24% | - Net Interest Margin increased by **28 basis points** from **3.24%** in YTD 2024 to **3.52%** in YTD 2025[18](index=18&type=chunk) - Interest Rate Spread increased by **57 basis points** from **2.04%** in YTD 2024 to **2.61%** in YTD 2025[18](index=18&type=chunk) [Summary Financial Data & Ratios](index=7&type=section&id=Summary%20Financial%20Data%20%26%20Ratios) This section provides a comprehensive overview of MainStreet Bancshares Inc.'s per share data, key performance ratios, asset quality, concentration ratios, non-performing assets, regulatory capital, and other operational metrics [Per Share Data and Shares Outstanding](index=7&type=section&id=Per%20share%20Data%20and%20Shares%20Outstanding) Earnings per common share significantly increased for both the quarter and year-to-date periods compared to the prior year. Book value and tangible book value per common share also showed positive trends | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------------------- | :------ | :------ | :------- | :------- | | Earnings per common share (basic and diluted) | $0.53 | $0.27 | $0.78 | $0.64 | | Book value per common share | $24.17 | $25.99 | $24.17 | $25.99 | | Tangible book value per common share | $24.17 | $23.72 | $24.17 | $23.72 | | Weighted average common shares (basic and diluted) | 7,704,677 | 7,608,389 | 7,670,623 | 7,610,188 | | Common shares outstanding at end of period | 7,704,037 | 7,598,529 | 7,704,037 | 7,598,529 | - Earnings per common share for Q2 2025 increased by **96.3%** YoY[20](index=20&type=chunk) - Tangible book value per common share increased by **1.9%** YoY to **$24.17**[20](index=20&type=chunk) [Performance Ratios](index=7&type=section&id=Performance%20Ratios) Key performance ratios improved significantly, with Return on Average Assets and Return on Average Equity showing substantial increases. The Net Interest Margin expanded, and the Efficiency Ratio improved, indicating better operational effectiveness | Metric (annualized) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :------------------ | :------ | :------ | :------- | :------- | | Return on average assets | 0.86% | 0.50% | 0.66% | 0.58% | | Return on average equity | 8.72% | 4.70% | 6.78% | 5.34% | | Net interest margin (FTE) | 3.75% | 3.20% | 3.52% | 3.24% | | Efficiency ratio | 74.26% | 78.60% | 77.90% | 77.30% | - Return on average assets increased by **36 basis points** YoY for Q2 2025[20](index=20&type=chunk) - Efficiency ratio improved by **4.34 percentage points** YoY for Q2 2025, indicating lower non-interest expense relative to income[20](index=20&type=chunk) [Asset Quality](index=7&type=section&id=Asset%20Quality) Asset quality improved significantly, with a decrease in the Allowance for Credit Losses (ACL) and a substantial reduction in non-performing loans. The coverage ratio of ACL to non-performing loans increased, reflecting a stronger position | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------------------- | :------ | :------ | :------- | :------- | | Ending balance, ACL - loans | $19,057 | $17,098 | $19,057 | $17,098 | | Total allowance for credit losses | $19,329 | $17,455 | $19,329 | $17,455 | | Allowance for credit losses on loans to total gross loans | 1.07% | 0.95% | 1.07% | 0.95% | | Allowance for credit losses on loans to non-performing loans | 2.01X | 1.78X | 2.01X | 1.78X | | Net charge-offs (recoveries) to average gross loans (annualized) | (0.03)% | 0.08% | (0.01)% | 0.06% | - Allowance for credit losses on loans to non-performing loans increased from **1.78X** in Q2 2024 to **2.01X** in Q2 2025[20](index=20&type=chunk) - Net charge-offs to average gross loans shifted from **0.08%** (charge-offs) in Q2 2024 to **(0.03)%** (recoveries) in Q2 2025[20](index=20&type=chunk) [Concentration Ratios](index=7&type=section&id=Concentration%20Ratios) Concentration ratios for commercial real estate and construction loans relative to total capital showed slight changes, with construction loans decreasing significantly year-over-year | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------------------- | :------ | :------ | :------- | :------- | | Commercial real estate loans to total capital | 365.89% | 367.24% | 365.89% | 367.24% | | Construction loans to total capital | 108.84% | 130.19% | 108.84% | 130.19% | - Construction loans to total capital decreased by **21.35 percentage points** YoY for Q2 2025[20](index=20&type=chunk) [Past Due and Non-Performing Assets](index=7&type=section&id=Past%20Due%20and%20Non-Performing%20Assets) Non-performing assets saw a substantial reduction, with non-accrual loans and total non-performing loans decreasing significantly year-over-year, indicating improved asset quality | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------------------- | :------ | :------ | :------- | :------- | | Loans 30-89 days past due and accruing to total gross loans | 2.12% | 0.81% | 2.12% | 0.81% | | Non-accrual loans to total gross loans | 0.40% | 1.15% | 0.40% | 1.15% | | Non-performing loans | $7,169 | $20,691 | $7,169 | $20,691 | | Non-performing assets to total assets | 0.34% | 0.99% | 0.34% | 0.99% | - Non-performing loans decreased by **$13.522 million (65.35%)** YoY for Q2 2025[20](index=20&type=chunk) - Non-performing assets to total assets decreased by **0.65 percentage points** YoY for Q2 2025[20](index=20&type=chunk) [Regulatory Capital Ratios (Bank only)](index=7&type=section&id=Regulatory%20Capital%20Ratios%20%28Bank%20only%29) The bank's regulatory capital ratios remained strong and well above minimum requirements, although showing a slight decrease across all categories year-over-year | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------------- | :------ | :------ | :------- | :------- | | Total risk-based capital ratio | 16.44% | 16.78% | 16.44% | 16.78% | | Tier 1 risk-based capital ratio | 15.39% | 15.85% | 15.39% | 15.85% | | Leverage ratio | 13.21% | 14.22% | 13.21% | 14.22% | | Common equity tier 1 ratio | 15.39% | 15.85% | 15.39% | 15.85% | - All regulatory capital ratios decreased slightly YoY, but remain robust[20](index=20&type=chunk) [Other Information](index=7&type=section&id=Other%20Information) The common shares closing stock price increased year-over-year, and the tangible equity to tangible assets ratio also improved. The number of full-time equivalent employees decreased | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------------------- | :------ | :------ | :------- | :------- | | Common shares closing stock price | $18.90 | $17.73 | $18.90 | $17.73 | | Tangible equity / tangible assets | 10.09% | 9.99% | 10.09% | 9.99% | | Number of full time equivalent employees | 174 | 195 | 174 | 195 | - Common shares closing stock price increased by **6.6%** YoY[20](index=20&type=chunk) - Number of full-time equivalent employees decreased by **21** YoY[20](index=20&type=chunk) [Non-GAAP Reconciliation](index=9&type=section&id=Non-GAAP%20Reconciliation) This section provides a reconciliation of MainStreet Bancshares Inc.'s GAAP financial measures to non-GAAP measures, including adjustments for tax-equivalent effects and intangible assets [Unaudited Reconciliation of Certain Non-GAAP Financial Measures](index=9&type=section&id=Unaudited%20Reconciliation%20of%20Certain%20Non-GAAP%20Financial%20Measures) This section provides a reconciliation of GAAP to non-GAAP financial measures, specifically for Net Interest Margin (FTE), Yield on Earning Assets (FTE), Net Interest Spread (FTE), Tangible Common Stockholders' Equity, and Tangible Assets. These adjustments primarily involve tax-equivalent adjustments for tax-exempt securities and the exclusion of intangible assets to provide a clearer view of core financial performance - Net interest income (GAAP) is adjusted for the tax-equivalent effect of tax-exempt securities to arrive at Net interest income (FTE) (non-GAAP)[23](index=23&type=chunk) - Total interest income (GAAP) is adjusted for the tax-equivalent effect of tax-exempt securities to derive Total interest income (FTE) (non-GAAP)[23](index=23&type=chunk) - Tangible common stockholders' equity (non-GAAP) is calculated by subtracting intangible assets and preferred stock from total stockholders' equity (GAAP)[23](index=23&type=chunk) - Total tangible assets (non-GAAP) are derived by subtracting intangible assets from total assets (GAAP)[23](index=23&type=chunk)

Core Insights - MainStreet Bancshares, Inc. reported a net income of $4.6 million for the quarter ended June 30, 2025, an increase of $2.1 million from the previous quarter, driven by a net interest margin expansion to 3.75%, up by 45 basis points [1] - The company's net interest income rose by $2.8 million to $19.3 million, with earnings per common share increasing to $0.53, surpassing market expectations [1] - The loan to deposit ratio remained strong at 99%, indicating effective management of deposits in alignment with loan funding needs [2] Financial Performance - The total assets of MainStreet Bancshares as of June 30, 2025, were $2,114.8 million, a decrease from $2,222.8 million in the previous quarter [7] - Total deposits decreased to $1,798.5 million from $1,908.3 million, reflecting a 5.8% decline [8] - The company maintained a strong capital position with total stockholders' equity of $213.5 million [8] Loan and Deposit Details - The total gross loans amounted to $1,790.9 million, a decrease of 2.4% from the previous quarter [9] - The composition of loans included 18.3% in construction and land development loans, 25.3% in residential real estate loans, and 50.9% in commercial real estate loans [9] - Non-interest bearing deposits accounted for 18.4% of total deposits, while interest-bearing deposits made up the remaining 81.6% [9] Strategic Initiatives - The company has an active share repurchase plan with approximately $3.1 million in available capacity, indicating a commitment to returning value to shareholders [2] - MainStreet Bank continues to focus on enhancing customer experience through robust online and mobile banking solutions [3][4] - The bank's commitment to credit discipline has resulted in a well-managed loan portfolio, contributing to the overall financial performance [2]

Group 1 - MainStreet Bank (MNSB) has reached a significant support level and is considered a good investment pick from a technical perspective due to a recent "golden cross" formation [1] - The golden cross occurs when a stock's short-term moving average, specifically the 50-day, breaks above its longer-term moving average, the 200-day, indicating a bullish breakout [1][2] - MNSB has experienced an 11.4% gain over the past four weeks and currently holds a 1 (Strong Buy) rating on the Zacks Rank, suggesting potential for further breakout [3] Group 2 - The successful golden cross event consists of three stages: the stock price bottoms out, the shorter moving average crosses above the longer one, and the stock maintains upward momentum [2] - MNSB's positive earnings outlook for the current quarter strengthens the bullish case, with no earnings estimates declining and one revision higher in the past two months [3] - Investors are encouraged to add MNSB to their watchlist due to the important technical indicator and the positive movement in earnings estimates [5]

Core Viewpoint - The article emphasizes the importance of confirming the sustainability of stock trends for successful short-term investing, highlighting that price movements should be supported by strong fundamentals and positive earnings estimates [1][2]. Group 1: Stock Performance - MainStreet Bank (MNSB) has shown a solid price increase of 18.5% over the past 12 weeks, indicating investor confidence in its potential upside [4]. - MNSB's stock has increased by 28.8% in the last four weeks, suggesting that the upward trend is still intact [5]. - Currently, MNSB is trading at 80.4% of its 52-week high-low range, indicating a potential breakout opportunity [5]. Group 2: Fundamental Strength - MNSB holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises [6]. - The stock has an Average Broker Recommendation of 1 (Strong Buy), reflecting high optimism from the brokerage community regarding its near-term price performance [7]. Group 3: Investment Strategy - The "Recent Price Strength" screen is a useful tool for identifying stocks like MNSB that are on an uptrend supported by strong fundamentals [3]. - The Zacks Rank stock-rating system has a proven track record, with Zacks Rank 1 stocks generating an average annual return of +25% since 1988, indicating a reliable strategy for stock selection [7].

PART I – FINANCIAL INFORMATION [Consolidated Financial Statements](index=4&type=section&id=Item%201%20%E2%80%93%20Consolidated%20Financial%20Statements) For the first quarter ended March 31, 2025, MainStreet Bancshares, Inc. reported total assets of **$2.22 billion**, a slight decrease from **$2.23 billion** at year-end 2024. Net income was **$2.45 million**, a decrease from **$3.31 million** in the same period of 2024, resulting in diluted earnings per share of **$0.25**, down from **$0.36** year-over-year. The financial statements reflect stable loan and deposit balances, with a strategic pivot away from its Banking-as-a-Service (BaaS) initiative to refocus on core community banking Consolidated Statements of Financial Condition (Unaudited) | (Dollars in thousands) | At March 31, 2025 | At December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$2,222,845** | **$2,228,098** | | Loans, net | $1,811,789 | $1,810,556 | | Total deposits | $1,908,325 | $1,907,794 | | **Total Liabilities** | **$2,013,227** | **$2,020,107** | | **Total Stockholders' Equity** | **$209,618** | **$207,991** | Consolidated Statements of Income (Unaudited) | (Dollars in thousands, except per share data) | For the Three Months Ended March 31, 2025 | For the Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net Interest Income | $16,510 | $15,625 | | Provision For Credit Losses - Loans | $0 | $164 | | **Net Income** | **$2,453** | **$3,305** | | Net Income Available to Common Shareholders | $1,914 | $2,766 | | **Diluted Earnings Per Common Share** | **$0.25** | **$0.36** | - In the first quarter of 2025, the Company made a strategic decision to pivot away from its Banking-as-a-Service (BaaS) initiative and its fintech core platform, Avenu, to concentrate on its core community banking activities[20](index=20&type=chunk) [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail the company's accounting policies, including the recent adoption of ASU 2023-07 for segment reporting. They provide breakdowns of the investment securities portfolio, which is primarily composed of collateralized mortgage-backed securities and municipal bonds, and the loan portfolio, dominated by commercial and residential real estate. The notes also cover derivatives used for customer accommodation, fair value measurements, lease obligations, and segment performance, which shows the Core Banking segment as profitable and the Financial Technology segment incurring a loss Investment Securities Composition (March 31, 2025) | (Dollars in thousands) | Amortized Cost | Fair Value | | :--- | :--- | :--- | | **Available-for-Sale** | **$65,509** | **$55,935** | | Collateralized Mortgage Backed | $21,134 | $17,488 | | Municipal Securities | $32,605 | $27,621 | | **Held-to-Maturity** | **$15,657** | **$15,354** | | Municipal Securities | $13,157 | $12,867 | Loan Portfolio Composition (March 31, 2025) | (Dollars in thousands) | Gross Loans | | :--- | :--- | | Residential Real Estate | $451,324 | | Commercial Real Estate | $933,349 | | Construction and Land Development | $344,816 | | Commercial – Non Real Estate | $105,180 | | **Total Gross Loans** | **$1,836,001** | Segment Performance (Q1 2025) | (Dollars in thousands) | Core Banking | Financial Technology | Consolidated | | :--- | :--- | :--- | :--- | | **Segment profit (loss)** | **$5,361** | **($2,226)** | **$3,135** | | Segment assets | $2,222,779 | $66 | $2,222,845 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=38&type=section&id=Item%202%20%E2%80%93%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reported a decrease in net income to **$2.5 million** for Q1 2025, down from **$3.3 million** in Q1 2024, primarily due to a **$1.8 million** increase in non-interest expense, driven by higher salaries, severance costs, and outside services. Net interest income grew by **5.6%** to **$16.6 million**, benefiting from a **33 basis point** increase in the interest rate spread. The loan portfolio remained stable at **$1.81 billion**, with a notable concentration in Commercial Real Estate (CRE) loans, which management addresses through robust underwriting and stress testing. The allowance for credit losses was stable at **1.06%** of gross loans, and non-performing assets remained at **0.97%** of total assets. The company maintains a strong liquidity position and capital ratios well above regulatory requirements [Comparison of Results of Operations](index=42&type=section&id=Comparison%20of%20Results%20of%20Operations) For Q1 2025 compared to Q1 2024, net income decreased by **$0.9 million**. This was driven by a **$1.8 million** rise in non-interest expenses, mainly from salaries, severance, and outside services. Despite this, net interest income increased by **$0.9 million** due to loan growth and a wider interest rate spread. The provision for credit losses was zero, compared to a **$164,000** provision in the prior year. Non-interest income saw a modest increase of **$143,000** - Net income decreased by **$0.9 million** to **$2.5 million** for Q1 2025, primarily impacted by a **$1.8 million** increase in non-interest expense[124](index=124&type=chunk) - Net interest income increased by approximately **$0.9 million (5.6%)** to **$16.6 million**, with the net interest margin remaining stable at **3.30%**[131](index=131&type=chunk)[132](index=132&type=chunk) - Non-interest expense increased by **$1.8 million (15%)**, primarily due to an **$897,000** increase in salaries and employee benefits (including severance), a **$434,000** increase in other operating expenses, and a **$399,000** increase in outside services[147](index=147&type=chunk) [Comparison of Financial Condition](index=49&type=section&id=Comparison%20of%20Financial%20Condition) As of March 31, 2025, total assets slightly decreased by **$5.3 million** to **$2.22 billion** from year-end 2024. Net loans grew marginally by **$1.2 million** to **$1.81 billion**, with increases in commercial and residential real estate loans offset by a decrease in construction loans. The company holds a significant concentration in Commercial Real Estate (CRE) loans, representing **388.2%** of risk-based capital, which is actively managed. Deposits remained stable at **$1.91 billion**, with a shift in composition including an increase in non-interest-bearing demand deposits and a decrease in money market accounts. Wholesale deposits increased to **$577.9 million**, serving as a key funding source - The company holds a significant concentration in commercial real estate (CRE) loans. As of March 31, 2025, total CRE loans represented **388.2%** of consolidated risk-based capital. Management maintains heightened risk management procedures and strong underwriting criteria for this portfolio[156](index=156&type=chunk)[157](index=157&type=chunk) Allowance for Credit Losses Ratios | Ratio | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Allowance to non-performing loans | 89.83% | 89.84% | | Allowance to gross loans | 1.06% | 1.06% | Nonperforming Assets | (Dollars in thousands) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total non-performing loans | $21,664 | $21,650 | | Total non-performing assets | $21,664 | $21,650 | | Non-performing assets to total assets | 0.97% | 0.97% | - Wholesale deposits increased by **$109.8 million** to **$577.9 million** as of March 31, 2025, providing a diversified and stable source of funding[180](index=180&type=chunk) [Liquidity and Capital Resources](index=61&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position, with primary funding from deposits and supplemental sources from FHLB advances and other borrowings. As of March 31, 2025, cash and cash equivalents totaled **$202.6 million**. The company had an additional secured borrowing capacity of **$554.8 million** from the FHLB and **$144.0 million** from other institutions. All capital ratios remained well above the regulatory requirements for being well-capitalized - As of March 31, 2025, the company had access to significant supplemental liquidity, including **$554.8 million** in secured borrowing capacity from the FHLB and **$144.0 million** from other financial institutions[185](index=185&type=chunk) Bank Capital Ratios (March 31, 2025) | Ratio | Actual | Well Capitalized Requirement | | :--- | :--- | :--- | | Total capital (to risk-weighted assets) | 15.83% | ≥ 10.0% | | Common equity tier 1 capital | 14.78% | ≥ 6.5% | | Tier 1 capital (to risk-weighted assets) | 14.78% | ≥ 8.0% | | Tier 1 capital (to average assets) | 12.90% | ≥ 5.0% | [Quantitative and Qualitative Disclosures about Market Risk](index=64&type=section&id=Item%203%20%E2%80%93%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's most significant market risk is interest rate risk, which is managed by the Asset/Liability Committee. The company uses simulation models to estimate the impact of interest rate changes on net interest income over a 12-month period. As of March 31, 2025, the model shows that a **100 basis point** increase in rates would increase net interest income by **2.36%**, while a **100 basis point** decrease would reduce it by **1.91%** Net Interest Income Sensitivity Analysis (March 31, 2025) | Basis Point Change in Interest Rates | Year 1 Change From Level | | :--- | :--- | | +400 | 5.70% | | +200 | 3.90% | | +100 | 2.36% | | **Level** | **—** | | -100 | (1.91)% | | -200 | (2.15)% | [Controls and Procedures](index=64&type=section&id=Item%204%20%E2%80%93%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures as of March 31, 2025, and concluded they were effective. There were no changes in internal control over financial reporting during the first quarter that materially affected, or are reasonably likely to materially affect, these controls - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were designed and operating in an effective manner as of March 31, 2025[205](index=205&type=chunk) - No material changes to the company's internal control over financial reporting occurred during the first fiscal quarter of 2025[206](index=206&type=chunk) PART II – OTHER INFORMATION [Legal Proceedings](index=65&type=section&id=Item%201%20%E2%80%93%20Legal%20Proceedings) As of March 31, 2025, the Company was not involved in any pending legal proceedings other than routine matters occurring in the ordinary course of business, which are not expected to be material to its financial condition or operating results - The Company is not involved in any material pending legal proceedings outside the ordinary course of business[207](index=207&type=chunk) [Risk Factors](index=65&type=section&id=Item%201A%20%E2%80%93%20Risk%20Factors) As a smaller reporting company, MainStreet Bancshares, Inc. is not required to provide a risk factor update in its Form 10-Q. The company refers to the Risk Factors section in its Annual Report on Form 10-K for the year ended December 31, 2024 - This section is not required for smaller reporting companies. Reference is made to the company's Annual Report on Form 10-K for risk factors[208](index=208&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=65&type=section&id=Item%202%20%E2%80%93%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the first quarter of 2025, the Company repurchased **24,909 shares** of its common stock under a publicly announced plan. All repurchases occurred in January 2025 at an average price of **$17.88 per share** Common Stock Repurchases (Q1 2025) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | January 2025 | 24,909 | $17.88 | | February 2025 | — | $— | | March 2025 | — | $— | | **Total** | **24,909** | **—** | [Other Information](index=65&type=section&id=Item%205%20-%20Other%20Information) During the quarter ended March 31, 2025, no directors or executive officers adopted, modified, or terminated any Rule 10b5-1 trading plans or other non-Rule 10b5-1 trading arrangements for the purchase or sale of company securities - No directors or executive officers adopted, modified, or terminated any Rule 10b5-1 trading plans during the fiscal quarter[211](index=211&type=chunk) [Exhibits](index=66&type=section&id=Item%206%20%E2%80%93%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including the CEO and CFO certifications required under Rule 13a-14(a) and Section 1350, as well as the Inline XBRL financial data files - Exhibits filed include: * 31.1: CEO Certification * 31.2: CFO Certification * 32.0: Section 1350 Certification * 101 & 104: Inline XBRL documents[213](index=213&type=chunk)[214](index=214&type=chunk) [Signatures](index=67&type=section&id=SIGNATURES)

Core Viewpoint - MainStreet Bank (MNSB) has received a Zacks Rank 1 (Strong Buy) due to an upward trend in earnings estimates, indicating a positive outlook for the company's stock price [1][2]. Earnings Estimates and Revisions - The Zacks Consensus Estimate for MainStreet Bank for the fiscal year ending December 2025 is projected at $1.77 per share, reflecting a significant increase of 227.8% from the previous year's reported figure [7]. - Over the past three months, analysts have raised their earnings estimates for MainStreet Bank by 73.5% [7]. Zacks Rating System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [6]. - The Zacks rating system maintains a balanced distribution of 'buy' and 'sell' ratings, ensuring that only the top 5% of stocks receive a 'Strong Buy' rating, indicating superior earnings estimate revisions [8][9]. Market Implications - The upgrade to Zacks Rank 1 positions MainStreet Bank in the top 5% of Zacks-covered stocks, suggesting potential for higher stock price movement in the near term [9]. - Rising earnings estimates and the corresponding rating upgrade imply an improvement in MainStreet Bank's underlying business, which could lead to increased investor interest and stock appreciation [4].