MainStreet Bancshares(US:MNSB)2024-11-13 19:53Financial Performance - Net income for the three months ended September 30, 2024, was $265 thousand, a significant decrease of 95.8% from $6,341 thousand in the same period of 2023[9]. - Net income for the nine months ended September 30, 2024, was $6,187,000, a decrease of 71% compared to $21,438,000 in 2023[20]. - Comprehensive income for the three months ended September 30, 2024, was $1,934 thousand, compared to $3,878 thousand for the same period in 2023[11]. - The company reported a basic loss per common share of $0.04 for the three months ended September 30, 2024, compared to earnings of $0.77 per share in the same period of 2023[9]. - Net income available to common shareholders for the three months ended September 30, 2024, was a loss of $274,000 compared to a profit of $5,802,000 for the same period in 2023[112]. Asset and Deposit Growth - Total assets increased to $2,224,599 thousand as of September 30, 2024, up from $2,035,432 thousand at December 31, 2023, representing a growth of approximately 9.3%[6]. - Total deposits increased to $1,893,669 thousand as of September 30, 2024, up from $1,686,127 thousand at December 31, 2023, reflecting a growth of approximately 12.3%[6]. - As of September 30, 2024, total stockholders' equity increased to $226,051 thousand, up from $224,715 thousand as of June 30, 2024, reflecting a growth of approximately 0.6%[15]. - Cash and cash equivalents at the end of the period reached $232,114,000, up from $121,183,000, marking an increase of 92%[20]. Interest Income and Expense - Net interest income for the three months ended September 30, 2024, was $15,343 thousand, a decrease of 18.3% compared to $18,772 thousand for the same period in 2023[9]. - The total interest income for the three months ended September 30, 2024, was $33,591 thousand, an increase of 5.8% from $31,766 thousand in the same period of 2023[9]. - Total interest expense increased by $5.3 million to $18.2 million for the three months ended September 30, 2024, from $13.0 million for the same period in 2023[150]. - The average yield on interest-earning assets decreased by 14 basis points to 6.67% for the three months ended September 30, 2024, compared to 6.81% for the same period in 2023[145]. Credit Losses and Provisions - Provision for credit losses on loans was $3,125 thousand for the three months ended September 30, 2024, compared to a recovery of $98 thousand in the same period of 2023[9]. - The allowance for credit losses on loans was $18.3 million as of September 30, 2024, compared to $16.5 million at the end of 2023, indicating an increase of approximately 10.9%[55]. - The total allowance for credit losses was $18,327,000, an increase from $17,098,000 at the end of the previous quarter[59]. - The company reported charge-offs of $1,907,000 for the three months ended September 30, 2024, compared to $324,000 in the same period last year[59]. Non-Interest Income and Expense - Non-interest income for the Core Banking segment was $667 million, while total non-interest expense was $12,153 million for the same period[120]. - Non-interest income decreased by $5,000, or 0.6%, to $886,000 for Q3 2024, primarily due to non-recurring prepayment penalties recognized in 2023[165]. - Non-interest expense increased by $1.7 million, or 14.4%, to $13.2 million for Q3 2024, driven by increases in salaries and employee benefits as the company added fifteen employees[166]. Loan Performance - Loan originations decreased from approximately $92.0 million in the three months ended September 30, 2023, to $60.0 million in the same period of 2024, a decline of $32.0 million[160]. - Non-performing loans increased to a balance of $28.3 million as of September 30, 2024, with 42% attributable to one relationship[160]. - Special mention loans increased by $29.9 million and substandard loans increased by $44.2 million, totaling $45.8 million and $77.6 million respectively as of September 30, 2024[162]. Strategic Initiatives and Future Outlook - The company is focusing on market expansion and new product development to enhance revenue streams in the upcoming quarters[81]. - Future guidance indicates a positive outlook for revenue growth driven by strategic initiatives and market demand[81]. - The company is actively exploring acquisition opportunities to strengthen its market position and diversify its offerings[81]. Regulatory and Accounting Changes - The company adopted ASU 2023-02, which allows for a new method of accounting for tax equity investments, effective January 1, 2024, with a cumulative change of approximately $217,000[33]. - The Company expects the adoption of ASU 2023-07 to have no material impact on its consolidated financial statements, effective for fiscal years beginning after December 15, 2023[36].