MainStreet Bancshares Inc. Reports 2024 Results

A challenging year, ending with strong and stable asset quality and strong capital, /PRNewswire/ -- MainStreet Bancshares, Inc. (Nasdaq: MNSB & MNSBP), the financial holding company for MainStreet Bank reported a loss of $9.98 million for 2024 resulting from the nonrecurring impairment of capitalized intangible software and the resolution of nonperforming assets. The Company remains strongly capitalized with good liquidity. MainStreet Bank Headquarters 10089 Fairfax Blvd Fairfax, Virginia 22030 (PRNewsfoto/MainStreet Bancshares, Inc.) "At the end of 2024, the Company impaired the full value of its capitalized intangible software. Despite this impairment, the software remains a component of our Avenu Banking-as-a-Service solution and will continue to be used to drive fintech partnerships to grow low-cost deposits and fee income," said Jeff W. Dick, Chairman & CEO of MainStreet Bancshares, Inc. and MainStreet Bank. "The end of 2024 was management's first opportunity to review the Avenu platform's performance, as it was only put into production during the fourth quarter. The delays in bringing Avenu to market and subsequent changes in the potential for revenue generation necessitated management's review for impairment and resulting charge to earnings. Management conducted the impairment assessment in accordance with ASC 350-40-35, using the income approach. We remain committed to providing innovative embedded banking services that meet our customers where they do business and that allow developers to focus on providing leading-edge digital financial solutions." "During 2024, the Company ended the year with a healthy net interest margin of 3.13%," said Alex Vari, Chief Accountant for MainStreet Bank. "Excess liquidity in the fourth quarter gave us the opportunity to exercise call options on higher-yielding term deposits and restructure our wholesale deposit position. This will further reduce our funding costs into 2025, and with expense management efforts will yield positive results for the Company and for our shareholders." Chief Lending Officer Tom Floyd said, "the lending team worked diligently to grow the loan portfolio by 6% while also resolving 62% of our nonperforming loans and making solid progress on resolving the final $21.7 million in a timely manner."Total deposits grew 13% from prior year-end to $1.9 billion, with core deposits growing $187 million year on year. Total core deposits at year-end were $1.4 billion, or 75% of total deposits. "The DC Metropolitan area remains a vibrant market. The interest rate environment is normalizing, with the FOMC cutting rates three times thus far for a total of 1.0%," said Abdul Hersiburane, President of MainStreet Bank. "Our borrowers are benefiting from the declining rate environment with strengthening liquidity."BACKGROUND: MainStreet Bancshares, Inc. (Nasdaq: MNSB & MNSBP), is a small-cap financial holding company trading in the Nasdaq Capital Market index. The financial holding company owns 100% of MainStreet Bank, a business-focused community bank headquartered in Fairfax, Virginia. The Bank engages a branch-lite model with six full-service financial centers in Herndon, Fairfax, McLean, Leesburg, Clarendon, and Washington, D.C. MainStreet Bank has 55,000 free ATMs and a fully integrated online and mobile banking solution. The Bank is not restricted by a conventional branching system, as it can offer business customers the ability to Put Our Bank in Your Office®. With robust and easy-to-use online business banking technology, MainStreet has "put our bank" in well over 1,000 businesses in the metropolitan area.MainStreet Bank has a robust line of business and professional lending products, including government contracting lines of credit, commercial lines and term loans, residential and commercial construction, and commercial real estate. MainStreet Bank is an SBA Preferred Lender, offering 7A and 504 lending solutions. From sophisticated cash management to enhanced mobile banking and instant-issue Debit cards, MainStreet Bank is always looking for ways to improve our customer's experience.MainStreet Bank was the first community bank in the Washington, D.C., 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.Banking-as-a-Service In 2021, the Board and management decided to make an investment in technology that would best serve clients requiring Banking-as-a-Service (BaaS). The Avenu BaaS solution officially launched on October 1, 2024. The ability to digitally offer banking services in a safe and compliant manner allows the Company to reach new customer deposit segments, diversify revenue streams and generate additional income. The BaaS market is currently underserved, and the opportunities for a well-developed solution are robust. The Avenu business model is in-line with the Company's physical branch-lite strategy.Avenu provides a full-stack embedded banking solution that connects our partners and their apps directly and seamlessly to our purpose-built Avenu core. Avenu's clients are fintechs, social media solutions, application developers, money movers, and entrepreneurs. They all have one thing in common: They are in search of a reliable partner to help innovate how money moves - solving real-world issues and helping communities thrive. MainStreet Bank is that reliable partner dedicated to providing a best-in-class solution to sustain long-term business relationships.MainStreet Bancshares, Inc. has an investment grade rating of "A" from Egan-Jones Rating Company. This release contains forward-looking statements, including our expectations with respect to future events that are subject to various risks and uncertainties. The statements contained in this release that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Words such as "may," "will," "could," "should," "expect," "plan," "project," "intend," "anticipate," "believe," "estimate," "predict," "potential," "pursuant," "target," "continue," and similar expressions are intended to identify such forward-looking statements. Factors that could cause actual results to differ materially from management's projections, forecasts, estimates and expectations include: fluctuation in market rates of interest and loan and deposit pricing, adverse changes in the overall national economy as well as adverse economic conditions in our specific market areas, future impacts of pandemic outbreaks, maintenance and development of well-established and valued client relationships and referral source relationships, and acquisition or loss of key production personnel. We caution readers that the list of factors above is not exclusive. The forward-looking statements are made as of the date of this release, and we may not undertake steps to update the forward-looking statements to reflect the impact of any circumstances or events that arise after the date the forward-looking statements are made. In addition, our past results of operations are not necessarily indicative of future performance. UNAUDITED CONSOLIDATED BALANCE SHEET INFORMATION (In thousands) December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023* ASSETS Cash and cash equivalents Cash and due from banks $ 47,553 $ 40,955 $ 41,697 $ 49,208 $ 53,581 Federal funds sold 160,155 191,159 49,762 75,533 60,932 Total cash and cash equivalents 207,708 232,114 91,459 124,741 114,513 Investment securities available for sale, at fair value 55,747 58,489 57,605 58,699 59,928 Investment securities held to maturity, at amortized cost, net of allowance for credit losses of $0 for all periods 16,078 16,016 16,036 17,251 17,275 Restricted equity securities, at amortized cost 30,623 26,745 26,797 23,924 24,356 Loans, net of allowance for credit losses of $19,450, $18,327, $17,098, $16,531, and $16,506, respectively 1,810,556 1,775,558 1,778,840 1,727,110 1,705,137 Premises and equipment, net 13,287 13,571 13,787 14,081 13,944 Accrued interest and other receivables 11,311 11,077 11,916 10,727 12,390 Computer software, net of amortization — 18,881 17,205 15,691 14,657 Bank owned life insurance 39,507 39,203 38,901 38,609 38,318 Other assets 43,281 32,945 41,200 39,182 34,914 Total Assets $ 2,228,098 $ 2,224,599 $ 2,093,746 $ 2,070,015 $ 2,035,432 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Non-interest bearing deposits $ 324,307 $ 347,575 $ 314,636 $ 348,945 $ 364,606 Interest bearing demand deposits 139,780 197,527 179,513 165,331 137,128 Savings and NOW deposits 64,337 61,893 60,867 46,036 45,878 Money market deposits 560,082 451,936 476,396 446,903 442,179 Time deposits 819,288 834,738 723,951 725,520 696,336 Total deposits 1,907,794 1,893,669 1,755,363 1,732,735 1,686,127 Federal funds purchased — — — — 15,000 Subordinated debt 73,039 72,940 72,841 72,741 72,642 Other liabilities 39,274 31,939 40,827 41,418 40,146 Total Liabilities 2,020,107 1,998,548 1,869,031 1,846,894 1,813,915 Stockholders' Equity: Preferred stock 27,263 27,263 27,263 27,263 27,263 Common stock 29,466 29,463 29,452 29,514 29,198 Capital surplus 67,823 67,083 66,392 65,940 65,985 Retained earnings 91,150 108,616 109,651 108,334 106,549 Accumulated other comprehensive loss (7,711) (6,374) (8,043) (7,930) (7,478) Total Stockholders' Equity 207,991 226,051 224,715 223,121 221,517 Total Liabilities and Stockholders' Equity $ 2,228,098 $ 2,224,599 $ 2,093,746 $ 2,070,015 $ 2,035,432 *Derived from audited financial statements UNAUDITED CONSOLIDATED STATEMENTS OF INCOME INFORMATION (In thousands, except share and per share data) Year-to-Date Three Months Ended December 31, 2024 December 31, 2023* December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 INTEREST INCOME: Interest and fees on loans $ 125,177 $ 116,482 $ 31,323 $ 31,615 $ 31,655 $ 30,582 $ 30,951 Interest on investment securities Taxable securities 1,693 1,836 431 397 430 435 451 Tax-exempt securities 1,093 1,065 262 294 268 270 268 Interest on federal funds sold 6,652 5,038 3,103 1,285 1,083 1,182 1,510 Total interest income 134,615 124,421 35,119 33,591 33,436 32,469 33,180 INTEREST EXPENSE: Interest on interest bearing demand deposits 8,661 1,786 2,612 2,117 2,118 1,814 1,027 Interest on savings and NOW deposits 754 546 201 206 190 157 146 Interest on money market deposits 21,386 13,631 5,475 5,277 5,542 5,092 5,538 Interest on time deposits 37,364 26,905 10,003 9,543 9,010 8,808 8,187 Interest on federal funds purchased 575 299 — 277 191 107 25 Interest on Federal Home Loan Bank advances 46 1,224 — — — 46 118 Interest on subordinated debt 3,255 3,288 787 828 820 820 828 Total interest expense 72,041 47,679 19,078 18,248 17,871 16,844 15,869 Net interest income 62,574 76,742 16,041 15,343 15,565 15,625 17,311 Provision for (recovery of) credit losses 6,763 1,642 3,407 2,913 638 (195) 466 Net interest income after provision for (recovery of) credit losses 55,811 75,100 12,634 12,430 14,927 15,820 16,845 NON-INTEREST INCOME: Deposit account service charges 1,996 2,149 481 557 490 469 510 Bank owned life insurance income 1,189 1,069 304 302 291 292 283 Net loss on securities called or matured (48) — — — (48) — — Other non-interest income (loss) 115 122 22 27 31 35 (34) Total non-interest income 3,252 3,340 807 886 764 796 759 NON-INTEREST EXPENSES: Salaries and employee benefits 30,475 28,267 8,253 7,250 7,484 7,488 7,129 Furniture and equipment expenses 3,636 2,787 830 931 940 935 804 Advertising and marketing 2,199 2,343 600 579 566 454 271 Occupancy expenses 1,614 1,684 358 407 415 435 397 Outside services 3,627 2,044 1,168 845 839 774 352 Administrative expenses 929 922 243 215 229 242 219 Computer software intangible impairment 19,721 — 19,721 — — — — Other operating expenses 10,766 7,569 3,258 2,992 2,362 2,153 2,166 Total non-interest expenses 72,967 45,616 34,431 13,219 12,835 12,481 11,338 Income (loss) before income tax expense (benefit) (13,904) 32,824 (20,990) 97 2,856 4,135 6,266 Income tax expense (benefit) (3,924) 6,239 (4,823) (168) 238 830 1,120 Net income (loss) (9,980) 26,585 (16,167) 265 2,618 3,305 5,146 Preferred stock dividends 2,156 2,156 539 539 539 539 539 Net income (loss) available to common shareholders $ (12,136) $ 24,429 $ (16,706) $ (274) $ 2,079 $ 2,766 $ 4,607 Earnings (loss) per common share, basic and diluted $ (1.60) $ 3.25 $ (2.20) $ (0.04) $ 0.27 $ 0.36 $ 0.61 Weighted average number of common shares, basic and diluted 7,606,391 7,522,913 7,603,318 7,601,925 7,608,389 7,611,990 7,527,327 *Derived from audited financial statements UNAUDITED LOAN, DEPOSIT AND BORROWING DETAIL (In thousands) December 31, 2024 September 30, 2024 December 31, 2023 Percentage Change $ Amount % of Total $ Amount % of Total $ Amount % of Total Last 3 Mos Last 12 Mos LOANS: Construction and land development loans $ 391,253 21.3 % $ 373,486 20.8 % $ 429,637 24.9 % 4.8 % -8.9 % Residential real estate loans 438,745 23.9 % 446,109 24.8 % 474,602 27.5 % -1.7 % -7.6 % Commercial real estate loans 898,204 48.9 % 871,280 48.4 % 743,827 43.1 % 3.1 % 20.8 % Commercial and industrial loans 105,212 5.7 % 106,249 5.9 % 75,415 4.3 % -1.0 % 39.5 % Consumer loans 1,574 0.2 % 1,977 0.1 % 3,610 0.2 % -20.4 % -56.4 % Total Gross Loans $ 1,834,988 100.0 % $ 1,799,101 100.0 % $ 1,727,091 100.0 % 2.0 % 6.2 % Less: Allowance for credit losses (19,450) (18,327) (16,506) Net deferred loan fees (4,982) (5,216) (5,448) Net Loans $ 1,810,556 $ 1,775,558 $ 1,705,137 DEPOSITS: Non-interest bearing deposits $ 324,307 17.0 % $ 347,575 18.4 % $ 364,606 21.6 % -6.7 % -11.1 % Interest-bearing deposits: Demand deposits 139,780 7.3 % 197,527 10.4 % 137,128 8.1 % -29.2 % 1.9 % Savings and NOW deposits 64,337 3.4 % 61,893 3.3 % 45,878 2.7 % 3.9 % 40.2 % Money market deposits 560,082 29.4 % 451,936 23.9 % 442,179 26.2 % 23.9 % 26.7 % Certificates of deposit $250,000 or more 535,676 28.0 % 532,201 28.0 % 442,662 26.3 % 0.7 % 21.0 % Certificates of deposit less than $250,000 283,612 14.9 % 302,537 16.0 % 253,674 15.1 % -6.3 % 11.8 % Total Deposits $ 1,907,794 100.0 % $ 1,893,669 100.0 % $ 1,686,127 100.0 % 0.7 % 13.1 % BORROWINGS: Federal funds purchased — 0.0 % — 0.0 % 15,000 17.1 % 0.0 % -100.0 % Subordinated debt 73,039 100.0 % 72,940 100.0 % 72,642 82.9 % 0.1 % 0.5 % Total Borrowings $ 73,039 100.0 % $ 72,940 100.0 % $ 87,642 100.0 % 0.1 % -16.7 % Total Deposits and Borrowings $ 1,980,833 $ 1,966,609 $ 1,773,769 0.7 % 11.7 % Core customer funding sources (1) $ 1,439,657 72.7 % $ 1,471,350 74.8 % $ 1,252,534 70.7 % -2.2 % 14.9 % Brokered and listing service sources (2) 468,137 23.6 % 422,319 21.5 % 433,593 24.4 % 10.8 % 8.0 % Federal funds purchased — 0.0 % — 0.0 % 15,000 0.8 % 0.0 % -100.0 % Subordinated debt (3) 73,039 3.7 % 72,940 3.7 % 72,642 4.1 % 0.1 % 0.5 % Total Funding Sources $ 1,980,833 100.0 % $ 1,966,609 100.0 % $ 1,773,769 100.0 % 0.7 % 11.7 % (1) Includes ICS, CDARS, and reciprocal deposits maintained by customers, which represent sweep accounts tied to customer operating accounts. (2) Consists of certificates of deposit (CD) through multiple listing services and multiple brokered deposit services, as well as ICS and CDARS one-way certificates of deposit and regional money market accounts. Excludes $259.9 million in core deposits placed in reciprocal networks for FDIC insurance coverage that will be classified as brokered deposits on the call report in pursuant to rule 12 CFR 337.6(e) as of December 31, 2024. (3) Subordinated debt obligation qualifies as Tier 2 capital at the holding company and Tier 1 capital at the Bank. UNAUDITED AVERAGE BALANCE SHEETS, INTEREST AND RATES (In thousands) For the three months ended December 31, 2024 For the three months ended December 31, 2023 Average Balance Interest Income/ Expense(3)(4) Average Yields/ Rate(annualized) (3)(4) Average Balance Interest Income/ Expense (3)(4) Average Yields/ Rate (annualized) (3)(4) ASSETS: Interest-earning assets: Loans (1)(2) $ 1,808,894 $ 31,323 6.87 % $ 1,720,790 $ 30,951 7.14 % Securities: Taxable 53,566 431 3.19 % 55,646 451 3.22 % Tax-exempt 35,512 332 3.71 % 37,614 339 3.58 % Federal funds and interest-bearing deposits 263,595 3,103 4.67 % 114,421 1,510 5.24 % Total interest-earning assets $ 2,161,567 $ 35,189 6.46 % $ 1,928,471 $ 33,251 6.84 % Other assets 129,077 69,725 Total assets $ 2,290,644 $ 1,998,196 Liabilities and Stockholders' Equity: Interest-bearing liabilities: Interest-bearing demand deposits $ 231,496 $ 2,612 4.48 % $ 98,021 $ 1,027 4.16 % Savings and NOW deposits 64,112 201 1.24 % 47,142 146 1.23 % Money market deposits 514,235 5,475 4.22 % 477,916 5,538 4.60 % Time deposits 809,924 10,003 4.90 % 710,026 8,187 4.57 % Total interest-bearing deposits $ 1,619,767 $ 18,291 4.48 % $ 1,333,105 $ 14,898 4.43 % Federal funds purchased 2 — 0.00 % 1,740 25 5.70 % FHLB advances — — — 8,424 118 5.56 % Subordinated debt 73,001 787 4.28 % 72,603 828 4.52 % Total interest-bearing liabilities $ 1,692,770 $ 19,078 4.47 % $ 1,415,872 $ 15,869 4.45 % Demand deposits and other liabilities 370,332 365,655 Total liabilities $ 2,063,102 $ 1,781,527 Stockholders' Equity 227,542 216,669 Total Liabilities and Stockholders' Equity $ 2,290,644 $ 1,998,196 Interest Rate Spread 1.99 % 2.39 % Net Interest Income $ 16,111 $ 17,382 Net Interest Margin 2.96 % 3.58 % (1) Includes loans classified as non-accrual (2) Total loan interest income includes amortization of deferred loan fees, net of deferred loan costs (3) Income and yields for all periods presented are reported on a tax-equivalent basis using the federal statutory rate of 21% (4) Refer to Appendix for reconciliation of non-GAAP measures UNAUDITED AVERAGE BALANCE SHEETS, INTEREST AND RATES (In thousands) For the year ended December 31, 2024 For the year ended December 31, 2023 Average Balance Interest Income/ Expense(3)(4) Average Yields/ Rate(annualized) (3)(4) Average Balance Interest Income/ Expense (3)(4) Average Yields/ Rate(annualized) (3)(4) ASSETS: Interest-earning assets: Loans (1)(2) $ 1,782,061 $ 125,177 7.02 % $ 1,659,179 $ 116,482 7.02 % Securities: Taxable 54,935 1,693 3.08 % 57,386 1,836 3.20 % Tax-exempt 36,379 1,384 3.80 % 37,810 1,348 3.57 % Federal funds and interest-bearing deposits 137,073 6,652 4.85 % 103,840 5,038 4.85 % Total interest-earning assets $ 2,010,448 $ 134,906 6.71 % $ 1,858,215 $ 124,704 6.71 % Other assets 126,138 73,590 Total assets $ 2,136,586 $ 1,931,805 Liabilities and Stockholders' Equity: Interest-bearing liabilities: Interest-bearing demand deposits $ 181,109 $ 8,661 4.78 % $ 83,087 $ 1,786 2.15 % Savings and NOW deposits 54,385 754 1.39 % 49,565 546 1.10 % Money market deposit 464,400 21,386 4.61 % 365,815 13,631 3.73 % Time deposits 748,938 37,364 4.99 % 702,034 26,905 3.83 % Total interest-bearing deposits $ 1,448,832 $ 68,165 4.70 % $ 1,200,501 $ 42,868 3.57 % Federal funds purchased 9,941 575 5.78 % 5,583 299 5.36 % FHLB advances 820 46 5.61 % 24,959 1,224 4.90 % Subordinated debt 72,852 3,255 4.47 % 72,455 3,288 4.54 % Total interest-bearing liabilities $ 1,532,445 $ 72,041 4.70 % $ 1,303,498 $ 47,679 3.66 % Demand deposits and other liabilities 379,510 418,386 Total liabilities $ 1,911,955 $ 1,721,884 Stockholders' Equity 224,631 209,921 Total Liabilities and Stockholders' Equity $ 2,136,586 $ 1,931,805 Interest Rate Spread 2.01 % 3.05 % Net Interest Income $ 62,865 $ 77,025 Net Interest Margin 3.13 % 4.15 % (1) Includes loans classified as non-accrual (2) Total loan interest income includes amortization of deferred loan fees, net of deferred loan costs (3) Income and yields for all periods presented are reported on a tax-equivalent basis using the federal statutory rate of 21% (4) Refer to Appendix for reconciliation of non-GAAP measures UNAUDITED SUMMARY FINANCIAL DATA (Dollars in thousands except share and per share data) At or For the Three Months Ended At or For the Year Ended December 31, December 31, 2024 2023 2024 2023 Per share Data and Shares Outstanding Earnings (loss) per common share (basic and diluted) $ (2.20) $ 0.61 $ (1.60) $ 3.25 Book value per common share $ 23.77 $ 25.81 $ 23.77 $ 25.81 Tangible book value per common share(2) $ 23.77 $ 23.86 $ 23.77 $ 23.86 Weighted average common shares (basic and diluted) 7,603,318 7,527,327 7,606,391 7,522,913 Common shares outstanding at end of period 7,603,765 7,527,415 7,603,765 7,527,415 Performance Ratios Return (loss) on average assets (annualized) (2.80) % 1.02 % (0.47) % 1.38 % Return (loss) on average equity (annualized) (28.19) % 9.42 % (4.44) % 12.66 % Return (loss) on average common equity (annualized) (33.09) % 10.28 % (6.15) % 13.37 % Yield on earning assets (FTE) (2) (annualized) 6.46 % 6.84 % 6.71 % 6.71 % Cost of interest bearing liabilities (annualized) 4.47 % 4.45 % 4.70 % 3.66 % Net interest spread (FTE)(2) (annualized) 1.99 % 2.39 % 2.01 % 3.05 % Net interest margin (FTE)(2) (annualized) 2.96 % 3.58 % 3.13 % 4.15 % Non-interest income as a percentage of average assets (annualized) 0.14 % 0.17 % 0.15 % 0.17 % Non-interest expense to average assets (annualized) 5.96 % 2.21 % 3.42 % 2.36 % Efficiency ratio(3) 204.36 % 61.29 % 110.85 % 56.96 % Asset Quality Allowance for credit losses (ACL) Beginning balance, ACL - loans $ 18,327 $ 15,626 $ 16,506 $ 14,114 Add: recoveries 9 9 28 22 Less: charge-offs (2,151) (137) (4,569) (468) Add: provision for (recovery of) credit losses - loans 3,265 1,008 7,485 1,943 Add: current expected credit losses, nonrecurring adoption — — — 895 Ending balance, ACL - loans $ 19,450 $ 16,506 $ 19,450 $ 16,506 Beginning balance, reserve for unfunded commitment (RUC) $ 145 $ 1,552 $ 1,009 $ — Add: current expected credit losses, nonrecurring adoption — — — 1,310 Add: provision for (recovery of) unfunded commitments, net 142 (543) (722) (301) Ending balance, RUC $ 287 $ 1,009 $ 287 $ 1,009 Total allowance for credit losses $ 19,737 $ 17,515 $ 19,737 $ 17,515 Allowance for credit losses on loans to total gross loans 1.06 % 0.96 % 1.06 % 0.96 % Allowance for credit losses to total gross loans 1.08 % 1.01 % 1.08 % 1.01 % Allowance for credit losses on loans to non-performing loans 89.84 % 16.44X 89.84 % 16.44X Net charge-offs (recoveries) to average gross loans (annualized) 0.46 % 0.03 % 0.25 % 0.03 % Concentration Ratios Commercial real estate loans to total capital (4) 393.79 % 372.50 % 393.79 % 372.50 % Construction loans to total capital (5) 131.92 % 137.67 % 131.92 % 137.67 % Non-performing Assets Loans 30-89 days past due and accruing to total gross loans 0.00 % 0.04 % 0.00 % 0.04 % Loans 90 days past due and accruing to total gross loans 0.00 % 0.00 % 0.00 % 0.00 % Non-accrual loans to total gross loans 1.18 % 0.06 % 1.18 % 0.06 % Other real estate owned $ — $ — $ — $ — Non-performing loans $ 21,650 $ 1,004 $ 21,650 $ 1,004 Non-performing assets to total assets 0.97 % 0.05 % 0.97 % 0.05 % Regulatory Capital Ratios (Bank only) (1) Total risk-based capital ratio 15.69 % 17.18 % 15.69 % 17.18 % Tier 1 risk-based capital ratio 14.64 % 16.22 % 14.64 % 16.22 % Leverage ratio 12.08 % 14.66 % 12.08 % 14.66 % Common equity tier 1 ratio 14.64 % 16.22 % 14.64 % 16.22 % Other information Closing stock price $ 18.10 $ 24.81 $ 18.10 $ 24.81 Tangible equity / tangible assets (2) 9.33 % 10.24 % 9.33 % 10.24 % Average tangible equity / average tangible assets (2) 9.21 % 10.22 % 9.80 % 10.31 % Number of full time equivalent employees 204 186 204 186 Number of full service branch offices 6 6 6 6 (1) Regulatory capital ratios as of December 31, 2024 are preliminary (2) Refer to Appendix for reconciliation of non-GAAP measures (3) Efficiency ratio is calculated as non-interest expense as a percentage of net interest income and non-interest income (4) Commercial real estate includes only non-owner occupied, multifamily, and construction loans as a percentage of Bank capital (5) Construction loans as a percentage of Bank capital Unaudited Reconciliation of Certain Non-GAAP Financial Measures (Dollars In thousands) For the three months ended December 31, For the year ended December 31, 2024 2023 2024 2023 Net interest margin (FTE) Net interest income (GAAP) $ 16,041 $ 17,311 $ 62,574 $ 76,742 FTE adjustment on tax-exempt securities 70 71 291 283 Net interest income (FTE) (non-GAAP) 16,111 17,382 62,865 77,025 Average interest earning assets 2,161,567 1,928,471 2,010,448 1,858,215 Net interest margin (GAAP) 2.94 % 3.56 % 3.11 % 4.13 % Net interest margin (FTE) (non-GAAP) 2.96 % 3.58 % 3.13 % 4.15 % For the three months ended December 31, For the year ended December 31, 2024 2023 2024 2023 Yield on earning assets (FTE) Total interest income (GAAP) $ 35,119 $ 33,180 $ 134,615 $ 124,421 FTE adjustment on tax-exempt securities 70 71 291 283 Total interest income (FTE) (non-GAAP) 35,189 33,251 134,906 124,704 Average interest earning assets 2,161,567 1,928,471 2,010,448 1,858,215 Yield on earning assets (GAAP) 6.45 % 6.83 % 6.70 % 6.70 % Yield on earning assets (FTE) (non-GAAP) 6.46 % 6.84 % 6.71 % 6.71 % For the three months ended December 31, For the year ended December 31, 2024 2023 2024 2023 Net Income and earnings per share, adjusted Net Income (loss), as reported $ (16,167) $ 5,146 $ (9,980) $ 26,585 Less: nonrecurring intangible impairment (19,721) — (19,721) — Less: nonrecurring restructuring expenses (430) — (430) — Less: nonrecurring other expenses (296) — (890) — Related income tax benefit 4,633 — 4,763 — Net income (loss), adjusted (353) 5,146 6,298 26,585 Preferred stock dividends 539 539 2,156 2,156 Net income (loss) available to common shareholders, adjusted (892) 4,607 4,142 24,429 Weighted average shares - basic and diluted 7,603,318 7,527,327 7,606,391 7,522,913 Earnings (loss) per common share, basic and diluted, adjusted Earnings (loss) per common share, basic and diluted, as reported $ (2.20) $ 0.61 $ (1.60) $ 3.25 Nonrecurring expenses per share, net of taxes 2.08 — 2.14 — Earnings (loss) per common share, basic and diluted, adjusted $ (0.12) $ 0.61 $ 0.54 $ 3.25 Adjusted Return (loss) on Average Assets (ROAA) Average assets, as reported 2,290,644 1,998,196 2,136,586 1,931,805 Annualized ROAA, as reported (2.80) % 1.02 % (0.47) % 1.38 % Annualized ROAA, as adjusted (0.06) % 1.02 % 0.29 % 1.38 % Adjusted Return (loss) on Average Equity (ROAE) Average equity, as reported 227,542 216,669 224,631 209,921 Annualized ROAE, as reported (28.19) % 9.42 % (4.44) % 12.66 % Annualized ROAE, as adjusted (0.62) % 9.42 % 2.80 % 12.66 % Efficiency Ratio, adjusted Noninterest expenses, as reported 34,431 11,338 72,967 45,616 Less: nonrecurring intangible impairment (19,721) — (19,721) — Less: nonrecurring restructuring expenses (430) — (430) — Less: nonrecurring other expenses (296) — (890) — Noninterest expenses, adjusted for nonrecurring expenses 13,984 11,338 51,926 45,616 Efficiency ratio, as reported 204.36 % 61.29 % 110.85 % 56.96 % Efficiency ratio, as adjusted 83.00 % 61.29 % 78.88 % 56.96 % For the three months ended December 31, For the year ended December 31, 2024 2023 2024 2023 Net interest spread (FTE) Yield on earning assets (GAAP) 6.45 % 6.83 % 6.70 % 6.70 % Yield on earning assets (FTE) (non-GAAP) 6.46 % 6.84 % 6.71 % 6.71 % Yield on interest-bearing liabilities (GAAP) 4.47 % 4.45 % 4.70 % 3.66 % Net interest spread (GAAP) 1.98 % 2.38 % 1.99 % 3.04 % Net interest spread (FTE) (non-GAAP) 1.99 % 2.39 % 2.01 % 3.05 % As of December 31, As of December 31, 2024 2023 2024 2023 Tangible common stockholders' equity Total stockholders equity (GAAP) $ 207,991 $ 221,517 $ 207,991 $ 221,517 Less: intangible assets — (14,657) — (14,657) Tangible stockholders' equity (non-GAAP) 207,991 206,860 207,991 206,860 Less: preferred stock (27,263) (27,263) (27,263) (27,263) Tangible common stockholders' equity (non-GAAP) 180,728 179,597 180,728 179,597 Common shares outstanding 7,603,765 7,527,415 7,603,765 7,527,415 Tangible book value per common share (non-GAAP) $ 23.77 $ 23.86 $ 23.77 $ 23.86 As of December 31, As of December 31, 2024 2023 2024 2023 Stockholders equity, adjusted Total stockholders equity (GAAP) $ 207,991 $ 221,517 $ 207,991 $ 221,517 Less: intangible assets — (14,657) — (14,657) Total tangible stockholders equity (non-GAAP) 207,991 206,860 207,991 206,860 As of December 31, As of December 31, 2024 2023 2024 2023 Total tangible assets Total assets (GAAP) $ 2,228,098 $ 2,035,432 $ 2,228,098 $ 2,035,432 Less: intangible assets — (14,657) — (14,657) Total tangible assets (non-GAAP) 2,228,098 2,020,775 2,228,098 2,020,775 For the three months ended December 31, For the year ended December 31, 2024 2023 2024 2023 Average tangible stockholders' equity Total average stockholders' equity (GAAP) $ 227,542 $ 216,669 $ 224,631 $ 209,921 Less: average intangible assets (18,327) (13,929) (16,989) (11,996) Total average tangible stockholders' equity (non-GAAP) 209,215 202,740 207,642 197,925 For the three months ended December 31, For the year ended December 31, 2024 2023 2024 2023 Average tangible assets Total average assets (GAAP) $ 2,290,644 $ 1,998,196 $ 2,136,586 $ 1,931,805 Less: average intangible assets (18,327) (13,929) (16,989) (11,996) Total average tangible assets (non-GAAP) 2,272,317 1,984,267 2,119,597 1,919,809 Contact: Billy FreesmeierChief of StaffDesk (703) 481-4579SOURCE MainStreet Bancshares, Inc. 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MainStreet Bancshares Inc. Reports 2024 Results

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