1. MNSB reported Q1 net income of $2.5 million, up significantly. 2. Net interest margin increased to 3.30%, driven by lower funding costs. 3. Total deposits remained stable at $1.9 billion, with funding costs improving. 4. Low nonperforming loans at $21.7 million expected to resolve favorably. 5. Strategic withdrawal from the Avenu technology initiative to focus on core banking.
MNSB's strong financial performance, especially in net interest margin, signals growth potential.
Strong earnings and improved margins can inspire investor confidence, affecting stock price positively.
Positive quarterly results may improve investor sentiment swiftly; market reactions typically occur quickly after earnings reports.
FAIRFAX, Va., April 21, 2025 /PRNewswire/ -- MainStreet Bancshares, Inc. (Nasdaq: MNSB & MNSBP), the financial holding company for MainStreet Bank, reported first quarter net income of $2.5 million with a net interest margin of 3.30%, up 34 basis points from the previous quarter. Net interest income after provision for credit losses was $16.5 million, up $3.9 million from the previous quarter and earnings per common share were $0.25 for the first quarter. The Company continues to report strong asset quality and strong capital.
Total deposits maintained their level at $1.9 billion, with total funding costs improving by 24 basis points from the previous quarter to 3.49%. "Our net interest margin expansion was fueled primarily by an opportunity to replace higher cost deposits," said Alex Vari, Chief Accountant for MainStreet Bank. "We worked diligently to optimize pricing on our deposit stack, while also structuring $211 million of our $578 million in noncore deposits to reprice quickly should rates adjust down." The loan-to-deposit ratio of 96% indicates efficient utilization of deposit funds for lending.
Nonperforming loans held steady at a low level of $21.7 million during the quarter, with another $11.2 million expected to pay off at par in the second quarter based upon a successful court-approved resolution. Chief Credit Officer Chris Johnston said, "The resolution of nonperforming loans is a testament to the team's diligent and creative efforts to work together with borrowers to find positive outcomes in a timely manner."
Total assets were $2.2 billion with gross loans demonstrating stability at $1.8 billion. "We remain cautiously optimistic about the DC Metropolitan market," said Abdul Hersiburane, President of MainStreet Bank. "Our team is steadfast on serving our customers but taking conservative steps as we monitor the early days that come with a new administration."
"This quarter saw a change in direction for the Avenu technology initiative, which will not be moving forward," according to Chairman and CEO Jeff W. Dick. "The timeline for the expected return on invested capital extended beyond the Company's plan, and we decided to devote our energy on the core bank."
MainStreet operates six branches 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 thousands of 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 also works with the SBA to offer 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.
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.