ﾒｲﾝｽﾄﾘｰﾄﾊﾞﾝｸｼｪｱｰｽﾞの適時開示・決算・その他

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): Date: July 29, 2024

MainStreet Bancshares, Inc.

(Exact name of Registrant as Specified in Its Charter)

Virginia	001-38817	81-2871064
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

10089 Fairfax Boulevard, Fairfax, VA		22030
(Address of Principal Executive Offices)		(Zip Code)

(703) 481-4567

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	MNSB	The Nasdaq Stock Market LLC
Depositary Shares (each representing a 1/40th interest in a share of 7.50% Series A Fixed-Rate Non-Cumulative Perpetual Preferred Stock	MNSBP	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Item 2.02 Results of Operations and Financial Condition.

On July 29, 2024, MainStreet Bancshares, Inc. (the “Company”) issued a press release setting forth the Company’s second quarter and year-to-date ended June 30, 2024 unaudited financial results. A copy of the Company’s press release is attached hereto as Exhibit 99.1, is hereby incorporated by reference, and will be posted on the Company's website.

Item 7.01 Regulation FD Disclosure

On July 29, 2024, the Company made available an investor presentation analyzing its second quarter financial results. A copy of the Company’s investor presentation is attached hereto as Exhibit 99.2, is hereby incorporated by reference, and will be posted on the Company’s website.

The information furnished under Items 2.02, 7.01 and 9.01 of this Current Report on Form 8-K, including the exhibits, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, and it shall not be deemed incorporated by reference in any filing under the Exchange Act, or the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing to this Form 8-K.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number		Description
99.1		Press Release, dated July 29, 2024, with respect to the Company’s unaudited financial results for the second quarter and year-to-date ended June 30, 2024.
99.2		Investor Presentation dated July 29, 2024.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	MAINSTREET BANCSHARES, INC

Date: July 29, 2024	By:	/s/ Thomas J. Chmelik
		Name: Thomas J. Chmelik
		Title: Chief Financial Officer

EX-99.1 2 ex_680446.htm EXHIBIT 99.1 ex_680446.htm

Exhibit 99.1

PRESS RELEASE		Contact: Debra Cope
July 29, 2024 8:00 AM ET		Director of Corporate Communications
		Desk (703) 481-4599
		Mobile (202) 468-3184

MainStreet Bancshares Inc. Reports a Profitable Second Quarter
Rise in Core Deposits Fueled an Uptick in Loan Growth

FAIRFAX, Va., July 29, 2024 /PRNewswire/ -- MainStreet Bancshares, Inc. (Nasdaq: MNSB & MNSBP), the holding company for MainStreet Bank, reported net income of $2.6 million for the second quarter of 2024.

Total deposits reached $1.8 billion in the second quarter, an increase of 10.2% from the second quarter of 2023. Loan growth is up 8.6% over the same period, also reaching $1.8 billion.

“We are now nine full quarters into the current interest rate cycle, and the entire industry has felt the effect of higher deposit costs. I’m happy to report that we experienced the softest impact this quarter, with our net interest margin settling in at a healthy 3.15%,” said Jeff W. Dick, Chairman and CEO of MainStreet Bancshares, Inc. and MainStreet Bank. “We see signs of an improving net interest margin going forward, but FOMC actions or other unforeseen externalities could affect momentum. Externalities aside, as our strategic initiatives start to bear fruit, we are confident and optimistic that the trail we have blazed to offer Banking as a Service (BaaS) will positively affect our net interest margin and our bottom line.”

“We remain focused on caring for our customers and meeting their continuing banking and borrowing needs while judiciously adding promising new relationships,” said Abdul Hersiburane, President of MainStreet Bank. “We’ve built our core customer funding sources up to 78% of total deposits.”

Loan growth in the second quarter was driven by a healthy rise in demand for commercial and industrial borrowing and in high-quality owner-occupied commercial real estate lending, a traditional area of strength for MainStreet Bank.

The Bank maintains a strong portfolio of earning assets, with very nominal AOCI exposure. The loan portfolio remains solid with net charge offs representing a mere eight basis points of average gross loans. Nonperforming assets account for 0.99% of total assets.

“We continue to carefully underwrite each loan opportunity and the lending team remains engaged with each borrower throughout their project lifecycle. If a borrower experiences a challenge, we work with them to face that challenge promptly and transparently,” said Tom Floyd, EVP and Chief Lending Officer at MainStreet Bank. “We have a meticulous understanding of our loan book and a rigorous risk management mindset.”

Banking-as-a-Service
In recent months, the weaknesses of other embedded banking solutions have been exposed—to the detriment of banks, their fintech clients and their end-customers. The Avenu team digested all the lessons that could be learned from these weaknesses and is implementing final enhancements to ensure a scalable and compliance rich solution. Avenu is live and in limited production until the final enhancements are fully integrated.

Avenu
Avenu is the first and only embedded banking solution that connects our partners and their apps directly and seamlessly to our purpose-built Avenu core solution. We are not a sponsor bank without our own technology, and we are not a middleware software company without our own bank. We are Avenu, a leading financial technology company owned by an established community bank in the heart of Washington, D.C.

Avenu’s clients are fintechs, social media, application developers, money movers, and entrepreneurs. They all have one thing in common: They are innovating how money moves to solve real-world issues and help communities thrive. We are focused on servicing our community and creating long-term business relationships.

ABOUT MAINSTREET 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 the novel coronavirus (COVID-19) outbreak, 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)

	June 30, 2024			March 31, 2024			December 31, 2023*			September 30, 2023			June 30, 2023
ASSETS
Cash and cash equivalents
Cash and due from banks	$	41,697		$	49,208		$	53,581		$	44,912		$	67,700
Federal funds sold		49,762			75,533			60,932			76,271			30,341
Total cash and cash equivalents		91,459			124,741			114,513			121,183			98,041
Investment securities available for sale, at fair value		57,605			58,699			59,928			56,726			60,579
Investment securities held to maturity, at amortized cost, net of allowance for credit losses of $0 for all periods		16,036			17,251			17,275			17,565			17,590
Restricted equity securities, at amortized cost		26,797			23,924			24,356			20,619			20,304
Loans, net of allowance for credit losses of $17,098, $16,531, $16,506, $15,626, and $16,047, respectively		1,778,840			1,727,110			1,705,137			1,681,444			1,637,484
Premises and equipment, net		13,787			14,081			13,944			14,275			14,427
Accrued interest and other receivables		11,916			10,727			12,390			11,184			10,256
Computer software, net of amortization		17,205			15,691			14,657			13,373			12,266
Bank owned life insurance		38,901			38,609			38,318			38,035			37,763
Other assets		41,200			39,182			34,914			47,087			40,641
Total Assets	$	2,093,746		$	2,070,015		$	2,035,432		$	2,021,491		$	1,949,351
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Non-interest bearing deposits	$	314,636		$	348,945		$	364,606		$	394,859		$	388,992
Interest bearing demand deposits		179,513			165,331			137,128			76,423			71,308
Savings and NOW deposits		60,867			46,036			45,878			46,550			51,294
Money market deposits		476,396			446,903			442,179			461,398			380,500
Time deposits		723,951			725,520			696,336			703,960			701,289
Total deposits		1,755,363			1,732,735			1,686,127			1,683,190			1,593,383
Federal funds purchased		—			—			15,000			—			30,000
Subordinated debt		72,841			72,741			72,642			72,543			72,444
Other liabilities		40,827			41,418			40,146			52,015			43,016
Total Liabilities		1,869,031			1,846,894			1,813,915			1,807,748			1,738,843
Stockholders’ Equity:
Preferred stock		27,263			27,263			27,263			27,263			27,263
Common stock		29,452			29,514			29,198			29,188			29,177
Capital surplus		66,392			65,940			65,985			65,407			64,768
Retained earnings		109,651			108,334			106,549			102,694			97,646
Accumulated other comprehensive loss		(8,043	)		(7,930	)		(7,478	)		(10,809	)		(8,346	)
Total Stockholders’ Equity		224,715			223,121			221,517			213,743			210,508
Total Liabilities and Stockholders’ Equity	$	2,093,746		$	2,070,015		$	2,035,432		$	2,021,491		$	1,949,351

*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
	June 30, 2024			June 30, 2023		June 30, 2024			March 31, 2024			December 31, 2023		September 30, 2023		June 30, 2023
INTEREST INCOME:
Interest and fees on loans	$	62,034		$	55,586	$	31,546		$	30,487		$	30,849	$	29,750	$	28,855
Interest on investment securities
Taxable securities		865			926		430			435			451		459		407
Tax-exempt securities		538			529		268			270			268		268		265
Interest on federal funds sold		2,264			2,311		1,083			1,182			1,510		1,217		1,179
Total interest income		65,701			59,352		33,327			32,374			33,078		31,694		30,706
INTEREST EXPENSE:
Interest on interest bearing demand deposits		4,032			594		2,172			1,860			1,058		240		251
Interest on savings and NOW deposits		347			255		190			157			146		145		147
Interest on money market deposits		10,816			4,129		5,638			5,178			5,639		4,156		2,926
Interest on time deposits		17,861			11,221		9,027			8,833			8,257		7,526		7,077
Interest on federal funds purchased		298			239		191			107			25		35		201
Interest on Federal Home Loan Bank advances		46			919		—			46			118		186		13
Interest on subordinated debt		1,640			1,632		820			820			828		828		820
Total interest expense		35,040			18,989		18,038			17,001			16,071		13,116		11,435
Net interest income		30,661			40,363		15,289			15,373			17,007		18,578		19,271
Provision for (recovery of) credit losses		443			921		638			(195	)		466		255		638
Net interest income after provision for (recovery of) credit losses		30,218			39,442		14,651			15,568			16,541		18,323		18,633
NON-INTEREST INCOME:
Deposit account service charges		959			1,125		490			469			510		514		535
Bank owned life insurance income		583			514		291			292			283		272		259
Net loss on securities called or matured		(48	)		—		(48	)		—			—		—		—
Other non-interest income		270			174		140			130			68		177		16
Total non-interest income		1,764			1,813		873			891			861		963		810
NON-INTEREST EXPENSES:
Salaries and employee benefits		14,972			14,216		7,484			7,488			7,129		6,924		6,595
Furniture and equipment expenses		1,875			1,270		940			935			804		713		772
Advertising and marketing		1,020			1,495		566			454			271		577		698
Occupancy expenses		849			912		415			435			397		375		426
Outside services		1,614			994		839			774			352		697		504
Administrative expenses		471			426		229			242			219		277		211
Other operating expenses		4,190			3,242		2,195			1,996			1,964		1,866		1,646
Total non-interest expenses		24,991			22,555		12,668			12,324			11,136		11,429		10,852
Income before income tax expense		6,991			18,700		2,856			4,135			6,266		7,857		8,591
Income tax expense		1,068			3,602		238			830			1,120		1,516		1,645
Net income		5,923			15,098		2,618			3,305			5,146		6,341		6,946
Preferred stock dividends		1,078			1,078		539			539			539		539		539
Net income available to common shareholders	$	4,845		$	14,020	$	2,079		$	2,766		$	4,607	$	5,802	$	6,407
Net income per common share, basic and diluted	$	0.64		$	1.86	$	0.27		$	0.36		$	0.61	$	0.77	$	0.85
Weighted average number of common shares, basic and diluted		7,610,188			7,519,949		7,608,389			7,611,990			7,527,327		7,524,332		7,522,764

UNAUDITED LOAN, DEPOSIT AND BORROWING DETAIL

(In thousands)

	June 30, 2024						March 31, 2024						June 30, 2023						Percentage Change
	$ Amount			% of Total			$ Amount			% of Total			$ Amount			% of Total			Last 3 Mos			Last 12 Mos
LOANS:
Construction and land development loans	$	410,698			22.8	%	$	408,903			23.4	%	$	421,277			25.4	%		0.4	%		-2.5	%
Residential real estate loans		449,700			25.0	%		451,991			25.8	%		410,550			24.7	%		-0.5	%		9.5	%
Commercial real estate loans		845,030			46.9	%		813,387			46.5	%		727,772			43.9	%		3.9	%		16.1	%
Commercial and industrial loans		93,559			5.2	%		71,822			4.1	%		93,604			5.6	%		30.3	%		0.0	%
Consumer loans		2,232			0.1	%		2,902			0.2	%		5,750			0.4	%		-23.1	%		-61.2	%
Total Gross Loans	$	1,801,219			100.0	%	$	1,749,005			100.0	%	$	1,658,953			100.0	%		3.0	%		8.6	%
Less: Allowance for credit losses		(17,098	)					(16,531	)					(16,047	)
Net deferred loan fees		(5,281	)					(5,364	)					(5,422	)
Net Loans	$	1,778,840					$	1,727,110					$	1,637,484
DEPOSITS:
Non-interest bearing deposits	$	314,636			17.9	%	$	348,945			20.1	%	$	388,992			24.4	%		-9.8	%		-19.1	%
Interest-bearing deposits:
Demand deposits		179,513			10.2	%		165,331			9.5	%		71,308			4.5	%		8.6	%		151.7	%
Savings and NOW deposits		60,867			3.5	%		46,036			2.7	%		51,294			3.2	%		32.2	%		18.7	%
Money market accounts		476,396			27.1	%		446,903			25.8	%		380,500			23.9	%		6.6	%		25.2	%
Certificates of deposit $250,000 or more		473,827			27.0	%		467,892			27.0	%		406,583			25.5	%		1.3	%		16.5	%
Certificates of deposit less than $250,000		250,124			14.3	%		257,628			14.9	%		294,706			18.5	%		-2.9	%		-15.1	%
Total Deposits	$	1,755,363			100.0	%	$	1,732,735			100.0	%	$	1,593,383			100.0	%		1.3	%		10.2	%
BORROWINGS:
Federal funds purchased		—			0.0	%		—			0.0	%		30,000			29.3	%		0.0	%		-100.0	%
Subordinated debt		72,841			100.0	%		72,741			100.0	%		72,444			70.7	%		0.1	%		0.5	%
Total Borrowings	$	72,841			100.0	%	$	72,741			100.0	%	$	102,444			100.0	%		0.1	%		-28.9	%
Total Deposits and Borrowings	$	1,828,204					$	1,805,476					$	1,695,827						1.3	%		7.8	%

Core customer funding sources (1)	$	1,376,991			75.3	%	$	1,312,746			72.7	%	$	1,184,958			69.9	%		4.9	%		16.2	%
Brokered and listing service sources (2)		378,372			20.7	%		419,989			23.3	%		408,425			24.1	%		-9.9	%		-7.4	%
Federal funds purchased		—			0.0	%		—			0.0	%		30,000			1.7	%		0.0	%		-100.0	%
Subordinated debt (3)		72,841			4.0	%		72,741			4.0	%		72,444			4.3	%		0.1	%		0.5	%
Total Funding Sources	$	1,828,204			100.0	%	$	1,805,476			100.0	%	$	1,695,827			100.0	%		1.3	%		7.8	%

(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 $290.5 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 June 30, 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 June 30, 2024							For the three months ended June 30, 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)	$	1,782,124	$	31,546		7.10	%	$	1,649,300	$	28,855		7.02	%
Securities:
Taxable		55,323		430		3.12	%		54,270		407		3.01	%
Tax-exempt		36,717		339		3.71	%		37,876		335		3.55	%
Federal funds and interest-bearing deposits		84,705		1,083		5.13	%		87,608		1,179		5.40	%
Total interest-earning assets	$	1,958,869	$	33,398		6.84	%	$	1,829,054	$	30,776		6.75	%
Other assets		131,656							83,599
Total assets	$	2,090,525						$	1,912,653
Liabilities and Stockholders’ Equity:
Interest-bearing liabilities:
Interest-bearing demand deposits	$	172,221	$	2,172		5.06	%	$	73,800	$	251		1.36	%
Savings and NOW deposits		47,767		190		1.60	%		50,644		147		1.16	%
Money market deposit accounts		463,641		5,638		4.88	%		344,118		2,926		3.41	%
Time deposits		715,777		9,027		5.06	%		723,056		7,077		3.93	%
Total interest-bearing deposits	$	1,399,406	$	17,027		4.88	%	$	1,191,618	$	10,401		3.50	%
Federal funds purchased		13,298		191		5.76	%		15,174		201		5.31	%
FHLB advances		—		—		—			989		13		5.27	%
Subordinated debt		72,802		820		4.52	%		72,405		820		4.54	%
Total interest-bearing liabilities	$	1,485,506	$	18,038		4.87	%	$	1,280,186	$	11,435		3.58	%
Demand deposits and other liabilities		381,825							424,505
Total liabilities	$	1,867,331						$	1,704,691
Stockholders’ Equity		223,194							207,962
Total Liabilities and Stockholders’ Equity	$	2,090,525						$	1,912,653
Interest Rate Spread						1.97	%						3.17	%
Net Interest Income			$	15,360						$	19,341
Net Interest Margin						3.15	%						4.24	%

(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 six months ended June 30, 2024							For the six months ended June 30, 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)	$	1,755,443	$	62,034		7.13	%	$	1,624,664	$	55,586		6.90	%
Securities:
Taxable		55,708		865		3.13	%		56,011		926		3.33	%
Tax-exempt		37,068		681		3.70	%		37,908		670		3.56	%
Federal funds and interest-bearing deposits		88,349		2,264		5.17	%		103,053		2,311		4.52	%
Total interest-earning assets	$	1,936,568	$	65,844		6.86	%	$	1,821,636	$	59,493		6.59	%
Other assets		127,430							77,601
Total assets	$	2,063,998						$	1,899,237
Liabilities and Stockholders’ Equity:
Interest-bearing liabilities:
Interest-bearing demand deposits	$	159,234	$	4,032		5.11	%	$	78,568	$	594		1.52	%
Savings and NOW deposits		45,993		347		1.52	%		51,290		255		1.00	%
Money market deposit accounts		448,647		10,816		4.86	%		284,906		4,129		2.92	%
Time deposits		712,898		17,861		5.05	%		698,384		11,221		3.24	%
Total interest-bearing deposits	$	1,366,772	$	33,056		4.88	%	$	1,113,148	$	16,199		2.93	%
Federal funds purchased		10,386		298		5.79	%		9,103		239		5.29	%
FHLB advances		1,648		46		5.63	%		39,199		919		4.73	%
Subordinated debt		72,752		1,640		4.55	%		72,355		1,632		4.55	%
Total interest-bearing liabilities	$	1,451,558	$	35,040		4.87	%	$	1,233,805	$	18,989		3.10	%
Demand deposits and other liabilities		389,792							460,632
Total liabilities	$	1,841,350						$	1,694,437
Stockholders’ Equity		222,648							204,800
Total Liabilities and Stockholders’ Equity	$	2,063,998						$	1,899,237
Interest Rate Spread						1.99	%						3.49	%
Net Interest Income			$	30,804						$	40,504
Net Interest Margin						3.21	%						4.48	%

(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 per share data)

	At or For the Three Months Ended						At or For the Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
Per share Data and Shares Outstanding
Earnings per common share (basic and diluted)	$	0.27		$	0.85		$	0.64		$	1.86
Book value per common share	$	25.99		$	24.36		$	25.99		$	24.36
Tangible book value per common share(2)	$	23.72		$	22.73		$	23.72		$	22.73
Weighted average common shares (basic and diluted)		7,608,389			7,522,764			7,610,188			7,519,949
Common shares outstanding at end of period		7,598,529			7,522,297			7,598,529			7,522,297
Performance Ratios
Return on average assets (annualized)		0.50	%		1.46	%		0.58	%		1.60	%
Return on average equity (annualized)		4.70	%		13.40	%		5.36	%		14.87	%
Return on average common equity (annualized)		5.36	%		14.22	%		6.11	%		15.92	%
Yield on earning assets (FTE) (2) (annualized)		6.84	%		6.75	%		6.86	%		6.59	%
Cost of interest bearing liabilities (annualized)		4.87	%		3.58	%		4.87	%		3.10	%
Net interest spread (FTE)(2)		1.97	%		3.17	%		1.99	%		3.49	%
Net interest margin (FTE)(2) (annualized)		3.15	%		4.24	%		3.21	%		4.48	%
Non-interest income as a percentage of average assets (annualized)		0.17	%		0.17	%		0.17	%		0.19	%
Non-interest expense to average assets (annualized)		2.43	%		2.28	%		2.44	%		2.39	%
Efficiency ratio(3)		78.38	%		54.04	%		77.07	%		53.48	%
Asset Quality
Allowance for credit losses (ACL)
Beginning balance, ACL - loans	$	16,531		$	15,435		$	16,506		$	14,114
Add: recoveries		6			1			8			12
Less: charge-offs		(370	)		(6	)		(511	)		(6	)
Add: provision for credit losses - loans		931			617			1,095			1,032
Add: current expected credit losses, nonrecurring adoption		—			—			—			895
Ending balance, ACL - loans	$	17,098		$	16,047		$	17,098		$	16,047

Beginning balance, reserve for unfunded commitment (RUC)	$	650		$	1,178		$	1,009		$	—
Add: current expected credit losses, nonrecurring adoption		—			—			—			1,310
Add: provision for unfunded commitments, net		(293	)		21			(652	)		(111	)
Ending balance, RUC	$	357		$	1,199		$	357		$	1,199
Total allowance for credit losses	$	17,455		$	17,246		$	17,455		$	17,246

Allowance for credit losses on loans to total gross loans		0.95	%		0.97	%		0.95	%		0.97	%
Allowance for credit losses to total gross loans		0.97	%		1.04	%		0.97	%		1.04	%
Allowance for credit losses on loans to non-performing loans	83		%		N/A		83		%		N/A
Net charge-offs (recoveries) to average gross loans (annualized)		0.08	%		0.00	%		0.06	%		0.00	%
Concentration Ratios
Commercial real estate loans to total capital (4)		367.24	%		363.70	%		367.24	%		363.70	%
Construction loans to total capital (5)		130.19	%		139.59	%		130.19	%		139.59	%
Non-performing Assets
Loans 30-89 days past due to total gross loans		0.81	%		0.00	%		0.81	%		0.00	%
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		1.15	%		0.00	%		1.15	%		0.00	%
Other real estate owned	$	—		$	—		$	—		$	—
Non-performing loans	$	20,691		$	—		$	20,691		$	—
Non-performing assets to total assets		0.99	%		0.00	%		0.99	%		0.00	%
Regulatory Capital Ratios (Bank only) (1)
Total risk-based capital ratio		16.78	%		16.79	%		16.78	%		16.79	%
Tier 1 risk-based capital ratio		15.85	%		15.83	%		15.85	%		15.83	%
Leverage ratio		14.22	%		14.81	%		14.22	%		14.81	%
Common equity tier 1 ratio		15.85	%		15.83	%		15.85	%		15.83	%
Other information
Closing stock price	$	17.73		$	22.66		$	17.73		$	22.66
Tangible equity / tangible assets (2)		9.99	%		10.24	%		9.99	%		10.24	%
Average tangible equity / average tangible assets (2)		9.97	%		10.34	%		10.10	%		10.28	%
Number of full time equivalent employees		195			179			195			179
Number of full service branch offices		6			6			6			6

(1)	Regulatory capital ratios as of June 30, 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 June 30,						For the six months ended June 30,
	2024			2023			2024			2023
Net interest margin (FTE)
Net interest income (GAAP)	$	15,289		$	19,271		$	30,661		$	40,363
FTE adjustment on tax-exempt securities		71			70			143			141
Net interest income (FTE) (non-GAAP)		15,360			19,341			30,804			40,504

Average interest earning assets		1,958,869			1,829,054			1,936,568			1,821,636
Net interest margin (GAAP)		3.13	%		4.23	%		3.19	%		4.47	%
Net interest margin (FTE) (non-GAAP)		3.15	%		4.24	%		3.21	%		4.48	%

	For the three months ended June 30,						For the six months ended June 30,
	2024			2023			2024			2023
Yield on earning assets (FTE)
Total interest income (GAAP)	$	33,327		$	30,706		$	65,701		$	59,352
FTE adjustment on tax-exempt securities		71			70			143			141
Total interest income (FTE) (non-GAAP)		33,398			30,776			65,844			59,493

Average interest earning assets		1,958,869			1,829,054			1,936,568			1,821,636
Yield on earning assets (GAAP)		6.82	%		6.73	%		6.84	%		6.57	%
Yield on earning assets (FTE) (non-GAAP)		6.84	%		6.75	%		6.86	%		6.59	%

	For the three months ended June 30,						For the six months ended June 30,
	2024			2023			2024			2023
Net interest spread (FTE)
Yield on earning assets (GAAP)		6.82	%		6.73	%	6.84		%	6.57		%
Yield on earning assets (FTE) (non-GAAP)		6.84	%		6.75	%	6.86		%	6.59		%

Yield on interest-bearing liabilities (GAAP)		4.87	%		3.58	%	4.87		%		3.10	%
Net interest spread (GAAP)		1.95	%		3.15	%	1.97		%	3.47		%
Net interest spread (FTE) (non-GAAP)		1.97	%		3.17	%		1.99	%	3.49		%

	As of June 30,						As of June 30,
	2024			2023			2024			2023
Tangible common stockholders' equity
Total stockholders equity (GAAP)	$	224,715		$	210,508		$	224,715		$	210,508
Less: intangible assets		(17,205	)		(12,266	)		(17,205	)		(12,266	)
Tangible stockholders' equity (non-GAAP)		207,510			198,242		$	207,510		$	198,242
Less: preferred stock		(27,263	)		(27,263	)		(27,263	)		(27,263	)
Tangible common stockholders' equity (non-GAAP)		180,247			170,979			180,247			170,979

Common shares outstanding		7,598,529			7,522,297			7,598,529			7,522,297
Tangible book value per common share (non-GAAP)	$	23.72		$	22.73		$	23.72		$	22.73

	As of June 30,						As of June 30,
	2024			2023			2024			2023
Stockholders equity, adjusted
Total stockholders equity (GAAP)	$	224,715		$	210,508		$	224,715		$	210,508
Less: intangible assets		(17,205	)		(12,266	)		(17,205	)		(12,266	)
Total tangible stockholders equity (non-GAAP)		207,510			198,242			207,510			198,242

	As of June 30,						As of June 30,
	2024			2023			2024			2023
Total tangible assets
Total assets (GAAP)	$	2,093,746		$	1,949,351		$	2,093,746		$	1,949,351
Less: intangible assets		(17,205	)		(12,266	)		(17,205	)		(12,266	)
Total tangible assets (non-GAAP)		2,076,541			1,937,085			2,076,541			1,937,085

	For the three months ended June 30,						For the six months ended June 30,
	2024			2023			2024			2023
Average tangible stockholders' equity
Total average stockholders' equity (GAAP)	$	223,194		$	207,962		$	222,648		$	204,800
Less: average intangible assets		(16,386	)		(11,284	)		(15,732	)		(10,585	)
Total average tangible stockholders' equity (non-GAAP)		206,808			196,678			206,916			194,215

	For the three months ended June 30,						For the six months ended June 30,
	2024			2023			2024			2023
Average tangible assets
Total average assets (GAAP)	$	2,090,525		$	1,912,653		$	2,063,998		$	1,899,237
Less: average intangible assets		(16,386	)		(11,284	)		(15,732	)		(10,585	)
Total average tangible assets (non-GAAP)		2,074,139			1,901,369			2,048,266			1,888,652

EX-99.2 3 ex_680447.htm EXHIBIT 99.2 Image Exhibit

Exhibit 99.2