MainStreet Bancshares, Inc.: MainStreet Bancshares Inc. Reports 2024 Results

A challenging year, ending with strong and stable asset quality and strong capital

FAIRFAX, Va., Jan. 27, 2025 /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.

"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

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