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MainStreet Bancshares, Inc. Provides Financial Insights for 2024

On January 27, 2025, MainStreet Bancshares, Inc. (Nasdaq: MNSB & MNSBP), the financial holding company for MainStreet Bank, disclosed its financial results for 2024. The report revealed a notable loss of $9.98 million primarily influenced by the nonrecurring impairment of capitalized intangible software and a strategic resolution of nonperforming assets. This financial year marks a challenging period; however, the company concludes the year with a solid capital structure and enhanced asset quality.

Financial Overview

MainStreet Bancshares faced considerable hurdles in 2024, culminating in the reported loss. The Chairman and CEO, Jeff W. Dick, explained that the company took the step to fully impair the capitalized intangible software, particularly affecting their Avenu Banking-as-a-Service (BaaS) solution launched in late 2024. Despite this impairment, they remain optimistic, focusing on leveraging the software for fintech partnerships and low-cost deposit growth.

“Management's review was prompted by delays and subsequent revenue projections concerning the Avenu platform,” Dick stated. The management used the income approach for its impairment assessment, reflecting a strategic response to changing market dynamics.

According to Chief Accountant Alex Vari, the net interest margin ended the year at a reputable 3.13%. The bank took advantage of excess liquidity in the fourth quarter to optimize its deposit strategies, anticipating a positive impact on funding costs going into 2025. The financial team successfully grew the loan portfolio by 6%, while also resolving 62% of nonperforming loans, leaving a remaining $21.7 million that is being addressed.

Deposits and Market Position

Total deposits experienced a 13% increase year-over-year, climbing to an impressive $1.9 billion. The organization's core deposits rose by $187 million, making up 75% of total deposits at year-end. Abdul Hersiburane, President of MainStreet Bank, emphasized the bank's proactive positioning in the District of Columbia's dynamic market. He noted improvements for borrowers in the declining interest rate environment, facilitated by three cuts from the Federal Open Market Committee.

Banking Solutions and Innovations

In 2021, MainStreet Bancshares made an important investment in technology aimed at enhancing their Banking-as-a-Service model. The Avenu platform is crafted to connect fintechs and other partners directly to its banking capabilities, promoting compliant and innovative financial services. “We're dedicated to offering a first-rate BaaS solution that adapts to the needs of our partners, improving how businesses and communities thrive,” stated Dick.

MainStreet Bank operates with a unique branch-lite model across six locations in the Virginia metropolitan area. Their commitment to modern, accessible banking solutions includes a robust range of services from commercial lines of credit to extensive online banking technologies, underscoring their stance as a community-centric and resourceful establishment.

As part of its strategic vision, MainStreet aims to expand its footprint in the tech-driven financial landscape, with Avenu already providing a framework for enduring partnerships within various sectors. With a reputable investment-grade rating of