MainStreet Bancshares, Inc. reported its financial results for the three and nine months ended September 30, 2024, revealing significant changes in revenue, profitability, and strategic developments compared to the previous fiscal period.

As of September 30, 2024, the company’s total assets increased to $2,224.6 million, up from $2,035.4 million at the end of 2023. Total deposits rose by 12.3% to $1,893.7 million, driven by a substantial increase in interest-bearing demand deposits and time deposits. However, cash and due from banks decreased to $40.9 million from $53.6 million, while cash and cash equivalents surged to $232.1 million from $114.5 million.

For the three months ended September 30, 2024, MainStreet reported total revenue of $34.5 million, an increase of $1.8 million from $32.7 million in the same period of 2023. However, net income plummeted to $0.3 million, a decrease of $6.1 million year-over-year, primarily due to a $2.9 million increase in the provision for credit losses. The net interest income for the quarter was $15.3 million, down 18.3% from $18.8 million in Q3 2023, reflecting a tighter interest rate spread and compressed net interest margin, which fell to 3.05% from 4.03%.

For the nine months ended September 30, 2024, total revenue reached $101.9 million, up from $93.8 million in the prior year. However, net income decreased significantly to $6.2 million from $21.4 million, with provisions for credit losses rising to $3.4 million compared to $1.2 million in the same period of 2023. The company’s net interest income for the nine months was $46.5 million, down from $59.4 million, with a net interest margin of 3.19%, down from 4.34%.

Strategically, MainStreet has focused on enhancing its Financial Technology segment, which provides Banking as a Service (BaaS) solutions. The company capitalized $18.9 million in developing its SaaS solution, which was deployed in October 2024. The bank also experienced a notable increase in non-performing loans, which rose to $28.3 million, with a significant portion attributed to liquidity constraints among borrowers.

The company’s allowance for credit losses on loans increased to $18.3 million as of September 30, 2024, reflecting heightened risk factors. Additionally, the bank's total non-performing loans to gross loans ratio surged to 1.57%, compared to 0.06% at the end of 2023.

Overall, while MainStreet Bancshares, Inc. demonstrated growth in total assets and deposits, it faced challenges in profitability and credit quality, necessitating increased provisions for credit losses and strategic adjustments in its operations.