MainStreet Bancshares Reports $9.98 Million Net Loss for Fiscal Year 2024

MainStreet Bancshares, Inc. reported a significant decline in its financial performance for the fiscal year ending December 31, 2024, with a net loss of $9.98 million compared to a net income of $26.59 million in 2023. This represents a decrease of 137.5%. The company's total interest income increased by 8.2% to $134.62 million, driven by higher loan volumes, but was offset by a substantial rise in interest expenses, which surged by 51.1% to $72.04 million. The net interest income before provisions for credit losses fell to $62.57 million, down 18.5% from the previous year, primarily due to increased costs associated with interest-bearing deposits.

In terms of operational metrics, MainStreet Bancshares experienced a notable increase in total assets, which rose by 9.5% to $2.23 billion, largely attributed to a $107.9 million increase in gross loans receivable. However, the allowance for credit losses on loans also increased to $19.45 million, reflecting a growing concern over asset quality as non-performing loans rose to $21.7 million, up from $1 million in 2023. The company’s non-performing loans as a percentage of total loans increased to 1.18%, compared to 0.06% the previous year.

Strategically, MainStreet Bancshares has focused on expanding its product offerings and enhancing its technological capabilities. The company launched Avenu, a Banking as a Service (BaaS) division, which aims to provide embedded banking solutions to fintech partners. However, the division incurred significant costs, including a $19.7 million impairment charge related to its software development, which contributed to the overall loss for the year. The company also reported an increase in employee headcount to 204, up from 186 in 2023, as it seeks to bolster its operational capacity.

Looking ahead, MainStreet Bancshares expressed optimism about its growth potential, particularly in the Northern Virginia and greater Washington, D.C. markets, which are characterized by high income and population growth. The company aims to leverage its community banking philosophy and advanced technology to attract new customers and enhance its market share. However, management acknowledged the challenges posed by rising interest rates and increased competition for deposits, which could impact future profitability. The company remains committed to maintaining a strong capital position, with a Tier 1 leverage capital ratio of 12.08% as of December 31, 2024, exceeding regulatory requirements.