# EDGAR Filing Document

**Accession Number:** 0001693577
**File Stem:** 0001437749-23-001543
**Filing Date:** 2023-1
**Character Count:** 39213
**Document Hash:** cd404453e703cd93994ba4f1c1514ea8
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001437749-23-001543.hdr.sgml**: 20230123

**ACCESSION NUMBER**: 0001437749-23-001543

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 37

**CONFORMED PERIOD OF REPORT**: 20230123

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Regulation FD Disclosure

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230123

**DATE AS OF CHANGE**: 20230123

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** MainStreet Bancshares, Inc.
- **CENTRAL INDEX KEY:** 0001693577
- **STANDARD INDUSTRIAL CLASSIFICATION:** STATE COMMERCIAL BANKS [6022]
- **IRS NUMBER:** 812871064
- **STATE OF INCORPORATION:** VA
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-38817
- **FILM NUMBER:** 23542540

**BUSINESS ADDRESS:**
- **STREET 1:** 10089 FAIRFAX BOULEVARD
- **CITY:** FAIRFAX
- **STATE:** VA
- **ZIP:** 22030
- **BUSINESS PHONE:** (703) 481-4567

**MAIL ADDRESS:**
- **STREET 1:** 10089 FAIRFAX BOULEVARD
- **CITY:** FAIRFAX
- **STATE:** VA
- **ZIP:** 22030

main20221222_8k.htm

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549** 

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**FORM **8-K**

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**CURRENT REPORT** 

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

**Date of Report (Date of earliest event reported): **January 23**, 2023**

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![mlogo.jpg](mlogo.jpg)

**<u>MainStreet Bancshares, Inc.</u>**

**(Exact name of Registrant as Specified in Its Charter)** 

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| | | |
|:---|:---|:---|
| **<u>Virginia</u>** | **<u>001-38817</u>** | **<u>81-2871064</u>** |
| **(State or Other Jurisdiction**<br> **of Incorporation)** | **(Commission File Number)** | **(IRS Employer**<br> **Identification No.)** |
| **<u>10089 Fairfax Boulevard</u>, **Fairfax**, **VA** |  | **<u>22030</u>** |
| **(Address of Principal Executive Offices)** |  | **(Zip Code)** |

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**<u>(**<u>703</u>**) **<u>481-4567</u>**</u>**

**(Registrant**'**s Telephone Number, Including Area Code)** 

**Not Applicable** 

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

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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:

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

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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. ☒

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**Item 2.02 Results of Operations and Financial Condition.**

On January 23, 2023, MainStreet Bancshares, Inc. (the "Company") issued a press release setting forth the Company's fourth quarter and year-ended December 31, 2022 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 January 23, 2023, the Company made available an investor presentation analyzing its fourth quarter and year-ended unaudited 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) <u>Exhibits</u>.

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| | |
|:---|:---|
| **Exhibit**<br> **Number** | **Description** |
| 99.1 | [Press Release, dated January 23, 2023, with respect to the Company's unaudited financial results for the fourth quarter and year-ended December 31, 2022.](ex_458731.htm) |
| 99.2 | [Investor Presentation dated January 23, 2023.](ex_458732.htm) |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |

---

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**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.

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| | | |
|:---|:---|:---|
|  | **MAINSTREET BANCSHARES, INC** | **MAINSTREET BANCSHARES, INC** |
| Date: January 23, 2023 | By: | /s/ Thomas J. Chmelik |
|  |  | **Name:** Thomas J. Chmelik |
|  |  | **Title:** Chief Financial Officer |

---

## Exhibit 99.1

**Exhibit 99.1**

<u>PRESS RELEASE</u> Contact: Debra Cope <br> January 23, 2023, 8:00 AM ET Director of Corporate Communications <br> (703) 481-4599

**MainStreet Bancshares, Inc. Achieves Record Results for 2022**

*Company*'*s Net Income Climbs 20% to $26.7 Million; NIM Reaches 4.19%*

FAIRFAX, Va., Jan. 23, 2023 /PRNewswire/ -- MainStreet Bancshares, Inc. (Nasdaq: MNSB & MNSBP), the holding company for MainStreet Bank, reported record net income of $26.7 million for 2022, a 20.3% increase from a year earlier. Year-end results represent:

● **13.98% return on average equity** 

● **1.53% return on average assets** 

● **4.19% net interest margin** 

● **$3.26 earnings per common share (basic and diluted)** 

● **$21.75 tangible book value per common share** 

"There is no doubt that 2022 was a banner year for the Company," said Jeff W. Dick, Chairman and CEO of MainStreet Bancshares Inc. and MainStreet Bank. "Quarter to quarter, we set performance records in nearly every activity and metric. We achieved this while maintaining our strong focus on credit quality and while building Avenu™, our innovative embedded banking software solution. The markets rewarded our upward momentum, efficiency, and focus on innovation with solid interest in our shares and improved valuations."

Net interest income reached $70 million in 2022, up 30.8% from the previous year's $53.5 million. As the Federal Reserve undertook seven interest rate increases in 2022, MainStreet Bank benefited from having an asset-sensitive balance sheet. This drove the average net interest margin (NIM) higher by 84 basis points to 4.19% for the year ended December 31, 2022, versus 3.35% a year earlier. On a quarterly basis, the NIM widened to 4.70% in the fourth quarter of 2022, up from 3.49% in the prior year's fourth quarter.

"We came into 2022 extremely well prepared for the interest rate hikes that materialized," said Thomas J. Chmelik, Chief Financial Officer of MainStreet Bancshares Inc. and MainStreet Bank. "As we enter 2023, we anticipate fewer and smaller rate hikes as the Fed makes progress toward dampening inflation, and this should yield somewhat more level interest rates this year. We are now taking steps to position our balance sheet accordingly." He noted that the level of Accumulated Other Comprehensive Income (AOCI) for the Company remains low, at -4.3% of total capital.

The loan portfolio grew 17.8% to $1.58 billion in 2022, up from $1.34 billion at the end of 2021. Loan quality remained exceptional, with zero nonperforming assets. Total deposits climbed 7% to $1.51 billion, up from $1.41 billion at the end of 2021. Non-interest-bearing deposits represent 36.4% of the total, and 69% of total deposits are core deposits. The bank's total assets grew 16.9% to reach $1.93 billion at year-end 2022, versus $1.65 billion a year earlier.

"We continue to experience solid commercial loan demand and deposit growth in our DC Metro market, and loan demand was particularly brisk in the fourth quarter," said Abdul Hersiburane, President of MainStreet Bank. "Our local economy is supported by a technologically advanced workforce and a large and steady federal employment base, and these factors mitigate the effects of any slowdown. We remain encouraged by the opportunities that we see to serve our community's growing businesses and organizations. Because we maintain rigorous underwriting standards, our credit quality remains pristine."

The Company's efficiency ratio improved to 52% for the year, from 55% at the end of 2021. This improvement occurred even as the Company was making significant investments in Avenu™, with the hiring process accelerating as the subsidiary moves toward being fully operational in 2023.

**Avenu**™ **Makes Major Strides, Onboards First Client**

Avenu™ continues to make strides and has onboarded its first customer into its sandbox. In recent weeks Avenu™ has stood up its production site and is in the process of finalizing vendor certifications and conducting end-to-end testing. Avenu™ connects partners and their apps directly and seamlessly to MainStreet Bank's banking core. These developments bring Avenu™ several steps closer to its objective of accelerating MainStreet Bank's deposit growth to support expanded lending.

"As technology evolves, consumers expect to be able to conduct transactions seamlessly using apps offered by communities they are part of and merchants they patronize regularly," said Todd Youngren, president of Avenu™. "We created Avenu™ to be a gateway to the fast, simple, secure payments that our clients' end users demand, and we are excited to 'go live' with our first client."

Chairman and CEO Jeff W. Dick elaborated: "In creating Avenu™, we sought to ensure that our partners and their consumers have a flawless experience with the banking services we provide them. Our emphasis on getting compliance right is critical. Our innovative approach ensures that our partners can connect to the core system of a reliable bank with well-honed instincts about regulatory compliance and a clear line of sight into any emerging risks."

**ABOUT AVENU**™

**Avenu**™ — **Banking Delivered**

Avenu™ is the only embedded banking solution that connects our partners and their apps directly and seamlessly to a banking core — MainStreet Bank's banking core. We are not a sponsor bank without our own technology, and we are not a middleware software company (aggregator) without our own bank. We are Avenu™, a leading financial technology company backed by an established community business bank in the heart of Washington, D.C.

**Avenu**™ — **Serving a Community of Innovation**

Our clients are fintechs, 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 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*

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![mlogo.jpg](mlogo.jpg)<br>

**UNAUDITED CONSOLIDATED BALANCE SHEET INFORMATION**

(In thousands)

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2022** | **September 30, 2022** | **June 30, 2022** | **March 31, 2022** | **December 31, 2021** |
| **ASSETS** |  |  |  |  |  |
| Cash and cash equivalents |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Cash and due from banks | $48931 | $50636 | $55636 | $63986 | $61827 |
| &nbsp;&nbsp;&nbsp; Federal funds sold | 81669 | 54098 | 47013 | 37756 | 31372 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total cash and cash equivalents | 130600 | 104734 | 102649 | 101742 | 93199 |
| Investment securities available for sale, at fair value | 62631 | 162319 | 143240 | 123802 | 99913 |
| Investment securities held to maturity, at carrying value | 17642 | 17670 | 17698 | 18769 | 20349 |
| Restricted equity securities, at cost | 24325 | 16436 | 16485 | 17209 | 15609 |
| Loans, net of allowance for loan losses of $14,114, $12,994, $12,982,$12,500, and $11,697, respectively | 1579950 | 1448071 | 1416875 | 1413238 | 1341760 |
| Premises and equipment, net | 14709 | 14523 | 14756 | 14833 | 14863 |
| Other real estate owned, net |  |  |  |  | 775 |
| Accrued interest and other receivables | 9581 | 8273 | 7313 | 6980 | 7701 |
| Computer software, net of amortization | 9149 | 7258 | 4956 | 3906 | 2493 |
| Bank owned life insurance | 37249 | 36996 | 36742 | 36492 | 36241 |
| Other assets | 39915 | 43835 | 32665 | 24777 | 14499 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total Assets** | $1925751 | $1860115 | $1793379 | $1761748 | $1647402 |
| **LIABILITIES AND STOCKHOLDERS' EQUITY** |  |  |  |  |  |
| **Liabilities:** |  |  |  |  |  |
| Non-interest bearing deposits | $550690 | $566016 | $535591 | $514160 | $530678 |
| Interest bearing DDA deposits | 80099 | 93695 | 99223 | 76286 | 69232 |
| Savings and NOW deposits | 51419 | 54240 | 58156 | 81817 | 85175 |
| Money market deposits | 222540 | 254190 | 231207 | 301842 | 267730 |
| Time deposits | 608141 | 585783 | 575950 | 460839 | 459148 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total deposits | 1512889 | 1553924 | 1500127 | 1434944 | 1411963 |
| Federal Home Loan Bank advances and other borrowings | 100000 |  |  | 40000 |  |
| Subordinated debt | 72245 | 72146 | 72047 | 71955 | 29294 |
| Other liabilities | 42335 | 44045 | 32801 | 26053 | 17357 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total Liabilities** | 1727469 | 1670115 | 1604975 | 1572952 | 1458614 |
| **Stockholders' Equity:** |  |  |  |  |  |
| Preferred stock | 27263 | 27263 | 27263 | 27263 | 27263 |
| Common stock | 28736 | 28728 | 29178 | 29642 | 29466 |
| Capital surplus | 63999 | 63231 | 64822 | 66798 | 67668 |
| Retained earnings | 86830 | 80534 | 73702 | 68691 | 64194 |
| Accumulated other comprehensive income (loss) | (8546) | (9756) | (6561) | (3598) | 197 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total Stockholders' Equity** | 198282 | 190000 | 188404 | 188796 | 188788 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total Liabilities and Stockholders' Equity** | $1925751 | $1860115 | $1793379 | $1761748 | $1647402 |

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![mlogo.jpg](mlogo.jpg)

**UNAUDITED CONSOLIDATED STATEMENTS OF INCOME INFORMATION**

(In thousands, except share and per share data)

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Year-to-Date** | **Year-to-Date** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** |
|  | **December 31, 2022** | **December 31, 2021** | **December 31, 2022** | **September 30, 2022** | **June 30, 2022** | **March 31, 2022** | **December 31, 2021** |
| **INTEREST INCOME:** |  |  |  |  |  |  |  |
| Interest and fees on loans | $78872 | $61743 | $23972 | $20261 | $17954 | $16685 | $15532 |
| Interest on investment securities |  |  |  |  |  |  |  |
| Taxable securities | 1603 | 1262 | 467 | 378 | 401 | 357 | 327 |
| Tax-exempt securities | 1058 | 1060 | 262 | 261 | 263 | 272 | 283 |
| Interest on federal funds sold | 2312 | 134 | 1071 | 1013 | 195 | 34 | 61 |
| Total interest income | 83845 | 64199 | 25772 | 21913 | 18813 | 17348 | 16203 |
| **INTEREST EXPENSE:** |  |  |  |  |  |  |  |
| Interest on interest bearing DDA deposits | 601 | 229 | 256 | 175 | 105 | 65 | 59 |
| Interest on savings and NOW deposits | 203 | 165 | 81 | 43 | 42 | 37 | 38 |
| Interest on money market deposits | 1547 | 772 | 781 | 496 | 151 | 119 | 127 |
| Interest on time deposits | 8202 | 7613 | 2966 | 2275 | 1530 | 1431 | 1574 |
| Interest on Federal Home Loan Bank advances and other borrowings | 347 |  | 264 |  | 52 | 31 |  |
| Interest on subordinated debt | 2936 | 1884 | 828 | 828 | 812 | 468 | 539 |
| Total interest expense | 13836 | 10663 | 5176 | 3817 | 2692 | 2151 | 2337 |
| Net interest income | 70009 | 53536 | 20596 | 18096 | 16121 | 15197 | 13866 |
| Provision for (recovery of) loan losses | 2398 | (1175) | 1118 |  | 480 | 800 | 295 |
| Net interest income after provision for (recovery of) loan losses | 67611 | 54711 | 19478 | 18096 | 15641 | 14397 | 13571 |
| **NON-INTEREST INCOME:** |  |  |  |  |  |  |  |
| Deposit account service charges | 2420 | 2426 | 610 | 601 | 597 | 611 | 624 |
| Bank owned life insurance income | 1008 | 900 | 253 | 254 | 250 | 251 | 253 |
| Loan swap fee income | 619 | 83 |  | 518 | 101 |  | 83 |
| Net gain on held-to-maturity securities | 4 | 6 |  |  | 4 |  | 3 |
| Net gain (loss) on sale of loans | (168) | 847 |  | (211) |  | 43 | 413 |
| Other non-interest income | 951 | 1848 | 196 | 186 | 312 | 257 | 247 |
| Total other income | 4834 | 6110 | 1059 | 1348 | 1264 | 1162 | 1623 |
| **NON-INTEREST EXPENSES:** |  |  |  |  |  |  |  |
| Salaries and employee benefits | 23801 | 19305 | 6775 | 5874 | 5604 | 5548 | 5029 |
| Furniture and equipment expenses | 2786 | 2468 | 710 | 760 | 659 | 657 | 726 |
| Advertising and marketing | 2304 | 1565 | 620 | 704 | 574 | 406 | 450 |
| Occupancy expenses | 1471 | 1541 | 378 | 400 | 352 | 341 | 449 |
| Outside services | 2075 | 1394 | 529 | 611 | 567 | 368 | 485 |
| Administrative expenses | 872 | 685 | 214 | 253 | 195 | 210 | 192 |
| Other operating expenses | 5748 | 5907 | 1481 | 1291 | 1543 | 1433 | 1389 |
| Total non-interest expenses | 39057 | 32865 | 10707 | 9893 | 9494 | 8963 | 8720 |
| Income before income tax expense | 33388 | 27956 | 9830 | 9551 | 7411 | 6596 | 6474 |
| Income tax expense | 6714 | 5785 | 2252 | 1808 | 1481 | 1173 | 1660 |
| Net income | 26674 | 22171 | 7578 | 7743 | 5930 | 5423 | 4814 |
| Preferred stock dividends | 2156 | 2156 | 539 | 539 | 539 | 539 | 539 |
| Net income available to common shareholders | $24518 | $20015 | $7039 | $7204 | $5391 | $4884 | $4275 |
| Net income per common share, basic and diluted | $3.26 | $2.65 | $0.95 | $0.97 | $0.71 | $0.64 | $0.56 |
| Weighted average number of common shares, basic and diluted | 7529382 | 7559310 | 7433607 | 7463719 | 7575484 | 7647519 | 7595062 |

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![mlogo.jpg](mlogo.jpg)

**UNAUDITED LOAN, DEPOSIT AND BORROWING DETAIL**

***(In thousands)***

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2022** | **December 31, 2022** | **September 30, 2022** | **September 30, 2022** | **December 31, 2021** | **December 31, 2021** | **Percentage Change** | **Percentage Change** |
|  | **$ Amount** | **% of Total** | **$ Amount** | **% of Total** | **$ Amount** | **% of Total** | **Last 3 Mos** | **Last 12 Mos** |
| **LOANS:** |  |  |  |  |  |  |  |  |
| Construction and land development loans | $393783 | 24.6% | $366689 | 25.0% | $337173 | 24.8% | 7.4% | 16.8% |
| Residential real estate loans | 394394 | 24.7% | 373056 | 25.4% | 300390 | 22.1% | 5.7% | 31.3% |
| Commercial real estate loans | 700728 | 43.8% | 638110 | 43.5% | 534187 | 39.3% | 9.8% | 31.2% |
| Commercial and industrial loans | 97351 | 6.1% | 74482 | 5.1% | 164014 | 12.1% | 30.7% | -40.6% |
| Consumer loans | 13336 | 0.8% | 13628 | 1.0% | 23171 | 1.7% | -2.1% | -42.4% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Gross Loans | $1599592 | 100.0% | $1465965 | 100.0% | $1358935 | 100.0% | 9.1% | 17.7% |
| Less: Allowance for loan losses | (14114) |  | (12994) |  | (11697) |  |  |  |
| Net deferred loan fees | (5528) |  | (4900) |  | (5478) |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net Loans | $1579950 |  | $1448071 |  | $1341760 |  |  |  |
| **DEPOSITS:** |  |  |  |  |  |  |  |  |
| Non-interest bearing demand deposits | $550690 | 36.4% | $566016 | 36.4% | $530678 | 37.6% | -2.7% | 3.8% |
| Interest-bearing demand deposits: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Demand deposits | 80099 | 5.3% | 93695 | 6.0% | 69232 | 4.9% | -14.5% | 15.7% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Savings and NOW deposits | 51419 | 3.4% | 54240 | 3.5% | 85175 | 6.0% | -5.2% | -39.6% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Money market accounts | 222540 | 14.7% | 254190 | 16.4% | 267730 | 19.0% | -12.5% | -16.9% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Certificates of deposit $250,000 or more | 370005 | 24.5% | 371739 | 23.9% | 285395 | 20.2% | -0.5% | 29.6% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Certificates of deposit less than $250,000 | 238136 | 15.7% | 214044 | 13.8% | 173753 | 12.3% | 11.3% | 37.1% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Deposits | $1512889 | 100.0% | $1553924 | 100.0% | $1411963 | 100.0% | -2.6% | 7.1% |
| **BORROWINGS:** |  |  |  |  |  |  |  |  |
| Federal Home Loan Bank advances | 100000 | 58.1% |  | 0.0% |  |  | 100.0% | 100.0% |
| Subordinated debt | 72245 | 41.9% | 72146 | 100.0% | 29294 | 100.0% | 0.1% | 146.6% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Borrowings | $172245 | 100.0% | $72146 | 100.0% | $29294 | 100.0% | 138.7% | 488.0% |
| Total Deposits and Borrowings | $1685134 |  | $1626070 |  | $1441257 |  | 3.6% | 16.9% |
| Core customer funding sources <sup>(1)</sup> | $1157573 | 68.7% | $1156862 | 71.1% | $1108177 | 76.9% | 0.1% | 4.5% |
| Brokered and listing service sources <sup>(2)</sup> | 355316 | 21.1% | 397062 | 24.5% | 303786 | 21.1% | -10.5% | 17.0% |
| Federal Home Loan Bank advances | 100000 | 5.9% |  | 0.0% |  |  | 100.0% | 0.0% |
| Subordinated debt <sup>(3)</sup> | 72245 | 4.3% | 72146 | 4.4% | 29294 | 2.0% | 0.1% | 146.6% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Funding Sources | $1685134 | 100.0% | $1626070 | 100.0% | $1441257 | 100.0% | 3.6% | 16.9% |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Includes ICS, CDARS, and reciprocal deposits maintained by customers, which represent sweep accounts tied to customer operating accounts

&nbsp;&nbsp;&nbsp;&nbsp;(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

&nbsp;&nbsp;&nbsp;&nbsp;(3) Subordinated debt obligation qualifies as Tier 2 capital at the holding company and Tier 1 capital at the Bank

------

![mlogo.jpg](mlogo.jpg)

**UNAUDITED AVERAGE BALANCE SHEETS, INTEREST AND RATES**

**(In thousands)**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the three months ended December 31, 2022** | **For the three months ended December 31, 2022** | **For the three months ended December 31, 2022** | **For the three months ended December 31, 2021** | **For the three months ended December 31, 2021** | **For the three months ended December 31, 2021** |
|  | **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: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loans <sup>(1)(2)</sup> | $1510087 | $23972 | 6.30% | $1277828 | $15532 | 4.82% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Securities: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Taxable | 70776 | 467 | 2.62% | 76776 | 327 | 1.69% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Tax-exempt | 38007 | 332 | 3.46% | 38936 | 358 | 3.65% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Federal funds and interest-bearing deposits | 124865 | 1071 | 3.40% | 192442 | 61 | 0.13% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total interest earning assets | $1743735 | $25842 | 5.88% | $1585982 | $16278 | 4.07% |
| Other assets | 55559 |  |  | 87072 |  |  |
| Total assets | $1799294 |  |  | $1673054 |  |  |
| **Liabilities and Stockholders' Equity:** |  |  |  |  |  |  |
| Interest-bearing liabilities: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest-bearing demand deposits | $81724 | $256 | 1.24% | $69532 | $59 | 0.34% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Savings and NOW deposits | 53570 | 81 | 0.60% | 82048 | 38 | 0.18% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Money market deposit accounts | 213530 | 781 | 1.45% | 296063 | 127 | 0.17% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Time deposits | 613262 | 2966 | 1.92% | 466190 | 1574 | 1.34% |
| Total interest-bearing deposits | $962086 | $4084 | 1.68% | $913833 | $1798 | 0.78% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Federal funds purchased | 2 |  |  | 1 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Subordinated debt | 72206 | 828 | 4.55% | 40297 | 539 | 5.31% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; FHLB borrowings | 23913 | 264 | 4.38% |  |  |  |
| Total interest-bearing liabilities | $1058207 | $5176 | 1.94% | $954131 | $2337 | 0.97% |
| Demand deposits and other liabilities | 546827 |  |  | 532216 |  |  |
| Total liabilities | $1605034 |  |  | $1486347 |  |  |
| Stockholders' Equity | 194260 |  |  | 186707 |  |  |
| Total Liabilities and Stockholders' Equity | $1799294 |  |  | $1673054 |  |  |
| **Interest Rate Spread** |  |  | 3.94% |  |  | 3.10% |
| **Net Interest Income** |  | $20666 |  |  | $13941 |  |
| **Net Interest Margin** |  |  | 4.70% |  |  | 3.49% |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Includes loans classified as non-accrual

&nbsp;&nbsp;&nbsp;&nbsp;(2) Total loan interest income includes amortization of deferred loan fees, net of deferred loan costs

&nbsp;&nbsp;&nbsp;&nbsp;(3) Income and yields for all periods presented are reported on a tax-equivalent basis using the federal statutory rate of 21%

&nbsp;&nbsp;&nbsp;&nbsp;(4) Refer to Appendix for reconciliation of non-GAAP measures

------

![mlogo.jpg](mlogo.jpg)

**UNAUDITED AVERAGE BALANCE SHEETS, INTEREST AND RATES**

**(In thousands)**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the year ended December 31, 2022** | **For the year ended December 31, 2022** | **For the year ended December 31, 2022** | **For the year ended December 31, 2021** | **For the year ended December 31, 2021** | **For the year ended December 31, 2021** |
|  | **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 <sup>(1)(2)</sup> | $1442716 | $78872 | 5.47% | $1289445 | $61743 | 4.79% |
| Securities: |  |  |  |  |  |  |
| Taxable | 72809 | 1603 | 2.20% | 60732 | 1262 | 2.08% |
| Tax-exempt | 38528 | 1339 | 3.48% | 39170 | 1342 | 3.43% |
| Federal funds and interest-bearing deposits | 122596 | 2312 | 1.89% | 216436 | 134 | 0.06% |
| Total interest earning assets | $1676649 | $84126 | 5.02% | $1605783 | $64481 | 4.02% |
| Other assets | 67380 |  |  | 79357 |  |  |
| Total assets | $1744029 |  |  | $1685140 |  |  |
| **Liabilities and Stockholders' Equity:** |  |  |  |  |  |  |
| Interest-bearing liabilities: |  |  |  |  |  |  |
| Interest-bearing demand deposits | $85566 | $601 | 0.70% | $67897 | $229 | 0.34% |
| Savings and NOW deposits | 63401 | 203 | 0.32% | 74975 | 165 | 0.22% |
| Money market deposit accounts | 137066 | 1547 | 1.13% | 333160 | 772 | 0.23% |
| Time deposits | 642918 | 8202 | 1.28% | 498001 | 7613 | 1.53% |
| Total interest-bearing deposits | $928951 | $10553 | 1.14% | $974033 | $8779 | 0.90% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Federal funds and repos purchased | 2 |  |  |  |  |  |
| Subordinated debt | 65176 | 2936 | 4.50% | 33953 | 1884 | 5.55% |
| FHLB borrowings | 23986 | 347 | 1.45% |  |  |  |
| Total interest-bearing liabilities | $1018115 | $13836 | 1.36% | $1007986 | $10663 | 1.06% |
| Demand deposits and other liabilities | 535075 |  |  | 498031 |  |  |
| Total liabilities | $1553190 |  |  | $1506017 |  |  |
| Stockholders' Equity | 190839 |  |  | 179123 |  |  |
| Total Liabilities and Stockholders' Equity | $1744029 |  |  | $1685140 |  |  |
| **Interest Rate Spread** |  |  | 3.66% |  |  | 2.96% |
| **Net Interest Income** |  | $70290 |  |  | $53818 |  |
| **Net Interest Margin** |  |  | 4.19% |  |  | 3.35% |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Includes loans classified as non-accrual

&nbsp;&nbsp;&nbsp;&nbsp;(2) Total loan interest income includes amortization of deferred loan fees, net of deferred loan costs

&nbsp;&nbsp;&nbsp;&nbsp;(3) Income and yields for all periods presented are reported on a tax-equivalent basis using the federal statutory rate of 21%

&nbsp;&nbsp;&nbsp;&nbsp;(4) Refer to Appendix for reconciliation of non-GAAP measures

------

![mlogo.jpg](mlogo.jpg)<br>

**UNAUDITED SUMMARY FINANCIAL DATA**

**(Dollars in thousands except per share data)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **At or For the Three Months Ended** | **At or For the Three Months Ended** | **At or For the Year Ended** | **At or For the Year Ended** |
|  | **December 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ***Per share Data and Shares Outstanding*** |  |  |  |  |
| Earnings per common share (basic and diluted) | $0.95 | $0.56 | $3.26 | $2.65 |
| Book value per common share | $22.98 | $21.27 | $22.98 | $21.27 |
| Tangible book value per common share<sup>(2)</sup> | $21.75 | $20.49 | $21.75 | $20.49 |
| Weighted average common shares (basic and diluted) | 7433607 | 7595062 | 7529382 | 7559310 |
| Common shares outstanding at end of period | 7442743 | 7595781 | 7442743 | 7595781 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ***Performance Ratios*** |  |  |  |  |
| Return on average assets (annualized) | 1.67% | 1.14% | 1.53% | 1.32% |
| Return on average equity (annualized) | 15.48% | 10.23% | 13.98% | 12.38% |
| Return on average common equity (annualized) | 16.72% | 10.63% | 14.99% | 13.18% |
| Yield on earning assets (FTE) (2) (annualized) | 5.88% | 4.07% | 5.02% | 4.02% |
| Cost of interest bearing liabilities (annualized) | 1.94% | 0.97% | 1.36% | 1.06% |
| Net interest spread (FTE)<sup>(2)</sup> | 3.94% | 3.10% | 3.66% | 2.96% |
| Net interest margin (FTE)(2) (annualized) | 4.70% | 3.49% | 4.19% | 3.35% |
| Noninterest income as a percentage of average assets (annualized) | 0.23% | 0.38% | 0.28% | 0.36% |
| Noninterest expense to average assets (annualized) | 2.36% | 2.07% | 2.24% | 1.95% |
| Efficiency ratio<sup>(3)</sup> | 49.45% | 56.31% | 52.19% | 55.10% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ***Asset Quality*** |  |  |  |  |
| Commercial real estate loans to total capital <sup>(4)</sup> | 377.54% | 367.88% | 377.54% | 367.88% |
| Construction loans to total capital <sup>(5)</sup> | 137.41% | 148.30% | 137.41% | 148.30% |
| Loans 30-89 days past due to total gross loans | 0.00% | 0.01% | 0.00% | 0.01% |
| Loans 90 days past due to total gross loans | 0.00% | 0.00% | 0.00% | 0.00% |
| Non-accrual loans to total gross loans | 0.00% | 0.00% | 0.00% | 0.00% |
| Other real estate owned | $— | $775 | $— | $775 |
| Non-performing assets | $— | $775 | $— | $775 |
| Non-performing assets to total assets | 0.00% | 0.05% | 0.00% | 0.05% |
| Allowance for loan losses to total gross loans | 0.88% | 0.86% | 0.88% | 0.86% |
| Allowance for loan losses to non-performing assets | N/A | 15.09 | N/A | 15.09 |
| Net loan recoveries | $2 | $26 | $19 | $5 |
| Net charge-offs (recoveries) to average gross loans (annualized) | 0.00% | 0.01% | 0.00% | 0.00% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ***Regulatory Capital Ratios (Bank only) <sup>(1)</sup>*** |  |  |  |  |
| Total risk-based capital ratio | 16.27% | 16.06% | 16.27% | 16.06% |
| Tier 1 risk-based capital ratio | 15.47% | 15.23% | 15.47% | 15.23% |
| Leverage ratio | 15.05% | 12.90% | 15.05% | 12.90% |
| Common equity tier 1 ratio | 15.47% | 15.23% | 15.47% | 15.23% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ***Other information*** |  |  |  |  |
| Closing stock price | $27.49 | $24.59 | $27.49 | $24.59 |
| Equity / assets | 10.35% | 11.46% | 10.35% | 11.46% |
| Average equity / average assets | 10.80% | 11.16% | 10.94% | 10.63% |
| Number of full time equivalent employees | 168 | 138 | 168 | 138 |
| # Full service branch offices | 6 | 6 | 6 | 6 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Regulatory capital ratios as of December 31, 2022 are preliminary

&nbsp;&nbsp;&nbsp;&nbsp;(2) Refer to Appendix for reconciliation of non-GAAP measures

&nbsp;&nbsp;&nbsp;&nbsp;(3) Efficiency ratio is calculated as non-interest expense as a percentage of net interest income and non-interest income

&nbsp;&nbsp;&nbsp;&nbsp;(4) Commercial real estate includes only non-owner occupied and construction loans as a percentage of Bank capital

&nbsp;&nbsp;&nbsp;&nbsp;(5) Construction loans as a percentage of Bank capital

------

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**Unaudited Reconciliation of Certain Non-GAAP Financial Measures**

**(Dollars In thousands)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the three months ended December 31,** | **For the three months ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
| **Net interest margin (FTE)** |  |  |  |  |
| Net interest income (GAAP) | $20596 | $13866 | $70009 | $53536 |
| FTE adjustment on tax-exempt securities | 70 | 75 | 281 | 282 |
| Net interest income (FTE) (non-GAAP) | 20666 | 13941 | 70290 | 53818 |
| Average interest earning assets | 1743735 | 1585982 | 1676649 | 1605783 |
| Net interest margin (GAAP) | 4.69% | 3.47% | 4.18% | 3.33% |
| Net interest margin (FTE) (non-GAAP) | 4.70% | 3.49% | 4.19% | 3.35% |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the three months ended December 31,** | **For the three months ended December 31,** | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
| **Stockholders equity, adjusted** |  |  |  |  |
| Total stockholders equity (GAAP) | $198282 | $188788 | $198282 | $188788 |
| Less: preferred stock | (27263) | (27263) | (27263) | (27263) |
| Total common stockholders equity (GAAP) | 171019 | 161525 | $171019 | $161525 |
| &nbsp;&nbsp;&nbsp; Less: intangible assets | 9149 | 2493 | 9149 | 2493 |
| Tangible common stockholders equity (non-GAAP) | 161870 | 159032 | 161870 | 159032 |
| Shares outstanding | 7442743 | 7595781 | 7442743 | 7595781 |
| Tangible book value per common share (non-GAAP) | $21.75 | $20.94 | $21.75 | $20.94 |

---

## Exhibit 99.2

**Exhibit 99.2**

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