MainStreet Bank (NASDAQ:MNSB) executives used the company’s prerecorded 2025 earnings webcast to outline a return to “core banking” priorities, a recovery from a 2024 technology transition, and plans to carry late-year loan and deposit momentum into 2026. Chairman and CEO Jeff Dick was joined by CFO Alex Vari and Chief Lending Officer Tom Floyd. Management encouraged investors to follow up with questions by phone and noted the team’s plans to attend the Janney conference in Scottsdale, Arizona, on February 4–5.
Management highlights: market position and strategy
Dick described the Washington, D.C., metropolitan area as a strong market for a community bank, citing regional economic diversity beyond federal government employment, including universities, tourism, technology, data centers, medical facilities, and large corporate presence. He also cited market statistics including a $125,000 median household income, an $810,000 average home listing price, and 38 days average time on market.
2025 results and balance sheet themes
Vari summarized performance for 2025, describing it as a year in which the company shifted focus back to core banking and positioned itself to “springboard” performance in 2026. He reported:
- Earnings per common share: $1.76
- Return on average assets: 0.73%
- Return on average tangible common equity: 7.24%
- Net interest margin: 3.46%
Despite what he described as “a small handful of problem credits,” Vari said net interest income increased 11% over the year. He added that the net interest margin remained healthy and that the company expects “even more funding cost relief throughout 2026.”
On liquidity, Vari said the bank intentionally managed its loan-to-deposit ratio to maximize net interest income and ended the year with a strong liquidity position and ample funding sources, “particularly in our secured credit availability.” He stated that liquidity facilities had been expanded to cover “over 30%” of the deposit portfolio.
Net interest margin and deposit mix
Vari said core net interest margin had remained steady over the last nine months. During the quarter, the bank recorded $600,000 of “non-recurring interest reversals” tied to two relationships that were moved to non-accrual. He said that with “the noise of 2025 behind us,” the core portfolio remains strong, and management expects net interest margin resilience and potential improvement as loan and deposit momentum continues.
He also highlighted deposit mix optimization over the last five quarters. According to Vari, the bank’s focus has been on recalibrating deposit composition rather than simply growing balances, and it reduced the cost of deposits by 71 basis points year-over-year, which he said generally tracked the Federal Reserve’s rate reduction cycle. He said the bank intends to expand its branch footprint and target niche industries to grow non-interest-bearing deposits, emphasizing a focus on “profitable, low cost, and scalable funding.”
Expenses, growth expectations, and capital actions
Looking ahead, Vari provided a near-term expense outlook, saying that after three quarters of normalized expenses, the first two quarters of 2026 are expected to be consistent with the fourth quarter of 2025. He also said the bank expects loan growth of 3% to 4% over the first six months of the year.
Dick and Vari also discussed share repurchases. Dick noted that in October the company filed a Form 8-K indicating it refreshed its share repurchase plan to increase capacity to $10 million, and said the company plans to file a Rule 10b5-1 plan after exiting its trading blackout period. He also stated that as of year-end the stock traded at 80% of tangible book value. Vari said the bank repurchased 209,000 shares during the fourth quarter at a price he characterized as “28% accretive to book value,” and he said management would continue to look for repurchase opportunities.
Loan portfolio composition and credit quality
Floyd said the fourth quarter showed healthy loan growth in “desirable categories,” while maintaining credit discipline. He reported annual net charge-offs were “virtually zero.” He said the bank delivered net portfolio growth while reducing commercial real estate (CRE) concentration, describing the pullback in CRE as intentional risk management and an effort to be more selective, with a strategic emphasis on owner-occupied CRE tied to fuller customer relationships.
As of the end of 2025, Floyd provided the following portfolio composition:
- 30% non-owner-occupied commercial real estate
- 24% owner-occupied commercial real estate
- 16% construction
- 12% multifamily
- 12% residential real estate
- 6% commercial and industrial
He added that nearly all of the construction portfolio has an interest reserve held at the bank.
Floyd also discussed the bank’s government contracting portfolio, saying the company sees opportunity to expand and remains in constant contact with borrowers given the space’s dynamics. He said the portfolio includes 27 asset-based lines of credit and referred to “29 lines” with $12.3 million outstanding against $67.3 million in total commitments, or an 18% utilization rate. He said the government contracting book includes $1.4 million in outstanding term debt, with loans amortizing rapidly and an average remaining term of 24 months. He highlighted average deposits attributable to the portfolio of $93.6 million during the quarter, describing deposits as averaging nearly seven times the outstanding credit.
On interest-rate positioning, Floyd said 67% of the portfolio has rate resets beyond six months, while 33% resets within six months. For the faster-reset portion, he said 60% has a weighted average floor rate of 5.84%, which he expects could support net interest margin if rates remain stable or fall.
Floyd noted the average new loan size has trended downward over the last several years, reflecting a focus on smaller opportunities in the current environment. He also discussed stress testing, noting an estimated worst-case stress loss of $62.9 million for the quarter, while emphasizing that post-stress capital remained strong. He cited a post-stress Common Equity Tier 1 ratio of 11.8%, above the 7% well-capitalized threshold, and reiterated that actual net charge-offs have remained near zero.
Finally, he reported classified assets of 2.69%, nonaccruals of 1.69%, and other real estate owned of 0.09%. While acknowledging these metrics are monitored closely, he said the bank’s track record of protecting principal and resolving problem loans supports management’s confidence.
In closing remarks, Dick reiterated that management is available to address investor questions by phone and said the company looks forward to further discussion at the Janney conference in early February.
About MainStreet Bank (NASDAQ:MNSB)
MainStreet Bank Group, Inc (NASDAQ: MNSB) is the bank holding company for MainStreet Bank, a community bank headquartered in Westborough, Massachusetts. Through its subsidiary, the company provides a full range of commercial and consumer banking services designed to meet the financial needs of individuals, small businesses, and non-profit organizations. Its core focus is on building long‐term relationships within the communities it serves.
MainStreet Bank’s product suite includes deposit accounts such as checking, savings, money market and certificate of deposit offerings, as well as a variety of lending solutions.
