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MainStreet Bancshares, Inc.

MainStreet Bancshares, Inc.MNSB财报

Nasdaq · 金融 · 国有商业银行

MainStreet Bancshares, Inc. is a US-based bank holding company that provides comprehensive retail and commercial banking services, including deposit products, personal and business loans, mortgage lending, and wealth management solutions. It primarily serves individual consumers, small and medium-sized enterprises, and local community customers through its regional branch network.

What changed in MainStreet Bancshares, Inc.'s 10-K — 2024 vs 2025

Top changes in MainStreet Bancshares, Inc.'s 2025 10-K

297 paragraphs added · 313 removed · 251 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

75 edited+16 added−26 removed232 unchanged
These loans are also short duration and carefully underwritten with an increased focus on the builder’s reputation and ability to deliver high quality homes on time and within budget. We also stress test the construction lending portfolio based upon the percentage completion method by stressing the as-is and as-completed appraised values.
These loans are also short duration and carefully underwritten with an increased focus on the builder’s reputation and ability to deliver high quality homes on time and within budget. We also stress test the construction lending portfolio based upon the percentage of completion method by stressing the as-is and as-completed appraised values.
The Bank offers a broad array of deposit products that include demand, NOW, money market and savings accounts as well as certificates of deposit. The Bank typically pays a competitive rate on the interest-bearing deposits. As a relationship-oriented organization, we seek generally to obtain deposit relationships with our loan clients.
The Bank offers a broad array of deposit products that include demand, NOW, money market and savings accounts as well as certificates of deposit. The Bank typically pays a competitive rate on the interest-bearing deposits. As a relationship-oriented organization, we seek to obtain deposit relationships with our loan clients.
In the event deposit growth does not fully support the Bank’s loan growth, the Bank will utilize deposit listing services, borrowed funds, or incorporate a combination of sales of investment securities, federal funds and other purchased/borrowed funds in order to augment the Bank’s funding position. 8 The current investment policy authorizes the Bank to invest in debt securities issued by the United States Government, agencies of the United States Government, or United States Government-sponsored enterprises.
In the event deposit growth does not fully support the Bank’s loan growth, the Bank will utilize deposit listing services, borrowed funds, or incorporate a combination of sales of investment securities, federal funds and other purchased/borrowed funds in order to augment the Bank’s funding position. 7 The current investment policy authorizes the Bank to invest in debt securities issued by the United States Government, agencies of the United States Government, or United States Government-sponsored enterprises.
Establishing a trading portfolio would require specific authorization by the Board of Directors. The investment portfolio is actively managed and consists of investments classified as available-for-sale and held-to-maturity. Under the available-for-sale classification, investment instruments may be sold as deemed appropriate by management. On a monthly basis, the investment portfolio is marked to market as required by ASC 320.
Establishing a trading portfolio would require specific authorization by the Board of Directors. The investment portfolio is actively managed and consists of investments classified as available-for-sale (AFS) and held-to-maturity (HTM). Under the available-for-sale classification, investment instruments may be sold as deemed appropriate by management. On a monthly basis, the investment portfolio is marked to market as required by ASC 320.
Failure to meet capital guidelines could subject the Bank to a variety of enforcement remedies, including issuance of a capital directive, restrictions on business activities, and other measures under the Federal Reserve’s prompt corrective action regulations. 17 As part of the directive under the Economic Growth Act, in September 2019, the Federal Reserve and other federal bank regulatory agencies approved the CBLR framework.
Failure to meet capital guidelines could subject the Bank to a variety of enforcement remedies, including issuance of a capital directive, restrictions on business activities, and other measures under the Federal Reserve’s prompt corrective action regulations. 15 As part of the directive under the Economic Growth Act, in September 2019, the Federal Reserve and other federal bank regulatory agencies approved the CBLR framework.
We offer a diversified loan portfolio consisting primarily of commercial business and owner-occupied and investment commercial real estate loans with higher risk-adjusted returns, shorter maturities and more sensitivity to interest rate fluctuations, while still providing high quality loan products for single-family and multi-family residential borrowers. 7 Commercial Business Lending .
We offer a diversified loan portfolio consisting primarily of commercial business and owner-occupied and investment commercial real estate loans with higher risk-adjusted returns, shorter maturities and more sensitivity to interest rate fluctuations, while still providing high quality loan products for single-family and multi-family residential borrowers. 6 Commercial Business Lending .
For example, MainStreet Bank contracts with an asset disposal company to ensure that electronic assets, including monitors, security cameras, and batteries, are disposed of and recycled in an appropriate and environmentally sensitive manner. We have long allowed and even encouraged our employees to telecommute. Approximately 12% of our employees work remotely full-time.
For example, MainStreet Bank contracts with an asset disposal company to ensure that electronic assets, including monitors, security cameras, and batteries, are disposed of and recycled in an appropriate and environmentally sensitive manner. We have long allowed and even encouraged our employees to telecommute. Approximately 8% of our employees work remotely full-time.
In 2016, the federal banking agencies issued comprehensive guidance on incentive compensation policies intended to ensure that such policies of banking organizations do not undermine the safety and soundness of those organizations by encouraging excessive risk-taking. The incentive compensation guidance sets expectations for banking organizations concerning their incentive compensation arrangements and related risk-management, control, and governance processes.
In 2010, the federal banking agencies issued comprehensive guidance on incentive compensation policies intended to ensure that such policies of banking organizations do not undermine the safety and soundness of those organizations by encouraging excessive risk-taking. The incentive compensation guidance sets expectations for banking organizations concerning their incentive compensation arrangements and related risk-management, control, and governance processes.
Under the final rule, the federal banking agencies will evaluate bank performance across the varied activities they conduct and communities in which they operate in order to encourage banks to expand access to credit, investment, and banking services in low- and moderate-income communities, the CRA regulations are updated to evaluate lending outside traditional assessment areas generated by the growth of non-branch delivery systems, such as online and mobile banking, branchless banking, and hybrid models, a new metrics-based approach was adopted to evaluate bank retail lending and community development financing, using benchmarks based on peer and demographic data, and CRA evaluations and data collection are tailored according to bank size and type.
Under the final rule, (1) the federal banking agencies will evaluate bank performance across the varied activities they conduct and communities in which they operate in order to encourage banks to expand access to credit, investment, and banking services in low- and moderate-income communities, (2) the CRA regulations are updated to evaluate lending outside traditional assessment areas generated by the growth of non-branch delivery systems, such as online and mobile banking, branchless banking, and hybrid models, (3) a new metrics-based approach was adopted to evaluate bank retail lending and community development financing, using benchmarks based on peer and demographic data, and (4) CRA evaluations and data collection are tailored according to bank size and type.
The information contained on our website is not part of this Annual Report on Form 10-K, nor incorporated by reference into this or any other SEC filing. Our SEC filings are also available at no cost through the SEC’s website at www.sec.gov . 19
The information contained on our website is not part of this Annual Report on Form 10-K, nor incorporated by reference into this or any other SEC filing. Our SEC filings are also available at no cost through the SEC’s website at www.sec.gov . 17
As of December 31, 2024, the Bank’s total reported loans for construction, land development, and other land represented more than 100% of the Bank’s total risk-based capital, and its total CRE loans, excluding owner occupied properties, represented more than 300% of the Bank’s total risk-based capital. As a result, the Bank has a concentration in CRE lending.
As of December 31, 2025, the Bank’s total reported loans for construction, land development, and other land represented more than 100% of the Bank’s total risk-based capital, and its total CRE loans, excluding owner occupied properties, represented more than 300% of the Bank’s total risk-based capital. As a result, the Bank has a concentration in CRE lending.
We offer a full range of consumer and commercial deposit products, including on-line banking with bill pay, cash management, sweep accounts, wire transfer, check imaging, remote deposit capture and courier services. As the Bank’s overall balance sheet positions dictate, we may become more or less competitive in our interest rate structure as our liquidity position changes.
We offer a full range of consumer and commercial deposit products, including online banking with bill pay, cash management, sweep accounts, wire transfer, check imaging, remote deposit capture and courier services. As the Bank’s overall balance sheet positions dictate, we may become more or less competitive in our interest rate structure as our liquidity position changes.
We believe that a diverse workforce enhances our ability to serve our customers and our communities by enabling us to better understand their financial needs and to provide necessary and appropriate financial services. Seventy-three percent of the Company’s employees self-identify as either female or ethnically diverse (defined as all Equal Employment Opportunity Commission classifications other than white).
We believe that a diverse workforce enhances our ability to serve our customers and our communities by enabling us to better understand their financial needs and to provide necessary and appropriate financial services. Seventy-three perce nt of the Company’s employees self-identify as either female or ethnically diverse (defined as all Equal Employment Opportunity Commission classifications other than white).
The Federal Reserve’s jurisdiction also extends to any company that we directly or indirectly control, such as any nonbank subsidiaries and other companies in which we own a controlling interest. 14 Financial Services Industry Reform .
The Federal Reserve’s jurisdiction also extends to any company that we directly or indirectly control, such as any nonbank subsidiaries and other companies in which we own a controlling interest. 12 Financial Services Industry Reform .
In the event of our bankruptcy, any commitment by us to a federal bank regulatory agency to maintain the capital of the Bank under a capital restoration plan would be assumed by the bankruptcy trustee and entitled to a priority of payment. 16 Scope of Permissible Activities .
In the event of our bankruptcy, any commitment by us to a federal bank regulatory agency to maintain the capital of the Bank under a capital restoration plan would be assumed by the bankruptcy trustee and entitled to a priority of payment. 14 Scope of Permissible Activities .
We consider our primary market area to be the northern Virginia counties of Arlington, Fairfax, Loudoun, and Prince William, and the cities of Fairfax, Alexandria, Falls Church, Manassas and Manassas Park, as well as Washington DC and the greater Washington, DC metropolitan area.
We consider our primary market area to be the northern Virginia counties of Arlington, Fairfax, Loudoun, and Prince William, and the cities of Fairfax, Alexandria, Falls Church, Leesburg, Middleburg, Manassas and Manassas Park, as well as Washington DC and the greater Washington, DC metropolitan area.
The independent members of the Board provide independent oversight of the Company's management and affairs. 10 Environmental, Social, and Governance At MainStreet Bancshares Inc., our overarching focus is to make a positive impact on the communities we serve.
The independent members of the Board provide independent oversight of the Company's management and affairs. 8 Environmental, Social, and Governance At MainStreet Bancshares Inc., our overarching focus is to make a positive impact on the communities we serve.
As of December 31, 2024, the Bank was in compliance with all regulatory capital standards and qualified as “well-capitalized” under the prompt corrective action regulations. See Note 16 of Notes to Consolidated Financial Statements.
As of December 31, 2025, the Bank was in compliance with all regulatory capital standards and qualified as “well-capitalized” under the prompt corrective action regulations. See Note 16 of Notes to Consolidated Financial Statements.
For information regarding underwriting analysis, risk rating and stress testing of our loan portfolio, including our CRE loans, see Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. 18 Community Reinvestment Act .
For information regarding underwriting analysis, risk rating and stress testing of our loan portfolio, including our CRE loans, see Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. 16 Community Reinvestment Act .
In the case of a bank holding company transaction, the CRA performance record of the subsidiary banks of the bank holding companies involved in the transaction are reviewed in connection with the filing of an application to acquire ownership or control of shares or assets of a bank or to merge with any other bank holding company.
In the case of a bank holding company transaction, the CRA performance record of the subsidiary banks of the bank holding companies involved in the transaction are rev iewed in connection with the filing of an application to acquire ownership or control of shares or assets of a bank or to merge with any other bank holding company.
MainStreet Community Capital has applied to the CDFI Fund for an allocation of the New Markets Tax Credits , and plans to continue to do so annually. Turning to our staff, as of December 31, 2024, the Company employed 204 full-time employees. None of our employees are represented by a collective bargaining agreement.
MainStreet Community Capital has applied to the CDFI Fund for an allocation of the New Markets Tax Credits , and plans to continue to do so annually. Turning to our staff, as of December 31, 2025, the Company employed 171 full-time employees. None of our employees are represented by a collective bargaining agreement.
Our headquarters is located approximately 15 miles west of Washington, D.C., in Fairfax County, Virginia. 5 According to the U.S. Census Bureau, the Washington, D.C. Metropolitan Statistical area (MSAs) includes three of the wealthiest counties in the United States, as well as six of the top 20 wealthiest counties.
Our headquarters is located approximately 15 miles west of Washington, D.C., in Fairfax County, Virginia. 4 According to the U.S. Census Bureau, the Washington, D.C. Metropolitan Statistical area (MSAs) in cludes three of the wealthiest counties in the United States, as well as six of the top 20 wealthiest counties.
Bureau of Labor Statistics, Data as of October 2024 Note: Data is not seasonally adjusted As the home of the federal government, the broader Washington, D.C. region benefits from consistent population growth and remains well positioned to capitalize on any increase in government spending and infrastructure.
Bureau of Labor Statistics, Data as of November 2025 Note: Data is not seasonally adjusted As the home of the federal government, the broader Washington, D.C. region benefits from consistent population growth and remains well positioned to capitalize on any increase in government spending and infrastructure.
An unsatisfactory CRA record could substantially delay approval or result in denial of an application. The Bank received an “Outstanding” rating in its most recent CRA examination in 2022. On October 24, 2023, the federal banking agencies adopted a final rule to modernize the CRA regulations.
An unsatisfactory CRA record could substantially delay approval or result in denial of an application. The Bank received a “Satisfactory” rating in its most recent CRA examination in 2025. On October 24, 2023, the federal banking agencies adopted a final rule to modernize the CRA regulations.
Results of the credit review are used to validate our internal loan ratings and to review independent commentary on specific loans and loan administration activities. Lending Limit . As of December 31, 2024, our legal lending limit for loans to one borrower was approxima tely $46.8 million .
Results of the credit review are used to validate our internal loan ratings and to review independent commentary on specific loans and loan administration activities. Lending Limit . As of December 31, 2025, our legal lending limit for loans to one borrower was approxima tely $46.3 million .
We were approved to list our depositary shares on the Nasdaq Capital Market under the symbol “MNSBP” as of September 16, 2020. Each depository share represents a 1/40th interest in a share of our 7.50% Series A Fixed-Rate Non-Cumulative Perpetual Preferred stock.
We were approved to list our depositary shares on the Nasdaq Capital Market under the symbol “MNSBP” as of September 16, 2020. Each depository share represents a 1/40th interest in a share of our 7.50% Series A Fixed-Rate Non-Cumulative Perpetual Preferred stock. Our Business We are a community-oriented financial institution.
Additionally, the Company is authorized to issue 2,000,000 shares of preferred stock, par value $1.00 per share. There were 7,603,765, shares of common stock outstanding and 28,750 shares of 7.50% Series A Fixed-Rate Non-Cumulative Perpetual Preferred Stock outstanding at December 31, 2024.
Additionally, the Company is authorized to issue 2,000,000 shares of preferred stock, par value $1.00 per share. There were 7,496,571, shares of common stock outstanding and 28,750 shares of 7.50% Series A Fixed-Rate Non-Cumulative Perpetual Preferred Stock outstanding at December 31, 2025.
In the current financial and economic environment, the Federal Reserve has indicated that bank holding companies should carefully review their dividend policy and has discouraged payment ratios that are at maximum allowable levels unless both asset quality and capital are very strong.
The Federal Reserve has indicated that bank holding companies should carefully review their dividend policy and has discouraged payment ratios that are at maximum allowable levels unless both asset quality and capital are very strong.
MSA Employment by Sector Employment Sector by Percent Mining, Lodging, and Construction 4.9% Manufacturing 1.7% Trade, Transportation, and Utilities 12.0% Information 2.3% Financial Activities 4.4% Professional and Business Services 24.0% Education and Health Services 13.8% Leisure and Hospitality 9.4% Other Services 5.8% Government 21.7% Source: U.S.
MSA Employment by Sector Employment Sector by Percent Mining, Lodging, and Construction 5.3% Manufacturing 1.7% Trade, Transportation, and Utilities 12.0% Information 2.4% Financial Activities 4.6% Professional and Business Services 23.6% Education and Health Services 14.8% Leisure and Hospitality 9.5% Other Services 5.6% Government 20.5% Source: U.S.
Board Leadership and Oversight The Board of Directors combines the position of Chairman of the Board with the position of Chief Executive Officer, coupled with a Lead Independent Director position to further strengthen the Company's corporate governance structure. Terry Saeger serves as Vice Chairman of the Board and Lead Independent Director.
Board Leadership and Oversight The Board of Directors combines the position of Chairman of the Board with the position of Chief Executive Officer, coupled with a Lead Independent Director position to further strengthen the Company's corporate governance structure.
At December 31, 2024, approximately 19.5% of our loan portfolio related to owner occupied commercial real estate loans, and approximately 30.5% of our loan portfolio related to investment commercial real estate. Real Estate Construction Lending . This segment of our portfolio is predominately residential in nature and is composed of loans with short durations.
At December 31, 2025, approximately 24.0% of our loan portfolio related to owner occupied commercial real estate loans, and approximately 30.4% of our loan portfolio related to investment commercial real estate. Real Estate Construction Lending . This segment of our portfolio is predominately residential in nature and is composed of loans with short durations.
The Company is proud to have four veterans on its team as well. 11 Governance As indicated in the discussion of Board Leadership and Oversight, the Company believes effective oversight by the Board of Directors is an essential element of a financially sound and well-managed bank.
The Company is proud to ha ve four ve terans on its team as well. 9 Governance As indicated in the discussion of Board Leadership and Oversight, the Company believes effective oversight by the Board of Directors is an essential element of a financially sound and well-managed bank.
We seek highly qualified directors with skills needed for a forward-looking Board. The Company has a technology expert on the Board since 2011, well before it became a recommended practice for community banks. At the Board level, the Company has seven independent directors, out of a total of nine.
We seek highly qualified directors with skills needed for a forward-looking Board. The Company has had a technology expert on the Board since 2011, well before it becam e a recommended practice for community banks. At the Board level, the Company has eight independent directors, out of a total of ten.
Additionally, the future implementation and enforcement of regulations may be affected by the outcome of the 2024 Presidential election, which resulted in significant changes in the leadership of various bank regulatory agencies. In early February 2025, the CFPB’s Acting Director issued directives to cease virtually all CFPB activities, including supervision, examinations, rulemaking, enforcement actions, and pending investigations.
Additionally, the future implementation and enforcement of regulations may be affected by the current Presidential administration. There have been significant changes in the leadership of various bank regulatory agencies. In early February 2025, the CFPB’s Acting Director issued directives to cease virtually all CFPB activities, including supervision, examinations, rulemaking, enforcement actions, and pending investigations.
Management believes that the Company is well positioned to build on its core performance to continue to grow profitably. Although we have successfully attracted new associates, providing depth and talent in key positions, additional employees and infrastructure are expected to be needed to manage the increasing customer relationships that would come with sustained growth. We are a community-oriented financial institution.
Management believes that the Company is well positioned to build on its core performance to continue to grow profitably. Although we have successfully attracted new associates, providing depth and talent in key positions, additional employees and infrastructure may be needed to manage the increasing customer relationships that would come with sustained growth. Our Market Area .
Board Size: Total Number of Directors 9 Gender: Male Female Non-Binary Gender Undisclosed Number of directors based on gender identity 8 1 — — Number of directors who identify in any of the categories below: African American or Black 1 — — — Alaskan Native or American Indian — — — — Asian — — — — Hispanic or Latinx 1 — — — Native Hawaiian or Pacific Islander — — — — White 6 1 — — Two or More Races or Ethnicities — — — — LQBTQ+ — Undisclosed — 12 Title Ethnically Diverse Female Ethnically Diverse Male White Female White Male Independent Directors 0.0% 29.0% 14.0% 57.0% Executives 0.0% 33.0% 0.0% 67.0% Exec.
Board Size: Total Number of Directors 10 Gender: Male Female Non-Binary Gender Undisclosed Number of directors based on gender identity 8 2 — — Number of directors who identify in any of the categories below: African American or Black 1 — — — Alaskan Native or American Indian — — — — Asian — — — — Hispanic or Latinx 1 — — — Native Hawaiian or Pacific Islander — — — — White 6 2 — — Two or More Races or Ethnicities — — — — LQBTQ+ — Undisclosed — 10 Title Ethnically Diverse Female Ethnically Diverse Male White Female White Male Independent Directors 0.0% 25.0% 25.0% 50.0% Executives 0.0% 33.3% 0.0% 66.7% Exec.
These promotions were distributed as follows: 2024 Promotions Diversity Ethnically Diverse White Female 5 6 Male 4 10 The Company celebrates diversity throughout the year and fosters opportunities to learn about different cultures, religious practices, traits and differences.
These promotions were distributed as follows: 2025 Promotions Diversity Ethnically Diverse White Female 16 9 Male 4 13 The Company celebrates diversity throughout the year and fosters opportunities to learn about different cultures, religious practices, traits and differences.
The Bank exceeds the regulatory guidelines to be classified as “well capitalized.” Our capital position remains strong. At December 31, 2024, the Bank had a tier 1 leverage capital ratio of 12.08%, a common equity tier 1 risk-based capital ratio of 14.64%, a tier 1 risk-based capital ratio of 14.64%, and a total risk-based capital ratio of 15.69%.
The Bank exceeds the regulatory guidelines to be classified as “well capitalized.” Our capital position remains strong. At December 31, 2025, the Bank had a tier 1 leverage capital ratio of 13.28%, a common equity tier 1 risk-based capital ratio of 15.05%, a tier 1 risk-based capital ratio of 15.05%, and a total risk-based capital ratio of 16.08%.
The Board and management are aligned regarding the growing importance of Environmental, Social and Governance (ESG) initiatives, and we believe that an emphasis on sustainability can strengthen risk management and enhance value. We are, in many ways, at the beginning of our ESG journey.
The Board and management are aligned regarding the importance of Environmental, Social and Governance (ESG) initiatives, and we believe that an emphasis on sustainability can strengthen risk management and enhance value.
The final rule requires financial institutions to collect and report data to the CFPB on small business loan applicants, including demographic data, lending decisions, and the price and terms of credit. The purpose of the rule is to increase transparency and combat discrimination in small business lending. For banks with moderate volume lending, the compliance deadline is January 16, 2026.
The final rule requires financial institutions to collect and report data to the CFPB on small business loan applicants, including demographic data, lending decisions, and the price and terms of credit. The purpose of the rule is to increase transparency and combat discrimination in small business lending.
According to the U.S Bureau of Labor Statistics, the Washington, D.C. MSA has a large and diversified economy. The following table provides an in-depth view of the distribution of employment within the Washington, D.C. MSA. Washington, D.C.
MSA has a large and diversified economy. The following table provides an in-depth view of the distribution of employment within the Washington, D.C. MSA. Washington, D.C.
According to the CFPB, the rule is designed to foster competition and innovation in the financial services industry by making it easier for consumers to switch financial providers and for new companies to offer innovative products and services. The compliance deadline is phased-in based on the asset size of the financial institution.
According to the CFPB, the rule is designed to foster competition and innovation in the financial services industry by making it easier for consumers to switch financial providers and for new companies to offer innovative products and services.
The future of the CFPB is uncertain at this time. 15 Holding Company Capital Requirements . As a bank holding company with less than $3 billion in total consolidated assets, the Company is eligible to be treated as a “small bank holding company” under the Federal Reserve’s Small Bank Holding Company and Savings and Loan Holding Company Policy Statement.
As a bank holding company with less than $3 billion in total consolidated assets, the Company is eligible to be treated as a “small bank holding company” under the Federal Reserve’s Small Bank Holding Company and Savings and Loan Holding Company Policy Statement.
Support 43.0% 15.0% 19.0% 23.0% All Employees 32.0% 18.0% 23.0% 27.0% The Company is focused on equal pay for equal work, and on developing all employees to reach their full potential. The Company realizes that hiring a diverse workforce that is representative of the diversity of the local population also allows us to better serve our marketplace.
Support 42.0% 8.0% 26.0% 24.0% All Employees 28.9% 16.0% 27.6% 27.6% The Company is focused on equal pay for equal work, and on developing all employees to reach their full potential. The Company realizes that hiring a diverse workforce that is representative of the diversity of the local population also allows us to better serve our marketplace.
Bureau of Labor Statistics, S&P Global Market Intelligence The Washington, D.C. MSA is a desirable market for a broad range of companies in a variety of industries, including thirty companies from the 2024 Fortune 500 list, and seven of the United States’ largest 100 private companies, according to the 2024 Forbes list of largest private companies by revenue.
MSA is a desirable market for a broad range of companies in a variety of industries , including twenty-nine companies from the 2025 Fortune 500 list, and eleven of the United States’ largest 200 private companies, according to the 2025 Forbes list of largest private companies by revenue. According to the U.S. Bureau of Labor Statistics, the Washington, D.C.
Median household income growth projections range from 7% to over 10% through 2030. Overall, the Washington D.C. MSA ra nks ninth out of the largest 25 MSAs ranked by population estimates as of 2023 according to the Census Bureau. We expect our strategies to benefit from the continued growth in population and high income of our market area’s residents.
Median household income growth projections range from 8% to over 12% through 2031. Overall, the Washington D.C. MSA ranks seventh out of the largest 25 MSAs ranked by population estimates as of 2024 according to the Census Bureau. We expect our strategies to benefit from the continue d growth in population and high income of our market area’s residents.
The Company also makes qualified investments that target these initiatives within our geographic footprint. In addition, many of our employees and directors are involved in community activities as well as volunteer their time and expertise to local causes. 6 Competitive Strengths.
The Company also makes qualified investments that target these initiatives within our geographic footprint. In addition, many of our employees and directors are involved in community activities as well as volunteer their time and expertise to local causes. The Company created its "Making Change" program in 2023 to allow our employees to get involved in corporate giving.
Employee Age Diversity Age Group 20 – 29 30 – 39 40 – 49 50 – 59 60 + Number of Employees 20 47 53 59 25 Percentage of Total 10% 23% 26% 29% 12% The age distribution of our employee base is also appropriately diversified. 13 The age distribution of our employees as denoted by generational categories.
Employee Age Diversity Age Group 20 – 29 30 – 39 40 – 49 50 – 59 60 + Number of Employees 11 32 47 51 30 Percentage of Total 6% 19% 27% 30% 18% The age distribution of our employee base is also appropriately diversified. 11 The age distribution of our employees as denoted by generational categories.
Our Business As of December 31, 2024, MainStreet Bancshares, Inc. had total consolidated assets of $2.23 billion, total net loans of $1.8 billion, total deposits of $1.9 billion and total stockholders’ equity of $208.0 million, and total tangible equity to total tangible assets was 9.33%.
As of December 31, 2025, MainStreet Bancshares, Inc. had total consolidated assets of $2.21 billion, total net loans of $1.8 billion, total deposits of $1.9 billion and total stockholders’ equity of $218.6 million, and total tangible equity to total tangible assets was 9.88%.
Internet account access is available for all personal and business accounts, internet bill payment services are available on most accounts, and a robust online cash management system is available for business customers. Avenu On October 25, 2021, MainStreet Bancshares, Inc. formally introduced Avenu, a division of MainStreet Bank.
Internet account access is available for all personal and business accounts, internet bill payment services are available on most accounts, and a robust online cash management system is available for business customers.
Diversity is one factor taken into account when considering candidates to serve on the Board of Directors. The Board believes that diversity supports its goal of best serving the Company and our shareholders, customers and employees. The matrix below summarizes the self-identified diversity attributes of our Board members.
The Board believes that diversity supports its goal of best serving the Company and our shareholders, customers and employees. The matrix below summarizes the self-identified diversity attributes of our Board members.
Employees by Generation Pre Baby Boomers 0.5 % Baby Boomers 14.7 % Generation X 44.1 % Millennials 37.3 % Generation Z 3.4 % The gender distribution of our employee base is diversified. Employees by Gender Female 53.9 % Male 46.1 % For the fiscal year ended December 31, 2024, we had 25 promotions.
Employees by Generation Pre Baby Boomers 0.6 % Baby Boomers 17.0 % Generation X 40.9 % Millennials 35.7 % Generation Z 5.8 % The gender distribution of our employee base is diversified. Employees by Gender Female 56.1 % Male 43.9 % For the fiscal year ended December 31, 2025, we had forty-two promotions.
The CFPB has authority to promulgate regulations; issue orders, guidance, interpretations, and policy statements; conduct examinations; and bring enforcement actions regarding consumer financial products and services. In general, banks with assets of $10 billion or less, such as the Bank, will continue to be examined for consumer compliance, and subject to enforcement actions, by their primary federal regulator.
In general, banks with assets of $10 billion or less, such as the Bank, will continue to be examined for consumer compliance, and subject to enforcement actions, by their primary federal regulator.
As of December 31, 2024, the Bank qualified for the CBLR framework. Management does not intend to utilize the CBLR framework. Corrective Measures for Capital Deficiencies . The federal banking regulators are required by the Federal Deposit Insurance Act, as amended (“FDIA”), to take “prompt corrective action” with respect to capital-deficient banks that are FDIC-insured.
The federal banking regulators are required by the Federal Deposit Insurance Act, as amended (“FDIA”), to take “prompt corrective action” with respect to capital-deficient banks that are FDIC-insured.
President Trump and Republican members of Congress have proposed significant reductions in financial institution regulation. The effect of these statutes, regulations, and policies and any changes to such statutes, regulations, and policies, if adopted, can be material and cannot be predicted.
The effect of these statutes, regulations, and policies and any changes to such statutes, regulations, and policies, if adopted in the future, can be material and cannot be predicted.
This oversight is conducted in part through the Audit and Risk Committee of the Board of Directors, but the full Board of Directors has retained responsibility for general oversight of risks.
This oversight is conducted in part through the Audit and Risk Committee of the Board of Directors, but the full Board of Directors has retained responsibility for general oversight of risks. The Chief Risk Officer has reporting lines to the Audit and Risk Committee and are free to contact independent Directors whenever they feel the need to do so.
These federal laws include the Electronic Fund Transfer Act, the Equal Credit Opportunity Act, the Fair Housing Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, RESPA, the S.A.F.E. Mortgage Licensing Act of 2008, TILA, and the Truth in Savings Act, among others.
These laws include, among others, laws regarding unfair, deceptive, and abusive acts and practices, and other federal consumer protection statutes. These federal laws include the Electronic Fund Transfer Act, the Equal Credit Opportunity Act, the Fair Housing Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, RESPA, the S.A.F.E.
We believe that our core lending and deposit business segments continue to perform well. For each of the fiscal years ended December 31, 2024 and December 31, 2023, our net charge-offs to average loans were 0.25% and 0.03%, respectively. As of December 31, 2024, we had $21.7 million in non-performing loans and non-performing assets to total assets was 0.97%.
For each of the fiscal years ended December 31, 2025 and December 31, 2024, our net charge-offs to average loans were 0.00% and 0.25%, respectively. As of December 31, 2025, we had $31.5 million in non-performing loans and $1.7 million in other real estate owned. As of December 31, 2025, non-performing assets to total assets was 1.50%.
As we look to the future, we recognize that ESG initiatives require a commitment to the long term, and making an impact requires a willingness to listen to, learn from, and work with stakeholders across our community. Fortunately, this approach is second nature to community banks; the challenge is to harness information.
As we look to the future, we recognize that ESG initiatives require a commitment to the long term, and making an impact requires a willingness to listen to, learn from, and work with stakeholders across our community. Environmental The Company has a goal of reducing its carbon emissions each year.
Additionally, the investment portfolio is used to balance the Bank’s asset and liability position. The Bank invests in fixed rate or floating rate instruments as necessary to reduce interest rate risk exposure.
Additionally, the investment portfolio is used to balance the Bank’s asset and liability position. The Bank invests in fixed rate or floating rate instruments as necessary to reduce interest rate risk exposure. At December 31, 2025, the held-to-maturity portfolio, which is primarily composed of municipal securities, and is carried at amortized cost, totaled $13.8 million.
The Bank also participates in the IntraFi Insured Cash Sweep ("ICS") program, which also functions to provide greater FDIC insurance coverage for participating customers. For additional information on deposits, see Note 9 of Notes to Consolidated Financial Statements. Banking-as-a-Service (BaaS). Beginning in 2016, the Board and management identified an opportunity for alternative sources of low-cost deposits and fee income.
The Bank also participates in the IntraFi Insured Cash Sweep ("ICS") program, which also functions to provide greater FDIC insurance coverage for participating customers. For additional information on deposits, see Note 9 of Notes to Consolidated Financial Statements. Competition . We face significant competition for the origination of loans and the attraction of deposits.
We currently operate six Bank branches; located in Herndon, Fairfax, McLean, Clarendon, and Leesburg, Virginia, and one in Washington D.C. The Bank is a community bank focused on serving the borrowing, cash management and depository needs of retail customers, small to medium-sized businesses, and professionals.
The Bank is a community bank focused on serving the borrowing, cash management and depository needs of retail customers, small to medium-sized businesses, and professionals.
MainStreet Bank MainStreet Bank is a community commercial bank incorporated in and chartered by the Commonwealth of Virginia. The Bank is a member of the Federal Reserve Bank of Richmond, and its deposits are insured by the FDIC. The Bank opened for business on May 26, 2004, and is headquartered in Fairfax, Virginia.
The Bank is a member of the Federal Reserve Bank of Richmond, and its deposits are insured by the FDIC. The Bank opened for business on May 26, 2004, and is headquartered in Fairfax, Virginia. We currently operate seven Bank branches; located in Herndon, Fairfax, McLean, Clarendon, Leesburg, and Middleburg, Virginia, and one in Washington D.C.
At December 31, 2024, the held-to-maturity portfolio, which is primarily composed of municipal securities and subordinated debt of other financial institutions, and is carried at amortized cost, totaled $16.1 million. At that date, the available-for-sale portfolio, which is composed of collateralized mortgage-backed securities, subordinated debt of other financial institutions, preferred stock, municipal securities, and U.S.
At December 31, 2025, the available-for-sale portfolio, which is composed of collateralized mortgage-backed securities, subordinated debt of other financial institutions, preferred stock, municipal securities, and U.S. Government agency securities and is carried at fair value, totaled $58.0 million. For additional information, see Note 3 of the Notes to Consolidated Financial Statements. Subordinated Notes .
The net proceeds were used to fully call subordinated notes issued in 2016 and to support additional growth for other general business purposes. The notes have a maturity date of April 15, 2031 and an annual fixed interest rate of 3.75% until April 15, 2026.
In April of 2021, the Company completed an issuance and sale of $30 million in fixed-to-floating subordinated notes. The net proceeds were used to fully call subordinated notes issued in 2016 and to support additional growth for other general business purposes.
Additionally, we must bear the cost of compliance with the reporting and regulations; these costs can be significant and may have an effect on our financial performance. Our Market Area .
Additionally, we must bear the cost of compliance with the reporting and regulations; these costs can be significant and may have an effect on our financial performance. We are focused on growing business relationships and building core deposits, loans and non-interest income. We strive to be the leading community bank in our markets.
The Bank also participates in the IntraFi Insured Cash Sweep ("ICS") program, which also functions to provide greater FDIC insurance coverage for participating customers.
The Bank also participates in the IntraFi Insured Cash Sweep ("ICS") program, which also functions to provide greater FDIC insurance coverage for participating customers. We believe that enhanced electronic delivery systems and technology increase profitability through greater productivity and cost control, and allow us to offer new and better products and services.
We believe that enhanced electronic delivery systems and technology increase profitability through greater productivity and cost control, and allow us to offer new and better products and services. 3 Our products and services include: business and consumer checking, premium interest-bearing checking, business account analysis, savings, certificates of deposit and other depository services, as well as a broad array of commercial, real estate and consumer loans.
The Bank has one subsidiary, a limited liability company, that it uses to hold real estate acquired through foreclosure. Our products and services include: business and consumer checking, premium interest-bearing checking, business account analysis, savings, certificates of deposit and other depository services, as well as a broad array of commercial, real estate and consumer loans.
Many states and local jurisdictions have consumer protection laws analogous, and in addition, to those enacted under federal law. These laws and regulations mandate certain disclosure requirements and regulate the manner in which financial institutions must deal with customers when taking deposits, making loans, and conducting other types of transactions.
These laws and regulations mandate certain disclosure requirements and regulate the manner in which financial institutions must deal with customers when taking deposits, making loans, and conducting other types of transactions. Failure to comply with these laws and regulations could give rise to regulatory sanctions, customer rescission rights, action by state and local attorneys general, and civil or criminal liability.
For the years ended December 31, 2024 and 2023, our return on average assets was (0.47)% and 1.38%, respectively, and our return on average equity was (4.44)% and 12.66%, respectively. We are focused on growing business relationships and building core deposits, loans and non-interest income.
For the years ended December 31, 2025 and 2024, our return on average assets was 0.73% and (0.47)%, respectively, and our return on average equity was 7.33% and (4.44)%, respectively. We believe that our core lending and deposit business segments continue to perform well.
In January 2022, the Community Development Financial Institutions Fund (“CDFI”) of the United States Department of the Treasury certified MainStreet Community Capital, LLC as a registered CDE. In December 2024, MainStreet Community Capital submitted an application to apply for the 2024 NMTC program allocation.
In January 2022, the Community Development Financial Institutions Fund (“CDFI”) of the United States Department of the Treasury certified MainStreet Community Capital, LLC as a registered CDE. 3 Nasdaq Listing We were approved to list shares of our common stock on the Nasdaq Capital Market under our current symbol “MNSB” as of April 22, 2019.
For banks with $1.5 billion to $3 billion in total assets, the compliance deadline is April 1, 2029. At this time, it is difficult to anticipate the continued impact the above-described legislation may have on our business, our customers, and the financial industry generally.
In August 2025, the CFPB issued an advance notice of proposed rulemaking seeking comments as it evaluates issuing a proposed rule that would replace the current rule. At this time, it is difficult to anticipate the continued impact the above-described legislation may have on our business, our customers, and the financial industry generally.
The total of nine includes one director who stepped down from manage ment in March 2022 and thus will become an independent director in March 2025. One of the independent directors self-identify as female, one self-identifies as an African-American male, and one self-identifies as a Hispanic male. Four of the independent directors self-identify as white males.
Two of the independent directors self-identify as female, one self-identifies as an African-American male, and one self-identifies as a Hispanic male. Four of the independent directors self-identify as white males. Diversity is one factor taken into account when considering candidates to serve on the Board of Directors.
Vice Pres. 0.0% 10.0% 40.0% 50.0% Senior Vice Pres. 21.0% 22.0% 14.0% 43.0% Vice Pres. 29.0% 18.0% 28.0% 25.0% Asst. Vice Pres. 14.0% 29.0% 43.0% 14.0% Branch 60.0% 10.0% 20.0% 10.0% Admin.
Vice Pres. 0.0% 10.0% 30.0% 60.0% Senior Vice Pres. 13.0% 21.7% 21.7% 43.5% Vice Pres. 25.8% 19.4% 32.3% 22.6% Asst. Vice Pres. 25.0% 25.0% 33.3% 16.7% Branch 46.7% 13.3% 26.7% 13.3% Admin.
The scope and content of the U.S. banking regulators’ policies on executive compensation are continuing to develop and evolve. In May 2024, four federal financial agencies re-proposed the regulatory text from the 2016 proposal without change, while seeking public comment on alternative approaches to certain regulatory provisions.
The scope and content of the U.S. banking regulators’ policies on executive compensation are continuing to develop and evolve. Deposit Insurance Assessments . FDIC-insured banks are required to pay deposit insurance assessments to the FDIC.
Removed
Avenu provides an embedded Banking as a Service (BaaS) solution that connects our partners (fintechs, application developers, money movers, and entrepreneurs) directly and seamlessly to our Software as a Service (SaaS) solution. Our transformational subledger combined with our high-touch compliance training goes beyond the industry standards to ensure that our Fintech partners will prosper.
Added
The Company acquired the property located in Middleburg, VA during 2025 but the branch officially commenced retail banking operations on February 9, 2026. MainStreet Bank MainStreet Bank is a community commercial bank incorporated in and chartered by the Commonwealth of Virginia.
Removed
This division of MainStreet Bank serves money service businesses, payment processers, and other clients who have a need to embed deposit gathering and payment processing in their mobile Apps. This division provides the Bank with valuable low-cost deposits and additional streams of fee income. Our SaaS software program was deployed in October 2024.
Added
Area Total Population as of 2026 (Actual) Population Change 2020-2026 Projected Population Change 2026-2031 Median Household Income 2026 Median Household Income Projected Change 2026-2031 Unemployment Rate as of December 2025 Unemployment Rate as of December 2024 District of Columbia 714,923 3.68 % 3.89 % $117,508 11.48 % 6.4 % 4.9 % Arlington County 244,002 2.25 % 3.48 % 150,831 10.98 % 3.1 % 2.0 % Fairfax County 1,164,358 1.22 % 1.16 % 154,279 8.61 % 3.3 % 2.2 % Loudoun County 447,975 6.42 % 3.76 % 187,829 8.92 % 3.2 % 2.2 % Prince William County 501,859 4.08 % 3.02 % 139,410 8.89 % 3.3 % 2.3 % United States 342,965,686 3.47 % 2.58 % 86,867 11.30 % 4.1 % 3.8 % Source: U.S.
Removed
The Avenu division is classified within our Financial Technology reportable segment outlined in Note 26. Additional information can be found in our investor presentations filed quarterly.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

29 edited+13 added−11 removed204 unchanged
There are many factors that may impact the market price and trading volume of our common stock, including, without limitation: • actual or anticipated fluctuations in our operating results, financial condition or asset quality; • operating results that vary from the expectations of management, securities analysts and investors; • changes in expectations as to our future financial performance; • operating and stock price performance of companies that investors deem comparable to us; • future issuances of our common stock or other securities; • changes in general economic or business conditions; • changes in the credit, mortgage and housing markets, the markets for securities relating to mortgages or housing, and developments with respect to financial institutions generally; • proposed or adopted changes in laws, regulations or policies affecting us; • significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by or involving our competitors or us; and • other economic, competitive, governmental, regulatory and technological factors affecting our operations, pricing, products and services. 30 The Company depends on the Bank for dividends, distributions and other payments.
There are many factors that may impact the market price and trading volume of our common stock, including, without limitation: • actual or anticipated fluctuations in our operating results, financial condition or asset quality; • operating results that vary from the expectations of management, securities analysts and investors; • changes in expectations as to our future financial performance; • operating and stock price performance of companies that investors deem comparable to us; • future issuances of our common stock or other securities; • changes in general economic or business conditions; • changes in the credit, mortgage and housing markets, the markets for securities relating to mortgages or housing, and developments with respect to financial institutions generally; • proposed or adopted changes in laws, regulations or policies affecting us; • significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by or involving our competitors or us; and • other economic, competitive, governmental, regulatory and technological factors affecting our operations, pricing, products and services. 28 The Company depends on the Bank for dividends, distributions and other payments.
Our success depends, to a certain extent, upon general business economic and political conditions, local and national, as well as governmental monetary policies. Conditions such as inflation, recession, unemployment, changes in interest rates, money supply and other factors beyond our control may adversely affect our asset quality, deposit levels and loan demand and, therefore our growth and earnings.
Our success depends, to a certain extent, upon general business economic and political conditions, local and national, as well as governmental monetary policies. Conditions such as inflation, tariffs, recession, unemployment, changes in interest rates, money supply and other factors beyond our control may adversely affect our asset quality, deposit levels and loan demand and, therefore our growth and earnings.
In addition, bank regulatory authorities may require an increase to the allowance for credit losses to cover future charge-offs, based on their judgments which may differ from ours. We may be required to increase our provisions for credit losses and to charge off loans in the future, which increases in provision and charges could materially adversely affect us.
In addition, bank regulatory authorities may require an increase to the allowance for credit losses to cover future charge-offs, based on their judgments which may differ from ours. We may be required to increase our provisions for credit losses and to charge off loans in the future; increases in provision and charge offs could materially adversely affect us.
Deep fakes could have a material impact on the Company in a number of ways, including: ● Loss of reputation - deep fakes could be used to damage a company's reputation by creating false or misleading content that is attributed to the company, ● Financial losses - deep fakes could be used to manipulate the stock market by creating false or misleading information about a company's financial performance, and ● Legal liability - deep fakes could expose companies to legal liability for defamation, copyright infringement, or other claims. 25 Our ability to provide our products and services, many of which are internet-based, and communicate with our customers, depends upon the management and safeguarding of information systems and infrastructure, networks, software, data, technology, methodologies and business secrets, including those of our service providers.
Deep fakes could have a material impact on the Company in a number of ways, including: ● Loss of reputation - deep fakes could be used to damage a company's reputation by creating false or misleading content that is attributed to the company, ● Financial losses - deep fakes could be used to manipulate the stock market by creating false or misleading information about a company's financial performance, and ● Legal liability - deep fakes could expose companies to legal liability for defamation, copyright infringement, or other claims. 23 Our ability to provide our products and services, many of which are internet-based, and communicate with our customers, depends upon the management and safeguarding of information systems and infrastructure, networks, software, data, technology, methodologies and business secrets, including those of our service providers.
These matters also could result in adverse judgments, settlements, fines, penalties, injunctions or other relief. 31 In addition, in recent years, a number of judicial decisions have upheld the right of borrowers to sue lending institutions on the basis of various evolving legal theories, collectively termed “lender liability.” Generally, lender liability is founded on the premise that a lender has either violated a duty, whether implied or contractual, of good faith and fair dealing owed to the borrower or has assumed a degree of control over the borrower resulting in the creation of a fiduciary duty owed to the borrower or its other creditors or shareholders.
These matters also could result in adverse judgments, settlements, fines, penalties, injunctions or other relief. 29 In addition, in recent years, a number of judicial decisions have upheld the right of borrowers to sue lending institutions on the basis of various evolving legal theories, collectively termed “lender liability.” Generally, lender liability is founded on the premise that a lender has either violated a duty, whether implied or contractual, of good faith and fair dealing owed to the borrower or has assumed a degree of control over the borrower resulting in the creation of a fiduciary duty owed to the borrower or its other creditors or shareholders.
The amount that we, as a mortgagee, may realize after a default is dependent upon factors outside of our control, including: • general or local economic conditions; • environmental clean-up liabilities; • neighborhood values; • interest rates; 20 • real estate tax rates; • operating expenses of the foreclosed properties; • supply of and demand for rental units or properties; • ability to obtain and maintain adequate occupancy of the properties; • zoning laws; • governmental rules, regulations and fiscal policies; and • extreme weather conditions or other natural or man-made disasters.
The amount that we, as a mortgagee, may realize after a default is dependent upon factors outside of our control, including: • general or local economic conditions; • environmental clean-up liabilities; • neighborhood values; • interest rates; 18 • real estate tax rates; • operating expenses of the foreclosed properties; • supply of and demand for rental units or properties; • ability to obtain and maintain adequate occupancy of the properties; • zoning laws; • governmental rules, regulations and fiscal policies; and • extreme weather conditions or other natural or man-made disasters.
Like all financial institutions, we are exposed to the risk that our borrowers may not repay their loans according to their terms, and the collateral securing the payment of these loans may be insufficient to fully compensate us for the outstanding balance of the loan plus the costs to dispose of the collateral. 21 We maintain an allowance for credit losses ("ACL"), which includes the allowance for credit losses on loans, at a level we believe is adequate to absorb expected losses in our loan portfolio as of the corresponding balance sheet date.
Like all financial institutions, we are exposed to the risk that our borrowers may not repay their loans according to their terms, and the collateral securing the payment of these loans may be insufficient to fully compensate us for the outstanding balance of the loan plus the costs to dispose of the collateral. 19 We maintain an allowance for credit losses ("ACL"), which includes the allowance for credit losses on loans, at a level we believe is adequate to absorb expected losses in our loan portfolio as of the corresponding balance sheet date.
There is no precise method of predicting the timing of loan losses. We can give no assurance that our allowance for credit losses is or will be sufficient to absorb actual loan losses.
There is no precise method of predicting the timing of credit losses. We can give no assurance that our allowance for credit losses is or will be sufficient to absorb actual credit losses.
Accordingly, we may lose customers seeking new technology-driven products and services to the extent we are unable to compete effectively. 24 A failure or a breach of our operational systems or infrastructure, or those of third party service providers, could disrupt our business, result in the unauthorized disclosure of confidential or proprietary information, damage our reputation, and cause financial losses.
Accordingly, we may lose customers seeking new technology-driven products and services to the extent we are unable to compete effectively. 22 A failure or a breach of our operational systems or infrastructure, or those of third party service providers, could disrupt our business, result in the unauthorized disclosure of confidential or proprietary information, damage our reputation, and cause financial losses.
NMTCs are subject to recapture for seven years after an equity investment is made in a CDE if: • The CDE ceases to be certified; or • “Substantially all” of the equity investment proceeds are no longer used for qualified businesses; or • The CDE redeems the investment. 29 Risks Associated with Our Common Stock The market price for the Company ’ s common stock price may be volatile.
NMTCs are subject to recapture for seven years after an equity investment is made in a CDE if: • The CDE ceases to be certified; or • “Substantially all” of the equity investment proceeds are no longer used for qualified businesses; or • The CDE redeems the investment. 27 Risks Associated with Our Common Stock The market price for the Company ’ s common stock price may be volatile.
As described below these competitors include banks, other financial institution and non-banks offering services and products previously only provided by banks. 27 The decreased soundness of other financial institutions could adversely affect us. Our ability to engage in routine funding transactions could be adversely affected by the actions and commercial soundness of other financial institutions.
As described below these competitors include banks, other financial institution and non-banks offering services and products previously only provided by banks. 25 The decreased soundness of other financial institutions could adversely affect us. Our ability to engage in routine funding transactions could be adversely affected by the actions and commercial soundness of other financial institutions.
Such regulation and supervision govern the activities in which we may engage, and are intended primarily for the protection of the insurance fund and the depositors and borrowers of the Bank rather than for holders of our capital stock. Various consumers and compliance laws also affect our operations.
Such regulation and supervision govern the activities in which we may engage, and are intended primarily for the protection of the insurance fund and the depositors and borrowers of the Bank rather than for holders of our capital stock. Various consumer and compliance laws also affect our operations.
However, such strategies may only mitigate these effects and not always be successful. 23 Liquidity Risk Liquidity risk could impair our ability to fund operations, meet our obligations as they become due, and jeopardize our financial condition. Liquidity is essential to our business.
However, such strategies may only mitigate these effects and not always be successful. 21 Liquidity Risk Liquidity risk could impair our ability to fund operations, meet our obligations as they become due, and jeopardize our financial condition. Liquidity is essential to our business.
Increases in operating expenses or nonperforming assets may decrease our earnings and the value of the Company’s capital stock. We may face increasing deposit-pricing pressures, which may, among other things, reduce our profitability. Deposit pricing pressures may result from competition as well as changes to the interest rate environment. Current economic conditions have intensified competition for deposits.
Increases in operating expenses or non-performing assets may decrease our earnings and the value of the Company’s capital stock. We may face increasing deposit-pricing pressures, which may, among other things, reduce our profitability. Deposit pricing pressures may result from competition as well as changes to the interest rate environment. Current economic conditions have intensified competition for deposits.
We cannot be certain as to our ability to manage increased levels of assets and liabilities without increased expenses and higher levels of nonperforming assets. We may be required to make additional investments in equipment and personnel to manage higher asset levels and loan balances, which may adversely affect earnings, shareholder returns, and our efficiency ratio.
We cannot be certain as to our ability to manage increased levels of assets and liabilities without increased expenses and higher levels of non-performing assets. We may be required to make additional investments in equipment and personnel to manage higher asset levels and loan balances, which may adversely affect earnings, shareholder returns, and our efficiency ratio.
Inflation began to rise sharply at the beginning of 2022 and remained at an elevated level through the present time. Small to medium-sized businesses may be impacted more during periods of high inflation as they are not able to leverage economies of scale to mitigate cost pressures compared to larger businesses.
Inflation began to rise sharply at the beginning of 2022 and remained at an elevated level for a period of time. Small to medium-sized businesses may be impacted more during periods of high inflation as they are not able to leverage economies of scale to mitigate cost pressures compared to larger businesses.
Changes in economic conditions affecting borrowers, new information regarding existing loans, identification of additional problem loans and other factors, both within and outside of our control, may require us to increase our allowance for credit losses. Increases in nonperforming loans have a significant impact on our allowance for credit losses.
Changes in economic conditions affecting borrowers, new information regarding existing loans, identification of additional problem loans and other factors, both within and outside of our control, may require us to increase our allowance for credit losses. Increases in non-performing loans may have an impact on our allowance for credit losses.
Those deposits may not be as stable as other types of deposits and, in the future, depositors may not renew those deposits when they mature, or we may have to pay a higher rate of interest to attract or retain them or to replace them with other deposits or with funds from other sources.
In the future, depositors may not renew these deposits when they mature, or we may have to pay a higher rate of interest to attract or retain them or to replace them with other deposits or with funds from other sources.
As of December 31, 2024, we had $232.6 million in unfunded credit commitments to our customers.
As of December 31, 2025, we had $202.6 million in unfunded credit commitments to our customers.
While these procedures are designed to provide us with the information needed to implement policy adjustments where necessary, and to take proactive corrective actions, there can be no assurance that such measures will be effective in avoiding undue credit risk. 22 We are subject to environmental liability risk associated with our lending activities.
While these procedures are designed to provide us with the information needed to implement policy adjustments where necessary, and to take proactive corrective actions, there can be no assurance that such measures will be effective in avoiding undue credit risk. Our stress tests may not accurately predict our financial condition.
We have insurance against some cyber risks and attacks; nonetheless, our insurance coverage may not be sufficient to offset the impact of a material loss event (including if our insurer denies coverage as to any particular claim in the future), and such insurance may increase in cost or cease to be available on commercially reasonable terms, or at all, in the future. 26 We rely on third party service providers to provide key components of our business infrastructure, and a failure of these parties to perform for any reason could disrupt our operations.
We have insurance against some cyber risks and attacks; nonetheless, our insurance coverage may not be sufficient to offset the impact of a material loss event (including if our insurer denies coverage as to any particular claim in the future), and such insurance may increase in cost or cease to be available on commercially reasonable terms, or at all, in the future.
As of December 31, 2024, we had approximately $357.7 million of owner-occupied and $560.1 million of investment commercial real estate loans outstanding, which represented approximately 19.5% and 30.5%, respectively, of our loan portfolio as of December 31, 2024.
As of December 31, 2025, we had approximately $448.5 million of owner-occupied and $566.4 million of investment commercial real estate loans outstanding, which represented approximately 24.0% and 30.4%, respectively, of our loan portfolio as of December 31, 2025.
Failure to successfully manage these risks in the development and implementation of new lines of business or offerings of new products, product enhancements or services could have an adverse impact on our business, financial condition or results of operations. Payments Services. In 2016, we added a new funding source by way of facilitating payment services.
Failure to successfully manage these risks in the development and implementation of new lines of business or offerings of new products, product enhancements or services could have an adverse impact on our business, financial condition or results of operations. We face risks related to our operational, technological, and organizational infrastructure.
Certain expenditures associated with the ownership of real estate, principally real estate taxes and maintenance costs, may also adversely affect our operating expenses. In recent years commercial real estate markets both nationally and locally have been adversely affected by the COVID-19 pandemic.
Certain expenditures associated with the ownership of real estate, principally real estate taxes and maintenance costs, may also adversely affect our operating expenses. In recent years commercial real estate markets both nationally and locally have been adversely affected by a weakening demand. Weakness in our commercial real estate market could result in increased delinquency rate and losses from these loans.
As of that same date, we had approximately $393.4 million of construction real estate loans and $439.5 million of residential real estate loans, which represented 21.4% and 23.9% respectively.
As of that same date, we had approximately $300.7 million of construction real estate loans and $441.6 million of residential real estate loans, which represented 16.1% and 23.7% respectively.
The re-emergence of widespread health emergencies or pandemics, such as coronavirus, could lead to quarantines, business shutdowns, increases in unemployment, labor shortages, disruptions to supply chains, and overall economic instability.
We cannot assure you that any such losses would not materially and adversely affect our business, financial condition or results of operations. Health emergencies or pandemics may re-emerge. The re-emergence of widespread health emergencies or pandemics, such as coronavirus, could lead to quarantines, business shutdowns, increases in unemployment, labor shortages, disruptions to supply chains, and overall economic instability.
However, increased losses from this portfolio could have an adverse effect on our business, financial condition and results of operations. Commercial and industrial loans may expose us to greater financial and credit risk than other loans. Commercial and industrial loans can involve a greater degree of financial and credit risk than other loans, including less collateral at liquidation.
We believe that the resilience of our market and borrowers provides an ability to adjust to and withstand such risks. However, increased losses from this portfolio could have an adverse effect on our business, financial condition and results of operations. Commercial and industrial loans may expose us to greater financial and credit risk than other loans.
Any significant failure to pay on time by these customers would hurt our earnings.
Commercial and industrial loans can involve a greater degree of financial and credit risk than other loans, including less collateral at liquidation. Any significant failure to pay on time by these customers would hurt our earnings.
In order to keep deposits required for funding purposes, it may be necessary to raise deposit rates without commensurate increases in asset pricing in the short term. Prior to 2022, it had been the policy of the Federal Reserve to maintain interest rates at historically low levels through its targeted federal funds rate and the purchase of mortgage-backed securities.
In order to keep deposits required for funding purposes, it may be necessary to raise deposit rates without commensurate increases in asset pricing in the short term. 26 External and Market-Related Risks Changes in general business, economic and political conditions, especially in our market area, could adversely affect our growth and earnings.
Removed
Remote employee work opportunities during the pandemic have impacted, and may continue to impact, the occupancy of commercial properties. Weakness in our commercial real estate market could result in an increased delinquency rate and losses from these loans. We believe that the resilience of our market and borrowers provides an ability to adjust to and withstand such risks.
Added
We perform credit and capital stress testing on an quarterly basis using stress test assumptions we believe are reasonable. Within our stress test, we estimate our credit losses, resources available to absorb those losses, and any necessary additions to capital.
Removed
We are continuing to identify and solicit new customers in need of these specialized services. The primary reasons for expanding into payment services are to secure an additional source of low-cost deposits and to capture additional fee income.
Added
The results of these stress tests involve many assumptions about the future economy, credit losses and default rates and may not accurately reflect our financial condition.
Removed
A bank’s risks when dealing with a processor account are similar to risks from other activities in which customers conduct transactions through the bank on behalf of the customers’ clients. It is necessary for a bank to implement an adequate processor approval, monitoring and auditing program that extends beyond credit risk management and is conducted on an ongoing basis.
Added
Any deterioration in the economy could result in significantly higher credit losses and negative impacts on our financial condition and capital than projected by our internal stress tests. 20 We are subject to environmental liability risk associated with our lending activities.
Removed
When a bank is not able to identify and understand the nature and source of transactions processed through accounts, the bank’s risks and the likelihood of suspicious activity can increase. Without these precautions, a bank could be vulnerable to processing illicit or sanctioned transactions. BAAS Software Solutions .
Added
The adoption and use of artificial intelligence tools by us and our third-party vendors and service providers may increase the risk of errors, omissions, unfair treatment or fraudulent behavior by our employees, clients, or counterparties, or other third parties.
Removed
Developing and deploying a software program has added, and may contain to add, additional risk, including financial, cybersecurity, compliance and reputational concerns.
Added
Our adoption and use of artificial intelligence, including generative artificial intelligence, machine learning, and similar tools and technologies that collect, aggregate, analyze or generate data or other materials or content (collectively, "AI"), for internal use has increased our efficiency, and we expect to continue to adopt such tools as appropriate, in line with our AI Strategy.
Removed
In 2021, the Company began development of a proprietary BAAS solution, Avenu, to provide an embedded banking solution that connects our partners (fintech, application developers, money movers, and entrepreneurs) directly and seamlessly to our Software as a Service (SAAS). At the end of 2024, management reviewed the Avenu platform’s performance.
Added
In addition, we expect our third-party vendors and service providers to increasingly develop and incorporate AI into their product offerings faster than we are able to do so independently.
Removed
Delays in bringing Avenu to market and subsequent changes in revenue generation potential necessitated a review for impairment and a resulting charge to earnings of the full value of its capitalized intangible software. For additional information, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” We face risks related to our operational, technological, and organizational infrastructure.
Added
The adoption and incorporation of such AI tools can lead to concerns around safety and soundness, fair access to financial services, fair treatment of consumers, and compliance with applicable laws and regulations. We have implemented an AI governance function and risk management framework that includes a risk assessment of internal and vendor AI solutions, due diligence, and controls.
Removed
We cannot assure you that any such losses would not materially and adversely affect our business, financial condition or results of operations. COVID-19 and its variants have not been completely eliminated. The Company has resumed pre-COVID-19 pandemic business activities, and our employees have returned to the office. The Bank’s branch offices are open and operating during normal business hours.
Added
In addition, regulation of AI is rapidly evolving as legislatures and regulators are increasingly focused on these powerful emerging technologies.
Removed
To protect the health of its customers and employees, the Company continues to take precautions. Those actions have not impaired our ability to conduct business and fully serve our customers. While the adverse impacts of the COVID-19 pandemic have dissipated, COVID-19 and its variants have not been completely eliminated. New variants could adversely disrupt our future operations.
Added
The technologies underlying AI and its uses are subject to a variety of laws and regulations, including intellectual property, data privacy and cybersecurity, consumer protection, competition, equal opportunity, and fair lending laws, and are expected to be subject to increased regulation and new laws or new applications of existing laws and regulations.
Removed
As a result, market rates on the loans we originated and the yields on securities we purchased during that period have been at historically low levels.
Added
AI is the subject of ongoing review by various U.S. governmental and regulatory agencies, and various U.S. states are applying, or are considering applying, existing laws and regulations to AI or are considering general legal frameworks for AI.
Removed
As discussed above, rates are fluctuating, and due to a number of factors including changes in monetary policies of the Federal Reserve, will likely continue to fluctuate. 28 External and Market-Related Risks Changes in general business, economic and political conditions, especially in our market area, could adversely affect our growth and earnings.
Added
We may not be able to anticipate how to respond to these rapidly evolving frameworks, and we may need to expend resources to adjust our operations or offerings in certain jurisdictions if the legal frameworks are inconsistent across jurisdictions.
Added
Furthermore, because AI technology itself is highly complex and rapidly developing, it is not possible to predict all the legal, operational or technological risks that may arise relating to the use of AI.
Added
Our use of AI may require additional resources, including the incurrence of additional costs, to develop and maintain our products and services to minimize potentially harmful or unintended consequences, to comply with applicable and emerging laws and regulations, to maintain or extend our competitive position, and to address any ethical, reputational, technical, operational, legal, competitive or regulatory issues which may arise as a result of any of the foregoing. 24 We rely on third party service providers to provide key components of our business infrastructure, and a failure of these parties to perform for any reason could disrupt our operations.

Item 2. Properties

Properties — owned and leased real estate

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Leased 2019 — Washington , D.C. 20036 We believe that current facilities are adequate to meet our present and foreseeable needs, subject to possible future expansion. See Note 7 of Notes to the December 31, 2024, Consolidated Financial Statements, for additional disclosures related to the Company’s properties.
Leased 2019 — Washington , D.C. 20036 We believe that current facilities are adequate to meet our present and foreseeable needs, subject to possible future expansion. See Note 7 of Notes to the December 31, 2025, Consolidated Financial Statements, for additional disclosures related to the Company’s properties.
Net Book Value Leased or Year Acquired of Real Location Owned or Leased Property (In thousands) Headquarters: 10089 Fairfax Blvd. Fairfax, VA 22030 Owned 2010 $7,063 Other Properties: Herndon Branch 727 Elden Street Leased 2004 — Herndon, VA 20170 Operations Center 22980 Shaw Road Leased 2021 — Sterling, VA, 20166 Middleburg Office 10 N.
Net Book Value Leased or Year Acquired of Real Location Owned or Leased Property (In thousands) Headquarters: 10089 Fairfax Blvd. Fairfax, VA 22030 Owned 2010 $6,839 Other Properties: Herndon Branch 727 Elden Street Leased 2004 — Herndon, VA 20170 Operations Center 22980 Shaw Road Leased 2021 — Sterling, VA, 20166 Middleburg Branch 10 N.
Item 2. Properties As of December 31, 2024, the net book value of our office properties was $11.0 million, and the net book value of our furniture, fixtures and equipment was $1.5 million. The following table sets forth information regarding our offices.
Item 2. Properties As of December 31, 2025, the net book value of our office properties was $11.7 million, and the net book value of our furniture, fixtures and equipment was $1.5 million. The following table sets forth information regarding our offices.
Pendleton Street Leased 2024 — Building A, Suite 100 Middleburg, VA 20118 McLean Branch 1354 Old Chain Bridge Road Owned 2014 1,271 McLean, VA 22101 Clarendon Branch 1000 N. Highland Street Owned 2009 464 Arlington, VA 22201 Leesburg Branch 307 E. Market Street Owned 2017 2,189 Leesburg, VA 20176 Washington D.C. Branch 1130 Connecticut Avenue, N.W.
Pendleton Street Owned 2025 1,067 Middleburg, VA 20117 McLean Branch 1354 Old Chain Bridge Road Owned 2014 1,206 McLean, VA 22101 Clarendon Branch 1000 N. Highland Street Owned 2009 427 Arlington, VA 22201 Leesburg Branch 307 E. Market Street Owned 2017 2,134 Leesburg, VA 20176 Washington D.C. Branch 1130 Connecticut Avenue, N.W.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Unregistered Sales and Issuer Repurchases of Common Stock Unregistered Sales of Common Stock Set forth below is information concerning sales of common stock by the Company during the past 3 years that were not registered under the Securities Act. 34 In 2019, the Board of Directors of the Bank and the Bank’s shareholders approved the MainStreet Bank 2019 Equity Incentive Plan (the “2019 Plan”), to provide officers, other selected employees and directors with additional incentives to promote growth and performance.
Unregistered Sales and Issuer Repurchases of Common Stock Unregistered Sales of Common Stock Set forth below is information concerning sales of common stock by the Company during the past 3 years that were not registered under the Securities Act. 32 In 2019, the Board of Directors of the Bank and the Bank’s shareholders approved the MainStreet Bank 2019 Equity Incentive Plan (the “2019 Plan”), to provide officers, other selected employees and directors with additional incentives to promote growth and performance.
During the fiscal year ended December 31, 2024, the Company declared and paid four cash dividends. Holders of the common stock are subject to priority dividend rights of any holders of preferred stock then outstanding. There were 28,750 shares of preferred stock outstanding at December 31, 2024.
During the fiscal year ended December 31, 2025, the Company declared and paid four cash dividends. Holders of the common stock are subject to priority dividend rights of any holders of preferred stock then outstanding. There were 28,750 shares of preferred stock outstanding at December 31, 2025.
All awards that were then outstanding under the 2016 Plan remained outstanding in accordance with their terms. At the Annual Meeting of shareholders held on May 15, 2024, the Company's common shareholders approved a proposal to increase the number of shares of authorized common stock from 650,000 to 1,150,000 shares.
All awards that were then outstanding under the 2016 Plan remained outstanding in accordance with their terms. At the Annual Meeting of shareholders held on May 15, 2024, th e Company's common shareholders approved a proposal to increase the number of shares of common stock authorized from the 2019 Plan from 650,000 to 1,150,000 shares.
(Dollars in thousands, except for per share amounts) Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares that May Yet be Purchased Under the Plans or Programs October 1, 2024 - October 31, 2024 — $ — — $ 3,538 November 1, 2024 - November 30, 2024 — $ — — $ 3,538 December 1, 2024 - December 31, 2024 — $ — — $ 3,538 Total — — $ 3,538 Preferred Stock and Depositary Shares On September 15, 2020, the Company closed its underwritten public offering of 1,000,000 depositary shares, each representing 1/40th of a share of 7.50% Series A Fixed-Rate Non-Cumulative Perpetual Preferred Stock, par value $1.00 per share (the “Series A Preferred Stock”).
(Dollars in thousands, except for per share amounts) Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares that May Yet be Purchased Under the Plans or Programs October 1, 2025 - October 31, 2025 — $ — — $ 10,000 November 1, 2025 - November 30, 2025 209,000 $ 18.49 209,000 $ 6,136 December 1, 2025 - December 31, 2025 — $ — — $ 6,136 Total 209,000 209,000 $ 6,136 Preferred Stock and Depositary Shares On September 15, 2020, the Company closed its underwritten public offering of 1,000,000 depositary shares, each representing 1/40th of a share of 7.50% Series A Fixed-Rate Non-Cumulative Perpetual Preferred Stock, par value $1.00 per share (the “Series A Preferred Stock”).
The terms and conditions of the 2019 Plan were subsequently converted into and deemed to be the terms and conditions of a substantially identical Company incentive compensation plan.
The terms and conditions of the 2019 Plan were subsequently converted into and deemed to be the terms and conditions of a substantially id entical Company incentive compensation plan.
(2) Remaining shares available for issuance include 570,462 shares under the 2019 Equity Incentive Plan (“2019 Plan”). Shares remaining to be issued subsequent to December 31, 2024 under the 2019 Plan can be issued either as a restricted stock grant or upon grant and exercise of stock options.
(2) Remaining shares available for issuance include 443,747 shares under the 2019 Equity Incentive Plan (“2019 Plan”). Shares remaining to be issued subsequent to December 31, 2025 under the 2019 Plan can be issued either as a restricted stock grant or upon grant and exercise of stock options.
Equity Compensation Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted- average exercise price of outstanding options, warrants and rights (1) Number of securities remaining and available for future issuance (2) Plans approved by shareholders 237,717 $ — 570,462 Plans not approved by shareholders — — — Total 237,717 $ — 570,462 (1) Restricted stock shares were not included when calculating the weighted-average exercise price.
Equity Compensation Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted- average exercise price of outstanding options, warrants and rights (1) Number of securities remaining and available for future issuance (2) Plans approved by shareholders 244,964 $ — 443,747 Plans not approved by shareholders — — — Total 244,964 $ — 443,747 (1) Restricted stock shares were not included when calculating the weighted-average exercise price.
Repurchases of Common Stock On May 18, 2022, the Company announced that the Board of Directors had authorized a plan to repurchase up to $7.5 million of the Company’s outstanding common stock in open market transactions or privately negotiated transactions, including pursuant to a trading plan in accordance with Rule 10b-18 under the Securities Exchange Act of 1934.
Repurchases of Common Stock On October 16, 2025, the Company announced that the Board of Directors had authorized a plan to repurchase up to $10.0 million of the Company’s outstanding common stock in open market transactions or privately negotiated transactions, including pursuant to a trading plan in accordance with Rule 10b-18 under the Securities Exchange Act of 1934.
During 2024, (108,518) shares of restricted common stock vested from shares issued under both the 2019 Plan and the Bank's 2016 Equity Incentive Plan ("2016 Plan"). See Note 18 of Notes to Consolidated Financial Statements.
During 2025 , 119,468 shares of restricted common stock vested from shares issued under both the 2019 Plan and the Bank's 2016 Equity Incentive Plan ("2016 Plan"). See Note 18 of Notes to Consolidated Financial Statements.
A discussion of applicable regulatory restrictions on dividends by the Company and the Bank is provided in Item 1 (“Business”) under “Dividends, Capital Distributions, and Other Payments.” Securities Authorized For Issuance Under Equity Compensation Plans The following table provides information concerning securities authorized for issuance under equity compensation plans, the weighted average price of such securities and the number of securities remaining available for future issuance, as of December 31, 2024.
A discussion of applicable regulatory restrictions on dividends by the Company and the Bank is provided in Item 1 (“Business”) under “Regulatory Restrictions on Dividends; Source of Strength.” Securities Authorized For Issuance Under Equity Compensation Plans The following table provides information concerning securities authorized for issuance under equity compensation plans, the weighted average price of such securities and the number of securities remaining available for future issuance, as of December 31, 2025.
Item 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Common Stock Our common stock is traded on the Nasdaq Capital Market under the symbol “MNSB.” At December 31, 2024, the Company had approximately 228 shareholders of record.
Item 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Common Stock Our common stock is traded on the Nasdaq Capital Market under the symbol “MNSB.” At December 31, 2025, the Company had app roximately 222 sharehol ders of record.
To date, a total of 605,553 shares of restricted common stock have been awarded under the 2019 Plan and 26,015 shares have been forfeited, for a net of 579,538 shares of restricted common stock issued and outstanding under the 2019 Plan.
As of December 31, 2024 , a total of 605,553 shares of restricted common stock had been awarded under the 2019 Plan and 26,015 shares had been forfeited, for a net of 579,538 shares of restricted common stock issued and outstanding under the 2019 Plan.
The new stock repurchase program replaces the Company’s previous program. During the year ended December 31, 2024, the Company repurchased 166,000 shares under this plan. The Company did not repurchase common stock during the fourth quarter of 2024.
The new stock repurchase program replaces the Company’s previous program. During the year ended December 31, 2025 , the Company repurchased 209,000 shares under this plan. Additionally, 24,909 shares were repurchased during the year ended December 31, 2025 under the previous common stock repurchase plan.
As of December 31, 2023, a total of 485,872 shares of restricted common stock had been awarded under the 2019 Plan and 24,269 shares had been forfeited, for a net of 461,603 shares of restricted common stock issued and outstanding under the 2019 Plan.
As of December 31, 2025 , a total of 742,421 shares of restricted common stock have been awarded under the 2019 Plan and 36,168 shares have been forfeited, for a net of 706,253 shares of restricted common stock issued and outstanding under the 2019 Plan.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Important factors that could cause actual results to differ materially from those in the forward–looking statements included herein include, but are not limited to: • general economic conditions, either nationally or in our market area, that are worse than expected; • competition among depository and other financial institutions, particularly intensified competition for deposits; • inflation and an interest rate environment that may reduce our margins or reduce the fair value of financial instruments; • adverse changes in the securities markets; • changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory structure and in regulatory fees and capital requirements; • our ability to enter new markets successfully and capitalize on growth opportunities; • our ability to successfully integrate acquired entities; • changes in consumer spending, borrowing and savings habits; • changes in accounting policies and practices; • changes in our organization, compensation and benefit plans; • our ability to attract and retain key employees; • changes in our financial condition or results of operations that reduce capital; • changes in the financial condition or future prospects of issuers of securities that we own; • the concentration of our business in the Northern Virginia as well as the greater Washington, DC metropolitan area and the effect of changes in the economic, political and environmental conditions on this market; • adequacy of our allowance for credit losses; • deterioration of our asset quality; • cyber threats, attacks or events; • reliance on third parties for key services; • future performance of our loan portfolio with respect to recently originated loans; • additional risks related to new lines of business, products, product enhancements or services; • results of examination of us by our regulators, including the possibility that our regulators may require us to increase our allowance for credit losses or to write-down assets or take other supervisory action; • the effectiveness of our internal controls over financial reporting and our ability to remediate any future material weakness in our internal controls over financial reporting; • liquidity, interest rate and operational risks associated with our business; • a work stoppage, forced quarantine, or other interruption or the unavailability of key employees; • volatility in the financial institution industry, including failures and/or rumors of possible failures of other financial institutions and actions by regulatory authorities in response thereto; • litigation or governmental actions; • impairment of a material asset; and • other factors beyond our knowledge or control. 36 Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may vary materially from those described herein.
Important factors that could cause actual results to differ materially from those in the forward–looking statements included herein include, but are not limited to: • general economic conditions, either nationally or in our market area, that are worse than expected; • competition among depository and other financial institutions, particularly intensified competition for deposits; • inflation and an interest rate environment that may reduce our margins or reduce the fair value of financial instruments; • adverse changes in the securities markets; • changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory structure and in regulatory fees and capital requirements; • our ability to enter new markets successfully and capitalize on growth opportunities; • our ability to successfully integrate acquired entities; • changes in consumer spending, borrowing and savings habits; • changes in accounting policies and practices; • changes in our organization, compensation and benefit plans; • our ability to attract and retain key employees; • changes in our financial condition or results of operations that reduce capital; • changes in the financial condition or future prospects of issuers of securities that we own; • the concentration of our business in the Northern Virginia as well as the greater Washington, DC metropolitan area and the effect of changes in the economic, political and environmental conditions on this market; • adequacy of our allowance for credit losses; • deterioration of our asset quality; • cyber threats, attacks or events; • reliance on third parties for key services; • future performance of our loan portfolio with respect to recently originated loans; • additional risks related to new lines of business, products, product enhancements or services; • results of examination of us by our regulators, including the possibility that our regulators may require us to increase our allowance for credit losses or to write-down assets or take other supervisory action; • the effectiveness of our internal controls over financial reporting and our ability to remediate any future material weakness in our internal controls over financial reporting; • liquidity, interest rate and operational risks associated with our business; • a work stoppage, forced quarantine, or other interruption or the unavailability of key employees; • volatility in the financial institution industry, including failures and/or rumors of possible failures of other financial institutions and actions by regulatory authorities in response thereto; • litigation or governmental actions; • impairment of a material asset; and • other factors beyond our knowledge or control. 34 Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may vary materially from those described herein.
This discussion and analysis should be read in conjunction with the accompanying consolidated financial statements. 35 Forward-Looking Statements This Annual Report on Form 10-K contains certain forward-looking statements and information relating to the Company within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on the beliefs of management as well as assumptions made by and information currently available to management.
This discussion and analysis should be read in conjunction with the accompanying consolidated financial statements. 33 Forward-Looking Statements This Annual Report on Form 10-K contains certain forward-looking statements and information relating to the Company within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on the beliefs of management as well as assumptions made by and information currently available to management.
See Note 1, Organization, Basis of Presentation, and Impact of Recently Issued Accounting Pronouncements and Note 5, Allowance for Credit Losses, in Notes to Consolidated Financial Statements for further information on the Company’s credit grade categories, which are derived from standard regulatory rating definitions. The following table summarizes asset quality information at December 31, 2024, and December 31, 2023.
See Note 1, Organization, Basis of Presentation, and Impact of Recently Issued Accounting Pronouncements and Note 5, Allowance for Credit Losses, in Notes to Consolidated Financial Statements for further information on the Company’s credit grade categories, which are derived from standard regulatory rating definitions. The following table summarizes asset quality information at December 31, 2025, and December 31, 2024.
Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted. The Company further describes loans that were modified during the year ended December 31, 2024 in Note 5 of Notes to Consolidated Financial Statements.
Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted. The Company further describes loans that were modified during the year ended December 31, 2025 and 2024 in Note 5 of Notes to Consolidated Financial Statements.
The Company did not sell any securities within the investment portfolio during the year ended December 31, 2024 or 2023. For available-for-sale securities, management evaluates all investments in an unrealized loss position on a quarterly basis, and more frequently when economic or market conditions warrant such evaluation.
The Company did not sell any securities within the investment portfolio during the year ended December 31, 2025 or 2024. For available-for-sale securities, management evaluates all investments in an unrealized loss position on a quarterly basis, and more frequently when economic or market conditions warrant such evaluation.
Below is a schedule that outlines the credit exposure to businesses with government contracts by structure type as of December 31, 2024. The line of credit balances consist of asset based lines of credits on billed receivables, which are receivables for work that has been completed and invoiced to the government or the prime contractor.
Below is a schedule that outlines the credit exposure to businesses with government contracts by structure type as of December 31, 2025. The line of credit balances consist of asset based lines of credits on billed receivables, which are receivables for work that has been completed and invoiced to the government or the prime contractor.
For commercial loans, residential real estate loans, owner-occupied commercial real estate loans and consumer installment loans, we multiply the total outstanding amount for each loan category by our highest quarter historical loss for that category as a surrogate in order to calculate a stressed loss. 47 For our non-owner occupied commercial real estate loans, we use three separate methodologies in our stress test.
For commercial loans, residential real estate loans, owner-occupied commercial real estate loans and consumer installment loans, we multiply the total outstanding amount for each loan category by our highest quarter historical loss for that category as a surrogate in order to calculate a stressed loss. 45 For our non-owner occupied commercial real estate loans, we use three separate methodologies in our stress test.
The Board determined that loans made inside a 15-mile radius of Washington, D.C. carry less geographic risk than those made outside of that radius. 51 The graphic below is a geopoint map that depicts all construction loans, non-owner occupied CRE loans, and owner-occupied CRE loans, with a majority of all loan types concentrated within a 15-mile radius of Washington, D.C.
The Board determined that loans made inside a 15-mile radius of Washington, D.C. carry less geographic risk than those made outside of that radius. 49 The graphic below is a geopoint map that depicts all construction loans, non-owner occupied CRE loans, and owner-occupied CRE loans, with a majority of all loan types concentrated within a 15-mile radius of Washington, D.C.
See Note 1, Organization, Basis of Presentation, and Impact of Recently Issued Accounting Pronouncements and Note 5, Allowance for Credit Losses, in Notes to Consolidated Financial Statements for further information on the Company’s adoption of ASC 326. 53 The following table sets forth activity in our allowance for credit losses on loans for the periods indicated.
See Note 1, Organization, Basis of Presentation, and Impact of Recently Issued Accounting Pronouncements and Note 5, Allowance for Credit Losses, in Notes to Consolidated Financial Statements for further information on the Company’s adoption of ASC 326. 51 The following table sets forth activity in our allowance for credit losses on loans for the periods indicated.
Non-GAAP; refer to Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section “Non-GAAP Measures” of this Form 10-K. 41 Rate/ Volume Analysis The following table presents the effects of changing rates and volumes on net interest income for the periods indicated.
Non-GAAP; refer to Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section “Non-GAAP Measures” of this Form 10-K. 39 Rate/ Volume Analysis The following table presents the effects of changing rates and volumes on net interest income for the periods indicated.
The capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. 58 The federal regulatory capital rules apply to all depository institutions as well as to bank holding companies with consolidated assets of $3 billion or more.
The capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. 56 The federal regulatory capital rules apply to all depository institutions as well as to bank holding companies with consolidated assets of $3 billion or more.
Management believes, as of December 31, 2024, the Bank meets all capital adequacy requirements to which it is subject. As of December 31, 2024 and 2023, the most recent notification from the Federal Reserve Bank of Richmond categorized the Bank as well capitalized under the regulatory framework for prompt corrective action.
Management believes, as of December 31, 2025, the Bank meets all capital adequacy requirements to which it is subject. As of December 31, 2025 and 2024, the most recent notification from the Federal Reserve Bank of Richmond categorized the Bank as well capitalized under the regulatory framework for prompt corrective action.
Many of the non-interest expense categories remain consistent for the year ended December 31, 2024 compared to the year ended December 31, 2023 as management continues to exercise judicious expense controls. Discussion of non-interest expense for the year ended December 31, 2022 has been omitted as such discussion was provided in Part II, Item 7.
Many of the non-interest expense categories remain consistent for the year ended December 31, 2025 compared to the year ended December 31, 2024 as management continues to exercise judicious expense controls. Discussion of non-interest expense for the year ended December 31, 2023 has been omitted as such discussion was provided in Part II, Item 7.
The composition and maturities of the investment securities portfolio at December 31, 2024, are summarized in the following table. Maturities are based on the final contractual payment date, and do not reflect the effect of scheduled principal repayments, prepayments, or early redemptions that may occur.
The composition and maturities of the investment securities portfolio at December 31, 2025, are summarized in the following table. Maturities are based on the final contractual payment date, and do not reflect the effect of scheduled principal repayments, prepayments, or early redemptions that may occur.
Adjustable-rate mortgage-backed securities are included in the period in which interest rates are next scheduled to adjust. The Company does invest in both taxable and non-taxable municipal securities. No material changes occurred in the non-taxable security portfolio for the year ended December 31, 2024.
Adjustable-rate mortgage-backed securities are included in the period in which interest rates are next scheduled to adjust. The Company does invest in both taxable and non-taxable municipal securities. No material changes occurred in the non-taxable security portfolio for the year ended December 31, 2025.
Loans greater than 90 days past due may remain on accrual status if management determines it has adequate collateral to cover the principal and interest. For those loans that are carried on nonaccrual status, payments are first applied to principal outstanding.
Loans greater than 90 days past due may remain on accrual status if management determines it has adequate collateral to cover the principal and interest. For those loans that are carried on non-accrual status, payments are first applied to principal outstanding.
Item 6. [Reserved] Item 7. Management ’ s Discussion and Analysis of Financial Condition and Results of Operations The purpose of this discussion is to focus on significant changes in the financial condition and results of operations of the Company during the years ended December 31, 2024 and 2023.
Item 6. [Reserved] Item 7. Management ’ s Discussion and Analysis of Financial Condition and Results of Operations The purpose of this discussion is to focus on significant changes in the financial condition and results of operations of the Company during the years ended December 31, 2025 and 2024.
Our lending activities are principally directed to our market area consisting of the Washington, D.C. and Northern Virginia metropolitan areas. Loan Portfolio Maturities and Yields . The following table summarizes the scheduled repayments of our loan portfolio at December 31, 2024.
Our lending activities are principally directed to our market area consisting of the Washington, D.C. and Northern Virginia metropolitan areas. Loan Portfolio Maturities and Yields . The following table summarizes the scheduled repayments of our loan portfolio at December 31, 2025.
The following table sets forth the major components of net interest income and the related yields and rates for the year ended December 31, 2024, compared to the years ended December 31, 2023 and December 31, 2022.
The following table sets forth the major components of net interest income and the related yields and rates for the year ended December 31, 2025, compared to the years ended December 31, 2024 and December 31, 2023.
As shown in the tables below, as of December 31, 2024, and 2023 the post-stress capital ratios well exceed our Board target ratios as well as Agency minimums (with buffer).
As shown in the tables below, as of December 31, 2025, and 2024 the post-stress capital ratios well exceed our Board target ratios as well as Agency minimums (with buffer).
Commercial loans are generally placed on nonaccrual status when the collection of principal or interest is 90 days or more past due, or earlier, if collection is uncertain based on an evaluation of the net realizable value of the collateral and the financial strength of the borrower.
Commercial loans are generally placed on non-accrual status when the collection of principal or interest is 90 days or more past due, or earlier, if collection is uncertain based on an evaluation of the net realizable value of the collateral and the financial strength of the borrower.
Consumer loans are generally placed on nonaccrual status when the collection of principal or interest is 120 days or more past due, or earlier, if collection is uncertain based on an evaluation of the net realizable value of the collateral and the financial strength of the borrower.
Consumer loans are generally placed on non-accrual status when the collection of principal or interest is 120 days or more past due, or earlier, if collection is uncertain based on an evaluation of the net realizable value of the collateral and the financial strength of the borrower.
The Agencies specifically excluded owner-occupied commercial real estate from their concentration guidance, as the primary source of repayment is the cash flow from the ongoing operations and activities conducted by the party, or affiliate of the party, who owns the property. 50 The following two tables depict a well-diversified portfolio of owner-occupied commercial real estate as of December 31, 2024 and December 31, 2023.
The Agencies specifically excluded owner-occupied commercial real estate from their concentration guidance, as the primary source of repayment is the cash flow from the ongoing operations and activities conducted by the party, or affiliate of the party, who owns the property. 48 The following two tables depict a well-diversified portfolio of owner-occupied commercial real estate as of December 31, 2025 and December 31, 2024.
We believe that we have enough sources of liquidity to satisfy our short and long-term liquidity needs as of December 31, 2024.
We believe that we have enough sources of liquidity to satisfy our short and long-term liquidity needs as of December 31, 2025.
The capital conservation buffer was phased in from 0.0% for 2015 to 2.50% by 2019. The capital conservation buffer for 2024 and 2023 is 2.50%.
The capital conservation buffer was phased in from 0.0% for 2015 to 2.50% by 2019. The capital conservation buffer for 2025 and 2024 is 2.50%.
The external review did not identify any material underwriting or ongoing portfolio management concerns. 48 The following two tables break down the December 31, 2024 and December 31, 2023 non-owner occupied CRE portfolio balances by showing the current balance in each sub-category and location.
The external review did not identify any material underwriting or ongoing portfolio management concerns. 46 The following two tables break down the December 31, 2025 and December 31, 2024 non-owner occupied CRE portfolio balances by showing the current balance in each sub-category and location.
The Bank’s actual regulatory capital amounts and ratios as of December 31, 2024 and 2023 are presented in the table below.
The Bank’s actual regulatory capital amounts and ratios as of December 31, 2025 and 2024 are presented in the table below.
Other short-term investments such as federal funds sold and maturing interest-bearing deposits with other banks, are additional sources of liquidity. 57 The liability portion of the balance sheet provides liquidity through various customers’ interest-bearing and noninterest-bearing deposit accounts and through FHLB and other borrowings.
Other short-term investments such as federal funds sold and maturing interest-bearing deposits with other banks, are additional sources of liquidity. 55 The liability portion of the balance sheet provides liquidity through various customers’ interest-bearing and non-interest-bearing deposit accounts and through FHLB and other borrowings.
Net cash used in investing activities, which consists primarily of disbursements for loan originations and the purchase of securities, offset by principal collections on loans and proceeds from maturing securities, was $122.3 million, $130.7 million, and $228.7 million for the twelve months ended December 31, 2024, December 31, 2023, and December 31, 2022, respectively.
Net cash used in investing activities, which consists primarily of disbursements for loan originations and the purchase of securities, offset by principal collections on loans and proceeds from maturing securities, was $38.4 million, $122.3 million, and $130.7 million for the twelve months ended December 31, 2025, December 31, 2024, and December 31, 2023, respectively.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” under the heading “Net Interest Income and Net Interest Margin” in the Company’s Annual Report on Form 10-K for the year ended December 31, 202 2 , which was filed with the SEC on March 23, 2023, and is incorporated herein by reference.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” under the heading “Net Interest Income and Net Interest Margin” in the Company’s Annual Report on Form 10-K for the year ended December 31, 202 3 , which was filed with the SEC on March 20, 2024, and is incorporated herein by reference.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” under the heading “Non-Interest Income” in the Company’s Annual Report on Form 10-K for the year ended December 31, 202 2 , which was filed with the SEC on March 23, 2023, and is incorporated herein by reference.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” under the heading “Non-Interest Income” in the Company’s Annual Report on Form 10-K for the year ended December 31, 202 3 , which was filed with the SEC on March 20, 2024, and is incorporated herein by reference.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” under the heading “Non-Interest Expense” in the Company’s Annual Report on Form 10-K for the year ended December 31, 202 2 , which was filed with the SEC on March 23, 2023, and is incorporated herein by reference.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” under the heading “Non-Interest Expense” in the Company’s Annual Report on Form 10-K for the year ended December 31, 202 3 , which was filed with the SEC on March 20, 2024, and is incorporated herein by reference.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” under the heading “Income Tax Expense” in the Company’s Annual Report on Form 10-K for the year ended December 31, 202 2 , which was filed with the SEC on March 23, 2023, and is incorporated herein by reference.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” under the heading “Income Tax Expense” in the Company’s Annual Report on Form 10-K for the year ended December 31, 202 3 , which was filed with the SEC on March 20, 2024, and is incorporated herein by reference.
Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities, and financing activities. Net cash provided by operating activities was $14.7 million, $31.6 million, and $33.5 million for the twelve months ended December 31, 2024, December 31, 2023, and December 31, 2022, respectively.
Our cash flows are comprised of three primary classifications: cash flows from operating activities, investing activities, and financing activities. Net cash provided by operating activities was $14.8 million, $14.7 million, and $31.6 million for the twelve months ended December 31, 2025, December 31, 2024, and December 31, 2023, respectively.
Fluctuations in interest rates as well as changes in the volume and mix of earning assets and interest-bearing liabilities can impact net interest income and net interest margin. Net interest income before provision for credit losses totaled $62.6 million for the year ended December 31, 2024, compared to $76.7 million for the year ended December 31, 2023.
Fluctuations in interest rates as well as changes in the volume and mix of earning assets and interest-bearing liabilities can impact net interest income and net interest margin. Net interest income before provision for credit losses totaled $69.5 million for the year ended December 31, 2025, compared to $62.6 million for the year ended December 31, 2024.
Establishing a trading portfolio would require specific authorization by the Board of Directors. The total investment securities portfolio, including both investment securities available-for-sale and investment securities held-to-maturity, was $71.8 million at December 31, 2024, a decrease of $5.4 million compared with December 31, 2023.
Establishing a trading portfolio would require specific authorization by the Board of Directors. The total investment securities portfolio, including both investment securities available-for-sale and investment securities held-to-maturity, was $71.8 million at December 31, 2025, a decrease of $0.1 million compared with December 31, 2024.
For the year ended December 31, 2024, the Bank had an effective tax benefit rate of 28.2%, compared to effective federal tax rate of 19.0% for the year ended December 31, 2023. Discussion of income tax expense for the year ended December 31, 2022 has been omitted as such discussion was provided in Part II, Item 7.
For the year ended December 31, 2025, the Bank had an effective tax rate of 18.2%, compared to effective benefit rate of 28.2% for the year ended December 31, 2024. Discussion of income tax expense for the year ended December 31, 2023 has been omitted as such discussion was provided in Part II, Item 7.
The Company holds a concentration in commercial real estate loans. The Board has set a risk tolerance level of 150% and 375% of consolidated risk-based capital for construction, land development and other land l oans and commercial real estate loans. As of December 31, 2024, construction, land development and other land l oans represented 131.9% of consolidated risk-based capital.
The Company holds a concentration in commercial real estate loans. The Board has set a risk tolerance level of 150% and 375% of consolidated risk-based capital for construction, land development and other land l oans and commercial real estate loans. As of December 31, 2025, construction, land development and other land l oans represented 97.6% of consolidated risk-based capital.
FHLB advances, other secured borrowings, federal funds purchased, and other short-term borrowed funds, as well as longer-term debt issued through the capital markets, all provide supplemental liquidity sources. The Company’s funding activities are monitored and governed through the Company’s asset/liability management process Deposits Total deposits increased by $221.7 million from December 31, 2023 to December 31, 2024.
FHLB advances, other secured borrowings, federal funds purchased, and other short-term borrowed funds, as well as longer-term debt issued through the capital markets, all provide supplemental liquidity sources. The Company’s funding activities are monitored and governed through the Company’s asset/liability management process Deposits Total deposits decreased by $8.6 million from December 31, 2024 to December 31, 2025.
The decrease in net interest income was driven by an increase in deposit interest expense discussed below, for the year ended December 31, 2024. The net interest margin was 3.13% for the year ended December 31, 2024, compared to 4.15% for the year ended December 31, 2023, on a fully tax equival ent basis.
The increase in net interest income was driven by a decrease in deposit interest expense discussed below, for the year ended December 31, 2025. The net interest margin was 3.46% for the year ended December 31, 2025, compared to 3.13% for the year ended December 31, 2024, on a fully tax equival ent basis.
These critical accounting policies require the use of estimates, assumptions and judgments which are based on information available as of the date of the financial statements. Accordingly, as this information changes, future financial statements could reflect the use of different estimates, assumptions and judgments.
This critical accounting policy requires the use of estimates, assumptions and judgments which are based on information available as of the date of the financial statements. Accordingly, as this information changes, future financial statements could reflect the use of different estimates, assumptions and judgments.
During the year ended December 31, 2024, the independent external loan review firm reviewed approximately 70% of the entire portfolio by outstanding dollar balance.
During the year ended December 31, 2025, the independent external loan review firm reviewed approximately 78% of the entire portfolio by outstanding dollar balance.
Total commercial real estate loans as defined by the Agency guidance represented 393.8% of consolidated risk-based capital. During the prior 36 months, the Company has experienced an increase in its commercial real estate portfolio by 72% .
Total commercial real estate loans as defined by the Agency guidance represented 354.6% of consolidated risk-based capital. During the prior 36 months, the Company has experienced an increase in its commercial real estate portfolio by 45% .
Even if the borrower is not presently in default, management will consider the likelihood that cash flow shortages, adverse economic conditions and negative trends may result in a payment default in the near future. 52 As a percentage of total assets, nonperforming assets were 0.97% at December 31, 2024, compared with 0.05% at December 31, 2023.
Even if the borrower is not presently in default, management will consider the likelihood that cash flow shortages, adverse economic conditions and negative trends may result in a payment default in the near future. 50 As a percentage of total assets, non-performing assets were 1.50% at December 31, 2025, compared with 0.97% at December 31, 2024.
December 31, 2024 Bank Capital Adequacy Ratios Pre- and Post-Stress (Tax-Effective) Well Capitalized with Buffer Bank Minimum Target As of December 31, 2024 Post Stress, Low Estimate Post Stress, High Estimate Leverage Ratio 5.00 % 7.50 % 12.08 % 10.62 % 10.44 % Total Risk-Based Capital 10.00 % 11.50 % 15.69 % 13.92 % 13.71 % Tier 1 Risk-Based Capital 8.00 % 9.50 % 14.64 % 12.87 % 12.66 % Common Equity Tier 1 Risk-Based Capital 6.50 % 8.00 % 14.64 % 12.47 % 12.26 % December 31, 2023 Bank Capital Adequacy Ratios Pre- and Post-Stress (Tax-Effective) Well Capitalized with Buffer Bank Minimum Target As of December 31, 2023 Post Stress, Low Estimate Post Stress, High Estimate Leverage Ratio 5.00 % 7.50 % 14.66 % 13.74 % 13.59 % Total Risk-Based Capital 10.00 % 11.50 % 17.18 % 16.17 % 16.00 % Tier 1 Risk-Based Capital 8.00 % 9.50 % 16.22 % 15.20 % 15.04 % Common Equity Tier 1 Risk-Based Capital 6.50 % 8.00 % 16.22 % 14.79 % 14.62 % The Company employs an external loan review firm to conduct ongoing reviews of the loan portfolio.
December 31, 2025 Bank Capital Adequacy Ratios Pre- and Post-Stress (Tax-Effective) Well Capitalized with Buffer Bank Minimum Target As of December 31, 2025 Post Stress, Low Estimate Post Stress, High Estimate Leverage Ratio 5.00 % 9.50 % 13.28 % 11.11 % 10.63 % Total Risk-Based Capital 10.00 % 11.50 % 16.08 % 13.62 % 13.08 % Tier 1 Risk-Based Capital 8.00 % 9.50 % 15.05 % 12.59 % 12.05 % Common Equity Tier 1 Risk-Based Capital 6.50 % 8.00 % 15.05 % 12.29 % 11.75 % December 31, 2024 Bank Capital Adequacy Ratios Pre- and Post-Stress (Tax-Effective) Well Capitalized with Buffer Bank Minimum Target As of December 31, 2024 Post Stress, Low Estimate Post Stress, High Estimate Leverage Ratio 5.00 % 9.50 % 12.08 % 10.62 % 10.44 % Total Risk-Based Capital 10.00 % 11.50 % 15.69 % 13.92 % 13.71 % Tier 1 Risk-Based Capital 8.00 % 9.50 % 14.64 % 12.87 % 12.66 % Common Equity Tier 1 Risk-Based Capital 6.50 % 8.00 % 14.64 % 12.47 % 12.26 % The Company employs an external loan review firm to conduct ongoing reviews of the loan portfolio.
There were $4.5 million in net loan charge-offs and $446,000 in net loan charge-offs during the years ended December 31, 2024 and December 31, 2023, respectively. 54 Allocation of Allowance for Credit Losses on Loans .
There were $24,000 and $4.5 million in net loan charge-offs during the years ended December 31, 2025 and December 31, 2024, respectively. 52 Allocation of Allowance for Credit Losses on Loans .
We stress test earning assets on a quarterly basis and measure the results against the Bank's risk-based capital.
We stress test earning assets using a worst-case methodology on a quarterly basis and measure the results against the Bank's risk-based capital.
Government Contracting Credit Exposures as of December 31, 2024 (Dollars in thousands) Principal Balance Line/Term Commitment Availability Number of Relationships Number of Relationships with Balances Line of Credit $ 16,733 $ 76,038 $ 59,305 30 13 Term Debt Exposure 1,445 1,445 — 2 2 Total Exposure $ 18,178 $ 77,483 $ 59,305 32 15 The federal banking Agencies issued guidance in 2006 which addresses institutions’ with increased concentrations of commercial real estate (CRE) loans.
December 31, 2025 Government Contracting Credit Exposures (Dollars in thousands) Principal Balance Line/Term Commitment Availability Number of Relationships Number of Relationships with Balances Line of Credit $ 12,316 $ 79,650 $ 67,334 30 12 Term Debt Exposure 1,374 1,374 — 3 3 Total Exposure $ 13,690 $ 81,024 $ 67,334 33 15 December 31, 2024 Government Contracting Credit Exposures (Dollars in thousands) Principal Balance Line/Term Commitment Availability Number of Relationships Number of Relationships with Balances Line of Credit $ 16,733 $ 76,038 $ 59,305 30 13 Term Debt Exposure 1,445 1,445 — 2 2 Total Exposure $ 18,178 $ 77,483 $ 59,305 32 15 The federal banking Agencies issued guidance in 2006 which addresses institutions’ with increased concentrations of commercial real estate (CRE) loans.
The recovery of credit losses for off-balance sheet exposure was driven by fluctuations in our revolving credit line utilization rates as of December 31, 2024. Loan originations decreased $73.6 million, which totaled $447.6 million for the year ended December 31, 2023 compared to loan originations of $374.0 million for the year ended December 31, 2024.
T he recovery of credit losses for off-balance sheet exposure was driven by fluctuations in our revolving credit line utilization rates as of December 31, 2025. Loan originations decreased $21.6 million, which totaled $374.0 million for the year ended December 31, 2024 compared to loan originations of $352.5 million for the year ended December 31, 2025.
The levels of these assets are dependent on our operating, financing, lending and investing activities during any given period. At December 31, 2024, cash and cash equivalents totaled $207.7 million. Securities classified as available-for-sale, which provide additional sources of liquidity, totaled $55.7 million at December 31, 2024.
The levels of these assets are dependent on our operating, financing, lending and investing activities during any given period. At December 31, 2025, cash and cash equivalents totaled $162.8 million. Securities classified as available-for-sale, which provide additional sources of liquidity, totaled $58.0 million at December 31, 2025.
At December 31, 2024 2023 2022 (Dollars in thousands) Charge-offs Recoveries Net charge-offs Net charge-offs to average loans Charge-offs Recoveries Net charge-offs Net charge-offs to average loans Charge-offs Recoveries Net charge-offs Net charge-offs to average loans Real Estate: Residential $ (132 ) $ — $ (132 ) 0.0 % $ — $ 7 $ 7 0.0 % $ — $ — $ — 0.0 % Commercial (740 ) — (740 ) (0.1 )% — — — 0.0 % — — — 0.0 % Construction (3,684 ) — (3,684 ) (0.9 )% — — — 0.0 % — — — 0.0 % Commercial and industrial (4 ) 19 15 0.0 % (462 ) — (462 ) (0.5 )% — — — 0.0 % Consumer (9 ) 9 — 0.0 % (6 ) 15 9 0.1 % (19 ) — (19 ) (0.1 )% Total $ (4,569 ) $ 28 $ (4,541 ) (0.3 )% $ (468 ) $ 22 $ (446 ) (0.0 )% $ (19 ) $ — $ (19 ) (0.0 )% At December 31, 2024, our allowance for credit losses on loans represented 1.06% of total loans and we had $21.7 million in non-performing loans.
At December 31, 2025 2024 2023 (Dollars in thousands) Charge-offs Recoveries Net charge-offs Net charge-offs to average loans Charge-offs Recoveries Net charge-offs Net charge-offs to average loans Charge-offs Recoveries Net charge-offs Net charge-offs to average loans Real Estate: Residential $ (200 ) $ 7 $ (193 ) (0.1 )% $ (132 ) $ — $ (132 ) 0.0 % $ — $ 7 $ 7 0.0 % Commercial — 740 740 0.1 % (740 ) — (740 ) (0.1 )% — — — 0.0 % Construction (35 ) — (35 ) 0.0 % (3,684 ) — (3,684 ) (0.9 )% — — — 0.0 % Commercial & Industrial (623 ) 86 (537 ) (0.5 )% (4 ) 19 15 — (462 ) — (462 ) (0.5 )% Consumer — 1 1 0.1 % (9 ) 9 — — (6 ) 15 9 0.1 % Total $ (858 ) $ 834 $ (24 ) 0.0 % $ (4,569 ) $ 28 $ (4,541 ) (0.3 )% $ (468 ) $ 22 $ (446 ) (0.0 )% At December 31, 2025, our allowance for credit losses on loans represented 1.04% of total loans and we had $31.5 million in non-performing loans.
These policies require numerous estimates or economic assumptions that may prove inaccurate or may be subject to variations which may significantly affect our reported results and financial condition for the current period or in future periods.
These policies require numerous estimates or economic assumptions that may prove inaccurate or may be subject to variations which may significantly affect our reported results and financial condition for the current period or in future periods. The Company’s critical accounting policy relates to the allowance for credit losses.
Certificates of deposit in amounts in excess of the FDIC insurance limit of $250,000 totaled approximately $457.4 million. The following table sets forth the maturity of these certificates as of December 31, 2024.
Certificates of deposit in amounts in excess of the FDIC insurance limit of $250,000 totaled approximately $416.8 million. The following table sets forth the maturity of these certificates as of December 31, 2025.
This increase was a result of higher rates paid on all outstanding borrowings in conjunction with the higher rate environment throughout the year. Discussion of net interest income and net interest margin for the year ended December 31, 2022 has been omitted as such discussion was provided in Part II, Item 7.
This decrease was a result of lower rates paid on all outstanding b orrowings in conjunction with the decreasing rate environment throughout the year. Discussion of net interest income and net interest margin for the year ended December 31, 2023 has been omitted as such discussion was provided in Part II, Item 7.
At December 31, 2024 and 2023, we were permitted to borrow up to an aggregate total of $544.8 million and $504.8 million, re spectively, from the Federal Home Loan Bank of Richmond. There were Federal Home Loan Bank borrowings outstanding of $0 at December 31, 2024, and December 31, 2023, respectively.
At December 31, 2025 and 2024 , we were permitted to borrow up to an aggregate total of $587.8 million and $544.8 million, respectively, from the Federal Home Loan Bank of Atlanta. There were Federal Home Loan Bank borrowings outstanding of $0 at December 31, 2025 , and December 31, 2024 , respectively.
Failure to meet minimum capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements.
Regulatory Capital The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements.
At December 31, 2024 2023 (Dollars in thousands) Allowance for Credit Losses - Loans Percent of Allowance in Each Category to Total Allocated Allowance Percent of Loans in Each Category to Total Loans Allowance for Credit Losses - Loans Percent of Allowance in Each Category to Total Allocated Allowance Percent of Loans in Each Category to Total Loans Residential Real Estate: Single family $ 1,433 7.4 % 11.1 % $ 1,510 9.1 % 11.8 % Multifamily 1,045 5.4 % 12.8 % 1,084 6.6 % 15.7 % Commercial Real Estate: Owner occupied 4,154 21.3 % 19.5 % 3,393 20.5 % 16.3 % Non-owner occupied 7,167 36.8 % 30.5 % 5,495 33.3 % 26.7 % Construction and Land Development 4,648 23.9 % 21.4 % 3,575 21.7 % 24.9 % Commercial – Non Real Estate: Commercial and industrial 993 5.1 % 4.5 % 1,435 8.7 % 4.4 % Consumer – Non Real Estate: Secured 10 0.1 % 0.1 % 14 0.1 % 0.2 % Total $ 19,450 100.0 % 100.0 % $ 16,506 100.0 % 100.0 % Funding Activities Deposits are the primary source of funds for lending and investing activities and their cost is the largest category of interest expense.
At December 31, 2025 2024 (Dollars in thousands) Allowance for Credit Losses - Loans Percent of Allowance in Each Category to Total Allocated Allowance Percent of Loans in Each Category to Total Loans Allowance for Credit Losses - Loans Percent of Allowance in Each Category to Total Allocated Allowance Percent of Loans in Each Category to Total Loans Residential Real Estate: Single Family $ 1,504 7.8 % 11.6 % $ 1,433 7.4 % 11.1 % Multifamily 932 4.8 % 12.1 % 1,045 5.4 % 12.8 % Commercial Real Estate: Owner Occupied 4,675 24.2 % 24.0 % 4,154 21.3 % 19.5 % Non-Owner Occupied 7,208 37.4 % 30.4 % 7,167 36.8 % 30.6 % Construction & Land Development 3,527 18.3 % 16.1 % 4,648 23.9 % 21.4 % Commercial – Non Real Estate: Commercial & Industrial 1,456 7.5 % 5.7 % 993 5.1 % 4.5 % Consumer – Non Real Estate: Secured 6 — 0.1 % 10 0.1 % 0.1 % Total $ 19,308 100 % 100 % $ 19,450 100 % 100 % Funding Activities Deposits are the primary source of funds for lending and investing activities and their cost is the largest category of interest expense.
The provision for credit losses on loans increased to a credit loss provision of $7.5 million for the year ended December 31, 2024, compared to the prior year which ended at credit loss provision of $1.9 million.
The provision for credit losses on loans decreased to a recovery of credit loss of $0.1 million for the year ended December 31, 2025, compared to the prior year which ended at a credit loss provision of $7.5 million.
Wholesale deposits, which are included in the table below, totaled $468.1 million and $433.0 million at December 31, 2024, and December 31, 2023, respectively.
Wholesale deposits, which are included in the table below, totaled $498.5 million and $468.1 million at December 31, 2025, and December 31, 2024, respectively.
Weighted average yield is calculated as the tax-equivalent yield on a pro rata basis for each security based on its relative amortized cost. 45 Loan Portfolio Our primary source of income is derived from interest earned on loans.
Weighted average yield is calculated as the tax-equivalent yield on a pro rata basis for each security based on its relative amortized cost. 43 Loan Portfolio Our primary source of income is derived from interest earned on loans. Our loan portfolio consists of loans secured by real estate as well as commercial business loans and consumer loans.
The decrease in net income was due to increases in interest expense of $24.4 million and an increase of non-interest expenses of $27.4 million compared to the same period in the prior year.
The increase in net income was due to a decrease in interest expense of $10.0 million and a decrease of non-interest expenses of $18.4 million compared to the same period in the prior year.
This increase was a result of higher rates paid on all outstanding deposits in conjunction with the higher rate environment throughout the year. 40 The rate paid on FHLB borrowings and federal funds purchased for the year ended December 31, 2024 was 5.61% and 5.78%, respectively, compared to the prior year of 4.90% for FHLB borrowings and 5.36% for federal funds purchased.
This decrease was a result of lower rates paid on all outstanding deposits in conjunction with the decreasing rate environment throughout the year. 38 The rate paid on FHLB borrowings and federal funds purchased for the year ended December 31, 2025 was 0.00% and 4.71%, respectively, compared to the prior year of 5.61% for FHLB borrowings and 5.78% for federal funds purchased.
As of December 31, 2024, the Company additionally reported $259.9 million in reciprocal deposits considered wholesale for call report purposes only, bringing regulatory defined wholesale deposits to $702.8 million as of December 31, 2024.
As of December 31, 2025, the Company additionally reported $145.2 million in reciprocal deposits considered wholesale for call report purposes only, bringing regulatory defined wholesale deposits to $625.2 million as of December 31, 2025.
Additionally, as of December 31, 2024 and 2023 we had credit availabilit y of $144.0 mill ion and $114.0 million with correspondent banks for short-term liquidity needs, if necessary. Borrowings were $0 million and $15.0 out standing at December 31, 2024 and 2023, respectively, under this facility.
Additionally, as of December 31, 2025 and 2024 we had credit availability of $144.0 million and $144.0 million with correspondent banks for short-term liquidity needs, if necessary. Borrowings were $0 outstanding at December 31, 2025 and 2024 , respectively, under this facility.
As of December 31, 2024, all of the Company's reciprocal deposits were core deposits from customers who placed their deposits in the reciprocal network for additional FDIC insurance coverage. 55 At December 31, 2024, the Company had $779.6 million in total deposits in excess of the FDIC insurance limit of $250,000.
As of December 31, 2025, all of the Company's reciprocal deposits were core deposits from customers who placed their deposits in the reciprocal network for additional FDIC insurance coverage. 53 At December 31, 2025, the Comp any had $911.8 million in total deposits i n excess of the FDIC insurance limit of $250,000.
At December 31, 2024 2023 (In thousands) Selected Financial Condition Data: Total assets $ 2,228,098 $ 2,035,432 Total cash and cash equivalents 207,708 114,513 Total investment securities 71,825 77,203 Loans receivable, net 1,810,556 1,705,137 Bank-owned life insurance 39,507 38,318 Premises and equipment, net 13,287 13,944 Computer software, net of amortization — 14,657 Total deposits 1,907,794 1,686,127 Federal funds purchased — 15,000 Subordinated debt 73,039 72,642 Allowance for credit losses on off-balance sheet credit exposure 287 1,009 Total stockholders’ equity 207,991 221,517 38 For the year ended December 31, 2024 2023 2022 (In thousands) Selected Operating Data: Interest income $ 134,615 $ 124,421 $ 84,018 Interest expense 72,041 47,679 13,369 Net interest income 62,574 76,742 70,649 Provision for credit losses 6,763 1,642 2,398 Net interest income after provision for credit losses 55,811 75,100 68,251 Total non-interest income 3,252 3,340 4,661 Total non-interest expenses 72,967 45,616 39,524 Income (loss) before income taxes (13,904 ) 32,824 33,388 Income tax expense (benefit) (3,924 ) 6,239 6,714 Net income (loss) (9,980 ) 26,585 26,674 Less: Preferred stock dividends 2,156 2,156 2,156 Net income (loss) available to common shareholders $ (12,136 ) $ 24,429 $ 24,518 Basic and diluted earnings (loss) per common share $ (1.60 ) $ 3.25 $ 3.26 At or For the Years Ended December 31, 2024 2023 2022 Performance Ratios: Return on average assets (0.47 )% 1.38 % 1.53 % Return on average equity (4.44 )% 12.66 % 13.98 % Interest rate spread (1) 2.01 % 3.05 % 3.71 % Net interest margin (1) 3.13 % 4.15 % 4.23 % Efficiency ratio (2) 110.85 % 56.69 % 52.19 % Non-interest expense to average assets 3.42 % 2.34 % 2.24 % Average interest-earning assets to average interest-bearing liabilities 131.19 % 143.43 % 164.68 % Per share Data and Shares Outstanding: Earnings (loss) per common share (basic and diluted) $ (1.60 ) $ 3.25 $ 3.26 Book value per common share $ 23.77 $ 25.81 $ 22.98 Dividends per common share $ 0.40 $ 0.40 $ 0.25 Tangible book value per common share (1) $ 23.77 $ 23.86 $ 21.75 Market value per common share $ 18.10 $ 24.81 $ 27.49 Weighted average common shares (basic and diluted) 7,606,391 7,522,913 7,529,382 Common shares outstanding at end of period 7,603,765 7,527,415 7,442,743 Capital Ratios (Bank): Common equity tier 1(CET1) capital to risk-weighted assets 14.64 % 16.22 % 15.47 % Total risk-based capital to risk-weighted assets 15.69 % 17.18 % 16.27 % Tier 1 capital to risk-weighted assets 14.64 % 16.22 % 15.47 % Tier 1 capital to average assets 12.08 % 14.66 % 15.05 % Asset Quality Ratios: Allowance for credit losses on loans as a percentage of total loans 1.06 % 0.96 % 0.88 % Allowance for credit losses on loans as a percentage of non-performing loans 89.84 % 16.44X N/A Net charge-offs to average outstanding loans during the period 0.25 % 0.03 % 0.00 % Non-performing loans as a percentage of total loans 1.18 % 0.06 % 0.00 % Non-performing assets as a percentage of total assets 0.97 % 0.05 % 0.00 % Other Data: Common equity / total assets 8.11 % 9.54 % 8.88 % Tangible equity / tangible assets (1) 9.33 % 10.24 % 9.87 % Average tangible equity to average tangible assets 9.80 % 10.31 % 10.66 % Number of offices 6 6 6 Number of full-time equivalent employees 204 186 168 (1) Non-GAAP; refer to Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section “Non-GAAP Measures” of this Form 10-K.
At December 31, 2025 2024 (In thousands) Selected Financial Condition Data: Total assets $ 2,212,669 $ 2,228,098 Total cash and cash equivalents 162,756 207,708 Total investment securities 71,752 71,825 Loans receivable, net 1,841,833 1,810,556 Bank owned life insurance 40,752 39,507 Premises and equipment, net, including property held for sale at fair value 16,336 13,287 Total deposits 1,899,184 1,907,794 Subordinated debt, net 69,936 73,039 Total stockholders’ equity 218,591 207,991 36 For the year ended December 31, 2025 2024 2023 (In thousands) Selected Operating Data: Interest income $ 131,588 $ 134,615 $ 124,421 Interest expense 62,043 72,041 47,679 Net interest income 69,545 62,574 76,742 Provision for credit losses (70 ) 6,763 1,642 Net interest income after provision for credit losses 69,615 55,811 75,100 Total non-interest income 4,027 3,252 3,340 Total non-interest expenses 54,551 72,967 45,616 Income (loss) before income taxes 19,091 (13,904 ) 32,824 Income tax expense (benefit) 3,478 (3,924 ) 6,239 Net income (loss) 15,613 (9,980 ) 26,585 Less: Preferred stock dividends 2,156 2,156 2,156 Net income (loss) available to common shareholders $ 13,457 $ (12,136 ) $ 24,429 Basic and diluted earnings (loss) per common share $ 1.76 $ (1.60 ) $ 3.25 At or For the Years Ended December 31, 2025 2024 2023 Performance Ratios: Return on average assets 0.73 % (0.47 )% 1.36 % Return on average equity 7.33 % (4.44 )% 12.66 % Interest rate spread (1)(3) 2.58 % 2.01 % 3.05 % Net interest margin (1)(3) 3.46 % 3.13 % 4.15 % Efficiency ratio (2)(3) 74.15 % 110.85 % 56.96 % Non-interest expense to average assets 2.55 % 3.42 % 2.33 % Average interest-earning assets to average interest-bearing liabilities 128.69 % 131.19 % 142.48 % Per share Data and Shares Outstanding: Earnings (loss) per common share (basic and diluted) $ 1.76 $ (1.60 ) $ 3.25 Book value per common share $ 25.52 $ 23.77 $ 25.81 Dividends per common share $ 0.40 $ 0.40 $ 0.40 Tangible book value per common share (1) $ 25.52 $ 23.77 $ 23.86 Market value per common share $ 20.36 $ 18.10 $ 24.81 Weighted average common shares (basic and diluted) 7,652,504 7,606,391 7,522,913 Common shares outstanding at end of period 7,496,571 7,603,765 7,527,415 Capital Ratios (Bank): Common equity tier 1 (CET1) capital to risk-weighted assets 15.05 % 14.64 % 16.22 % Total risk-based capital to risk-weighted assets 16.08 % 15.69 % 17.18 % Tier 1 capital to risk-weighted assets 15.05 % 14.64 % 16.22 % Tier 1 capital to average assets 13.28 % 12.08 % 14.66 % Asset Quality Ratios: Allowance for credit losses on loans as a percentage of total loans 1.04 % 1.06 % 0.96 % Allowance for credit losses on loans as a percentage of non-performing loans 61.33 % 89.84 % 16.44X Net charge-offs to average outstanding loans during the period 0.00 % 0.25 % 0.03 % Non-performing loans as a percentage of total loans 1.69 % 1.18 % 0.06 % Non-performing assets as a percentage of total assets 1.50 % 0.97 % 0.05 % Other Data: Common equity / total assets 8.65 % 8.11 % 9.54 % Tangible equity / tangible assets (1) 9.88 % 9.33 % 10.24 % Average tangible equity to average tangible assets 9.95 % 9.80 % 10.31 % Number of offices 6 6 6 Number of full-time equivalent employees 171 204 186 (1) Non-GAAP; refer to Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section “Non-GAAP Measures” of this Form 10-K.
Asset Quality The Company’s asset quality remained strong during the year ended December 31, 2024. Nonperforming assets, which includes nonaccrual loans, accruing loans 90 days past due, and other real estate owned totaled $21.7 million at December 31, 2024, and $1.0 million at December 31, 2023.
Asset Quality The Company’s asset quality remained resilient during the year ended December 31, 2025. Non-performing assets, which includes non-accrual loans, accruing loans 90 days past due, and other real estate owned totaled $33.2 million at December 31, 2025, and $21.7 million at December 31, 2024.
At December 31, 2024, the investment securities portfolio includes $55.7 million of investment securities available-for-sale and $16.1 million of investment securities held-to-maturity compared to $59.9 million of investment securities available-for-sale and $17.3 million of investment securities held-to-maturity at December 31, 2023.
At December 31, 2025, the investment securities portfolio includes $58.0 million of investment securities available-for-sale and $13.8 million of investment securities held-to-maturity compared to $55.7 million of investment securities available-for-sale and $16.1 million of investment securities held-to-maturity at December 31, 2024.
The decrease in net interest margin primarily resulted from an increase of interest expense on our interest bearing liabilities that outpaced the increase in interest income. The primary drivers of increased interest expense came from demand, money market, and time deposits.
The increase in net interest margin primarily resulted from a decrease of interest expense on our interest-bearing liabilities. The primary drivers of decreased interest expense came from cost management on demand, money market, and time deposits during 2025.
As of December 31, 2024 2023 (Dollars in thousands) Wholesale Money Market Deposits Accounts (MMDA) Balance Percent % Weighted Average Rate Weighted Remaining Maturity (in months) Balance Percent % Weighted Average Rate Weighted Remaining Maturity (in months) Wholesale MMDAs $ 100,334 21.4 % 4.50 % N/A $ 120,536 27.8 % 5.75 % N/A Wholesale Time Deposits Listing Service CDs (1) 25,231 5.4 % 4.79 % 13 34,481 8.0 % 4.86 % 5 Wholesale CDs: Term 220,357 47.1 % 4.56 % 7 148,906 34.4 % 4.32 % 7 Term with Call Option (2) 122,216 26.1 % 5.12 % 30 129,083 29.8 % 5.22 % 30 Total Wholesale CDs 342,573 277,989 Total wholesale deposits $ 468,138 100.0 % $ 433,006 100.0 % (1) Listing service CDs are excluded from being classified as wholesale deposits, per FDIC call report instructions (2) 80% of the CDs in this balance can be called as of December 31, 2024 Regulatory Defined Wholesale Deposits Each quarter the Bank files a bank call report with the FDIC, which has a specific way it defines wholesale brokered deposits.
As of December 31, 2025 2024 (Dollars in thousands) Wholesale Money Market Deposits Accounts (MMDA) Balance Percent % Weighted Average Rate Weighted Remaining Maturity (in months) Balance Percent % Weighted Average Rate Weighted Remaining Maturity (in months) Wholesale MMDAs $ 170,575 34.2% 3.80% N/A $ 100,334 21.4% 4.50% N/A Wholesale Time Deposits Listing Service CDs (1) 18,534 3.7% 4.81% 5 25,231 5.4% 4.79% 13 Wholesale CDs: Term 283,397 56.9% 4.16% 7 220,357 47.1% 4.56% 7 Term with Call Option (2) 26,000 5.2% 3.83% 33 122,216 26.1% 5.12% 30 Total Wholesale CDs 309,397 342,573 Total wholesale deposits $ 498,506 100.0 % $ 468,138 100.0 % (1) Listing service CDs are excluded from being classified as wholesale deposits, per FDIC call report instructions (2) All of the CDs as of December 31, 2025 can be called starting in 2026 Regulatory Defined Wholesale Deposits Each quarter the Bank files a bank call report with the FDIC, which has a specific way it defines wholesale brokered deposits.
For the Year Ended December 31, For the Year Ended December 31, 2024 2023 (Dollars in thousands) Balance at beginning of year $ 16,506 $ 14,114 Current expected credit losses, nonrecurring adoption — 895 Charge-offs: Residential real estate (132 ) — Commercial real estate (740 ) — Construction (3,684 ) — Commercial and industrial (4 ) (462 ) Consumer (9 ) (6 ) Total charge-offs (4,569 ) (468 ) Recoveries: Residential real estate — 7 Commercial and industrial 19 — Consumer 9 15 Total recoveries 28 22 Net charge-offs (4,541 ) (446 ) Provision for credit losses - loans 7,485 1,943 Balance at end of period $ 19,450 $ 16,506 Ratios: Net charge offs to average loans outstanding 0.25 % 0.03 % Allowance for credit losses on loans to non-performing loans at end of period 89.84 % 16.44X Allowance for credit losses on loans to gross loans at end of period 1.06 % 0.96 % The following table summarizes our net charge-off activity by loan segment for the periods indicated.
For the Year Ended December 31, For the Year Ended December 31, 2025 2024 (Dollars in thousands) Balance at beginning of year $ 19,450 $ 16,506 Charge-offs: Residential Real Estate (200 ) (132 ) Commercial Real Estate — (740 ) Construction (35 ) (3,684 ) Commercial & Industrial (623 ) (4 ) Consumer — (9 ) Total charge-offs (858 ) (4,569 ) Recoveries: Residential Real Estate 7 — Commercial Real Estate 740 — Commercial & Industrial 86 19 Consumer 1 9 Total recoveries 834 28 Net charge-offs (24 ) (4,541 ) Provision for credit losses - loans (118 ) 7,485 Balance at end of period $ 19,308 $ 19,450 Ratios: Net charge offs to average loans outstanding 0.00 % 0.25 % Allowance for credit losses on loans to non-performing loans at end of period 61.33 % 89.84 % Allowance for credit losses on loans to gross loans at end of period 1.04 % 1.06 % The following table summarizes our net charge-off activity by loan segment for the periods indicated.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” under the heading “Provision for Loan Losses” in the Company’s Annual Report on Form 10-K for the year ended December 31, 202 2 , which was filed with the SEC on March 23, 2023, and is incorporated herein by reference. 42 Non-Interest Income Our primary sources of non-interest income are service charges on deposit accounts, such as interchange fees and statement fees, income earned on bank owned life insurance, fees earned from executing interest rate swaps on commercial loans, and gains realized on the sale of the guaranteed portion of Small Business Administration (“SBA”) loans.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” under the heading " Provision for Credit Losses ” in the Company’s Annual Report on Form 10-K for the year ended December 31, 202 3 , which was filed with the SEC on March 20, 2024, and is incorporated herein by reference. 40 Non-Interest Income Our primary sources of non-interest income are service charges on deposit accounts, such as interchange fees and statement fees, and income earned on bank owned life insurance.
Actual Capital Adequacy Purposes To Be Well Capitalized Under the Prompt Corrective Action Provision (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio As of December 31, 2024 Total capital (to risk-weighted assets) $ 296,584 15.69 % $ 151,269 ≥ 8.0% $ 189,086 ≥ 10.0% Common equity tier 1 capital (to risk-weighted assets) $ 276,847 14.64 % $ 85,089 ≥ 4.5% $ 122,906 ≥ 6.5% Tier 1 capital (to risk-weighted assets) $ 276,847 14.64 % $ 113,451 ≥ 6.0% $ 151,269 ≥ 8.0% Tier 1 capital (to average assets) $ 276,847 12.08 % $ 91,708 ≥ 4.0% $ 114,635 ≥ 5.0% As of December 31, 2023 Total capital (to risk-weighted assets) $ 312,069 17.18 % $ 145,300 ≥ 8.0% $ 181,625 ≥ 10.0% Common equity tier 1 capital (to risk-weighted assets) $ 294,553 16.22 % $ 81,731 ≥ 4.5% $ 118,056 ≥ 6.5% Tier 1 capital (to risk-weighted assets) $ 294,553 16.22 % $ 108,975 ≥ 6.0% $ 145,300 ≥ 8.0% Tier 1 capital (to average assets) $ 294,553 14.66 % $ 80,375 ≥ 4.0% $ 100,469 ≥ 5.0% Non-GAAP Measures In reporting the results as of and for the year ended December 31, 2024, the Company has provided supplemental performance measures on an operating basis.
Actual Capital Adequacy Purposes To Be Well Capitalized Under the Prompt Corrective Action Provision (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio As of December 31, 2025 Total capital (to risk-weighted assets) $ 306,631 16.08 % $ 152,541 ≥ 8.0% $ 190,677 ≥ 10.0% Common equity tier 1 capital (to risk-weighted assets) $ 286,987 15.05 % $ 85,805 ≥ 4.5% $ 123,940 ≥ 6.5% Tier 1 capital (to risk-weighted assets) $ 286,987 15.05 % $ 114,406 ≥ 6.0% $ 152,541 ≥ 8.0% Tier 1 capital (to average assets) $ 286,987 13.28 % $ 86,467 ≥ 4.0% $ 108,083 ≥ 5.0% As of December 31, 2024 Total capital (to risk-weighted assets) $ 296,584 15.69 % $ 151,269 ≥ 8.0% $ 189,086 ≥ 10.0% Common equity tier 1 capital (to risk-weighted assets) $ 276,847 14.64 % $ 85,089 ≥ 4.5% $ 122,906 ≥ 6.5% Tier 1 capital (to risk-weighted assets) $ 276,847 14.64 % $ 113,451 ≥ 6.0% $ 151,269 ≥ 8.0% Tier 1 capital (to average assets) $ 276,847 12.08 % $ 91,708 ≥ 4.0% $ 114,635 ≥ 5.0% Non-GAAP Measures In reporting the results as of and for the year ended December 31, 2025, the Company has provided supplemental performance measures on an operating basis.
The following table presents the Company’s average deposits segregated by major category for the years ended December 31, 2024 and December 31, 2023: At December 31, 2024 2023 Average Balance Percent Weighted Average Rate Average Balance Percent Weighted Average Rate (Dollars in thousands) Deposit type: Interest-bearing demand $ 181,109 10.1 % 4.78 % $ 83,087 5.1 % 2.15 % Money market 464,400 26.0 % 4.61 % 365,815 22.6 % 3.73 % Savings and NOW 54,385 3.0 % 1.39 % 49,565 3.0 % 1.10 % Time deposits 748,938 41.9 % 4.99 % 702,034 43.3 % 3.83 % Interest-bearing deposits 1,448,832 81.0 % 4.70 % 1,200,501 74.0 % 3.57 % Non-interest bearing demand 340,005 19.0 % 421,177 26.0 % Total deposits $ 1,788,837 100.0 % 3.81 % $ 1,621,678 100.0 % 2.67 % The pronounced shift from non-interest bearing demand deposits into money market demand and time deposits was driven by market conditions emanating from the large-bank failures in the first half of 2023.
The following table presents the Company’s average deposits segregated by major category for the years ended December 31, 2025 and December 31, 2024: At December 31, 2025 2024 Average Balance Percent Weighted Average Rate Average Balance Percent Weighted Average Rate (Dollars in thousands) Deposit type: Interest-bearing demand $ 117,493 6.4 % 3.56 % $ 181,109 10.1 % 4.78 % Money market 486,945 26.7 % 3.87 % 464,400 26.0 % 4.61 % Savings and NOW 107,151 5.9 % 1.37 % 54,385 3.0 % 1.39 % Time deposits 785,378 43.0 % 4.36 % 748,938 41.9 % 4.99 % Interest-bearing deposits 1,496,967 82.0 % 3.92 % 1,448,832 81.0 % 4.70 % Non-interest-bearing demand 327,632 18.0 % 340,005 19.0 % Total deposits $ 1,824,599 100.0 % 3.22 % $ 1,788,837 100.0 % 3.81 % The shift from non-interest-bearing demand deposits into money market demand and time deposits was driven by market conditions emanating from the large-bank failures in the first half of 2023.
For the Year Ended December 31, 2024 2023 % Change 2023 2022 % Change (In thousands) (In thousands) Interest income $ 134,615 $ 124,421 8.19 % $ 124,421 $ 84,018 48.09 % Interest expense 72,041 47,679 51.10 % 47,679 13,369 256.64 % Net interest income 62,574 76,742 (18.46 )% 76,742 70,649 8.62 % Provision for credit losses 6,763 1,642 311.88 % 1,642 2,398 (31.53 )% Net interest income after provision 55,811 75,100 (25.68 )% 75,100 68,251 10.04 % Non-interest income 3,252 3,340 (2.63 )% 3,340 4,661 (28.34 )% Non-interest expense 72,967 45,616 59.96 % 45,616 39,524 15.41 % Net income (loss) before income taxes (13,904 ) 32,824 (142.36 )% 32,824 33,388 (1.69 )% Income tax expense (benefit) (3,924 ) 6,239 (162.89 )% 6,239 6,714 (7.07 )% Net income (loss) (9,980 ) 26,585 (137.54 )% 26,585 26,674 (0.33 )% Less: Preferred stock dividends 2,156 2,156 0.00 % 2,156 2,156 0.00 % Net income (loss) available to common shareholders $ (12,136 ) $ 24,429 (149.68 )% $ 24,429 $ 24,518 (0.36 )% Net loss for the year ended December 31, 2024, was $10.0 million, a decrease of $36.6 million, or 137.5% compared to net income of $26.6 million earned during the year ended December 31, 2023.
For the Year Ended December 31, 2025 2024 % Change 2024 2023 % Change (In thousands) (In thousands) Interest income $ 131,588 $ 134,615 (2.25 )% $ 134,615 $ 124,421 8.19 % Interest expense 62,043 72,041 (13.88 )% 72,041 47,679 51.10 % Net interest income 69,545 62,574 11.14 % 62,574 76,742 (18.46 )% Provision for credit losses (70 ) 6,763 (101.04 )% 6,763 1,642 311.88 % Net interest income after provision for credit losses 69,615 55,811 24.73 % 55,811 75,100 (25.68 )% Non-interest income 4,027 3,252 23.83 % 3,252 3,340 (2.63 )% Non-interest expense 54,551 72,967 (25.24 )% 72,967 45,616 59.96 % Net income (loss) before income taxes 19,091 (13,904 ) 237.31 % (13,904 ) 32,824 (142.36 )% Income tax expense (benefit) 3,478 (3,924 ) 188.63 % (3,924 ) 6,239 (162.89 )% Net income (loss) 15,613 (9,980 ) 256.44 % (9,980 ) 26,585 (137.54 )% Less: Preferred stock dividends 2,156 2,156 0.00 % 2,156 2,156 0.00 % Net income (loss) available to common shareholders $ 13,457 $ (12,136 ) 210.88 % $ (12,136 ) $ 24,429 (149.68 )% Net income for the year ended December 31, 2025, w as $15.6 million, an increase of $ 25.6 million, compared to a net loss of $10.0 million for the year ended December 31, 2024 .
December 31, December 31, 2024 2023 (Dollars in thousands) Non-accrual loans: Residential real estate Single family $ 1,162 $ 851 Commercial real estate Non-owner occupied 11,160 — Construction & Land Development 4,235 — Commercial non-real estate Commercial and industrial 5,093 149 Total non-accrual loans 21,650 1,000 Loans greater than 90 days past due and still accruing: Consumer non real estate - secured — 4 Total non-performing loans 21,650 1,004 Total non-performing assets $ 21,650 $ 1,004 Ratios: Total non-performing loans to gross loans receivable 1.18 % 0.06 % Total non-performing loans to total assets 0.97 % 0.05 % Total non-accrual loans to gross loans receivable 1.18 % 0.05 % Interest income that would have been recorded for the years ended December 31, 2024 and 2023 had non-accruing loans been current according to their original terms was $1.9 million and $133,092, respectively.
December 31, December 31, 2025 2024 (Dollars in thousands) Non-accrual loans: Residential Real Estate Single Family $ 5,316 $ 1,162 Commercial Real Estate Non-Owner Occupied 314 11,160 Construction & Land Development 25,467 4,235 Commercial Non-Real Estate Commercial & Industrial 385 5,093 Total non-accrual loans 31,482 21,650 Other Real Estate Owned 1,697 — Total non-performing assets $ 33,179 $ 21,650 Ratios: Total non-performing loans to total assets 1.42 % 0.97 % Total non-performing assets to total assets 1.50 % 0.97 % Total non-accrual loans to gross loans receivable 1.69 % 1.18 % Interest income that would have been recorded for the years ended December 31, 2025 and 2024 had non-accruing loans been current according to their original terms was $1.4 million and $1.9 million, respectively.
Commercial and industrial loans had a balance of $82.8 million at December 31, 2024 compared to $75.4 million at December 31, 2023, for a net increase of $7.4 million.
Commercial and industrial loans had a balance of $107.0 million at December 31, 2025 compared to $102.4 million at December 31, 2024, for a net increase of $4.6 million.
Income Tax Expense Income tax expense decreased $10.2 million or 162.9%, to a tax benefit of $3.9 million for the year ended December 31, 2024 from a tax expense of $6.2 million for the year ended December 31, 2023.
Income Tax Expense Income tax expense increased $7.4 million or 188.6%, to a tax expense of $3.5 million for the year ended December 31, 2025 from a tax benefit of $3.9 million for the year ended December 31, 2024.
Comparison of Statements of Financial Condition at December 31, 2024 and at December 31, 2023 Total Assets Total assets increased $192.7 million, or 9.5%, to $2.2 billion at December 31, 2024 from $2.0 billion at December 31, 2023.
Comparison of Statements of Financial Condition at December 31, 2025 and at December 31, 2024 Total Assets Total assets decreased $ 15.4 million, or 0.7% , to $2.21 billion at December 31, 2025 from $2.23 billion at December 31, 2024 .
At December 31, 2024 2023 (In thousands) Interest Rate Range: 0.01 – 0.99% $ 1,324 $ 6,354 1.00 – 1.99% 1,073 71,544 2.00 – 2.99% 4,451 74,245 3.00 – 3.99% 59,296 40,392 4.00 – 4.99% 463,571 123,178 5.00 and greater 289,573 380,623 Total $ 819,288 $ 696,336 The following table sets forth by interest rate ranges information concerning the maturities of our certificates of deposit as of December 31, 2024.
At December 31, 2025 2024 (In thousands) Interest Rate Range: 0.01 – 0.99% $ 34 $ 1,324 1.00 – 1.99% 2,375 1,073 2.00 – 2.99% 3,332 4,451 3.00 – 3.99% 363,851 59,296 4.00 – 4.99% 409,531 463,571 5.00 and greater 721 289,573 Total $ 779,844 $ 819,288 The following table sets forth by interest rate ranges, information concerning the maturities of our certificates of deposit as of December 31, 2025.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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These back-to-back loan swaps qualify as financial derivatives with fair values reported in “Other assets” and “Other liabilities” in the Consolidated Statement of Financial Condition. We believe that our current interest rate exposure is manageable and does not indicate any significant exposure to interest rate changes. 62
These back-to-back loan swaps qualify as financial derivatives with fair values reported in “Other assets” and “Other liabilities” in the Consolidated Statement of Financial Condition. We believe that our current interest rate exposure is manageable and does not indicate any significant exposure to interest rate changes. 60
The table below sets forth, as of December 31, 2024, the calculation of the estimated changes in our net interest income that would result from changes in market interest rates over one year if we take no action from our current plan.
The table below sets forth, as of December 31, 2025, the calculation of the estimated changes in our net interest income that would result from changes in market interest rates over one year if we take no action from our current plan.
The table below represents an analysis of our interest rate risk as measured by the estimated changes in our economic value of equity, resulting from an instantaneous and sustained parallel shift in the yield curve at December 31, 2024.
The table below represents an analysis of our interest rate risk as measured by the estimated changes in our economic value of equity, resulting from an instantaneous and sustained parallel shift in the yield curve at December 31, 2025.
(4) EVE Ratio represents EVE divided by the fair value of assets. 61 Market Interest Rate Shift The financial statements and related data presented herein have been prepared in accordance with generally accepted accounting principles in the United States of America which require the measurement of financial position and operating results in terms of historical dollars without considering changes in relative purchasing power of money over time due to inflation.
(3) EVE Ratio represents EVE divided by the fair value of assets. 59 Market Interest Rate Shift The financial statements and related data presented herein have been prepared in accordance with generally accepted accounting principles in the United States of America which require the measurement of financial position and operating results in terms of historical dollars without considering changes in relative purchasing power of money over time due to inflation.
However, this goal can be difficult to completely achieve in times of rapidly changing interest rates and is one of many factors considered in determining the Company’s interest rate positioning. The Company is asset sensitive as of December 31, 2024. Refer to the Net Interest Income Sensitivity table for additional details on the Company’s interest rate sensitivity.
However, this goal can be difficult to completely achieve in times of rapidly changing interest rates and is one of many factors considered in determining the Company’s interest rate positioning. The Company is liability sensitive as of December 31, 2025. Refer to the Net Interest Income Sensitivity table for additional details on the Company’s interest rate sensitivity.
We then calculate what the net interest income would be for the same period under different interest rate assumptions. These estimates require certain assumptions to be made, including loan and mortgage-related investment prepayment speeds, reinvestment rates, and deposit maturity and decay rates. These assumptions are inherently uncertain.
We then calculate what the net interest income would be for the same period under different interest rate scenarios without changing any other assumptions. These estimates require certain assumptions to be made, including loan and mortgage-related investment prepayment speeds, reinvestment rates, and deposit maturity and decay rates. These assumptions are inherently uncertain.
(2) EVE is the fair value of expected cash flows from assets, less fair value of the expected cash flows arising from our liabilities adjusted for the value of off-balance sheet contracts. (3) Fair value of assets represents the amount at which an asset could be exchanged between knowledgeable and willing parties in an arms-length transaction.
(2) Fair value of assets represents the amount at which an asset could be exchanged between knowledgeable and willing parties in an arms-length transaction.
Estimated Increase EVE as a Percentage of Fair (Decrease) EVE Value of Assets(3) Basis Point Increase Change in Estimated EVE (Decrease) Interest Rates(1) EVE(2) Amount Percent Ratio(4) Basis Points (Dollars in thousands) +400 $ 258,851 $ (56,812 ) (18.00 )% (11.54 )% (165 ) +300 $ 280,280 $ (35,383 ) (11.21 )% (6.25 )% (89 ) +200 $ 295,186 $ (20,477 ) (6.49 )% (3.09 )% (44 ) +100 $ 309,798 $ (5,865 ) (1.86 )% (0.26 )% (4 ) Level $ 315,663 $ — — — — -100 $ 316,834 $ 1,171 0.37 % (1.18 )% (17 ) -200 $ 315,422 $ (241 ) (0.08 )% (3.10 )% (44 ) -300 $ 311,777 $ (3,886 ) (1.23 )% (5.67 )% (81 ) -400 $ 308,597 $ (7,066 ) (2.24 )% (8.21 )% (117 ) (1) Assumes an immediate uniform change in interest rates at all maturities.
Estimated Increase EVE as a Percentage of Fair (Decrease) EVE Value of Assets(2) Basis Point Increase Change in EVE (Decrease) Interest Rates(1) Amount Percent Ratio(3) Basis Points (Dollars in thousands) +400 $ (62,659 ) (18.46 )% (12.42 )% (194 ) +300 $ (39,821 ) (11.73 )% (7.11 )% (111 ) +200 $ (22,394 ) (6.60 )% (3.47 )% (54 ) +100 $ (8,571 ) (2.53 )% (1.00 )% (16 ) Level $ — — — — -100 $ 1,223 0.36 % (1.08 )% (17 ) -200 $ (17 ) (0.01 )% (2.94 )% (46 ) -300 $ (4,013 ) (1.18 )% (5.55 )% (87 ) -400 $ (8,200 ) (2.42 )% (8.34 )% (130 ) (1) Assumes an immediate uniform change in interest rates at all maturities.
Basis Point Change in Net Interest Income Year 1 Change Interest Rates Year 1 Forecast From Level (Dollars in thousands) +400 $ 75,167 7.57 % +300 $ 74,639 6.82 % +200 $ 73,384 5.02 % +100 $ 71,964 2.99 % Level $ 69,874 — -100 $ 67,836 -2.92 % -200 $ 68,956 -1.31 % -300 $ 72,353 3.55 % -400 $ 75,746 8.40 % Economic Value of Equity ( “ EVE ” ).
Basis Point Change in Year 1 Change Interest Rates From Level +400 (6.22 )% +300 (3.75 )% +200 (2.13 )% +100 (0.86 )% Level — -100 1.11 % -200 6.20 % -300 12.69 % -400 15.87 % Economic Value of Equity ( “ EVE ” ).

Other MNSB 10-K year-over-year comparisons