Main Street Banks (NASDAQ:MSBK)
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Main Street Banks Reports 31 Percent Increase in Net Income
First Quarter Record Earnings Extend Seven-Year Trend
ATLANTA, April 21 /PRNewswire-FirstCall/ -- Main Street Banks, Inc. ,
Atlanta's largest and highest performing community banking company, today
reported net income of $7.6 million for the first quarter of 2004, a 31.0
percent increase over the $5.8 million reported in the first quarter of 2003.
Diluted earnings per common share for the first quarter of 2004 were $0.38
versus $0.34 per diluted common share in the first quarter of 2003, matching
the consensus estimate of the six analysts covering Main Street Banks. The
first quarter earnings increase continues a seven-year trend of record earnings
reports for the company.
"We are gratified by our company's continued growth and strong earnings
momentum during the first quarter," said chairman and chief executive officer,
Edward C. Milligan. "Reflecting the strengthening Atlanta economy, Main Street
reported strong growth in loans and deposits, along with a 47.2 percent
increase in non-interest income over the first quarter of 2003."
Return on average assets was 1.53 percent for the first quarter of 2004, and
return on average common shareholders equity was 14.8 percent for the quarter.
Loan Growth is Robust in Strengthening Atlanta Economy
As of March 31, 2004, Main Street Banks' loans outstanding were $1.511 billion,
reflecting an increase of $462.9 million, or 44.2 percent, compared to the same
period last year. The First Colony Bancshares, Inc. acquisition completed on
May 23, 2003, represented $287.9 million of this increase. Excluding First
Colony, loans outstanding increased 16.7% compared to the first quarter of
2003.
"We experienced very robust loan demand in the first quarter," continued
Milligan. "The local economy and our targeted Atlanta markets continue to be
relatively strong, as evidenced by our loan growth and superior asset quality."
Net charge offs decreased to 0.15 percent of average loans for the first
quarter of 2004 versus 0.24 percent in the fourth quarter of 2003.
Nonperforming asset levels decreased in the first quarter to 0.35 percent of
assets from 0.68 percent of assets at December 31, 2003. The allowance for
loan losses at March 31, 2004, was $22.2 million and represented 1.47 percent
of loans outstanding at the end of the period.
Deposits Increase Over Previous Year
Since March 31, 2003, total deposits grew $393.0 million or 34.5% to $1.531
billion. Despite the company's disciplined deposit pricing policy, total
deposits grew 9.7 percent internally over the previous year. The First Colony
Bancshares, Inc. acquisition represented $282.2 million of the increase in
total deposits. The company's pricing discipline continues to enhance results,
as low cost core deposits increased 16.2% on an internal basis as well.
Net Interest Margin Improves to 4.60 Percent
The company's net interest margin improved to 4.60 percent for the first
quarter of 2004, up from the 4.49 percent net interest margin reported for the
fourth quarter of 2003. The net interest margin has remained stable over the
past several quarters. Main Street's fully taxable equivalent net interest
income totaled $20.2 million for the first quarter of 2004, an increase of $4.8
million, or 31.2 percent, compared to the first quarter of 2003.
Non-interest Income Growth Remains Very Strong
The company reported total non-interest income of $7.8 million for the first
quarter of 2004, an increase of 47.2 percent as compared to the $5.3 million
reported in the first quarter of 2003. Continued strong growth in insurance
agency commissions, mortgage banking income and service charges on deposits
contributed to this increase, reflecting the company's enhanced emphasis on
providing a full range of financial services to the communities it serves.
Insurance agency revenue totaled $2.8 million for the quarter, an increase of
$1.6 million or 133.3 percent compared to the first quarter of 2003. The
acquisition of Banks, Moneyhan, Hayes Insurance as of January 2, 2004,
contributed 70.7% of this increase. Mortgage banking revenue totaled $0.9
million for the first quarter of 2004, a $0.3 million or 50.0 percent increase
compared to the same period in 2003.
Efficiency Ratio Remains Stable for Quarter
Main Street Bank's efficiency ratio for the first quarter of 2004 was 56.1
percent, compared to the 54.6 percent efficiency ratio for the first quarter of
2003. Non-interest expense for the first quarter of 2004 was $15.6 million,
compared to $11.1 million in the first quarter of 2003. The company continues
to make significant investments to support its future growth opportunities, and
personnel expenses accounted for $2.9 million of this increase. The majority
of this increase is related to the First Colony Bancshares, Inc. and the Banks,
Moneyhan, Hayes Insurance acquisitions as well as the opening of the Dunwoody
and Buckhead Banking Centers last year.
During the same period, occupancy expenses increased $0.5 million, with the
majority of these increases being related to these same transactions and
openings.
About Main Street
Main Street Banks, Inc., a $2.0 billion asset, community banking organization
based in metropolitan Atlanta, provides a broad range of banking, brokerage,
insurance, and mortgage products and services through its 24 banking centers
located in eighteen of Georgia's fastest growing communities. Main Street is
the largest and highest performing community banking company in the greater
Atlanta area.
Safe Harbor
Statements made in this press release, other than those containing historical
information, are forward-looking statements made pursuant to the safe harbor
provisions of the Private Securities Litigation Act of 1995. Such statements
involve risks and uncertainties that may cause results to differ materially
from those set forth in these statements. Main Street cautions readers that
results and events subject to forward-looking statements could differ
materially due to the following factors: possible changes in economic and
business conditions; the ability of Main Street to integrate recent
acquisitions and attract new customers; possible changes in monetary and fiscal
policies, laws and regulations; the effects of easing of restrictions on
participants in the financial services industry; the cost and other effects of
legal and administrative cases; possible changes in the credit worthiness of
customers and the possible impairment of loans; the effects of changing
interest rates and other risks and factors identified in the company's filings
with the Securities and Exchange Commission.
For additional information about Main Street Banks, Inc.'s financial
performance, products and services, please visit our web site at
http://www.mainstreetbank.com/ .
To hear a live webcast of Main Street Banks, Inc.'s first quarter earnings
conference call at 10 a.m. today, please visit our web site at
http://www.mainstreetbank.com/ . Replays of the conference call will be
available through our web site for a limited time.
This press release contains forward-looking statements as defined by federal
securities laws. These statements may address issues that involve significant
risks, uncertainties, estimates and assumptions made by management. Actual
results could differ materially from current projections. Please refer to Main
Street Banks, Inc.'s filings with the Securities and Exchange Commission for a
summary of important factors that could affect Main Street Banks, Inc.'s
forward-looking statements. Main Street Banks, Inc. undertakes no obligation
to revise these statements following the date of this press release.
Financial Tables Follow
MAIN STREET BANKS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
First Fourth Third Second
Quarter Quarter Quarter Quarter
2004 2003 2003 2003
NET INTEREST INCOME
Loans, including
fees $24,781,842 $24,045,242 $23,774,469 $21,418,754
Interest on investment
securities:
Taxable 2,247,038 2,136,462 1,952,469 2,144,684
Non-taxable 417,657 376,992 413,969 441,624
Federal funds sold &
repurchase agreements 30,399 75,418 3,982 10,340
Interest bearing
deposits in banks 5,223 9,114 4,700 5,653
Interest on other
investments 205,662 204,453 160,278 110,900
Total interest income 27,687,821 26,847,681 26,309,867 24,131,955
INTEREST EXPENSE
Interest-bearing demand
and money market 1,322,218 1,288,087 1,533,317 1,527,968
Savings 88,707 89,583 80,733 88,382
Time deposits 4,463,088 4,261,858 4,179,155 3,067,821
Other time deposits 55,813 85,577 110,249 85,603
Federal funds purchased 34,701 36,153 19,308 7,496
Federal Home Loan
Bank advances 866,258 795,729 679,715 564,029
Interest expense on trust
preferred securities 574,946 580,102 580,096 237,006
Other 355,691 370,193 362,260 364,401
Total interest
expense 7,761,422 7,507,282 7,544,832 5,942,707
Net interest income 19,926,398 19,340,399 18,765,035 18,189,248
Provision for loan
losses 1,561,000 1,241,000 1,146,000 1,801,000
Net interest income
after provision for
loan losses 18,365,398 18,099,399 17,619,035 16,388,248
NON-INTEREST INCOME
Service charges on
deposit accounts 1,880,521 2,069,881 2,092,139 1,857,289
Other customer
service fees 356,795 396,098 388,960 395,227
Mortgage banking
revenue 883,128 711,660 1,118,464 865,347
Investment brokerage
revenue 315,080 30,758 88,616 60,433
Insurance agency
revenue 2,771,701 1,252,337 1,188,538 1,235,868
Income from SBA
Lending 485,918 434,799 405,936 504,925
Other income 1,146,755 2,000,906 1,253,129 715,782
Total noninterest
income 7,839,898 6,896,440 6,535,781 5,634,871
NON-INTEREST EXPENSE
Salaries and other
compensation 8,041,199 6,956,283 6,799,573 6,203,214
Employee benefits 1,640,263 1,213,020 1,283,603 1,049,294
Net occupancy and
equipment expense 1,859,695 2,003,525 1,772,929 1,528,317
Data processing fees 557,301 481,895 449,812 442,383
Professional
services 438,395 363,319 824,785 585,609
Communications &
supplies 1,050,888 1,168,727 983,575 756,953
Regulatory agency
assessments 91,126 81,388 73,557 106,105
Amortization of
intangible assets 140,644 106,800 106,750 91,112
Other expense 1,759,525 2,261,412 2,073,521 2,067,356
Total noninterest
expense 15,579,035 14,636,369 14,368,104 12,830,345
Income before income
taxes 10,626,261 10,359,470 9,786,712 9,192,774
Income tax expense 3,029,516 2,912,764 2,668,556 2,808,785
Net income 7,596,745 7,446,706 7,118,156 6,383,989
EARNINGS PER SHARE
Basic $0.394 $0.393 $0.376 $0.367
Diluted $0.382 $0.379 $0.363 $0.353
WEIGHTED AVERAGE
SHARES OUTSTANDING
Basic 19,280,882 18,951,688 18,913,088 17,374,719
Diluted 19,910,810 19,645,157 19,602,219 18,059,948
CASH DIVIDENDS PER SHARE $0.135 $0.120 $0.120 $0.120
MAIN STREET BANKS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
First Three months ended
Quarter March 31,
2003 2004 2003
NET INTEREST INCOME
Loans, including fees $18,933,953 $24,781,842 $18,933,953
Interest on investment securities:
Taxable 2,075,114 2,247,038 2,075,114
Non-taxable 438,663 417,657 438,663
Federal funds sold & repurchase
agreements 56,180 30,399 56,180
Interest bearing deposits in banks 9,213 5,223 9,213
Interest on other investments 31,740 205,662 31,740
Total interest income 21,544,864 27,687,821 21,544,864
INTEREST EXPENSE
Interest-bearing demand and money
market 1,385,838 1,322,218 1,385,838
Savings 89,804 88,707 89,804
Time deposits 4,182,825 4,463,088 4,182,825
Other time deposits 98,960 55,813 98,960
Federal funds purchased 13,233 34,701 13,233
Federal Home Loan Bank advances 230,111 866,258 230,111
Interest expense on trust
preferred securities 55,402 574,946 55,402
Other 413,662 355,691 413,662
Total interest expense 6,469,835 7,761,422 6,469,835
Net interest income 15,075,029 19,926,398 15,075,029
Provision for loan losses 1,047,000 1,561,000 1,047,000
Net interest income after provision
for loan losses 14,028,029 18,365,398 14,028,029
NON-INTEREST INCOME
Service charges on deposit
accounts 1,740,874 1,880,521 1,740,874
Other customer service fees 364,100 356,795 364,100
Mortgage banking revenue 646,375 883,128 646,375
Investment brokerage revenue 83,670 315,080 83,670
Insurance agency revenue 1,180,240 2,771,701 1,180,240
Income from SBA Lending 379,254 485,918 379,254
Other income 882,186 1,146,755 882,186
Total noninterest income 5,276,699 7,839,898 5,276,699
NON-INTEREST EXPENSE
Salaries and other compensation 5,614,891 8,041,199 5,614,891
Employee benefits 1,203,592 1,640,263 1,203,592
Net occupancy and equipment
expense 1,356,098 1,859,695 1,356,098
Data processing fees 309,735 557,301 309,735
Professional services 376,180 438,395 376,180
Communications & supplies 827,050 1,050,888 827,050
Regulatory agency assessments 61,215 91,126 61,215
Amortization of intangible assets 59,837 140,644 59,837
Other expense 1,299,131 1,759,525 1,299,131
Total noninterest expense 11,107,728 15,579,035 11,107,728
Income before income taxes 8,197,001 10,626,261 8,197,001
Income tax expense 2,446,522 3,029,516 2,446,522
Net income 5,750,479 7,596,745 5,750,479
EARNINGS PER SHARE
Basic $0.355 $0.394 $0.355
Diluted $0.342 $0.382 $0.342
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 16,217,854 19,280,882 16,217,854
Diluted 16,828,821 19,910,810 16,828,821
CASH DIVIDENDS PER SHARE $0.120 $0.135 $0.120
MAIN STREET BANKS, INC. AND SUBSIDIARIES
SUMMARY OF INTEREST RATES (TAX-EQUIVALENT*)
(Unaudited)
First Fourth Third Second
Quarter Quarter Quarter Quarter
2004 2003 2003 2003
EARNING ASSETS
Total interest earning
assets (in thousands) 1,762,015 1,730,110 1,660,522 1,478,067
Loans 6.68% 6.61% 6.70% 6.99%
Investment securities 4.49% 4.36% 4.11% 4.40%
Federal funds sold 1.01% 0.91% 1.14% 1.32%
Loans held for sale 5.25% 5.50% 5.66% 6.51%
FHLB stock & other 4.03% 4.36% 4.17% 6.25%
Total interest assets 6.37% 6.21% 6.35% 6.63%
INTEREST-BEARING LIABILITIES
Total interest bearing
liabilities (in thousands) 1,774,259 1,739,771 1,664,361 1,450,029
Demand deposits 0.72% 0.68% 0.90% 1.03%
Demand deposits - public funds 1.07% 0.95% 0.73% 0.84%
Time deposits 2.49% 2.47% 2.44% 2.07%
Retail repurchases 1.69% 1.71% 1.90% 1.84%
Federal funds purchased 1.24% 1.25% 1.69% 1.67%
Federal Home Loan Bank
Advances 1.77% 1.78% 1.81% 1.70%
Securities sold under
agreement to repurchase 4.09% 4.09% 4.09% 4.02%
Subordinated debentures 4.55% 4.54% 4.54% 4.27%
Net Cost of Funds 1.75% 1.71% 1.80% 1.64%
NET INTEREST SPREAD
Interest earning assets
less interest bearing
liabilities (in thousands) (12,243) (9,661) (3,839) 28,038
Yield on earning assets
less cost of interest-
bearing liabilities 4.61% 4.50% 4.55% 4.98%
NET INTEREST MARGIN
Net interest income (tax
equivalent) as a percentage
of average earning assets 4.60% 4.49% 4.55% 5.01%
MAIN STREET BANKS, INC. AND SUBSIDIARIES
SUMMARY OF INTEREST RATES (TAX-EQUIVALENT*)
(Unaudited)
First Three months ended
Quarter March 31,
2003 2004 2003
EARNING ASSETS
Total interest earning
assets (in thousands) 1,258,454 1,762,015 1,258,454
Loans 7.43% 6.68% 7.43%
Investment securities 5.21% 4.49% 5.21%
Federal funds sold 1.20% 1.01% 1.20%
Loans held for sale 6.11% 5.25% 6.11%
FHLB stock & other 3.90% 4.03% 3.90%
Total interest earning assets 7.04% 6.37% 7.04%
INTEREST-BEARING LIABILITIES
Total interest bearing liabilities
(in thousands) 1,234,903 1,774,259 1,234,903
Demand deposits 1.05% 0.72% 1.05%
Demand deposits - public funds 1.08% 1.07% 1.08%
Time deposits 3.10% 2.49% 3.10%
Retail repurchases 1.84% 1.69% 1.84%
Federal funds purchased 2.58% 1.24% 2.58%
Federal Home Loan Bank Advances 1.78% 1.77% 1.78%
Securities sold under
agreement to repurchase 3.70% 4.09% 3.70%
Subordinated debentures 4.30% 4.55% 4.30%
Net Cost of Funds 2.12% 1.75% 2.12%
NET INTEREST SPREAD
Interest earning assets less interest
bearing liabilities (in thousands) 23,551 (12,243) 23,551
Yield on earning assets less cost
of interest-bearing liabilities 4.91% 4.61% 4.91%
NET INTEREST MARGIN
Net interest income (tax
equivalent) as a percentage
of average earning assets 4.95% 4.60% 4.95%
MAIN STREET BANKS, INC. AND SUBSIDIARIES
LOAN QUALITY
First Fourth Third Second
Quarter Quarter Quarter Quarter
2004 2003 2003 2003
RESERVE FOR POSSIBLE
LOAN LOSSES
Reserve for loan at
beginning of period* 21,151,987 20,765,377 20,272,465 15,390,616
Provision for loan losses 1,561,000 1,241,000 1,146,000 1,801,000
Loans charged off
during period (650,138) (958,275) (784,950) (1,267,223)
Recoveries on loans
previously charged off 87,803 103,886 131,862 96,054
Net loans charged off
(recovered) during
period (562,335) (854,389) (653,088) (1,171,169)
Reserve for loan losses
at end of period 22,150,651 21,151,987 20,765,377 20,272,465
Net charges-off to average
loans, annualized 0.15% 0.24% 0.19% 0.39%
Gross charges-off average
loans, annualized 0.18% 0.27% 0.22% 0.42%
Recoveries as a percentage
of gross charge-offs 13.51% 10.84% 16.80% 7.58%
Reserve for loan losses
as a percentage of loans,
at end of period 1.47% 1.47% 1.47% 1.47%
NON-PERFORMING ASSETS
Loans accounted for on a
non-accrual basis 4,822,135 11,548,489 10,854,580 6,068,538
Restructured loans - - - -
Total non-performing
loans 4,822,135 11,548,489 10,854,580 6,068,538
Foreclosed assets 2,255,553 1,844,869 1,366,820 1,065,064
Total non-performing
assets 7,077,688 13,393,358 12,221,400 7,133,602
Non-performing assets as
a percentage of loans
plus foreclosed assets,
at end of period 0.47% 0.93% 0.86% 0.52%
Non-performing assets as
a percentage of total
assets, at end of period 0.35% 0.68% 0.64% 0.37%
Reserve for loan losses as a
percentage of non-performing
assets, at end of period 312.96% 157.93% 169.91% 284.18%
Loans 90 days past due 9,492,293 11,028,256 10,867,283 9,927,567
Loans 90 days past due
as a percentage of
loans, at end of period 0.63% 0.76% 0.77% 0.72%
* Acquisition of First National Bank of Johns Creek on 12/11/02 included
$1.4 million of loan loss reserves
Acquisition of First Colony Bank on 5/22/03 included $4.3 million of
loan loss reserves
MAIN STREET BANKS, INC. AND SUBSIDIARIES
LOAN QUALITY
First Three months ended
Quarter March 31,
2003 2004 2003
RESERVE FOR POSSIBLE LOAN LOSSES
Reserve for loan losses at
beginning of period * 14,588,582 21,151,987 14,588,582
Provision for loan losses 1,047,000 1,561,000 1,047,000
Loans charged off during period (325,590) (650,138) (325,590)
Recoveries on loans previously
charged off 80,624 87,803 80,624
Net loans charged off (recovered)
during period (244,966) (562,335) (244,966)
Reserve for loan losses
at end of period 15,390,616 22,150,651 15,390,616
Net charges-off to average loans,
annualized 0.10% 0.15% 0.10%
Gross charges-off to average loans,
annualized 0.13% 0.18% 0.13%
Recoveries as a percentage of gross
charge-offs 24.76% 13.51% 24.76%
Reserve for loan losses as a percentage
of loans, at end of period 1.47% 1.47% 1.47%
NON-PERFORMING ASSETS
Loans accounted for on a
non-accrual basis 4,635,012 4,822,135 4,635,012
Restructured loans - - -
Total non-performing loans 4,635,012 4,822,135 4,635,012
Foreclosed assets 796,688 2,255,553 796,688
Total non-performing assets 5,431,700 7,077,688 5,431,700
Non-performing assets as a
percentage of loans plus
foreclosed assets, at end of period 0.52% 0.47% 0.52%
Non-performing assets as a
percentage of total
assets, at end of period 0.39% 0.35% 0.39%
Reserve for loan losses as a
percentage of non-performing
assets, at end of period 283.35% 312.96% 283.35%
Loans 90 days past due 3,937,948 9,492,293 3,937,948
Loans 90 days past due as a percentage
of loans, at end of period 0.38% 0.63% 0.38%
* Acquisition of First National Bank of Johns Creek on 12/11/02 included
$1.4 million of loan loss reserves
Acquisition of First Colony Bank on 5/22/03 included $4.3 million of
loan loss reserves
MAIN STREET BANKS, INC. AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
First Fourth Third Second
Quarter Quarter Quarter Quarter
2004 2003 2003 2003
RESULTS OF OPERATIONS
Net interest income 19,926,398 19,340,399 18,765,035 18,189,248
Net interest income (tax
equivalent) 20,204,931 19,591,290 19,036,194 18,474,237
Provision for loan losses 1,561,000 1,241,000 1,146,000 1,801,000
Non-interest income 7,839,898 6,896,440 6,535,781 5,634,871
Non-interest expense 15,579,035 14,636,369 14,368,104 12,830,345
Net Income 7,596,745 7,446,706 7,118,156 6,383,989
AVERAGE BALANCE SHEET
DATA (in thousands)
Loans, net of unearned
income 1,470,876 1,424,858 1,389,998 1,204,483
Investment securities 260,866 252,107 249,175 258,760
Earning assets 1,762,015 1,730,110 1,660,522 1,478,067
Total assets 1,986,972 1,946,136 1,869,759 1,622,600
Deposits 1,466,087 1,452,073 1,423,029 1,252,649
Shareholders' equity 205,272 196,375 189,592 154,818
PER COMMON SHARE
Earnings per share - Basic $0.394 $0.393 $0.376 $0.367
Earnings per share - Diluted $0.382 $0.379 $0.363 $0.353
Book value per share at
end of period 11.04 10.50 10.25 10.10
End of period shares
outstanding 19,340,676 18,981,340 18,933,178 18,888,732
Weighted average shares
outstanding
Basic 19,280,882 18,951,688 18,913,088 17,374,719
Diluted 19,910,810 19,645,157 19,602,219 18,059,948
STOCK PERFORMANCE
Market Price:
Closing 27.34 26.52 25.02 24.94
High 27.50 27.92 26.00 25.40
Low 24.90 25.00 23.37 18.48
Trading volume 1,703,700 1,630,300 1,022,400 1,243,900
Cash dividends per share $0.135 $0.120 $0.120 $0.120
Dividend payout ratio 36.69% 31.66% 33.05% 33.95%
Price to earnings 17.87 17.63 17.37 17.59
Price to book value 2.48 2.53 2.44 2.47
PERFORMANCE RATIOS
Return on average assets 1.53% 1.52% 1.51% 1.58%
Return on average equity 14.8% 15.0% 14.9% 16.5%
Average earning assets
to average total assets 88.7% 88.9% 88.8% 91.1%
Average loans as percentage
of average deposits 100.3% 98.1% 97.7% 96.2%
Net interest margin (tax
equivalent) 4.60% 4.49% 4.55% 5.01%
Average equity to
average assets 10.33% 10.09% 10.14% 9.54%
Non-interest income
ratio 28.24% 26.29% 25.83% 23.65%
Efficiency ratio 56.11% 55.79% 56.79% 53.85%
ASSET QUALITY
Total non-performing
assets 7,077,688 13,393,358 12,221,400 7,133,602
Non-performing assets as
a percentage of loans plus
foreclosed assets 0.47% 0.93% 0.86% 0.52%
Net annualized charges-offs
(recoveries) as a percentage
of average loans 0.15% 0.24% 0.19% 0.39%
Reserve for loan losses
as a percentage of loans,
at end of period 1.47% 1.47% 1.47% 1.47%
MAIN STREET BANKS, INC. AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
First Three months ended
Quarter March 31,
2003 2004 2003
RESULTS OF OPERATIONS
Net interest income 15,075,029 19,926,398 15,075,029
Net interest income (tax equivalent) 15,363,807 20,204,931 15,363,807
Provision for loan losses 1,047,000 1,561,000 1,047,000
Non-interest income 5,276,699 7,839,898 5,276,699
Non-interest expense 11,107,728 15,579,035 11,107,728
Net Income 5,750,479 7,596,745 5,750,479
AVERAGE BALANCE SHEET
DATA (in thousands)
Loans, net of unearned income 1,019,221 1,470,876 1,019,221
Investment securities 216,117 260,866 216,117
Earning assets 1,258,454 1,762,015 1,258,454
Total assets 1,378,355 1,986,972 1,378,355
Deposits 1,127,800 1,466,087 1,127,800
Shareholders' equity 136,072 205,272 136,072
PER COMMON SHARE
Earnings per share - Basic $0.355 $0.394 $0.355
Earnings per share - Diluted $0.342 $0.382 $0.342
Book value per share at end of period 8.23 11.04 8.23
End of period shares outstanding 16,173,647 19,340,676 16,173,647
Weighted average shares outstanding
Basic 16,217,854 19,280,882 16,217,854
Diluted 16,828,821 19,910,810 16,828,821
STOCK PERFORMANCE
Market Price:
Closing 18.45 27.34 18.45
High 20.48 27.50 20.48
Low 18.45 24.90 18.45
Trading volume 1,262,900 1,703,700 1,262,900
Cash dividends per share $0.120 $0.135 $0.120
Dividend payout ratio 35.12% 36.69% 35.12%
Price to earnings 13.31 17.87 13.31
Price to book value 2.24 2.48 2.24
PERFORMANCE RATIOS
Return on average assets 1.69% 1.53% 1.69%
Return on average equity 17.1% 14.8% 17.1%
Average earning assets to average
total assets 91.3% 88.7% 91.3%
Average loans as percentage of
average deposits 90.4% 100.3% 90.4%
Net interest margin (tax equivalent) 4.95% 4.60% 4.95%
Average equity to average assets 9.87% 10.33% 9.87%
Non-interest income ratio 25.93% 28.24% 25.93%
Efficiency ratio 54.58% 56.11% 54.58%
ASSET QUALITY
Total non-performing assets 5,431,700 7,077,688 5,431,700
Non-performing assets as a
percentage of loans plus
foreclosed assets 0.52% 0.47% 0.52%
Net annualized charges-offs
(recoveries) as a percentage
of average loans 0.10% 0.15% 0.10%
Reserve for loan losses as a
percentage of loans, at end of period 1.47% 1.47% 1.47%
MAIN STREET BANKS, INC. AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
First Fourth Third Second
Quarter Quarter Quarter Quarter
2004 2003 2003 2003
OPERATING EARNINGS
Net income $7,596,745 $7,446,706 $7,118,156 $6,383,989
Amortization of
intangible assets, net 92,825 70,488 70,455 60,134
Operating income $7,689,570 $7,517,193 $7,188,610 $6,444,123
Operating earnings
per share
Basic $0.399 $0.397 $0.380 $0.371
Diluted $0.386 $0.383 $0.367 $0.357
Average tangible assets
(in thousands) 1,888,316 1,851,095 1,774,814 1,580,621
Average tangible equity
(in thousands) 106,616 101,334 94,647 112,839
Operating return on
average tangible assets 1.63% 1.61% 1.61% 1.64%
Operating return on
average tangible equity 28.93% 29.43% 30.13% 22.91%
MAIN STREET BANKS, INC. AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
First Three months ended
Quarter March 31,
2003 2004 2003
OPERATING EARNINGS
Net income $5,750,479 $7,596,745 $5,750,479
Amortization of intangible
assets, net 39,492 92,825 39,492
Operating income $5,789,971 $7,689,570 $5,789,971
Operating earnings per share
Basic $0.357 $0.399 $0.357
Diluted $0.344 $0.386 $0.344
Average tangible assets (in
thousands) 1,361,421 1,888,316 1,361,421
Average tangible equity (in
thousands) 119,152 106,616 119,152
Operating return on average tangible
assets 1.72% 1.63% 1.72%
Operating return on average tangible
equity 19.71% 28.93% 19.71%
MAIN STREET BANKS, INC. AND SUBSIDIARIES
AVERAGE BALANCE SHEETS
(Unaudited)
First Fourth Third
Quarter Quarter Quarter
2004 2003 2003
ASSETS
Cash and due from banks $37,174,008 $38,074,607 $39,800,995
Interest-bearing
deposits in banks 206,921 1,037,948 1,166,343
Federal funds sold and
securities purchased under
agreements to resell 13,733,915 35,288,778 1,812,613
Investment securities
available for sale 249,633,094 248,724,785 248,487,509
Investment securities held
to maturity 11,233,274 3,382,680 687,918
Other investments 20,172,234 18,799,718 14,659,477
Mortgage loans held for sale 4,685,417 3,841,104 7,258,692
Loans, net of unearned
income 1,470,876,346 1,424,858,073 1,389,998,248
Allowance for loan losses (21,409,245) (20,816,925) (20,335,059)
Loans, net 1,449,467,100 1,404,041,149 1,369,663,188
Premises and equipment, net 43,622,711 42,801,524 39,815,150
Other real estate 2,813,337 1,941,348 1,332,024
Accrued interest receivable 7,614,443 7,407,238 7,440,913
Goodwill and other
intangible assets 98,655,805 95,040,910 94,944,727
Bank owned life insurance 37,904,493 35,462,722 34,875,340
Other assets 10,054,978 10,291,118 7,814,168
Total assets 1,986,971,730 1,946,135,628 1,869,759,058
LIABILITIES
Total deposits 1,466,086,785 1,452,073,218 1,423,029,046
Accrued interest payable 3,023,843 3,133,317 3,245,698
Federal Home Loan Bank
advances 147,072,474 191,157,159 149,870,653
Federal funds purchased and
securities sold under
repurchase agreements 110,799,890 47,439,961 42,395,574
Trust preferred securities - 50,000,000 50,000,000
Subordinated debentures 50,000,000 - -
Other liabilities 4,717,074 5,956,644 11,626,540
Total liabilities 1,781,700,065 1,749,760,298 1,680,167,511
SHAREHOLDERS' EQUITY
Common stock-no par value
per share 102,361,167 99,587,649 97,619,793
Retained earnings 107,198,497 101,961,196 97,314,014
Accumulated other
comprehensive loss 4,501,139 3,615,380 3,445,861
Treasury stock (8,789,138) (8,788,895) (8,788,122)
Total shareholders' equity 205,271,665 196,375,330 189,591,547
Total liabilities and
shareholders' equity 1,986,971,730 1,946,135,628 1,869,759,058
MAIN STREET BANKS, INC. AND SUBSIDIARIES
AVERAGE BALANCE SHEETS
(Unaudited)
Second First
Quarter Quarter
2003 2003
ASSETS
Cash and due from banks $28,209,301 $30,567,413
Interest-bearing deposits in banks 1,094,527 1,497,701
Federal funds sold and securities
purchased under agreements to resell 3,693,932 20,244,475
Investment securities available for sale 258,072,188 215,429,174
Investment securities held to
maturity 687,759 687,629
Other investments 11,012,217 4,233,797
Mortgage loans held for sale 5,225,069 5,133,533
Loans, net of unearned income 1,204,483,316 1,019,221,091
Allowance for loan losses (17,481,891) (14,952,587)
Loans, net 1,187,001,425 1,004,268,504
Premises and equipment, net 36,412,960 34,029,192
Other real estate 1,615,887 811,576
Accrued interest receivable 6,731,239 6,125,846
Goodwill and other intangible
assets 41,978,424 16,919,975
Bank owned life insurance 32,463,339 31,082,911
Other assets 8,401,565 7,323,044
Total assets 1,622,599,833 1,378,354,769
LIABILITIES
Total deposits 1,252,649,026 1,127,800,437
Accrued interest payable 3,252,074 3,259,859
Federal Home Loan Bank advances 130,617,494 51,688,172
Federal funds purchased and securities
sold under repurchase agreements 40,343,740 49,323,060
Trust preferred securities 21,980,387 5,153,333
Subordinated debentures - -
Other liabilities 18,939,291 5,058,019
Total liabilities 1,467,782,012 1,242,282,880
SHAREHOLDERS' EQUITY
Common stock-no par value per share 67,369,211 47,037,996
Retained earnings 90,739,660 91,154,419
Accumulated other comprehensive loss 5,496,040 5,309,007
Treasury stock (8,787,089) (7,429,532)
Total shareholders' equity 154,817,821 136,071,890
Total liabilities and shareholders'
equity 1,622,599,833 1,378,354,769
MAIN STREET BANKS, INC. AND SUBSIDIARIES
AVERAGE BALANCE SHEETS
(Unaudited)
March 31,
2004 2003
ASSETS
Cash and due from banks $37,174,008 $30,567,413
Interest-bearing deposits in banks 206,921 1,497,701
Federal funds sold and securities
purchased under agreements to resell 13,733,915 20,244,475
Investment securities available for sale 249,633,094 215,429,174
Investment securities held to maturity 11,233,274 687,629
Other investments 20,172,234 4,233,797
Mortgage loans held for sale 4,685,417 5,133,533
Loans, net of unearned income 1,470,876,346 1,019,221,091
Allowance for loan losses (21,409,245) (14,952,587)
Loans, net 1,449,467,100 1,004,268,504
Premises and equipment, net 43,622,711 34,029,192
Other real estate 2,813,337 811,576
Accrued interest receivable 7,614,443 6,125,846
Goodwill and other intangible assets 98,655,805 16,919,975
Bank owned life insurance 37,904,493 31,082,911
Other assets 10,054,978 7,323,044
Total assets 1,986,971,730 1,378,354,769
LIABILITIES
Total deposits 1,466,086,785 1,127,800,437
Accrued interest payable 3,023,843 3,259,859
Federal Home Loan Bank advances 147,072,474 51,688,172
Federal funds purchased and securities
sold under repurchase agreements 110,799,890 49,323,060
Trust preferred securities 5,153,333
Subordinated debentures 50,000,000
Other liabilities 4,717,074 5,058,019
Total liabilities 1,781,700,065 1,242,282,880
SHAREHOLDERS' EQUITY
Common stock-no par value per share 102,361,167 47,037,996
Retained earnings 107,198,497 91,154,419
Accumulated other comprehensive loss 4,501,139 5,309,007
Treasury stock (8,789,138) (7,429,532)
Total shareholders' equity 205,271,665 136,071,890
Total liabilities and shareholders'
equity 1,986,971,730 1,378,354,769
MAIN STREET BANKS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
First Fourth Third
Quarter Quarter Quarter
2004 2003 2003
ASSETS
Cash and due from banks $31,901,310 $39,839,060 $39,559,729
Interest-bearing deposits
in banks 588,694 1,021,288 693,409
Federal funds sold and
securities purchased under
agreements to resell 5,644,000 31,819,619 15,919,619
Investment securities
available for sale 263,304,831 247,391,640 247,867,031
Investment securities held
to maturity 11,998,297 10,788,146 688,005
Other investments 19,205,358 19,651,370 17,081,869
Mortgage loans held for sale 7,208,105 5,670,625 6,490,437
Loans, net of unearned
income 1,511,436,809 1,443,325,787 1,411,950,618
Allowance for loan losses (22,150,651) (21,151,987) (20,765,377)
Loans, net 1,489,286,157 1,422,173,800 1,391,185,242
Premises and equipment, net 45,167,765 42,760,918 41,726,221
Other real estate 2,255,553 1,844,869 1,366,820
Accrued interest receivable 8,293,918 8,181,579 8,069,190
Goodwill and other
intangible assets 103,381,314 96,237,492 94,919,932
Bank owned life insurance 41,595,547 35,773,237 35,274,639
Other assets 15,801,591 8,611,815 10,275,481
Total assets 2,045,632,440 1,971,765,458 1,911,117,625
LIABILITIES
Deposits 1,530,979,973 1,458,403,096 1,437,640,769
Accrued interest payable 3,210,642 3,020,265 3,343,309
Federal Home Loan Bank
advances 156,471,522 210,605,296 159,739,071
Federal funds purchased and
securities sold under
repurchase agreements 83,930,239 43,859,277 61,575,200
Trust preferred securities - 50,000,000 50,000,000
Subordinated debentures 51,547,000 - -
Other liabilities 4,116,703 5,334,408 4,753,558
Total liabilities 1,830,256,078 1,771,222,342 1,717,051,908
SHAREHOLDERS' EQUITY
Common stock-no par value
Authorized -
50,000,000 shares
Outstanding - shares 109,117,216 100,875,984 99,454,457
Retained earnings 109,299,988 104,539,042 99,132,523
Accumulated other
comprehensive loss 5,748,748 3,917,179 4,267,326
Treasury stock (8,789,589) (8,789,089) (8,788,589)
Total shareholders' equity 215,376,362 200,543,116 194,065,717
Total liabilities and
shareholders' equity 2,045,632,440 1,971,765,458 1,911,117,625
MAIN STREET BANKS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
Second First
Quarter Quarter
2003 2003
ASSETS
Cash and due from banks $43,328,652 $35,914,335
Interest-bearing deposits in banks 1,437,383 833,073
Federal funds sold and securities
purchased under agreements to resell 6,452,619 5,455,000
Investment securities available for sale 287,014,644 217,188,820
Investment securities held to maturity 687,849 687,713
Other investments 12,550,140 7,934,364
Mortgage loans held for sale 6,926,692 4,719,794
Loans, net of unearned income 1,382,761,970 1,048,550,371
Allowance for loan losses (20,272,465) (15,390,616)
Loans, net 1,362,489,505 1,033,159,755
Premises and equipment, net 38,466,608 34,999,863
Other real estate 1,065,064 796,688
Accrued interest receivable 8,116,249 6,629,105
Goodwill and other intangible
assets 94,826,459 18,235,133
Bank owned life insurance 34,526,510 31,366,634
Other assets 8,311,873 7,004,843
Total assets 1,906,200,247 1,404,925,120
LIABILITIES
Deposits 1,405,589,895 1,137,990,763
Accrued interest payable 3,445,084 3,316,098
Federal Home Loan Bank advances 167,872,846 74,500,000
Federal funds purchased and
securities sold under repurchase
agreements 39,814,872 47,220,167
Trust preferred securities 50,000,000 5,000,000
Subordinated debentures - -
Other liabilities 48,782,257 3,863,639
Total liabilities 1,715,504,953 1,271,890,666
SHAREHOLDERS' EQUITY
Common stock-no par value
Authorized - 50,000,000 shares
Outstanding - shares 99,007,084 47,223,006
Retained earnings 94,282,108 89,847,565
Accumulated other comprehensive loss 6,193,192 4,750,972
Treasury stock (8,787,089) (8,787,089)
Total shareholders' equity 190,695,294 133,034,454
Total liabilities and shareholders'
equity 1,906,200,247 1,404,925,120
MAIN STREET BANKS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31,
2004 2003
ASSETS
Cash and due from banks $31,901,310 $35,914,335
Interest-bearing deposits in banks 588,694 833,073
Federal funds sold and securities
purchased under agreements to resell 5,644,000 5,455,000
Investment securities available for sale 263,304,831 217,188,820
Investment securities held to maturity 11,998,297 687,713
Other investments 19,205,358 7,934,364
Mortgage loans held for sale 7,208,105 4,719,794
Loans, net of unearned income 1,511,436,809 1,048,550,371
Allowance for loan losses (22,150,651) (15,390,616)
Loans, net 1,489,286,157 1,033,159,755
Premises and equipment, net 45,167,765 34,999,863
Other real estate 2,255,553 796,688
Accrued interest receivable 8,293,918 6,629,105
Goodwill and other intangible assets 103,381,314 18,235,133
Bank owned life insurance 41,595,547 31,366,634
Other assets 15,801,591 7,004,843
Total assets 2,045,632,440 1,404,925,120
LIABILITIES
Deposits 1,530,979,973 1,137,990,763
Accrued interest payable 3,210,642 3,316,098
Federal Home Loan Bank advances 156,471,522 74,500,000
Federal funds purchased and securities
sold under repurchase agreements 83,930,239 47,220,167
Trust preferred securities - 5,000,000
Subordinated debentures 51,547,000 -
Other liabilities 4,116,703 3,863,639
Total liabilities 1,830,256,078 1,271,890,666
SHAREHOLDERS' EQUITY
Common stock-no par value
Authorized - 50,000,000 shares
Outstanding - shares 109,117,216 47,223,006
Retained earnings 109,299,988 89,847,565
Accumulated other comprehensive loss 5,748,748 4,750,972
Treasury stock (8,789,589) (8,787,089)
Total shareholders' equity 215,376,362 133,034,454
Total liabilities and shareholders'
equity 2,045,632,440 1,404,925,120
MAIN STREET BANKS, INC. AND SUBSIDIARIES
LOAN AND DEPOSIT STRATIFICATION
(Unaudited)
First Fourth Third
Quarter Quarter Quarter
2004 2003 2003
LOAN PORTFOLIO
Real estate:
Residential Mortgage 280,453,804 269,357,951 262,686,049
Construction 314,171,269 304,045,641 332,971,587
Commercial real estate 762,815,561 711,208,711 654,262,301
Commercial & Industrial 116,735,287 118,242,893 120,508,759
Consumer 39,063,479 41,649,590 42,206,090
Unearned income (1,802,592) (1,178,999) (684,167)
Total loans 1,511,436,809 1,443,325,787 1,411,950,618
Loan growth 4.7% 2.2% 2.1%
DEPOSITS
Non-interest bearing
demand 227,159,637 222,595,660 218,655,715
Interest bearing demand 112,043,973 116,749,330 106,886,881
Money market 313,554,963 266,913,040 287,898,967
Savings 40,074,116 40,000,806 39,182,173
Total transaction
accounts 692,832,689 646,258,836 652,623,737
Public funds - transaction 101,844,740 115,258,296 84,061,089
Total low cost core accounts 794,677,429 761,517,133 736,684,825
Time deposits - public funds 17,565,349 10,741,662 21,788,712
Time deposits 718,737,195 686,444,301 679,167,232
Total deposits 1,530,979,973 1,458,703,096 1,437,640,769
Deposit growth 5.0% 1.5% 2.3%
Percentage low cost core to
total deposits 51.9% 44.3% 51.2%
MAIN STREET BANKS, INC. AND SUBSIDIARIES
LOAN AND DEPOSIT STRATIFICATION
(Unaudited)
Second First
Quarter Quarter
2003 2003
LOAN PORTFOLIO
Real estate:
Residential Mortgage 254,249,140 212,270,942
Construction 349,508,658 270,713,895
Commercial real estate 612,342,600 455,547,433
Commercial & Industrial 120,771,227 74,478,407
Consumer 46,178,523 37,127,397
Unearned income (288,178) (1,587,702)
Total loans 1,382,761,970 1,048,550,371
Loan growth 31.9% 6.7%
DEPOSITS
Non-interest bearing demand 210,380,963 173,716,068
Interest bearing demand 115,980,561 97,838,803
Money market 278,897,227 198,502,525
Savings 40,302,482 36,597,700
Total transaction accounts 645,561,234 506,655,095
Public funds - transaction 75,593,528 86,558,371
Total low cost core accounts 721,154,761 593,213,467
Time deposits - public funds 17,412,493 14,723,607
Time deposits 667,022,641 530,053,689
Total deposits 1,405,589,895 1,137,990,763
Deposit growth 23.5% 0.8%
Percentage low cost core to total deposits 51.3% 52.1%
DATASOURCE: Main Street Banks, Inc.
CONTACT: Edward C. Milligan, Chairman & CEO, +1-770-422-2888, or Samuel
B. Hay III, President & COO, +1-770-385-2424, both of Main Street Banks, Inc.
Web site: http://www.mainstreetbank.com/