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MainStreet Bancshares Prices Preferred

As predicted by some yesterday small Virginia community bank MainStreet Bancshares (MNSB) has priced their new preferred offering at 7.50%.

They are selling 1 million shares with an over allotment available of 150,000 shares.

The issue is non-cumulative and is not rated.

Make sure to understand the risk/reward with this issue–presently 22.5% of their loan portfolio is in ‘deferral’–so you can be fairly certain they will be taking large write downs in the near future.

The pricing term sheet can be read here.

5 thoughts on “MainStreet Bancshares Prices Preferred”

  1. In normal times, a bank with 20% of loans in modified status would have an army of bank examiners crawling like ants over their offices.
    Are we Wiley E Coyote in mid-air and about to look down?
    I see that courts are opening back up, so evictions and repossessions should start to rise considerably.

  2. On June 30, 2020, the bank reported a Net loan total of 1.2 Billion on their balance sheet. They reported $140 million in equity. The twenty two percent loan deferral of the 1.2 Billion loan total equals approximately $264 million. Who is going to buy this $25 million dollar offering with those financials?
    Is there a public pension fund or college endowment that can justify investing in this issue? At least their Chairman, Jeff Dick, did not offer a low ball rate like Capital One- perhaps he is more like his mother’s side of his family and not like his paternal Dick side of the family – no offense to those named Dick.

    1. This issue clearly targeted at the “dumb money”. That’s how the retail investor is referred to on Wall Street.

      1. “That’s how the retail investor is referred to on Wall Street.”

        That’s very sad (if true).

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