MainStreet Bancshares, Inc 8-K, filed Oct 25, 2021
MainStreet Bancshares, Inc. (MNSB)
About this 8-K
MainStreet Bancshares, Inc filed this 8-K on October 25, 2021.
Items reported
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 7.01. Regulation FD Disclosure
MainStreet Bancshares, Inc. (the “Company”) plans to make a series of investor and other presentations (the “Investor Presentation”) regarding the Company’s suite of Banking as a Service (“BaaS”) solutions designed to meet the banking needs of Fintech customers. A copy of the Investor Presentation is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference. The Investor Presentation is available under “SEC Filings” in the “Investor Relations” section of the Company’s website, located at www.mstreetbank.com.
On October 25, 2021, the Company issued a press release announcing key highlights of the Investor Presentation, attached as Exhibit 99.2 hereto. The press release is also available under “SEC Filings” in the “Investor Relations” section of the Company’s website, located at www.mstreetbank.com.
The Company undertakes no duty or obligation to update or revise the information contained herein, although it may do so from time to time as its management believes is appropriate. Any such updating may be made through the filing of other reports or documents with the Securities and Exchange Commission (the “SEC”), through press releases or through other public disclosures. For important information about forward-looking statements, see the disclaimers on page 1 of the Investor Presentation and at the end of the press release, attached as Exhibit 99.1 and Exhibit 99.2, respectively, hereto.
The information in this Item 7.01 of this Current Report on Form 8-K and Exhibit 99.1 and Exhibit 99.2 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Section 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information contained in this Item 7.01 and in Exhibit 99.1 and Exhibit 99.2 to this Form 8-K shall not be incorporated by reference into any filing with the SEC made by the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
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99.1 |
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99.2 |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document). |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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MAINSTREET BANCSHARES, INC |
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Date: October 25, 2021 |
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/s/ Thomas J. Chmelik |
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Name: Thomas J. Chmelik |
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Title: Chief Financial Officer |
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Powered by MainStreet Bank Member FDIC TM October 25, 2021 1
This presentation contains forward-looking statements, including our expectations with respect to future events that are subject to various risks and uncertainties. The statements contained in this presentation that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Words such as “may,” “will,” “could,” “should,” “expect,” “plan,” “project,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “pursuant,” “target,” “continue,” and similar expressions are intended to identify such forward-looking statements. There are or will be important factors that could cause our actual results to differ materially from those indicated in these forward-looking statements, including, but not limited to, the following: the impact of developments related to the novel coronavirus (COVID-19), economic conditions, competition, inflation and market rates of interest, client relationships and changes in our organization. Factors that could cause actual results to differ materially are described in our Annual Report on Form 10-K for the year ended December 31, 2020, and in other documents subsequently filed will the Securities and Exchange Commission, available at sec.gov and mstreetbank.com. We caution readers that the list of factors is not exclusive. The forward-looking statements are made as of the date of this presentation, and we may not undertake steps to update the forward-looking statements to reflect the impact of any circumstances or events that arise after the date the forward-looking statements are made. In addition, our past results of operations are not necessarily indicative of future performance. Unless otherwise indicated or the context otherwise requires, all references in this presentation to “we,” “our,” and “us,” refer to MainStreet Bancshares, Inc., and MainStreet Bank. Our Banking as a Service (BaaS) program is currently in development. Once completed, we believe that the BaaS program will provide an important source of low-cost deposits and fee income for the Bank. We also have consulted with the Bank’s regulators to provide information and to review potential compliance issues. We have current expectations that BaaS will perform as designed. However, there can be no assurance that this product and the related services will be successfully developed or meet customers’ requirements, or that the Bank’s regulators will not raise supervisory objections to aspects of the program. 2
What defines a Fintech For us, Fintech companies provide a laser-focused App-driven customer experience that includes the offering of bank products and services – frequently in connection with broader non-banking services In 2020, the global investment in fintech firms was $34 billion. In the U.S. alone, there are more than 10,000 fintech firms of one type or another. Source: Aite Novarica Group 2021 3
What is ™ Built upon our solid foundation of experience in providing BaaS 4
The Intersection of Banking and Fintech Fintechs are disrupting and enabling the banking industry by designing financial products and services that are laser-focused on user experience Fintechs need a banking relationship which can be achieved through direct or indirect affiliation with a bank Banks with Fintech customers remain wholly accountable for compliance with regulatory expectations 5
Partnering with Fintechs will provide access to untapped markets, and become a fresh source for growth in low-cost deposits and fee income MainStreet has been providing Banking as a Service solutions to Fintech partners for more than 6 years Of the 4,902 community banks in the USA, few are considered technology savvy and less than 1% have engaged in or articulated a BaaS strategy What is the Opportunity 6
While there is no simple metric that can quantify the opportunity for Fintechs. A good bogey is the amount and volume of noncash payments The dollar amount of noncash payments processed in the United States exceeded $97 trillion in 2018 The volume of noncash payments exceeded 174 billion transactions in 2018 Quantifying the Opportunity 2019 Federal Reserve Payment Study 7
Chime Dave Kabbage SMART Payment Plan Examples of Fintechs Partners with banks } - Developed by a bank to attract younger consumers - Partners with MainStreet Bank / Avenu 8
MainStreet Bank has been an important strategic partner and BaaS provider for SMART Payment Plan since 2015. The team has been great to work with in providing and developing banking services that support and help grow our business. ” ” Smart Payment Plan 9
Banking as a Service Deposits checking savings time Payments electronic ACH debit card virtual debit check bill payment credit card Networks ATM ACH Fed wire Card rails RTP Swift Auto Reconcile API’s Integrated Compliance BSA / AML Cyber Security Tokenization Complaint management Dashboard & Reporting FDIC Insurance Subledger Customer Identity CIP / KYC automation Payment Gateway 10
Challenges we’ve seen over our 6+ years of providing BaaS Fintech may lack proper knowledge of banking regulations Fintech has an excellent idea but may have insufficient resources to build a subledger with integrated compliance technology Fintech may not be able to routinely balance its subledger Fintech’s marketing efforts may fall short of regulatory expectations Fintech may have had a bad experience with a bank 11
Lessons we’ve Learned over our 6+ years of providing BaaS We need clear sightlines into: 12
How Works 30 – 60 days standard timeline to full integration ™ 13
To Become a Fintech Partner Pass our Development, Testing, Acceptance and Production process Code review Cybersecurity controls Transactional A/B testing Complete our Certified Compliance Program Our compliance training is fully integrated to our policy templates and provides the front-to-back training our Fintech partners need to succeed Pass our Risk Assessment Process Risk review Financial review Business Plan review 14
Why for Fintechs ™ 15
Why for MainStreet Source of low-cost deposits Source of fee income Taps new markets Enhances shareholder value ™ 16
Implementation Roadmap Building the future of Banking as Service (BaaS) Beta testing Begin Deployment Full Deployment ™ 17
Beta Client Laura MacMahon Co-Founder “ “ 18 ™
We believe our approach to providing a proprietary Banking as a Service solution is unique Our transformational subledger combined with our high-touch compliance training goes beyond industry standards to ensure that our Fintech partners will prosper Our solution is designed to set the standard for industry best practice ™ 19
MainStreet Bancshares, Inc. ™
News Release
Contact: Debra Cope, (202) 468-3814
October 25, 2021, 8:00 AM ET
MainStreet Bank Unveils AvenuÔ Platform to Serve Fintech Partners
Solution Leverages MNSB’s Experience in Providing ‘Banking as a Service’
Fairfax, Virginia, October 25, 2021 – MainStreet Bank announces the launch of AvenuÔ, a transformative technology solution designed to meet the diverse banking and payment needs of fintech customers, including creators of mobile apps.
The innovative platform leverages the $1.7 billion bank’s experience in providing Banking as a Service (BaaS) and provides a streamlined way for fintechs to accept deposits and facilitate payments while managing risk and meeting compliance obligations.
“Over the past decade, MainStreet Bank has amassed expertise in providing Banking as a Service, and we have come to know many fintech innovators and understand their unique needs,” said Jeff W. Dick, Chairman and CEO of MainStreet Bank and its parent company, MainStreet Bancshares Inc. (Nasdaq: MNSB). “Now, by harnessing the capabilities under our AvenuÔ brand, we are scaling up to serve the booming fintech segment with a single, streamlined solution. By providing BaaS, MainStreet Bank has forged a path to access low-cost deposits, generate fee income, and tap new markets, which translates into enhanced shareholder value.”
AvenuÔ is a purpose-built solution that is designed to help MainStreet Bank’s fintech partners complete transactions smoothly, protect their resources, know their customers, and stay in compliance, said Todd Youngren, President of AvenuÔ. While the exact size of the fintech market is hard to quantify, they are significant processors of the $97 trillion in noncash payments that moved through the U.S. economy in more than 174 billion transactions during 2018, according to Federal Reserve data.
“We know BaaS backwards and forwards, and we have anticipated the concerns of both fintechs and regulators,” Youngren said. “We are innovating how money moves with our unique ‘core in a box’ solution, which enables us to get our clients up and running in 30 to 60 days.”
AvenuÔ enables fintechs to create any type of deposit account a customer needs, and provides access to transaction processing for digital and card payments of all types, Youngren explained. It enables clients to build the accounting part of their app through subledgers that are easy to reconcile. Vexing challenges that can slow down a fintech—such as customer identification, fraud and money laundering monitoring, and complaint management—are built into the solution. All transactions are tokenized for safety, and customer deposit balances are protected by the Federal Deposit Insurance Corp. Visit Avenu.bank and click on “Learn more.” If you like what you see, click on “Get in the queue.”
MainStreet Bank operates six branches in Herndon, Fairfax, McLean, Leesburg, Clarendon and Washington, D.C. In addition, MainStreet Bank has 55,000 free ATMs worldwide and a fully integrated online and mobile banking solution.
The Bank is not restricted by a conventional branching system, as it can offer business customers the ability to Put Our Bank in Your Office®. With robust and easy-to-use online business banking technology, MainStreet has “put our bank” in over 1,000 businesses in the metropolitan area.
MainStreet Bank has a robust line of business and professional lending products, including government contracting lines of credit, commercial lines and term loans, residential and commercial construction, and commercial real estate. MainStreet also works with the SBA to offer 7A and 504 lending solutions. From sophisticated cash management to enhanced mobile banking and instant-issue Debit Cards, MainStreet Bank is always looking for ways to improve its customer experience.
MainStreet Bank was the first community bank in the Washington, D.C. metropolitan area to offer a full online business banking solution. MainStreet Bank was also the first bank headquartered in the Commonwealth of Virginia to offer CDARS – a solution that provides multi-million-dollar FDIC insurance. Further information on the Bank can be obtained by visiting its website at mstreetbank.com.
This release contains forward-looking statements, including our expectations with respect to future events that are subject to various risks and uncertainties. The statements contained in this release that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Words such as “may,” “will,” “could,” “should,” “expect,” “plan,” “project,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “pursuant,” “target,” “continue,” and similar expressions are intended to identify such forward-looking statements. Factors that could cause actual results to differ materially from management's projections, forecasts, estimates and expectations include: fluctuation in market rates of interest and loan and deposit pricing, adverse changes in the overall national economy as well as adverse economic conditions in our specific market areas, maintenance and development of well-established and valued client relationships and referral source relationships, and acquisition or loss of key production personnel.