MainStreet Bancshares in Fairfax, Va., expects its Banking-as-a-Service (BaaS) division to break even within two years of having a fully operational solution.
The $1.9 billion-asset company was asked during its Oct. 17 earnings conference call to provide that estimate for its Avenu business. Management made good on a promise to look into the request and provide the information.
Avenu has one BaaS client so far. It also has a Software-as-a-Service product that will not be sold or leased to external parties.
Avenu generates revenue from client fee income and interest income derived from investing client deposit balances.
MainStreet said Avenu should break even when it has successfully onboarded 20 to 30 clients and its outstanding deposit balances average $75 million and $100 million.
Avenu’s total income rose by 51% in the third quarter from a quarter earlier, to $739,000.
The business lost $570,000 in the quarter after noninterest expenses rose by 82% to $1.3 million. Avenu’s assets increased by 46% to $7.3 million, but deposits fell by 4.2% to $69.4 million.