MainStreet Bancshares in Fairfax, Va., expects to report a third-quarter loss due to nonperforming loans.
The $2.1 billion-asset company said in a press release that it would likely lose 4 cents a share in the quarter after charging off $1.9 million to successfully offload $21.8 million in nonperforming loans.
The loans, originated between March 2020 and April 2021, were negatively impacted by pandemic-related construction delays, higher costs, supply chain delays and rapidly rising interest rates.
Mainstreet also reversed $983,000 of accrued interest income, paid $593,519 in nonrecurring liquidation expenses and set aside $1 million to support loan growth and ensure that its loan-loss allowance “is directionally consistent.”
“We’ve been thorough in identifying problem loans and where possible, have found creative means to work with borrowers to preserve their ownership,” Tom Floyd, Mainstreet’s chief lending officer. “However, in a few cases the borrowers’ options dwindled and the best course of action was liquidation.”