MSBK Main Street Banks (MM)

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/

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