COLDWATER, Mich., April 17, 2007 (PRIME NEWSWIRE) -- Monarch Community Bancorp, Inc. (Nasdaq:MCBF), the parent company of Monarch Community Bank ("Bank"), today announced earnings for the quarter ended March 31, 2007 of $494,000 compared to $330,000 for the same period in 2006 (an increase of 49.7%). Earnings per share for the quarter ended March 31, 2007 was $0.21 compared to $0.13 for the same period in 2006 (an increase of 61.5%).
Net interest income before any provision for loan losses decreased $42,000, or 2.0%, for the quarter ended March 31, 2007 compared to the same period in 2006 as a result of a $437,000 increase in interest expense offset by increases in interest income on loans, securities, federal funds sold and overnight deposits totaling $395,000. The increase in total interest expense was caused by $7.7 million of growth in our high yield Investor Money Market accounts and $6.4 million of growth in our certificates of deposit since March 31, 2006 (most of which came from brokered deposits) as the Bank continued to offer high interest rates in response to local competition. The Bank's net interest margin decreased from 3.46% for the first quarter of 2006 to 3.20% for the first quarter of 2007.
Net interest income after the provision for loan losses decreased $267,000, or 12.6% for the quarter ended March 31, 2007 compared to the same period in 2006. During the first quarter of 2007, the Bank recorded a $225,000 provision for loan losses where no provision was recorded in 2006. The provision was recorded primarily as a result of a $111,000 increase in the estimated total impairment of three loans on the Bank's watch list and $151,000 in net charge-offs.
Non-interest income increased $248,000, or 33.0% for the quarter ended March 31, 2007. Fees and service charges increased $136,000 as a result of a $74,000 increase in loan related fees (from $208,000 to $282,000) and a $62,000 increase in deposit related fees (from $367,000 to $429,000).
The increase in loan related fees was a result of $57,000 in loan brokerage fees (as the Bank has developed new mortgage banking relationships with six brokerage companies since June 2006), a $10,000 increase in construction loan fees, and a $7,000 increase in all other loan related fees. The increase in deposit related fees was a result of a $51,000 increase in NSF fees, a $5,000 increase in ATM/Debit Card income, and a $6,000 increase in all other deposit related fee income.
Gain on sale of loans for the quarter increased $125,000 compared to the same period a year ago as mortgage banking activities sharply increased in the last six months. Other income decreased $13,000 primarily due to a $19,000 loss on the sale of investments as management replaced low yield securities with higher yield securities that will result in enough additional interest income to more than fully recover the loss by the end of 2007.
Noninterest expense decreased $272,000, or 11.0% for the quarter ended March 31, 2007. Salaries and employee benefits expense decreased $173,000 (from $1.3 million to $1.1 million) as a result of downsizing certain department staffing levels in the fourth quarter of 2006. The Bank has 79 full-time equivalent employees as of March 31, 2007 compared to 95 full-time equivalent employees as of March 31, 2006. Professional services expense decreased $16,000 (from $121,000 to $105,000) primarily from reduced regulatory examination expense. Repossessed property expense decreased $34,000 (from $57,000 to $23,000) as foreclosed property held by the Bank decreased from $2.5 million as of March 31, 2006 to $1.4 million as of March 31, 2007. Amortization of core deposit intangible decreased $18,000 (from $86,000 to $68,000). Other general and administrative expense decreased $29,000 (from $291,000 to $262,000) primarily due to a $30,000 reduction in advertising and promotion expense where modifications to the Bank's marketing strategy were made for 2007.
The Company's provision for federal income taxes increased $89,000 for the quarter ended March 31, 2007 compared to the same period in 2006 as our taxable income base increased $253,000.
At March 31, 2007, the Company's total assets were $291.3 million, compared to $290.0 million at December 31, 2006, an increase of 0.5%. The asset growth was primarily due to a $5.1 million increase in cash and investments and a $3.8 million decrease in total net loans. Total deposits increased $0.8 million, or 0.4% to $193.4 million at March 31, 2007 from $192.6 million at December 31, 2006. This growth included a $2.3 million increase in non-interest bearing deposits offset by a $1.5 million decrease in interest bearing deposits. The Bank continues to be committed to increasing its core deposit balances during 2007.
Monarch Community Bank is headquartered in Coldwater, Michigan and operates six full service retail offices in Branch, Calhoun and Hillsdale counties, as well as a drive-thru only location in Branch County.
For additional information, visit Monarch Bancorp's website at www.monarchcb.com.
Monarch Community Bancorp, Inc.
Consolidated Financial Highlights
Unaudited
March 31, Dec. 31,
2007 2006
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Selected Financial Condition Data: (In thousands,
except per share data)
Total assets 291,274 289,987
Loans receivable, net 226,474 230,247
Investment securities, at carrying value 14,828 13,934
Cash and cash equivalents 19,482 15,297
Deposits 193,448 192,572
Federal Home Loan Bank Advances 54,476 54,476
Equity 40,366 39,986
Book Value per share (in dollars) $ 15.93 $ 15.78
Tangible Book Value per share (in dollars) $ 11.74 $ 11.56
Quarter Ended
Unaudited
March 31, March 31,
2007 2006
---- ----
Selected Operations Data: (In thousands,
except per share data)
Total interest income $ 4,427 $ 4,032
Total interest expense 2,353 1,916
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Net interest income 2,074 2,116
Provision for loan losses 225 --
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Net interest income after provision for loan
losses 1,849 2,116
Fees and service charges 711 575
Gains on sales of loans 193 68
Other non-interest income 96 109
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Total non-interest income 1,000 752
Total non-interest expense 2,191 2,463
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Income before taxes 658 405
Income tax provision 164 75
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Net income $ 494 $ 330
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Earnings per share - Basic $ 0.21 $ 0.13
Earnings per share - Diluted $ 0.21 $ 0.13