COLDWATER, Mich., Feb. 6, 2007 (PRIME NEWSWIRE) -- Monarch Community Bancorp, Inc. (Nasdaq:MCBF), the parent company of Monarch Community Bank, today announced earnings for the year ended December 31, 2006 of $1.5 million compared to $1.4 million for the year ended December 31, 2005 (an increase of 7.1%) as earnings for 2006 reached its highest level since incorporation in 2002. Earnings per share for 2006 was $0.63 compared to $0.57 for 2005 (an increase of 10.5%).
Net interest income for the year ended December 31, 2006 before any provision or recovery of loan losses increased $16,000, or 0.2% as total interest income increased slightly more than total interest expense. Rising market interest rates had a greater impact on the Bank's cost of funds than it did on earning assets as the Bank's net interest margin percentage decreased from 3.56% in 2005 to 3.42% in 2006.
Net interest income after the provision for loan losses decreased $369,000 or 4.1% as the Company had no provision for loan losses in 2006 compared to a $385,000 recovery in 2005. No provision for loan losses was required in 2006 as a result of much lower levels of non-performing assets.
Non-performing assets were $2.1 million, or 0.7% of assets, at December 31, 2006 compared to $3.6 million, or 1.3% of assets, at December 31, 2005. Non-performing commercial loans decreased $947,000 (to $0), non-performing one-to-four family real estate loans decreased $657,000 (to $2.0 million), and non-performing consumer loans increased $130,000 (to $160,000). The net decrease is the result of the Bank's ongoing commitment to improving its credit quality. Foreclosed assets decreased $1.1 million (to $1.7 million) at December 31, 2006 compared to December 31, 2005 as management continues its aggressive but necessary collection efforts.
Noninterest income decreased to $3.1 million for the year ended December 31, 2006 as compared to $3.4 million for the same period in 2005, a decrease of 9.7%. The decrease was primarily the result of a $200,000 decrease in fees and gains on sales of loans (to $362,000) and a $67,000 net loss on sales of foreclosed real estate in 2006 compared to a net gain of $53,000 in 2005.
Noninterest expense decreased 7.6% to $9.7 million in 2006 from $10.5 million in 2005 as management had more success with cost control. Repossessed property expense decreased $175,000 (to $346,000) as the level of total foreclosed assets decreased. Professional services expense decreased $161,000 (to $441,000) as a result of significantly lower legal, audit and regulatory examination expenses. Salaries and employee benefits expense decreased $136,000 (to $5.0 million) primarily due to downsizing the number of total employees and revising certain benefit plans effective October 1, 2006. Occupancy and equipment costs decreased $61,000 (to $1.0 million) primarily due to lower depreciation expense and lower repairs and maintenance expense.
Amortization of core deposit intangible decreased $78,000 (to $291,000), amortization of mortgage servicing rights decreased $56,000 (to $382,000), and all other total general and administrative costs decreased $142,000 (to $1.2 million).
Earnings for the quarter ended December 31, 2006 were $570,000 compared to $311,000 for the quarter ended December 31, 2005 (an increase of 83.3%). Earnings for the quarter ending December 31, 2006 include $143,000 in gains on sales of mortgage loans and an adjustment for correcting the calculation net deferred fee amortization resulting in approximately $76,000 of additional earnings (net of federal income taxes).
The correction also affected the increase in 2006 total interest income. Excluding the correction, earnings for the quarter ending December 31, 2006 would have been $494,000 which is a $183,000 or 58.8% increase over earnings for the quarter ending December 31, 2005 with most of the increase arising from a $334,000 decrease in noninterest expenses offset by a $9,000 decrease in net interest income, a $67,000 decrease in noninterest income, and a $75,000 increase in federal income taxes.
Total assets were $290.0 million at December 31, 2006 compared to $277.1 million at December 31, 2005. This increase of 4.7% was due primarily to an increase in net loans of $17.1 million offset by a decrease in cash and investments of $2.2 million, a decrease in foreclosed assets of $1.1 million and a decrease in all other assets of $0.7 million. Deposits increased $17.9 million or 10.2% to $192.6 million at December 31, 2006 as total core deposits (checking, savings and money market accounts) increased $2.0 million and certificates of deposit increased $15.9 million (which includes a $12.7 million increase in brokered deposits). Stockholders' equity decreased to $40.0 million at December 31, 2006 from $40.6 million at December 31, 2005 primarily due to repurchase of $2.1 million in treasury stock from our stock buyback program offset by $1.5 million in net income.
The Monarch Community Bancorp, Inc. Annual Meeting of Shareholders will be held Tuesday, April 17, 2007 at the Creal Soccer Complex Building in Coldwater, Michigan.
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 Community Bancorp's website at www.monarchcb.com.
Monarch Community Bancorp, Inc.
Consolidated Financial Highlights
Unaudited
Dec. 31, Dec. 31,
2006 2005
---- ----
Selected Financial Condition Data: (In thousands,
except per share data)
Total assets 289,987 277,068
Loans receivable, net 230,247 213,097
Investment securities,
at carrying value 13,934 14,584
Cash and cash equivalents 15,297 16,286
Deposits 192,572 174,715
Federal Home Loan Bank Advances 54,476 59,562
Equity 39,986 40,576
Book Value per share (in dollars) $ 15.78 $ 14.97
Tangible Book Value per share (in dollars) $ 11.56 $ 10.92
Year Ended
Unaudited
Dec. 31, Dec. 31,
2006 2005
---- ----
Selected Operations Data: (In thousands,
except per share data)
Total interest income $ 17,287 $ 15,231
Total interest expense 8,607 6,567
------ -----
Net interest income 8,680 8,664
Provision for loan losses - (385)
-- -----
Net interest income after
provision for loan losses 8,680 9,049
Fees and service charges 2,642 2,496
Gains on sales of loans 362 562
Other non-interest income 118 341
---- ---
Total non-interest income 3,122 3,399
Total non-interest expense 9,710 10,503
------ ------
Income before taxes 2,092 1,945
Income tax provision 544 505
---- ---
Net income $ 1,548 $ 1,440
======== =======
Earnings per share - Basic $ 0.63 $ 0.57
Earnings per share - Diluted $ 0.63 $ 0.57
Monarch Community Bancorp, Inc.
Consolidated Financial Highlights, continued
Quarter Ended
Unaudited
Dec. 31, Dec. 31,
2006 2005
---- ----
Selected Operations Data: (In thousands,
except per share data)
Total interest income $ 4,606 $ 3,884
Total interest expense 2,387 1,759
--------- ---------
Net interest income 2,219 2,125
Provision for loan losses - -
--------- ---------
Net interest income after
provision for loan losses 2,219 2,125
Fees and service charges 687 619
Gains on sales of loans 143 113
Other non-interest income (6) 159
--------- ---------
Total non-interest income 824 891
Total non-interest expense 2,267 2,601
--------- ---------
Income before taxes 776 415
Income tax provision 206 104
--------- ---------
Net income $ 570 $ 311
========= =========
Earnings per share - Basic $ 0.24 $ 0.14
Earnings per share - Diluted $ 0.24 $ 0.14