BLOOMINGTON, Ind., July 22, 2008 (PRIME NEWSWIRE) -- Monroe Bancorp (the "Company") (Nasdaq:MROE), the independent Bloomington-based holding company for Monroe Bank (the "Bank"), today reported net income of $1,860,000 or $0.299 per diluted common share, for the quarter ended June 30, 2008, compared to $2,190,000 or $0.346 per diluted common share for the same period in 2007. This represents a 15.1 percent decrease in net income and a 13.6 percent decrease in diluted earnings per share. Return on average assets (ROAA) and return on average equity (ROAE) for the second quarter of 2008 were 0.96 percent and 13.26 percent, respectively, compared to 1.17 percent and 16.93 percent respectively for the second quarter of 2007.
Net income for the second quarter of 2008 increased by $267,000 or 16.8 percent over net income for the first quarter of 2008.
Net income for the first six months of 2008 totaled $3,453,000 or $0.554 per diluted common share compared to $4,202,000 or $0.657 per diluted common share for the same period of 2007. This represents a 17.8 percent decrease in net income and a 15.7 percent decrease in diluted earnings per share. Return on average assets (ROAA) and return on average equity (ROAE) were 0.89 percent and 12.46 percent, respectively, for the first six months of 2008 compared to 1.14 percent and 16.09 percent, respectively, for the first six months of 2007.
The decline in net income was largely the result of asset quality issues. The provision for loan losses totaled $1,050,000 for the second quarter of 2008 compared to $255,000 for the same period of 2007. An increase in non-accrual loans significantly impacted net interest income. Nonperforming loans totaled $15,906,000 on June 30, 2008, compared to $6,944,000 on March 31, 2008 and $2,701,000 on June 30, 2007. Additional asset quality information is presented below in the section titled Asset Quality.
Net income was favorably impacted by gains on the sale of securities in the Bank's investment portfolio. Total gains on the sale of securities during the second quarter were $439,000 compared to $41,000 for the same quarter of 2007.
"I am pleased that we were able to generate a relatively strong level of net income during a period in which our income statement felt the impact of credit quality issues," said Mark D. Bradford, President and Chief Executive Officer.
Financial Performance
Net interest income before the provision for loan losses decreased 1.7 percent to $5,756,000 for the three months ended June 30, 2008 compared to $5,853,000 for the same period in 2007. The decline is largely attributable to the previously discussed increase in non-accruing loans. The tax-equivalent net interest margin as a percentage of average earning assets for the quarter ended June 30, 2008 was 3.31 percent, compared to 3.36 percent for the quarter ended March 31, 2008 and 3.44 percent for the second quarter of 2007.
Net interest income before the provision for loan losses, increased $48,000 or 0.4 percent to $11,632,000 for the six months ended June 30, 2008 compared to $11,584,000 for the same period in 2007. The tax-equivalent net interest margin for the first six months of 2008 was 3.33 percent, compared to 3.44 percent for the first six months of 2007. A reconciliation of the non-GAAP tax-equivalent net interest margin to the GAAP net interest margin is provided in a table entitled "Reconciliation of GAAP Net Interest Margin to Non-GAAP Net Interest Margin on a Tax-Equivalent Basis," included at the end of the attached financial summary.
Noninterest income totaled $3,024,000 for the second quarter of 2008 compared to $2,685,000 for the same period of 2007. Excluding the effect of the Company's deferred compensation plan, discussed in the "Use of Non-GAAP Financial Information" section of this release, noninterest income totaled $3,066,000 for the second quarter of 2008 compared to $2,560,000 for the same period of 2007, an increase of $506,000 or 19.8 percent. The increase in noninterest income was driven by a $398,000 increase in gains from the sale of securities and a $97,000 increase in trust fees.
Trust fees grew 18.1 percent to $634,000 for the three months ended June 30, 2008 compared to $537,000 for the same period of 2007. The increase in trust fees was driven by growth in trust assets under management and to a lesser extent, a fee schedule increase that was implemented during April of 2007. Trust assets under management reached $338,948,000 at June 30, 2008, growing 3.0 percent, or $9,800,000 over the June 30, 2007 total of $329,148,000.
Noninterest income totaled $5,388,000 for the first six months of 2008 compared to $5,132,000 for the same period of 2007. Excluding the effect of the Company's deferred compensation plan, noninterest income totaled $5,622,000 for the first six months of 2008 compared to $4,967,000 for the same period of 2007. The $655,000 or 13.2 percent increase over the same period of 2007 was primarily the result of a $537,000 increase in gains from the sale of securities.
Noninterest expense was $5,371,000 for the three months ended June 30, 2008, compared to $5,266,000 for the same period of 2007. Noninterest expense, adjusted to remove the effect of the Company's deferred compensation plan, was $5,390,000 for the three months ended June 30, 2008, compared to $5,114,000 for the same period of 2007. A reconciliation of the non-GAAP noninterest income and expense, adjusted to remove the effect of the Company's deferred compensation plan, is provided in a table entitled "Reconciliation of GAAP Noninterest Income & Expense to Noninterest Income & Expense Without the Financial Impact of the Deferred Compensation Plan," included at the end of the attached financial summary. The $276,000 or 5.4 percent increase in noninterest expense is largely the result of a $113,000 or 15.8 percent increase in occupancy expense. The increase in occupancy expense resulted primarily from the Company opening two new full service banking centers, one in December of 2007 and the second in January of 2008.
Noninterest expense totaled $10,762,000 for the first six months of 2008 compared to $10,359,000 for the same period of 2007. Noninterest expense, excluding the effect of the Company's deferred compensation plan, was $10,941,000 for the first six months of 2008, compared to $10,140,000 for the same period of 2007. The $801,000, or 7.9 percent increase is largely the result of a $234,000 or 3.8 percent increase in total compensation expense, a $169,000 or 491.5 percent increase in deposit insurance expense related to the Federal Deposit Insurance Reform Act of 2005, and a $167,000 or 10.9 percent increase in occupancy expense much of which is related to the two new full service banking centers.
Asset Quality
Nonperforming assets and 90-day past due loans totaled $16,472,000 (2.12 percent of total assets) at June 30, 2008 compared to $8,355,000 (1.08 percent of total assets) at March 31, 2008 and $3,397,000 (0.44 percent of total assets) at June 30, 2007.
Net charge-offs for the second quarter of 2008 totaled $575,000 or 0.10 percent of total loans compared to $261,000 (0.04 percent of total loans) for the first quarter of 2008 and net recoveries of $17,000 (0.003 percent of total loans) for the second quarter of 2007.
Due to general economic conditions in the real estate markets, credit quality has been under pressure. The Bank maintains a "watch list" representing credits that require above average attention in order to mitigate the risk of default or loss. Over the periods noted below, the watch list consisted of the following:
Watch List Data 6/30/2008 3/31/2008 6/30/2007 --------------- --------- --------- --------- Total Watch List ($) 27,911,000 25,528,000 13,876,000 Number of Watch List Customers 42 40 34 Total Watch List $ More Than 30 Days Past Due 16,129,000 10,874,000 5,464,000 Total Watch List $ Secured by R/E 24,929,000 22,338,000 10,437,000 Total Watch List $ Secured by Non-R/E 2,782,000 2,891,000 3,009,000 Total Watch List $ Unsecured 200,000 299,000 322,000
As of June 30, 2008, 42.2 percent of the watch list exposure was less than thirty days past due, compared to 57.4 percent as of March 31, 2008 and 60.6 percent as of June 30, 2007. The largest areas of stress within the loan portfolio are loans for Residential Real Estate Development and loans secured by 1-4 Family Non-Owner Occupied Residential Properties. As of June 30, 2008, loans totaling $40,323,000 were secured by Residential Real Estate Development collateral with $9,481,000 of these loans being on the watch list of which $8,016,000 were more than thirty days past due. The majority ($35,317,000 or 87.6 percent) of the $40,323,000 of loans secured by Residential Real Estate Development collateral were originated in our Central Indiana region (greater Indianapolis). Of the $35,317,000 of loans originated in our Central Indiana region and secured by Residential Real Estate Development collateral, $9,451,000 of these loans were on the watch list (included in the $9,481,000 reported above), of which $7,986,000 were more than thirty days past due.
In addition, as of June 30, 2008, there were $53,691,000 of loans secured by 1-4 Family Non-Owner Occupied Residential Properties with $3,498,000 of these loans being on the watch list of which $2,446,000 were more than thirty days past due.
These two categories combined account for 46.5 percent of the watch list. Approximately 19.5 percent ($10,487,000) of the $53,691,000 of loans secured by 1-4 Family Non-Owner Occupied Residential Properties were originated in our Central Indiana region. Of the $10,487,000 of loans originated in our Central Indiana region and secured by 1-4 Family Non-Owner Occupied Properties, $2,589,000 of these loans were on the watch list (included in the $3,498,000 reported above), of which $1,800,000 were more than thirty days past due.
"I am disappointed with the Company's problem asset levels and trends. Problem asset resolution is our number one priority, and we are devoting a significant amount of time and effort to identifying and resolving asset quality issues," said Mr. Bradford.
Financial Condition
Total assets grew 1.9 percent from June 30, 2007, reaching $778,204,000 on June 30, 2008. Loans, including loans held for sale, totaled $602,369,000 on June 30, 2008, a 6.8 percent increase from total loans on June 30, 2007, which were $563,989,000. Deposits increased 1.5 percent to $623,871,000 at June 30, 2008 compared to $614,592,000 a year earlier.
Other News
The Company continued to focus on the growth of its new full-service locations in Avon and Plainfield in Hendricks County during the second quarter. A series of promotions during this time frame has continued to achieve our overall goal of market awareness and growth of core consumer relationships. A new banking center, to be located in Noblesville, in Hamilton County, is expected to open during the late summer of 2008.
Over 300 people attended the opening of an art exhibition in May at the Monroe Bank Art Gallery housed in the Bank's main Bloomington banking center. Goodwill generated by community outreach efforts supporting the arts remains an important aspect of the Bank's branding and the successful reputation it enjoys in the communities it serves. In addition, the Bank continues to host financial seminars and participate in community and business expos and networking events as part of its ongoing sales and marketing efforts.
About Monroe Bancorp
Monroe Bancorp, headquartered in Bloomington, Indiana, is an Indiana bank holding company with Monroe Bank as its wholly owned subsidiary. Monroe Bank was established in Bloomington in 1892, and offers a full range of financial, trust and investment services through its locations in Central and South Central Indiana. The Company's common stock is traded on the NASDAQ(r) Global Stock Market under the symbol MROE.
The Monroe Bancorp logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=4316
See attachments for additional financial information. For further information, contact: Mark D. Bradford, President and Chief Executive Officer, (812) 331-3455.
Use of Non-GAAP Financial Information
To supplement the Company's consolidated condensed financial statements presented on a GAAP basis, the Company has used the following non-GAAP measures of reporting: (1) The net interest margin is reported on a tax equivalent basis. The tax equivalent adjustment to net interest income recognizes the income tax savings when comparing taxable and tax-exempt assets and assumes a marginal income tax rate of 34 percent. Management believes that it is a standard practice in the banking industry to present net interest margin and net interest income on a fully tax equivalent basis. Therefore, management believes these measures provide useful information to investors by allowing them to make peer comparisons. A table entitled "Reconciliation of GAAP Net Interest Margin to Non-GAAP Net Interest Margin on a Tax-Equivalent Basis," included at the end of the attached financial summary, reconciles the non-GAAP financial measure "net interest income (tax-equivalent)" with net interest income calculated and presented in accordance with GAAP. The table also reconciles the non-GAAP financial measure "net interest margin (tax-equivalent)" with net interest margin calculated and presented in accordance with GAAP. (2) Noninterest income and noninterest expense are reported without the effect of income and expenses related to securities held in a rabbi trust for the deferred compensation plan. A table entitled "Reconciliation of GAAP Noninterest Income & Expense to Noninterest Income & Expense Without the Financial Impact of the Deferred Compensation Plan," included at the end of the attached financial summary, details all the items included in noninterest income and expense associated with the deferred compensation plan / rabbi trust and reconciles the GAAP numbers to the non-GAAP numbers. The activity in the rabbi trust has no effect on the Company's net income, therefore, management believes a more accurate comparison of current and prior year noninterest income and noninterest expense can be made if items related to the rabbi trust are removed.
The Company believes these adjustments are appropriate to enhance an overall understanding of the Company's past financial performance and also its prospects for the future. These adjustments to the Company's GAAP results are made with the intent of providing both management and investors a more complete understanding of the underlying operational results and trends and the Company's marketplace performance. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the numbers prepared in accordance with generally accepted accounting principles in the United States.
Forward-Looking Statements
This release contains forward-looking statements about the Company which we believe are within the meaning of the Private Securities Litigation Reform Act of 1995. This release contains certain forward-looking statements with respect to the financial condition, results of operations, plans, objectives, future performance and business of the Company. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words "believe," "expect," "anticipate," "intend," "plan," "estimate" or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could" or "may" or words of similar meaning. These forward-looking statements, by their nature, are subject to risks and uncertainties. There are a number of important factors that could cause future results to differ materially from historical performance and these forward-looking statements. Factors that might cause such a difference include, but are not limited to: (1) competitive pressures among depository institutions; (2) changes in the interest rate environment; (3) prepayment speeds, charge-offs and loan loss provisions; (4) general economic conditions, either national or in the markets in which the Company does business; (5) legislative or regulatory changes adversely affecting the business of the Company; (6) changes in real estate values or the real estate markets; and (7) the Company's business development efforts in new markets in and around Hendricks and Hamilton Counties. Further information on other factors which could affect the financial results of the Company is included in the Company's filings with the Securities and Exchange Commission.
Monroe Bancorp (MROE)
Financial Summary
(dollar amounts in thousands except per share data)
Quarters Ended
-----------------------------------------------------
Jun 2008 Mar 2008 Dec 2007 Sept 2007 Jun 2007
---------------------------------------------------------------------
BALANCE
SHEET *
---------------------------------------------------------------------
Cash and
Interest
-Earning
Deposits $ 27,141 $ 30,559 $ 24,563 $ 15,071 $ 18,732
---------------------------------------------------------------------
Federal Funds
Sold 1,654 2,565 1,077 10,149 20,533
---------------------------------------------------------------------
Securities 106,591 121,074 125,658 125,998 121,530
---------------------------------------------------------------------
Total Loans 602,369 581,956 584,831 564,904 563,989
---------------------------------------------------------------------
Loans Held
for Sale 4,110 2,176 2,974 1,875 3,091
---------------------------------------------------------------------
Commercial &
Industrial 99,141 100,378 104,611 98,596 104,226
---------------------------------------------------------------------
Real Estate:
---------------------------------------------------------------------
Commercial
&
Residential 355,393 333,725 332,664 309,952 305,692
---------------------------------------------------------------------
Construction
& Vacant
Land 99,694 102,428 101,011 109,951 107,684
---------------------------------------------------------------------
Home Equity 25,783 25,534 25,222 25,756 24,642
---------------------------------------------------------------------
Installment
Loans 18,248 17,715 18,349 18,774 18,654
---------------------------------------------------------------------
Reserve for
Loan Losses 7,748 7,273 6,654 6,147 6,487
---------------------------------------------------------------------
Bank Premises
and Equipment 20,534 20,173 20,029 18,343 17,674
---------------------------------------------------------------------
Federal Home
Loan Bank
Stock 2,312 2,312 2,312 2,312 2,312
---------------------------------------------------------------------
Interest
Receivable
and Other
Assets 25,351 25,420 26,264 24,156 25,094
---------------------------------------------------------------------
Total
Assets $ 778,204 $ 776,786 $ 778,080 $ 754,786 $ 763,377
---------------------------------------------------------------------
---------------------------------------------------------------------
Total
Deposits $ 623,871 $ 637,230 $ 619,717 $ 611,504 $ 614,592
---------------------------------------------------------------------
Noninterest
Checking 79,548 76,716 81,542 77,874 83,136
---------------------------------------------------------------------
Interest
Bearing
Checking &
NOW 129,422 122,987 131,295 133,233 121,169
---------------------------------------------------------------------
Regular
Savings 17,876 18,710 17,712 17,636 18,127
---------------------------------------------------------------------
Money Market
Savings 116,862 109,105 99,135 97,910 98,966
---------------------------------------------------------------------
CDs Less than
$100,000 152,685 156,849 160,456 149,127 147,693
---------------------------------------------------------------------
CDs Greater
than
$100,000 127,163 152,473 128,602 134,683 145,142
---------------------------------------------------------------------
Other Time 315 390 975 1,041 359
---------------------------------------------------------------------
Total
Borrowings 88,723 70,328 96,421 80,628 89,204
---------------------------------------------------------------------
Federal Funds
Purchased 12,810 5,256 24,850 -- --
---------------------------------------------------------------------
Securities
Sold Under
Repurchase
Agreement 46,390 45,717 43,195 52,167 58,699
---------------------------------------------------------------------
FHLB Advances 21,249 9,262 18,273 18,349 19,408
---------------------------------------------------------------------
Loans Sold
Under
Repurchase
Agreement &
Other Debt 26 1,845 1,855 1,864 2,849
---------------------------------------------------------------------
Subordinated
Debentures
- Trust
Preferred 8,248 8,248 8,248 8,248 8,248
---------------------------------------------------------------------
Interest
Payable and
Other
Liabilities 9,578 13,072 7,490 9,732 7,986
---------------------------------------------------------------------
Total
Liabilities 722,172 720,630 723,628 701,864 711,782
---------------------------------------------------------------------
Shareholders
Equity 56,032 56,156 54,452 52,922 51,595
---------------------------------------------------------------------
Total
Liabilities
and
Shareholders'
Equity $ 778,204 $ 776,786 $ 778,080 $ 754,786 $ 763,377
---------------------------------------------------------------------
---------------------------------------------------------------------
Book Value
Per Share $ 9.01 $ 9.03 $ 8.76 $ 8.52 $ 8.23
---------------------------------------------------------------------
End of Period
Shares Issued
and
Outstanding 6,227,550 6,227,550 6,227,550 6,227,550 6,283,592
---------------------------------------------------------------------
Less:Unearned
ESOP Shares 8,300 10,700 13,100 15,100 17,500
---------------------------------------------------------------------
End of Period
Shares Used
to Calculate
Book Value 6,219,250 6,216,850 6,214,450 6,212,450 6,266,092
---------------------------------------------------------------------
----------------------
Years Ended
----------------------
Dec 2007 Dec 2006
---------------------------------------------------------------------
BALANCE SHEET *
---------------------------------------------------------------------
Cash and Interest-earning Deposits $ 24,563 $ 27,743
---------------------------------------------------------------------
Federal Funds Sold 1,077 5,803
---------------------------------------------------------------------
Securities 125,658 120,250
---------------------------------------------------------------------
Total Loans 584,831 559,463
---------------------------------------------------------------------
Loans Held for Sale 2,974 2,545
---------------------------------------------------------------------
Commercial & Industrial 104,611 93,912
---------------------------------------------------------------------
Real Estate:
---------------------------------------------------------------------
Commercial & Residential 332,664 320,789
---------------------------------------------------------------------
Construction & Vacant Land 101,011 97,006
---------------------------------------------------------------------
Home Equity 25,222 26,515
---------------------------------------------------------------------
Installment Loans 18,349 18,696
---------------------------------------------------------------------
Reserve for Loan Losses 6,654 6,144
---------------------------------------------------------------------
Bank Premises and Equipment 20,029 15,411
---------------------------------------------------------------------
Federal Home Loan Bank Stock 2,312 2,312
---------------------------------------------------------------------
Interest Receivable and Other Assets 26,264 23,355
---------------------------------------------------------------------
Total Assets $ 778,080 $ 748,193
---------------------------------------------------------------------
---------------------------------------------------------------------
Total Deposits $ 619,717 $ 589,328
---------------------------------------------------------------------
Noninterest Checking 81,542 79,783
---------------------------------------------------------------------
Interest Bearing Checking & NOW 131,295 138,418
---------------------------------------------------------------------
Regular Savings 17,712 17,884
---------------------------------------------------------------------
Money Market Savings 99,135 105,702
---------------------------------------------------------------------
CDs Less than $100,000 160,456 122,037
---------------------------------------------------------------------
CDs Greater than $100,000 128,602 112,401
---------------------------------------------------------------------
Other Time 975 13,103
---------------------------------------------------------------------
Total Borrowings 96,421 98,079
---------------------------------------------------------------------
Federal Funds Purchased 24,850 2,075
---------------------------------------------------------------------
Securities Sold Under Repurchase Agreement 43,195 70,784
---------------------------------------------------------------------
FHLB Advances 18,273 19,430
---------------------------------------------------------------------
Loans Sold Under Repurchase
Agreement & Other Debt 1,855 2,697
---------------------------------------------------------------------
Subordinated Debentures - Trust Preferred 8,248 3,093
---------------------------------------------------------------------
Interest Payable and Other Liabilities 7,490 7,281
---------------------------------------------------------------------
Total Liabilities 723,628 694,688
---------------------------------------------------------------------
Shareholders Equity 54,452 53,505
---------------------------------------------------------------------
Total Liabilities and Shareholders' Equity $ 778,080 $ 748,193
---------------------------------------------------------------------
---------------------------------------------------------------------
Book Value Per Share $8.76 $8.24
---------------------------------------------------------------------
End of Period Shares Issued and Outstanding 6,227,550 6,515,342
---------------------------------------------------------------------
Less:Unearned ESOP Shares 13,100 22,300
---------------------------------------------------------------------
End of Period Shares Used to Calculate
Book Value 6,214,450 6,493,042
---------------------------------------------------------------------
* period end numbers
Monroe Bancorp (MROE)
Financial Summary
(dollar amounts in thousands except per share data)
-------------------------------------------
Quarters Ended
-------------------------------------------
INCOME Jun Mar Dec Sept Jun
STATEMENT 2008 2008 2007 2007 2007
--------------------------------------------------------------
Interest
Income $10,366 $11,483 $12,141 $12,232 $12,249
--------------------------------------------------------------
Interest
Expense 4,610 5,607 6,390 6,528 6,396
--------------------------------------------------------------
Net Interest
Income 5,756 5,876 5,751 5,704 5,853
--------------------------------------------------------------
Loan Loss
Provision 1,050 880 1,150 345 255
--------------------------------------------------------------
Total
Noninterest
Income 3,024 2,364 2,468 2,651 2,685
--------------------------------------------------------------
Service
Charges on
Deposit
Accounts 985 869 964 917 932
--------------------------------------------------------------
Trust Fees 634 608 604 617 537
--------------------------------------------------------------
Commission
Income 246 219 229 210 239
--------------------------------------------------------------
Gain on Sale
of Loans 175 198 147 231 262
--------------------------------------------------------------
Realized
Gains on
Trading and
Available
for Sale
Securities 439 140 5 2 41
--------------------------------------------------------------
Unrealized
Gains
(Losses) on
Trading
Securities
Associated
with
Directors'
Deferred
Comp Plan (50) (217) (154) 55 83
--------------------------------------------------------------
Other
Operating
Income 595 547 673 619 591
--------------------------------------------------------------
Total
Noninterest
Expense 5,371 5,391 4,984 5,283 5,266
--------------------------------------------------------------
Salaries &
Wages 2,204 2,204 2,189 2,178 2,152
--------------------------------------------------------------
Commissions,
Options &
Incentive
Compensation 402 364 277 427 581
--------------------------------------------------------------
Employee
Benefits 535 681 393 481 465
--------------------------------------------------------------
Premises &
Equipment 830 873 765 799 717
--------------------------------------------------------------
Advertising 179 220 131 149 162
--------------------------------------------------------------
Legal Fees 102 185 208 85 118
--------------------------------------------------------------
Appreciation
(Depreciation)
in Directors'
Deferred
Compensation
Plan (23) (164) (23) 78 148
--------------------------------------------------------------
Other
Operating
Expenses 1,142 1,028 1,043 1,086 923
--------------------------------------------------------------
Income Before
Income Tax 2,359 1,969 2,085 2,727 3,017
--------------------------------------------------------------
Income Tax
Expense 499 376 479 729 827
--------------------------------------------------------------
Net Income
After Tax &
Before
Extraordinary
Items 1,860 1,593 1,606 1,998 2,190
--------------------------------------------------------------
Extraordinary
Items -- -- -- -- --
--------------------------------------------------------------
Net Income $ 1,860 $ 1,593 $ 1,606 $ 1,998 $ 2,190
--------------------------------------------------------------
--------------------------------------------------------------
Basic
Earnings
Per Share $ 0.299 $ 0.256 $ 0.259 $ 0.321 $ 0.348
--------------------------------------------------------------
Diluted
Earnings
Per Share $ 0.299 $ 0.256 $ 0.258 $ 0.319 $ 0.346
--------------------------------------------------------------
----------------------
Years Ended
----------------------
INCOME STATEMENT Dec 2007 Dec 2006
--------------------------------------------------------------------
Interest Income $ 48,474 $ 44,643
--------------------------------------------------------------------
Interest Expense 25,435 21,978
--------------------------------------------------------------------
Net Interest Income 23,039 22,665
--------------------------------------------------------------------
Loan Loss Provision 2,035 1,200
--------------------------------------------------------------------
Total Noninterest Income 10,251 9,492
--------------------------------------------------------------------
Service Charges on Deposit Accounts 3,680 3,614
--------------------------------------------------------------------
Trust Fees 2,243 1,701
--------------------------------------------------------------------
Commission Income 910 785
--------------------------------------------------------------------
Gain on Sale of Loans 817 1,045
--------------------------------------------------------------------
Realized Gains on Trading and
Available for Sale Securities 49 115
--------------------------------------------------------------------
Unrealized Gains (Losses) on Trading
Securities Associated with Directors'
Deferred Comp Plan 17 74
--------------------------------------------------------------------
Other Operating Income 2,535 2,158
--------------------------------------------------------------------
Total Noninterest Expense 20,626 20,098
--------------------------------------------------------------------
Salaries & Wages 8,621 8,077
--------------------------------------------------------------------
Commissions, Options & Incentive Compensation 1,737 1,862
--------------------------------------------------------------------
Employee Benefits 1,774 2,055
--------------------------------------------------------------------
Premises & Equipment 3,100 3,151
--------------------------------------------------------------------
Advertising 667 712
--------------------------------------------------------------------
Legal Fees 566 307
--------------------------------------------------------------------
Appreciation (Depreciation) in Directors'
Deferred Compensation Plan 267 301
--------------------------------------------------------------------
Other Operating Expenses 3,894 3,633
--------------------------------------------------------------------
Income Before Income Tax 10,629 10,859
--------------------------------------------------------------------
Income Tax Expense 2,823 3,273
--------------------------------------------------------------------
Net Income After Tax & Before Extraordinary Items 7,806 7,586
--------------------------------------------------------------------
Extraordinary Items -- --
--------------------------------------------------------------------
Net Income $ 7,806 $ 7,586
--------------------------------------------------------------------
--------------------------------------------------------------------
Basic Earnings Per Share $ 1.240 $ 1.154
--------------------------------------------------------------------
Diluted Earnings Per Share $ 1.235 $ 1.150
--------------------------------------------------------------------
Monroe Bancorp (MROE)
Financial Summary
(dollar amounts in thousands except per share data)
-----------------------------------------------------
Quarters Ended
-----------------------------------------------------
ASSET QUALITY Jun 2008 Mar 2008 Dec 2007 Sept 2007 Jun 2007
---------------------------------------------------------------------
Net
Charge-Offs
(Recoveries) $ 575 $ 261 $ 643 $ 686 $ (17)
---------------------------------------------------------------------
OREO Expenses 22 82 10 46 3
---------------------------------------------------------------------
Total Credit
Charges $ 597 $ 343 $ 653 $ 732 $ (14)
---------------------------------------------------------------------
---------------------------------------------------------------------
Nonperforming
Loans $ 15,906 $ 6,944 $ 6,938 $ 4,821 $ 2,701
---------------------------------------------------------------------
OREO 493 848 841 141 212
---------------------------------------------------------------------
Nonperforming
Assets 16,399 7,792 7,779 4,962 2,913
---------------------------------------------------------------------
90 Day Past
Due Loans Net
of
Nonperforming
Loans 73 563 435 197 484
---------------------------------------------------------------------
Nonperforming
Assets + 90
Day Past
Due $ 16,472 $ 8,355 $ 8,214 $ 5,159 $ 3,397
---------------------------------------------------------------------
---------------------
Years Ended
---------------------
ASSET QUALITY Dec 2007 Dec 2006
---------------------------------------------------------------------
Net Charge-Offs (Recoveries) $ 1,525 $ 641
---------------------------------------------------------------------
OREO Expenses 67 24
---------------------------------------------------------------------
Total Credit Charges $ 1,592 $ 665
---------------------------------------------------------------------
---------------------------------------------------------------------
Nonperforming Loans $ 6,938 $ 1,712
---------------------------------------------------------------------
OREO 841 141
---------------------------------------------------------------------
Nonperforming Assets 7,779 1,853
---------------------------------------------------------------------
90 Day Past Due Loans Net of Nonperforming Loans 435 644
---------------------------------------------------------------------
Nonperforming Assets + 90 Day Past Due $ 8,214 $ 2,497
---------------------------------------------------------------------
Quarters Ended
-------------------------------------------
RATIO ANALYSIS - Jun Mar Dec Sept Jun
CREDIT QUALITY* 2008 2008 2007 2007 2007
---------------------------------------------
NCO/Loans 0.38% 0.18% 0.44% 0.49% -0.01%
---------------------------------------------
Credit Charges/Loans
& OREO 0.40% 0.24% 0.45% 0.52% -0.01%
---------------------------------------------
Nonperforming Loans/
Loans 2.64% 1.19% 1.19% 0.85% 0.48%
---------------------------------------------
Nonperforming Assets/
Loans & OREO 2.72% 1.34% 1.33% 0.88% 0.52%
---------------------------------------------
Nonperforming Assets/
Assets 2.11% 1.00% 1.00% 0.66% 0.38%
---------------------------------------------
Nonperforming Assets
+ 90 Day PD/Assets 2.12% 1.08% 1.06% 0.68% 0.44%
---------------------------------------------
Reserve/
Nonperforming Loans 48.71% 104.74% 95.91% 127.50% 240.17%
---------------------------------------------
Reserve/Total Loans 1.29% 1.25% 1.14% 1.09% 1.15%
---------------------------------------------
Equity & Reserves/
Nonperforming
Assets 388.93% 814.03% 785.53% 1190.43% 1993.89%
---------------------------------------------
OREO/Nonperforming
Assets 3.01% 10.88% 10.81% 2.84% 7.28%
---------------------------------------------
--------------------
Years Ended
--------------------
RATIO ANALYSIS - CREDIT QUALITY* Dec 2007 Dec 2006
---------------------------------------------------------------------
NCO/Loans 0.26% 0.11%
---------------------------------------------------------------------
Credit Charges/Loans & OREO 0.27% 0.12%
---------------------------------------------------------------------
Nonperforming Loans/Loans 1.19% 0.31%
---------------------------------------------------------------------
Nonperforming Assets/Loans & OREO 1.33% 0.33%
---------------------------------------------------------------------
Nonperforming Assets/Assets 1.00% 0.25%
---------------------------------------------------------------------
Nonperforming Assets + 90 Day PD/Assets 1.06% 0.33%
---------------------------------------------------------------------
Reserve/Nonperforming Loans 95.91% 358.88%
---------------------------------------------------------------------
Reserve/Total Loans 1.14% 1.10%
---------------------------------------------------------------------
Equity & Reserves/Nonperforming Assets 785.53% 3219.05%
---------------------------------------------------------------------
OREO/Nonperforming Assets 10.81% 7.61%
---------------------------------------------------------------------
-------------------------------------------------
Quarters Ended
-------------------------------------------------
RATIO ANALYSIS - Jun Mar Dec Sept Jun
CAPITAL ADEQUACY* 2008 2008 2007 2007 2007
---------------------------------------------------------------------
Equity/Assets 7.20% 7.23% 7.00% 7.01% 6.76%
---------------------------------------------------------------------
Equity/Loans 9.30% 9.65% 9.31% 9.37% 9.15%
---------------------------------------------------------------------
--------------------
Years Ended
--------------------
RATIO ANALYSIS - CAPITAL ADEQUACY* Dec 2007 Dec 2006
-------------------------------------------------------------------
Equity/Assets 7.00% 7.15%
-------------------------------------------------------------------
Equity/Loans 9.31% 9.56%
-------------------------------------------------------------------
-------------------------------------------------
Quarters Ended
-------------------------------------------------
RATIO ANALYSIS - Jun Mar Dec Sept Jun
PROFITABILITY 2008 2008 2007 2007 2007
-------------------------------------------------
Return on Average
Assets 0.96% 0.82% 0.83% 1.05% 1.17%
---------------------------------------------------------------------
Return on Average
Equity 13.26% 11.62% 11.89% 15.27% 16.93%
---------------------------------------------------------------------
Net Interest Margin
(Tax-Equivalent)
(1) 3.31% 3.36% 3.29% 3.31% 3.44%
---------------------------------------------------------------------
--------------------
Years Ended
--------------------
RATIO ANALYSIS - PROFITABILITY Dec 2007 Dec 2006
-------------------------------------------------------------------
Return on Average Assets 1.04% 1.04%
-------------------------------------------------------------------
Return on Average Equity 14.79% 14.59%
-------------------------------------------------------------------
Net Interest Margin (Tax-Equivalent) (1) 3.37% 3.42%
-------------------------------------------------------------------
* Based on period end numbers
(1) Interest income on tax-exempt securities has been adjusted to a
tax-equivalent basis using a marginal income tax rate of 34%.
Reclassification of amounts from prior periods were made to
conform to the September 2007 presentation.
Monroe Bancorp (MROE)
Reconciliation of GAAP Net Interest Margin to Non-GAAP Net Interest
Margin on a Tax-Equivalent Basis (dollar amounts in thousands except
per share data)
-----------------------------------------------------
Quarters Ended
-----------------------------------------------------
Jun 2008 Mar 2008 Dec 2007 Sept 2007 Jun 2007
-----------------------------------------------------
Net interest
income $ 5,756 $ 5,876 $ 5,751 $ 5,704 $ 5,853
---------------------------------------------------------------------
Tax equivalent
adjustment 189 195 180 176 179
---------------------------------------------------------------------
Net interest
income - tax
equivalent $ 5,945 $ 6,071 $ 5,931 $ 5,880 $ 6,032
---------------------------------------------------------------------
---------------------------------------------------------------------
Average earning
assets $723,441 $725,793 $714,737 $703,681 $702,664
---------------------------------------------------------------------
---------------------------------------------------------------------
Net interest
margin 3.20% 3.26% 3.19% 3.22% 3.34%
---------------------------------------------------------------------
---------------------------------------------------------------------
Net interest
margin - tax
equivalent 3.31% 3.36% 3.29% 3.31% 3.44%
---------------------------------------------------------------------
--------------------
Years Ended
--------------------
Dec 2007 Dec 2006
-------------------------------------------------------------------
Net interest income $ 23,039 $ 22,665
-------------------------------------------------------------------
Tax equivalent adjustment 696 632
-------------------------------------------------------------------
Net interest income - tax equivalent $ 23,735 $ 23,297
-------------------------------------------------------------------
-------------------------------------------------------------------
Average earning assets $703,675 $681,999
-------------------------------------------------------------------
-------------------------------------------------------------------
Net interest margin 3.27% 3.32%
-------------------------------------------------------------------
-------------------------------------------------------------------
Net interest margin - tax equivalent 3.37% 3.42%
-------------------------------------------------------------------
-----------------------------------------------------
Year-to-Date
-----------------------------------------------------
Jun 2008 Mar 2008 Dec 2007 Sept 2007 Jun 2007
---------------------------------------------------------------------
Net interest
income $ 11,632 $ 5,876 $ 23,039 $ 17,288 $ 11,584
---------------------------------------------------------------------
Tax equivalent
adjustment 383 195 696 515 340
---------------------------------------------------------------------
Net interest
income - tax
equivalent $ 12,015 $ 6,071 $ 23,735 $ 17,803 $ 11,924
---------------------------------------------------------------------
---------------------------------------------------------------------
Average earning
assets $724,617 $725,793 $703,675 $699,948 $698,050
---------------------------------------------------------------------
---------------------------------------------------------------------
Net interest
margin 3.23% 3.26% 3.27% 3.30% 3.35%
---------------------------------------------------------------------
---------------------------------------------------------------------
Net interest
margin - tax
equivalent 3.33% 3.36% 3.37% 3.40% 3.44%
---------------------------------------------------------------------
Monroe Bancorp (MROE)
Financial Impact on Net Income of Deferred Compensation Plan
(dollar amounts in thousands except per share data)
Quarters Ended Years Ended
-------------------------------------- -------------
Jun Mar Dec Sept Jun Dec Dec
2008 2008 2007 2007 2007 2007 2006
-------------------------------------- -------------
Interest and
Dividend
Income $ 23 $ 32 $ 38 $ 25 $ 27 $117 $107
-------------------------------------- -------------
Realized and
Unrealized
Gains (Losses) (48) (204) (148) 57 124 66 129
-------------------------------------- -------------
Other Income 6 12 91 -- 1 99 78
-------------------------------------- -------------
Total Income
From Plan: (19) (160) (19) 82 152 282 314
-------------------------------------- -------------
-------------------------------------- -------------
Change in De-
ferred Compen-
sation Liability (23) (164) (23) 78 148 267 301
-------------------------------------- -------------
Trustee Fees 4 4 4 4 4 15 13
-------------------------------------- -------------
Total Expense
of Plan: (19) (160) (19) 82 152 282 314
-------------------------------------- -------------
-------------------------------------- -------------
Net Impact
of Plan: $ -- $ -- $ -- $ -- $ -- $ -- $ --
-------------------------------------- -------------
Reconciliation of GAAP Noninterest Income & Expense to Noninterest
Income & Expense Without the Financial Impact of the Deferred
Compensation Plan
(dollar amounts in thousands except per share data)
Quarters Ended Years Ended
-------------------------------------- --------------
Jun Mar Dec Sept Jun Dec Dec
2008 2008 2007 2007 2007 2007 2006
-------------------------------------- --------------
Total Non-
interest
Income $3,024 $2,364 $ 2,468 $2,651 $2,685 $10,251 $9,492
-------------------------------------- --------------
Income of
Deferred Comp
Plan Incl. in
Noninterest
Income (42) (192) (57) 57 125 165 207
-------------------------------------- --------------
Adjusted Non-
interest
Income: 3,066 2,556 2,525 2,594 2,560 10,086 9,285
-------------------------------------- --------------
-------------------------------------- --------------
Total Non-
interest
Expense 5,371 5,391 4,984 5,283 5,266 20,626 20,098
-------------------------------------- --------------
Expense of
Deferred
Compensation
Plan (19) (160) (19) 82 152 282 314
-------------------------------------- --------------
Adjusted Non-
interest
Expense: 5,390 5,551 5,003 5,201 5,114 20,344 19,784
-------------------------------------- --------------
Year-to-Date
--------------------------------------
Jun Mar Dec Sept Jun
2008 2008 2007 2007 2007
--------------------------------------
Total Non-
interest
Income $5,388 $2,364 $10,251 $7,783 $5,132
--------------------------------------
Income of
Deferred
Comp Plan
Incl. in
Noninterest
Income (234) (192) 165 222 165
--------------------------------------
Adjusted Non-
interest
Income: 5,622 2,556 10,086 7,561 4,967
--------------------------------------
--------------------------------------
Total Non-
interest
Expense 10,762 5,391 20,626 15,642 10,359
--------------------------------------
Expense of
Deferred
Compensation
Plan (179) (160) 282 301 219
--------------------------------------
Adjusted Non-
interest
Expense: 10,941 5,551 20,344 15,341 10,140
--------------------------------------
Monroe Bancorp (MROE)
Select Average Balance Sheet Information
(dollar amounts in thousands except per share data)
Quarters Ended
------------------------------------------------
Jun 2008 Mar 2008 Dec 2007 Sept 2007 Jun 2007
------------------------------------------------
Total Average Loans $591,310 $582,255 $574,273 $560,590 $565,373
------------------------------------------------
Average Commercial
& Industrial 99,546 98,603 100,360 100,268 103,368
------------------------------------------------
Average Real
Estate: 473,521 465,625 455,269 441,705 443,617
------------------------------------------------
Average Commercial
& Residential 344,213 338,160 321,287 308,890 314,317
------------------------------------------------
Average Construction
& Vacant Land 103,745 102,116 108,417 107,976 103,870
------------------------------------------------
Average Home Equity 25,563 25,349 25,565 24,839 25,430
------------------------------------------------
Average Installment
Loans 18,243 18,027 18,644 18,617 18,388
------------------------------------------------
Average Federal Funds
Sold 3,907 10,462 9,445 15,837 9,693
------------------------------------------------
Average Federal Home
Loan Bank Stock 2,312 2,312 2,312 2,312 2,312
------------------------------------------------
------------------------------------------------
Total Average
Deposits $633,127 $643,686 $625,656 $618,615 $609,420
------------------------------------------------
Average Noninterest
Checking 79,062 75,673 74,875 80,001 79,405
------------------------------------------------
Average Interest
Bearing Checking
& NOW 126,399 132,683 137,218 124,280 125,390
------------------------------------------------
Average Regular
Savings 18,153 17,937 17,790 17,854 18,229
------------------------------------------------
Average Money Market
Savings 111,797 104,415 99,049 101,648 99,894
------------------------------------------------
Average CDs Less
than $100,000 141,550 147,598 138,900 138,865 134,244
------------------------------------------------
Average CDs Greater
than $100,000 139,725 149,277 141,244 141,530 138,247
------------------------------------------------
Average Other Time 16,441 16,103 16,580 14,437 14,011
------------------------------------------------
Average Federal Funds
Purchased 5,906 3,511 2,281 387 3,053
------------------------------------------------
Average Securities Sold
Under Repurchase
Agreement 42,332 41,894 49,305 44,933 48,180
------------------------------------------------
Average FHLB Advances 18,005 16,050 18,304 19,350 19,412
------------------------------------------------
Monroe Bancorp (MROE)
Select Average Balance Sheet Information
(dollar amounts in thousands except per share data)
Years Ended
---------------------
Dec 2007 Dec 2006
-------------------------------------------------------------
Total Average Loans $564,483 $549,464
-------------------------------------------------------------
Average Commercial & Industrial 99,884 97,043
-------------------------------------------------------------
Average Real Estate: 446,144 433,386
-------------------------------------------------------------
Average Commercial & Residential 316,578 323,019
-------------------------------------------------------------
Average Construction & Vacant Land 104,088 83,895
-------------------------------------------------------------
Average Home Equity 25,478 26,472
-------------------------------------------------------------
Average Installment Loans 18,455 19,035
-------------------------------------------------------------
Average Federal Funds Sold 11,102 9,002
-------------------------------------------------------------
Average Federal Home Loan
Bank Stock 2,312 2,467
-------------------------------------------------------------
-------------------------------------------------------------
Total Average Deposits $611,907 $582,762
-------------------------------------------------------------
Average Noninterest Checking 77,725 77,647
-------------------------------------------------------------
Average Interest Bearing
Checking & NOW 129,887 129,142
-------------------------------------------------------------
Average Regular Savings 17,940 19,448
-------------------------------------------------------------
Average Money Market Savings 101,123 97,763
-------------------------------------------------------------
Average CDs Less than $100,000 134,851 119,652
-------------------------------------------------------------
Average CDs Greater than $100,000 135,882 127,377
-------------------------------------------------------------
Average Other Time 14,499 11,733
-------------------------------------------------------------
Average Federal Funds Purchased 2,085 1,858
-------------------------------------------------------------
Average Securities Sold Under
Repurchase Agreement 49,884 54,644
-------------------------------------------------------------
Average FHLB Advances 19,120 27,451
-------------------------------------------------------------