BLOOMINGTON, Ind., Jan. 29, 2009 (GLOBE NEWSWIRE) -- Monroe Bancorp (the "Company") (Nasdaq:MROE), the independent Bloomington-based holding company for Monroe Bank (the "Bank"), reported net income of $3,979,000 or $0.639 per diluted common share for the year ended December 31, 2008, compared to $7,806,000 or $1.235 per diluted common share for the year ended December 31, 2007. This represents a 49.0 percent decrease in net income and a 48.3 percent decrease in diluted earnings per share.
As discussed in more detail below, net income was significantly impacted by asset quality related issues, most notably a $6,845,000 increase in the provision for loan losses from $2,035,000 in 2007 to $8,880,000 in 2008.
Return on average shareholders' equity for 2008 was 7.11 percent, compared to 14.79 percent for the year ended December 31, 2007. Return on average assets for the year ended December 31, 2008 was 0.50 percent, compared to 1.04 percent for the year ended December 31, 2007.
"I am certainly disappointed by the impact of problem loans on our 2008 results. You can be confident that we are working hard to address all of the issues that are resulting from the downturn in the economy," said Mark D. Bradford, President and Chief Executive Officer of Monroe Bancorp and Monroe Bank.
Net loss for the fourth quarter of 2008 was ($209,000) or ($0.034) per diluted common share, compared to net income of $1,606,000 or $0.258 per diluted common share for the fourth quarter of 2007 and $735,000 or $0.118 per diluted common share for the third quarter of 2008. The provision for loan losses was $4,150,000 for the fourth quarter of 2008 compared to $1,150,000 for the same period of 2007.
Financial Performance
Net interest income before the provision for loan losses increased 2.4 percent to $23,601,000 for the year ended December 31, 2008 compared to $23,039,000 for 2007. The tax equivalent net interest margin declined during 2008, decreasing from 3.37 percent for the year ended December 31, 2007, to 3.30 percent for 2008. See the table titled "Reconciliation of GAAP Net Interest Margin to Non-GAAP Net Interest Margin on a Tax-Equivalent Basis" for a reconcilement of GAAP net interest margin to Non-GAAP net interest margin on a tax equivalent basis.
A significant factor contributing to the decline in the Company's net interest margin was the year over year increase in nonperforming loans and other real estate owned (OREO). The average combined balance of nonperforming loans and OREO was $12,169,000 during 2008 compared to $3,763,000 for 2007. The $8,406,000 increase in average combined nonperforming loans and OREO, if calculated at an average yield of 6.0% resulted in a seven basis point reduction in the Company's 2008 net interest margin.
Noninterest income totaled $10,033,000 for the year ended December 31, 2008, compared to $10,251,000 in 2007. Excluding the effect of the Company's deferred compensation plan, noninterest income totaled $10,832,000 for 2008 compared to $10,086,000 during 2007. The $746,000 increase (7.4 percent) was largely the result of a $950,000 increase in gains from the sale of securities from the Company's available for sale investment portfolio. It is worth noting that the Company's investment portfolio had unrealized gains (net of taxes) totaling $817,000 at year-end 2008. See the table titled "Reconciliation of GAAP Noninterest Income & Expense to Noninterest Income & Expense Without the Financial Impact of the Deferred Compensation Plan" for a reconcilement of GAAP noninterest income and expense to noninterest income and expense without the financial impact of the deferred compensation plan.
Excluding gains from the sale of securities, the Company's three largest sources of fee income were (1) deposit related fees ($3,796,000 in 2008, a 3.2 percent increase over 2007), (2) trust fees ($2,387,000 in 2008, a 6.4 percent increase over 2007) and (3) interchange income on Visa Check Card transactions ($1,098,000 in 2008, a 15.6 percent increase over 2007). Interchange fees earned on Visa Check Card transactions are included in Other Income in the financials included in this release.
"Growing noninterest income from a variety of sources is very important to our overall success. Increased noninterest income reduces the Company's reliance on net interest income which can be subject to wide swings driven by interest rate and real estate related cycles," said Mr. Bradford.
Total noninterest expense increased 0.5 percent to $20,732,000 for the year ended December 31, 2008, as compared to $20,626,000 for 2007. Noninterest expense, excluding the effect of the Company's deferred compensation plan, was $21,426,000 for 2008, compared to $20,344,000 for 2007. The $1,082,000, or 5.3 percent increase is largely the result of increases in FDIC assessment expenses (year over year increase of $412,000 or 597.1 percent), employee benefit expense (year over year increase of $302,000 or 17.0 percent) and occupancy expense (year over year increase of $273,000 or 8.8 percent). The increase in occupancy expense is largely related to the opening of two new banking centers in 2008 and another new banking center in December 2007. The latest, which opened on September 2, 2008, is in Noblesville, Hamilton County, a rapidly growing county located just north of Indianapolis.
Asset Quality
Nonperforming assets and 90-day past due loans totaled $18,780,000 (2.29 percent of total assets) at December 31, 2008 compared to $14,565,000 (1.78 percent of total assets) at September 30, 2008 and $8,214,000 (1.06 percent of total assets) at December 31, 2007.
Net charge-offs for the fourth quarter of 2008 totaled $2,374,000 or 0.37 percent of total loans compared to $1,151,000 (0.19 percent of total loans) for the third quarter of 2008 and $643,000 (0.11 percent of total loans) for the fourth quarter of 2007.
Due to general economic conditions in the real estate (R/E) markets, credit quality has been under pressure. The Bank maintains a "watch list" representing credits that require above average attention in order to mitigate the risk of default or loss. Over the periods noted below, the watch list consisted of the following:
Watch List Data 12/31/2008 9/30/2008 12/31/2007 --------------- ---------- --------- ---------- Total Watch List ($) 59,172,000 34,531,000 18,478,000 Number of Watch List Customers 52 43 43 Total Watch List $ greater than 30 Days Past Due 14,751,000 15,821,000 7,793,000 Total Watch List $ Secured by R/E 55,507,000 31,886,000 16,207,000 Total Watch List $ Secured by Non-R/E 3,268,000 2,446,000 1,972,000 Total Watch List $ Unsecured 397,000 199,000 299,000
The watch list consists of credits having deficiencies that, if not corrected, could lead to the possibility of loss in either principal or interest. This risk of loss is mitigated by the nature and quality of collateral, if any, pledged to the loan. When impairment is identified, the collateral is evaluated to determine the likely realizable value and a reserve is placed against the loan or the loan is charged down to the likely realizable value. Real estate values are generally determined based on objective valuations based on current market conditions.
As of December 31, 2008, 75.1 percent of the watch list exposure was less than thirty days past due, compared to 54.2 percent as of September 30, 2008, and 57.8 percent as of December 31, 2007. The largest areas of stress within the loan portfolio are loans for Residential Real Estate Development, Residential Speculative Construction, Unimproved Land and loans secured by 1-4 Family Non-Owner Occupied Residential Properties. These four categories combined account for 65.9 percent of the watch list as of December 31, 2008.
Residential Real Estate Development Loans 12/31/2008 9/30/2008 ------------------------------------------ ---------- ---------- Total Loans ($) Secured by Residential R/E Development Collateral 35,921,000 39,340,000 Total Loans ($) Secured by Residential R/E Development Collateral Originated in Central Indiana 30,445,000 34,214,000 Total Watch List ($) Secured by Residential R/E Development Collateral 22,919,000 13,966,000 Total Watch List ($) Secured by Residential R/E Development Collateral Originated in Central Indiana 22,740,000 13,945,000 Total Loans $ greater than 30 Days Past Due Secured by Residential R/E Development Collateral 4,195,000 7,972,000 Total Loans $ greater than 30 Days Past Due Secured by Residential R/E Development Collateral Originated in Central Indiana 4,179,000 7,956,000 Residential Speculative Construction Loans 12/31/2008 9/30/2008 ------------------------------------------ ---------- ---------- Total Loans ($) Secured by Residential Speculative Construction Collateral 16,950,000 18,632,000 Total Loans ($) Secured by Residential Speculative Construction Collateral Originated in Central Indiana 7,999,000 9,305,000 Total Watch List ($) Secured by Residential Speculative Construction Collateral 8,994,000 1,724,000 Total Watch List ($) Secured by Residential Speculative Construction Collateral Originated in Central Indiana 7,908,000 760,000 Total Loans $ greater than 30 Days Past Due Secured by Residential Speculative Construction Collateral 4,878,000 922,000 Total Loans $ greater than 30 Days Past Due Secured by Residential Speculative Construction Collateral Originated in Central Indiana 4,520,000 760,000 Unimproved Land Loans 12/31/2008 9/30/2008 ------------------------------------------ ---------- ---------- Total Loans ($) Secured by Unimproved Land Collateral 14,050,000 13,371,000 Total Loans ($) Secured by Unimproved Land Collateral Originated in Central Indiana 3,533,000 3,071,000 Total Watch List ($) Secured by Unimproved Land Collateral 2,605,000 1,535,000 Total Watch List ($) Secured by Unimproved Land Collateral Originated in Central Indiana 1,333,000 1,505,000 Total Loans $ greater than 30 Days Past Due Secured by Unimproved Land Collateral 1,359,000 2,738,000 Total Loans $ greater than 30 Days Past Due Secured by Unimproved Land Collateral Originated in Central Indiana 1,333,000 1,448,000 1-4 Family Non-Owner Occupied Residential Loans 12/31/2008 9/30/2008 ------------------------------------------ ---------- ---------- Total Loans ($) Secured by 1-4 Family Non-Owner Occupied Residential Collateral 57,563,000 56,382,000 Total Loans ($) Secured by 1-4 Family Non-Owner Occupied Residential Collateral Originated in Central Indiana 10,696,000 10,177,000 Total Watch List ($) Secured by 1-4 Family Non-Owner Occupied Residential Collateral 4,494,000 4,583,000 Total Watch List ($) Secured by 1-4 Family Non-Owner Occupied Residential Collateral Originated in Central Indiana 3,608,000 4,071,000 Total Loans $ greater than 30 Days Past Due Secured by 1-4 Family Non-Owner Occupied Residential Collateral 651,000 1,839,000 Total Loans $ greater than 30 Days Past Due Secured by 1-4 Family Non-Owner Occupied Residential Collateral Originated in Central Indiana 207,000 1,617,000
"We increased the ratio of our allowance for loan losses to total loans from 1.14 percent at the end of 2007 to 1.76 percent at December 31, 2008 in response to general economic conditions and deterioration in our Residential Real Estate Development, Residential Speculative Construction, Unimproved Land and 1-4 Family Non-Owner Occupied Residential loan portfolio. 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 at December 31, 2008 were $819,799,000, an increase of 5.4 percent from $778,080,000 at December 31, 2007. Total loans, including loans held for sale, totaled $633,091,000 on December 31, 2008, an 8.3 percent increase from total loans on December 31, 2007, which were $584,831,000.
Total deposits at December 31, 2008 were $665,179,000 compared to $619,717,000 at December 31, 2007, an increase of $45,462,000 or 7.3 percent.
Other Company News
A highlight of 2008 was the completion of the Company's plan to transition from less visible, limited service branches in Hendricks County to more visible, strategically located full-service banking centers. While the opening of the third Banking Center on January 14, 2008 in Avon marked the completion of the Company's Hendricks County branch expansion plans, the Company's growth plans in the northeast area of the Indianapolis metropolitan region commenced with the opening on September 2, 2008 of a new, full-service banking center located in Noblesville. Special marketing promotions and events were held to celebrate the grand openings of these banking centers and to develop core consumer relationships.
While the Bank's expansion into Central Indiana remained a primary focus during 2008, the Bank expanded its presence in all markets by offering customers the opportunity to open accounts online. Starting January 2, 2008, this convenient online account opening alternative broadened the delivery channel for checking and savings products that allows customers to open accounts in a time, place and manner of their choosing. Another technological efficiency was the active promotion of paperless online statements in April 2008. This additional service has enhanced the package of electronic services offered to our customers. Digital Deposit, an electronic business check deposit solution launched in December 2006, continued to be well received by business customers in 2008. Electronic banking solutions for both personal and business customers have positioned the Bank to be accessible to both users of traditional banking channels and customers who prefer electronic banking channels.
The Company introduced the CDARS -- Certificate of Deposit Account Registry Service -- program in September 2008. This program offers customers access to multi-million dollar FDIC insurance on their Certificate of Deposit balances up to $50 million per customer. This program has been beneficial to customers who have sought alternative ways to insure funds that exceed FDIC maximums.
Separately, the Company announced that it has applied for approval to participate in the U.S. Treasury Department's Capital Purchase Program (CPP). If approved to participate in the CPP and if the Company ultimately determines to accept funds under the CPP, the Company could sell to the Treasury Department up to approximately $19 million in newly issued preferred equity. Authorization of the preferred equity would require shareholder approval. As part of its investment, the Treasury Department also would receive warrants to purchase common stock of the Company having an aggregate market price of 15 percent of the investment amount. The Treasury Department is not obligated to accept the Company's application to participate in the CPP or may decide to purchase less than the $19 million of preferred equity requested by the Company in its application. The Company cannot predict when or if it will be approved to participate in the CPP, or if it is approved to participate, whether it will accept funds under the CPP.
The Company will hold its Annual Meeting of Shareholders at 10 a.m., Thursday, April 30, 2009 at the Bloomington/Monroe County Convention Center in downtown Bloomington, Indiana.
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.globenewswire.com/newsroom/prs/?pkgid=4316
Additional financial information follows this press release. 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 with this release, 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 with this release, 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) changes in competitive pressures among depository institutions; (2) changes in the interest rate environment; (3) changes in prepayment speeds, charge-offs and loan loss provisions; (4) changes in 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
--------------------------------------------------------
Dec 2008 Sep 2008 Jun 2008 Mar 2008 Dec 2007
--------------------------------------------------------
BALANCE SHEET *
---------------------------------------------------------------------
Cash and
Interest-
Earning
Deposits $ 15,058 $ 33,675 $ 27,141 $ 30,559 $ 24,563
---------------------------------------------------------------------
Federal Funds
Sold 8,663 26,593 1,654 2,565 1,077
---------------------------------------------------------------------
Securities 121,530 99,795 106,591 121,074 125,658
---------------------------------------------------------------------
Total Loans 633,091 616,226 602,369 581,956 584,831
---------------------------------------------------------------------
Loans Held
for Sale 3,389 2,406 4,110 2,176 2,974
---------------------------------------------------------------------
Commercial &
Industrial 104,779 97,373 99,141 100,378 104,611
---------------------------------------------------------------------
Real Estate:
---------------------------------------------------------------------
Commercial &
Residential 398,896 368,363 355,393 333,725 332,664
---------------------------------------------------------------------
Construction
& Vacant
Land 80,917 103,459 99,694 102,428 101,011
---------------------------------------------------------------------
Home Equity 28,976 27,305 25,783 25,534 25,222
---------------------------------------------------------------------
Installment
Loans 16,134 17,320 18,248 17,715 18,349
---------------------------------------------------------------------
Reserve for
Loan Losses 11,172 9,397 7,748 7,273 6,654
---------------------------------------------------------------------
Bank Premises
and Equipment 20,750 20,836 20,534 20,173 20,029
---------------------------------------------------------------------
Federal Home
Loan Bank
Stock 2,312 2,312 2,312 2,312 2,312
---------------------------------------------------------------------
Interest
Receivable
and Other
Assets 29,567 28,969 25,351 25,420 26,264
---------------------------------------------------------------------
Total
Assets $ 819,799 $ 819,009 $ 778,204 $ 776,786 $ 778,080
---------------------------------------------------------------------
---------------------------------------------------------------------
Total Deposits $ 665,179 $ 679,421 $ 623,871 $ 637,230 $ 619,717
---------------------------------------------------------------------
Noninterest
Checking 84,317 88,264 79,548 76,716 81,542
---------------------------------------------------------------------
Interest
Bearing
Checking &
NOW 107,124 125,407 129,422 122,987 131,295
---------------------------------------------------------------------
Regular
Savings 16,619 16,844 17,876 18,710 17,712
---------------------------------------------------------------------
Money Market
Savings 108,246 106,808 116,862 109,105 99,135
---------------------------------------------------------------------
CDs & CDARs
Less than
$100,000 155,127 142,648 139,584 146,815 150,422
---------------------------------------------------------------------
CDARs Greater
than
$100,000 &
Brokered CDs 67,949 23,101 13,101 10,034 10,034
---------------------------------------------------------------------
CDs Greater
than
$100,000 125,741 175,906 127,163 152,473 128,602
---------------------------------------------------------------------
Other Time 56 443 315 390 975
---------------------------------------------------------------------
Total
Borrowings 93,203 75,954 88,723 70,328 96,421
---------------------------------------------------------------------
Federal Funds
Purchased -- -- 12,810 5,256 24,850
---------------------------------------------------------------------
Securities
Sold Under
Repurchase
Agreement 59,404 46,569 46,390 45,717 43,195
---------------------------------------------------------------------
FHLB Advances 25,523 20,186 21,249 9,262 18,273
---------------------------------------------------------------------
Loans Sold
Under
Repurchase
Agreement &
Other Debt 28 951 26 1,845 1,855
---------------------------------------------------------------------
Subordinated
Debentures
- Trust
Preferred 8,248 8,248 8,248 8,248 8,248
---------------------------------------------------------------------
Interest
Payable and
Other
Liabilities 5,496 7,942 9,578 13,072 7,490
---------------------------------------------------------------------
Total
Liabilities 763,878 763,317 722,172 720,630 723,628
---------------------------------------------------------------------
Shareholders'
Equity 55,921 55,692 56,032 56,156 54,452
---------------------------------------------------------------------
Total
Liabilities
and Share-
holders'
Equity $ 819,799 $ 819,009 $ 778,204 $ 776,786 $ 778,080
---------------------------------------------------------------------
---------------------------------------------------------------------
Book Value
Per Share $ 8.99 $ 8.95 $ 9.01 $ 9.03 $ 8.76
---------------------------------------------------------------------
End of Period
Shares Issued
and
Outstanding 6,227,550 6,227,550 6,227,550 6,227,550 6,227,550
---------------------------------------------------------------------
Less: Unearned
ESOP Shares 7,601 5,900 8,300 10,700 13,100
---------------------------------------------------------------------
End of Period
Shares Used
to Calculate
Book Value 6,219,949 6,221,650 6,219,250 6,216,850 6,214,450
---------------------------------------------------------------------
------------------------------
Years Ended
------------------------------
Dec 2008 Dec 2007
------------------------------
BALANCE SHEET *
---------------------------------------------------------------------
Cash and Interest-Earning Deposits $ 15,058 $ 24,563
---------------------------------------------------------------------
Federal Funds Sold 8,663 1,077
---------------------------------------------------------------------
Securities 121,530 125,658
---------------------------------------------------------------------
Total Loans 633,091 584,831
---------------------------------------------------------------------
Loans Held for Sale 3,389 2,974
---------------------------------------------------------------------
Commercial & Industrial 104,779 104,611
---------------------------------------------------------------------
Real Estate:
---------------------------------------------------------------------
Commercial & Residential 398,896 332,664
---------------------------------------------------------------------
Construction & Vacant Land 80,917 101,011
---------------------------------------------------------------------
Home Equity 28,976 25,222
---------------------------------------------------------------------
Installment Loans 16,134 18,349
---------------------------------------------------------------------
Reserve for Loan Losses 11,172 6,654
---------------------------------------------------------------------
Bank Premises and Equipment 20,750 20,029
---------------------------------------------------------------------
Federal Home Loan Bank Stock 2,312 2,312
---------------------------------------------------------------------
Interest Receivable and Other Assets 29,567 26,264
---------------------------------------------------------------------
Total Assets $ 819,799 $ 778,080
---------------------------------------------------------------------
---------------------------------------------------------------------
Total Deposits $ 665,179 $ 619,717
---------------------------------------------------------------------
Noninterest Checking 84,317 81,542
---------------------------------------------------------------------
Interest Bearing Checking & NOW 107,124 131,295
---------------------------------------------------------------------
Regular Savings 16,619 17,712
---------------------------------------------------------------------
Money Market Savings 108,246 99,135
---------------------------------------------------------------------
CDs & CDARs Less than $100,000 155,127 150,422
---------------------------------------------------------------------
CDARs Greater than $100,000 & Brokered CDs 67,949 10,034
---------------------------------------------------------------------
CDs Greater than $100,000 125,741 128,602
---------------------------------------------------------------------
Other Time 56 975
---------------------------------------------------------------------
Total Borrowings 93,203 96,421
---------------------------------------------------------------------
Federal Funds Purchased -- 24,850
---------------------------------------------------------------------
Securities Sold Under Repurchase
Agreement 59,404 43,195
---------------------------------------------------------------------
FHLB Advances 25,523 18,273
---------------------------------------------------------------------
Loans Sold Under Repurchase Agreement &
Other Debt 28 1,855
---------------------------------------------------------------------
Subordinated Debentures - Trust Preferred 8,248 8,248
---------------------------------------------------------------------
Interest Payable and Other Liabilities 5,496 7,490
---------------------------------------------------------------------
Total Liabilities 763,878 723,628
---------------------------------------------------------------------
Shareholders' Equity 55,921 54,452
---------------------------------------------------------------------
Total Liabilities and Shareholders'
Equity $ 819,799 $ 778,080
---------------------------------------------------------------------
---------------------------------------------------------------------
Book Value Per Share $ 8.99 $ 8.76
---------------------------------------------------------------------
End of Period Shares Issued and
Outstanding 6,227,550 6,227,550
---------------------------------------------------------------------
Less: Unearned ESOP Shares 7,601 13,100
---------------------------------------------------------------------
End of Period Shares Used to
Calculate Book Value 6,219,949 6,214,450
---------------------------------------------------------------------
* period end numbers
Monroe Bancorp (MROE)
Financial Summary
(dollar amounts in thousands except per share data)
------------------------------------------------
Quarters Ended
------------------------------------------------
INCOME STATEMENT Dec 2008 Sep 2008 Jun 2008 Mar 2008 Dec 2007
---------------------------------------------------------------------
Interest Income $ 10,141 $ 10,472 $ 10,366 $ 11,483 $ 12,141
---------------------------------------------------------------------
Interest Expense 4,152 4,492 4,610 5,607 6,390
---------------------------------------------------------------------
Net Interest
Income 5,989 5,980 5,756 5,876 5,751
---------------------------------------------------------------------
Loan Loss Provision 4,150 2,800 1,050 880 1,150
---------------------------------------------------------------------
Total Noninterest
Income 2,096 2,549 3,024 2,364 2,468
---------------------------------------------------------------------
Service Charges
on Deposit
Accounts 946 996 985 869 964
---------------------------------------------------------------------
Trust Fees 553 592 634 608 604
---------------------------------------------------------------------
Commission Income 201 208 246 219 229
---------------------------------------------------------------------
Gain on Sale of
Loans 141 189 175 198 147
---------------------------------------------------------------------
Realized Gains on
Trading and
Available for
Sale Securities 175 210 439 140 5
---------------------------------------------------------------------
Unrealized Gains
(Losses) on
Trading
Securities
Associated with
Directors'
Deferred Comp
Plan (354) (222) (50) (217) (154)
---------------------------------------------------------------------
Other Operating
Income 434 576 595 547 673
---------------------------------------------------------------------
Total Noninterest
Expense 4,901 5,069 5,371 5,391 4,984
---------------------------------------------------------------------
Salaries & Wages 2,160 2,175 2,204 2,204 2,189
---------------------------------------------------------------------
Commissions,
Options &
Incentive
Compensation 337 339 417 379 277
---------------------------------------------------------------------
Employee Benefits 343 517 535 681 393
---------------------------------------------------------------------
Premises &
Equipment 826 844 830 873 765
---------------------------------------------------------------------
Advertising 138 187 179 220 131
---------------------------------------------------------------------
Legal Fees 158 121 102 185 208
---------------------------------------------------------------------
Appreciation
(Depreciation)
in Directors'
Deferred
Compensation Plan (317) (203) (23) (164) (23)
---------------------------------------------------------------------
Other Operating
Expenses 1,256 1,089 1,127 1,013 1,043
---------------------------------------------------------------------
Income Before
Income Tax (966) 660 2,359 1,969 2,085
---------------------------------------------------------------------
Income Tax Expense
(Benefit) (757) (75) 499 376 479
---------------------------------------------------------------------
Net Income After
Tax & Before
Extraordinary
Items (209) 735 1,860 1,593 1,606
---------------------------------------------------------------------
Extraordinary Items -- -- -- -- --
---------------------------------------------------------------------
Net Income $ (209) $ 735 $ 1,860 $ 1,593 $ 1,606
---------------------------------------------------------------------
---------------------------------------------------------------------
Basic Earnings Per
Share $ (0.034) $ 0.118 $ 0.299 $ 0.256 $ 0.259
---------------------------------------------------------------------
Diluted Earnings
Per Share $ (0.034) $ 0.118 $ 0.299 $ 0.256 $ 0.258
---------------------------------------------------------------------
-------------------------
Years Ended
-------------------------
INCOME STATEMENT Dec 2008 Dec 2007
---------------------------------------------------------------------
Interest Income $ 42,462 $ 48,474
---------------------------------------------------------------------
Interest Expense 18,861 25,435
---------------------------------------------------------------------
Net Interest Income 23,601 23,039
---------------------------------------------------------------------
Loan Loss Provision 8,880 2,035
---------------------------------------------------------------------
Total Noninterest Income 10,033 10,251
---------------------------------------------------------------------
Service Charges on Deposit Accounts 3,796 3,680
---------------------------------------------------------------------
Trust Fees 2,387 2,243
---------------------------------------------------------------------
Commission Income 874 910
---------------------------------------------------------------------
Gain on Sale of Loans 703 817
---------------------------------------------------------------------
Realized Gains on Trading and
Available for Sale Securities 964 49
---------------------------------------------------------------------
Unrealized Gains (Losses) on Trading
Securities Associated with
Directors' Deferred Comp Plan (843) 17
---------------------------------------------------------------------
Other Operating Income 2,152 2,535
---------------------------------------------------------------------
Total Noninterest Expense 20,732 20,626
---------------------------------------------------------------------
Salaries & Wages 8,743 8,621
---------------------------------------------------------------------
Commissions, Options & Incentive
Compensation 1,472 1,737
---------------------------------------------------------------------
Employee Benefits 2,076 1,774
---------------------------------------------------------------------
Premises & Equipment 3,373 3,100
---------------------------------------------------------------------
Advertising 724 667
---------------------------------------------------------------------
Legal Fees 566 566
---------------------------------------------------------------------
Appreciation (Depreciation) in
Directors' Deferred Compensation Plan (707) 267
---------------------------------------------------------------------
Other Operating Expenses 4,485 3,894
---------------------------------------------------------------------
Income Before Income Tax 4,022 10,629
---------------------------------------------------------------------
Income Tax Expense (Benefit) 43 2,823
---------------------------------------------------------------------
Net Income After Tax & Before
Extraordinary Items 3,979 7,806
---------------------------------------------------------------------
Extraordinary Items -- --
---------------------------------------------------------------------
Net Income $ 3,979 $ 7,806
---------------------------------------------------------------------
---------------------------------------------------------------------
Basic Earnings Per Share $ 0.640 $ 1.240
---------------------------------------------------------------------
Diluted Earnings Per Share $ 0.639 $ 1.235
---------------------------------------------------------------------
Monroe Bancorp (MROE)
Financial Summary
(dollar amounts in thousands except per share data)
----------------------------------------------------
Quarters Ended
----------------------------------------------------
ASSET QUALITY Dec 2008 Sep 2008 Jun 2008 Mar 2008 Dec 2007
---------------------------------------------------------------------
Net Charge-Offs
(Recoveries) $ 2,375 $ 1,151 $ 575 $ 261 $ 643
---------------------------------------------------------------------
OREO Expenses 121 4 22 82 10
---------------------------------------------------------------------
Total Credit
Charges $ 2,496 $ 1,155 $ 597 $ 343 $ 653
---------------------------------------------------------------------
---------------------------------------------------------------------
Nonperforming
Loans $ 14,329 $ 14,000 $ 15,906 $ 6,944 $ 6,938
---------------------------------------------------------------------
OREO 3,257 438 493 848 841
---------------------------------------------------------------------
Nonperforming
Assets 17,586 14,438 16,399 7,792 7,779
---------------------------------------------------------------------
90 Day Past Due
Loans Net of
Nonperforming
Loans 1,194 127 73 563 435
---------------------------------------------------------------------
Nonperforming
Assets + 90
Day Past Due
$ 18,780 $ 14,565 $ 16,472 $ 8,355 $ 8,214
---------------------------------------------------------------------
-------------------------
Years Ended
-------------------------
ASSET QUALITY Dec 2008 Dec 2007
---------------------------------------------------------------------
Net Charge-Offs (Recoveries) $ 4,362 $ 1,525
---------------------------------------------------------------------
OREO Expenses 229 67
---------------------------------------------------------------------
Total Credit Charges $ 4,591 $ 1,592
--------------------------------------------------------------------
Nonperforming Loans $ 14,329 $ 6,938
---------------------------------------------------------------------
OREO 3,257 841
---------------------------------------------------------------------
Nonperforming Assets 17,586 7,779
---------------------------------------------------------------------
90 Day Past Due Loans Net of
Nonperforming Loans 1,194 435
---------------------------------------------------------------------
Nonperforming Assets + 90
Day Past Due $ 18,780 $ 8,214
---------------------------------------------------------------------
----------------------------------------------------
Quarters Ended
----------------------------------------------------
Dec 2008 Sep 2008 Jun 2008 Mar 2008 Dec 2007
----------------------------------------------------
RATIO ANALYSIS
- CREDIT QUALITY *
---------------------------------------------------------------------
NCO/Loans 1.50% 0.75% 0.38% 0.18% 0.44%
---------------------------------------------------------------------
Credit Charges/
Loans & OREO 1.57% 0.75% 0.40% 0.24% 0.45%
---------------------------------------------------------------------
Nonperforming
Loans/Loans 2.26% 2.27% 2.64% 1.19% 1.19%
---------------------------------------------------------------------
Nonperforming
Assets/Loans &
OREO 2.76% 2.34% 2.72% 1.34% 1.33%
---------------------------------------------------------------------
Nonperforming
Assets/Assets 2.15% 1.76% 2.11% 1.00% 1.00%
---------------------------------------------------------------------
Nonperforming
Assets + 90 Day
PD/Assets 2.29% 1.78% 2.12% 1.08% 1.06%
---------------------------------------------------------------------
Reserve/
Nonperforming
Loans 77.97% 67.12% 48.71% 104.74% 95.91%
---------------------------------------------------------------------
Reserve/Total
Loans 1.76% 1.52% 1.29% 1.25% 1.14%
---------------------------------------------------------------------
Equity & Reserves/
Nonperforming
Assets 381.51% 450.82% 388.93% 814.03% 785.53%
---------------------------------------------------------------------
OREO/Nonperforming
Assets 18.52% 3.03% 3.01% 10.88% 10.81%
---------------------------------------------------------------------
-------------------------
RATIO ANALYSIS Years Ended
- CREDIT QUALITY * Dec 2008 Dec 2007
---------------------------------------------------------------------
NCO/Loans 0.69% 0.26%
---------------------------------------------------------------------
Credit Charges/Loans & OREO 0.72% 0.27%
---------------------------------------------------------------------
Nonperforming Loans/Loans 2.26% 1.19%
---------------------------------------------------------------------
Nonperforming Assets/Loans & OREO 2.76% 1.33%
---------------------------------------------------------------------
Nonperforming
Assets/Assets 2.15% 1.00%
---------------------------------------------------------------------
Nonperforming Assets + 90 Day PD/Assets 2.29% 1.06%
---------------------------------------------------------------------
Reserve/Nonperforming Loans 77.97% 95.91%
---------------------------------------------------------------------
Reserve/Total Loans 1.76% 1.14%
---------------------------------------------------------------------
Equity & Reserves/Nonperforming Assets 381.51% 785.53%
---------------------------------------------------------------------
OREO/Nonperforming Assets 18.52% 10.81%
---------------------------------------------------------------------
----------------------------------------------------
Quarters Ended
----------------------------------------------------
Dec 2008 Sep 2008 Jun 2008 Mar 2008 Dec 2007
---------------------------------------------------------------------
RATIO ANALYSIS -
CAPITAL ADEQUACY *
---------------------------------------------------------------------
Equity/Assets 6.82% 6.80% 7.20% 7.23% 7.00%
---------------------------------------------------------------------
Equity/Loans 8.83% 9.04% 9.30% 9.65% 9.31%
---------------------------------------------------------------------
-------------------------
Years Ended
Dec 2008 Dec 2007
---------------------------------------------------------------------
RATIO ANALYSIS -
CAPITAL ADEQUACY *
---------------------------------------------------------------------
Equity/Assets 6.82% 7.00%
---------------------------------------------------------------------
Equity/Loans 8.83% 9.31%
---------------------------------------------------------------------
----------------------------------------------------
Quarters Ended
----------------------------------------------------
Dec 2008 Sep 2008 Jun 2008 Mar 2008 Dec 2007
----------------------------------------------------
RATIO ANALYSIS -
PROFITABILITY
---------------------------------------------------------------------
Return on Average
Assets -0.10% 0.37% 0.96% 0.82% 0.83%
---------------------------------------------------------------------
Return on Average
Equity -1.49% 5.20% 13.26% 11.62% 11.89%
---------------------------------------------------------------------
Net Interest Margin
(Tax-Equivalent) (1) 3.23% 3.31% 3.31% 3.36% 3.29%
---------------------------------------------------------------------
-------------------------
Years Ended
Dec 2008 Dec 2007
---------------------------------------------------------------------
RATIO ANALYSIS -
PROFITABILITY
---------------------------------------------------------------------
Return on Average Assets 0.50% 1.04%
---------------------------------------------------------------------
Return on Average Equity 7.11% 14.79%
---------------------------------------------------------------------
Net Interest Margin (Tax-Equivalent) (1) 3.30% 3.37%
---------------------------------------------------------------------
* 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
----------------------------------------------------
Dec 2008 Sep 2008 Jun 2008 Mar 2008 Dec 2007
---------------------------------------------------------------------
Net Interest
Income $ 5,989 $ 5,980 $ 5,756 $ 5,876 $ 5,751
---------------------------------------------------------------------
Tax Equivalent
Adjustment 167 166 189 195 180
---------------------------------------------------------------------
Net Interest
Income - Tax
Equivalent $ 6,156 $ 6,146 $ 5,945 $ 6,071 $ 5,931
---------------------------------------------------------------------
---------------------------------------------------------------------
Average Earning
Assets $759,173 $738,927 $723,441 $725,793 $714,737
---------------------------------------------------------------------
---------------------------------------------------------------------
Net Interest Margin 3.14% 3.22% 3.20% 3.26% 3.19%
---------------------------------------------------------------------
---------------------------------------------------------------------
Net Interest
Margin - Tax
Equivalent 3.23% 3.31% 3.31% 3.36% 3.29%
---------------------------------------------------------------------
-------------------------
Years Ended
-------------------------
Dec 2008 Dec 2007
---------------------------------------------------------------------
Net Interest
Income $ 23,601 $ 23,039
---------------------------------------------------------------------
Tax Equivalent Adjustment 717 696
---------------------------------------------------------------------
Net Interest Income - Tax Equivalent $ 24,318 $ 23,735
---------------------------------------------------------------------
Average Earning Assets $ 736,903 $ 703,675
---------------------------------------------------------------------
Net Interest Margin 3.20% 3.27%
---------------------------------------------------------------------
Net Interest Margin - Tax Equivalent 3.30% 3.37%
---------------------------------------------------------------------
----------------------------------------------------
Year-to-Date
----------------------------------------------------
Dec 2008 Sep 2008 Jun 2008 Mar 2008 Dec 2007
---------------------------------------------------------------------
Net Interest
Income $ 23,601 $ 17,611 $ 11,632 $ 5,876 $ 23,039
---------------------------------------------------------------------
Tax Equivalent
Adjustment 717 550 383 195 696
---------------------------------------------------------------------
Net Interest
Income - Tax
Equivalent $ 24,318 $ 18,161 $ 12,015 $ 6,071 $ 23,735
---------------------------------------------------------------------
---------------------------------------------------------------------
Average Earning
Assets $736,903 $729,425 $724,617 $725,793 $703,675
---------------------------------------------------------------------
---------------------------------------------------------------------
Net Interest Margin 3.20% 3.23% 3.23% 3.26% 3.27%
---------------------------------------------------------------------
---------------------------------------------------------------------
Net Interest
Margin - Tax
Equivalent 3.30% 3.33% 3.33% 3.36% 3.37%
---------------------------------------------------------------------
Monroe Bancorp (MROE)
Financial Impact on Net Income of
Deferred Compensation Plan
(dollar amounts in thousands
except per share data)
-------------------------------------------------
Quarters Ended
-------------------------------------------------
Dec 2008 Sep 2008 Jun 2008 Mar 2008 Dec 2007
--------------------------------------------------------------------
Interest and
Dividend Income $ 29 $ 22 $ 23 $ 32 $ 38
--------------------------------------------------------------------
Realized and
Unrealized
Gains (Losses) (355) (222) (48) (204) (148)
--------------------------------------------------------------------
Other Income 12 -- 6 12 91
--------------------------------------------------------------------
Total Income
From Plan: (314) (200) (19) (160) (19)
--------------------------------------------------------------------
Change in Deferred
Compensation
Liability (317) (203) (23) (164) (23)
--------------------------------------------------------------------
Trustee Fees 3 3 4 4 4
--------------------------------------------------------------------
Total Expense
of Plan: (314) (200) (19) (160) (19)
--------------------------------------------------------------------
Net Impact of Plan: $ -- $ -- $ -- $ -- $ --
--------------------------------------------------------------------
-------------------
Years Ended
-------------------
Dec 2008 Dec 2007
--------------------------------------------------------------------
Interest and Dividend Income $ 106 $ 117
--------------------------------------------------------------------
Realized and Unrealized Gains (Losses) (829) 66
--------------------------------------------------------------------
Other Income 30 99
--------------------------------------------------------------------
Total Income From Plan: (693) 282
--------------------------------------------------------------------
Change in Deferred Compensation Liability (707) 267
--------------------------------------------------------------------
Trustee Fees 14 15
--------------------------------------------------------------------
Total Expense of Plan: (693) 282
--------------------------------------------------------------------
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
------------------------------------------------
Dec 2008 Sep 2008 Jun 2008 Mar 2008 Dec 2007
---------------------------------------------------------------------
Total Noninterest
Income $ 2,096 $ 2,549 $ 3,024 $ 2,364 $ 2,468
---------------------------------------------------------------------
Income of Deferred
Comp Plan Incl. in
Noninterest Income (343) (222) (42) (192) (57)
---------------------------------------------------------------------
Adjusted
Noninterest
Income: 2,439 2,771 3,066 2,556 2,525
---------------------------------------------------------------------
Total Noninterest
Expense 4,901 5,069 5,371 5,391 4,984
---------------------------------------------------------------------
Expense of
Deferred
Compensation Plan (314) (200) (19) (160) (19)
---------------------------------------------------------------------
Adjusted
Noninterest
Expense: 5,215 5,269 5,390 5,551 5,003
---------------------------------------------------------------------
-----------------------------
Years Ended
-----------------------------
Dec 2008 Dec 2007
---------------------------------------------------------------------
Total Noninterest Income $ 10,033 $ 10,251
---------------------------------------------------------------------
Income of Deferred Comp Plan Incl. in
Noninterest Income (799) 165
---------------------------------------------------------------------
Adjusted Noninterest Income: 10,832 10,086
---------------------------------------------------------------------
Total Noninterest Expense 20,732 20,626
---------------------------------------------------------------------
Expense of Deferred Compensation Plan (693) 282
---------------------------------------------------------------------
Adjusted Noninterest Expense: 21,425 20,344
---------------------------------------------------------------------
------------------------------------------------
Year-to-Date
------------------------------------------------
Dec 2008 Sep 2008 Jun 2008 Mar 2008 Dec 2007
---------------------------------------------------------------------
Total Noninterest
Income $ 10,033 $ 7,937 $ 5,388 $ 2,364 $ 10,251
---------------------------------------------------------------------
Income of Deferred
Comp Plan Incl. in
Noninterest Income $ (799) (456) (234) (192) 165
---------------------------------------------------------------------
Adjusted
Noninterest
Income: 10,832 8,393 5,622 2,556 10,086
---------------------------------------------------------------------
Total Noninterest
Expense 20,732 15,830 10,762 5,391 20,626
---------------------------------------------------------------------
Expense of
Deferred
Compensation Plan (693) (380) (179) (160) 282
---------------------------------------------------------------------
Adjusted
Noninterest
Expense: 21,425 16,210 10,941 5,551 20,344
---------------------------------------------------------------------
Monroe Bancorp (MROE)
Select Average Balance Sheet Information
(dollar amounts in thousands except per share data)
------------------------------------------------
Quarters Ended
------------------------------------------------
Dec 2008 Sep 2008 Jun 2008 Mar 2008 Dec 2007
---------------------------------------------------------------------
Total Average Loans $624,421 $609,184 $591,310 $582,255 $574,273
---------------------------------------------------------------------
Average Commercial
& Industrial 101,347 97,911 99,546 98,603 100,360
---------------------------------------------------------------------
Average
Real Estate: 506,315 493,567 473,521 465,625 455,269
---------------------------------------------------------------------
Average
Commercial &
Residential 379,409 365,942 344,213 338,160 321,287
---------------------------------------------------------------------
Average
Construction &
Vacant Land 98,531 101,162 103,745 102,116 108,417
---------------------------------------------------------------------
Average
Home Equity 28,375 26,463 25,563 25,349 25,565
---------------------------------------------------------------------
Average
Installment
Loans 16,759 17,706 18,243 18,027 18,644
---------------------------------------------------------------------
Average Federal
Funds Sold 11,444 9,161 3,907 10,462 9,445
---------------------------------------------------------------------
Average Federal
Home Loan
Bank Stock 2,312 2,312 2,312 2,312 2,312
---------------------------------------------------------------------
Total Average
Deposits $669,074 $652,031 $633,127 $643,686 $625,656
---------------------------------------------------------------------
Average
Noninterest
Checking 81,805 81,425 79,062 75,673 74,875
---------------------------------------------------------------------
Average Interest
Bearing Checking
& NOW 120,196 129,898 126,399 132,683 137,218
---------------------------------------------------------------------
Average Regular
Savings 16,658 17,733 18,153 17,937 17,790
---------------------------------------------------------------------
Average Money
Market Savings 104,398 110,292 111,797 104,415 99,049
---------------------------------------------------------------------
Average CDs Less
than $100,000 197,271 149,907 141,550 147,598 138,900
---------------------------------------------------------------------
Average CDs
Greater than
$100,000 132,340 147,051 139,725 149,277 141,244
---------------------------------------------------------------------
Average Other Time 16,406 15,725 16,441 16,103 16,580
---------------------------------------------------------------------
Average Federal
Funds Purchased 321 2,892 5,906 3,511 2,281
---------------------------------------------------------------------
Average Securities
Sold Under
Repurchase
Agreement 55,674 42,768 42,332 41,894 49,305
---------------------------------------------------------------------
Average FHLB
Advances 19,486 21,215 18,005 16,050 18,304
---------------------------------------------------------------------
-------------------
Years Ended
-------------------
Dec 2008 Dec 2007
--------------------------------------------------------------------
Total Average Loans $601,875 $564,483
--------------------------------------------------------------------
Average Commercial & Industrial 99,353 99,884
--------------------------------------------------------------------
Average Real Estate: 484,841 446,144
--------------------------------------------------------------------
Average Commercial & Residential 357,018 316,578
--------------------------------------------------------------------
Average Construction & Vacant Land 101,380 104,088
--------------------------------------------------------------------
Average Home Equity 26,443 25,478
--------------------------------------------------------------------
Average Installment Loans 17,681 18,455
--------------------------------------------------------------------
Average Federal Funds Sold 8,754 11,102
--------------------------------------------------------------------
Average Federal Home Loan Bank Stock 2,312 2,312
--------------------------------------------------------------------
Total Average Deposits $649,540 $611,907
--------------------------------------------------------------------
Average Noninterest Checking 79,503 77,725
--------------------------------------------------------------------
Average Interest Bearing Checking & NOW 127,282 129,887
--------------------------------------------------------------------
Average Regular Savings 17,618 17,940
--------------------------------------------------------------------
Average Money Market Savings 107,723 101,123
--------------------------------------------------------------------
Average CDs Less than $100,000 159,120 152,609
--------------------------------------------------------------------
Average CDs Greater than $100,000 142,126 118,124
--------------------------------------------------------------------
Average Other Time 16,168 14,499
--------------------------------------------------------------------
Average Federal Funds Purchased 3,149 2,085
--------------------------------------------------------------------
Average Securities Sold Under
Repurchase Agreement 45,686 49,884
--------------------------------------------------------------------
Average FHLB Advances 18,698 19,120
--------------------------------------------------------------------