Monarch Community Bancorp Inc. (MCBF, Financial) filed Quarterly Report for the period ended 2010-09-30.
Monarch Community Bancorp Inc. has a market cap of $2.45 million; its shares were traded at around $1.2 with and P/S ratio of 0.12.
Total equity was $12.6 million at September 30, 2010 compared to $23.2 million at December 31, 2009. This represents 4.9% and 8.2% of total assets at September 30, 2010 and December 31, 2009, respectively. Decreases in equity for the nine months ended September 30, 2010 included a net loss of $18.8 million and $256,000 in accrued dividend payments on the Preferred stock. The annual 5% dividend on the Preferred Stock together with the amortization of the discount will reduce net income (or increase the net loss) applicable to common stock by approximately $350,000 annually. Effective February 2010, the Corporation deferred regularly scheduled dividend payments on the $6.7 million in par outstanding on its Series A fixed rate, cumulative perpetual preferred stock (aggregate liquidation preference of $6.8 million) which was issued to the U.S. Treasury in February 2009. At September 30, 2010 the dividend payable to the Treasury Department totaled $300,000. The suspension of dividend payments is permissible under the terms of the TARP Capital Purchase Program, but the dividend is a cumulative dividend and failure to pay dividends for six dividend periods would trigger board of director appointment rights for the holder of the Series A Preferred Stock, (see further discussion under Capital Resources).
The provision for loan losses was $2.7 million in the third quarter of 2010 compared to $1.3 million for the third quarter of 2009. The significant increase in the provision was primarily driven by the continued deteriorating economic conditions in Michigan and weaknesses in the local real estate markets which resulted in downgrades to the credit ratings of certain loans in the portfolio and a significant increase in the balances of nonperforming loans. The Company continues to monitor real estate dependent loans and focus on asset quality. Non-performing loans totaled $23.9 million at the end of the third quarter of 2010, an increase of $8.3 million from December 31, 2009. Net charge offs for the quarter ended September 30, 2010 were $2.9 million compared to $880,000 for the same period in 2009. Year to date 2010 net charge offs totaled $8.0 million compared to $2.3 million for the same period a year ago.
Net gain on sale of loans decreased $134,000 for the quarter ended September 30, 2010 from $370,000 to $236,000 compared to the same period a year ago. The decrease is largely due to the decline in one to four family residential mortgage refinancing activity. Management expects current trends to continue through the remainder of the year and be more consistent with the gains recognized in 2008. Fees from overdraft protection program decreased $65,000, to $284,000 as of September 30, 2010 from $349,000 for the same period a year ago. Management expects income from this program to be less than 2010 due to the regulatory changes that became effective August 15, 2010 with the amendment to Regulation E and the need for customers to opt in to the program A gain of $39,000 was recognized on the sale of $3.0 million in U.S. Treasuries in the third quarter of 2010.
Non-interest income for the nine months ended September 30, 2010 decreased $1.1 million, or 28.6%, from $3.9 million to $2.8 million for the same period in 2009. Net gain on sale loans decreased $1.2 million for the nine months ended September 30, 2010 from $1.8 million to $585,000 compared to the same period a year ago. Fees and Service charges decreased $95,500 for the nine months ended September 30, 2010 compared to the same period a year ago. The decrease in fees and service charges is primarily due to a decrease in fees of $82,000 from the Overdraft protection program mentioned previously, a decrease in loan late charges of $58,000 and a decrease in all other fees of $19,000. Offsetting were increases of $41,000 in ATM income and $23,000 in early withdrawal penalties.
Noninterest expense remained relatively unchanged for the quarter ended September 30, 2010 compared to the same period a year ago.Salaries and employee benefits decreased $116,000. The decline in personnel expense was primarily attributable to a decline in general staffing, the discontinuance of our 401k match and the increased employee match for health insurance coverage. Foreclosed property expense decreased $81,000. Professional services increased $55,000 primarily due to increases in legal fees associated with non-performing loans. Other general and administrative expense increased $61,000 largely due to increased FDIC insurance premiums. Now account and ATM/Debit card processing increased $21,000. All other expenses increased $57,000.
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Monarch Community Bancorp Inc. has a market cap of $2.45 million; its shares were traded at around $1.2 with and P/S ratio of 0.12.
Highlight of Business Operations:
Total deposits decreased $11.5 million, or 5.4%, from $213.4 million at December 31, 2009 to $201.9 million at September 30, 2010. The decline in deposits included decreases of $13.2 million in money market deposits and $8.2 million in brokered certificates of deposits. The Bank continues to be committed to increasing its core deposit balances during 2010 and saw increases in local certificates of deposits of $7.3 million and in interest bearing checking, savings accounts and demand deposits of $2.6 million.Total equity was $12.6 million at September 30, 2010 compared to $23.2 million at December 31, 2009. This represents 4.9% and 8.2% of total assets at September 30, 2010 and December 31, 2009, respectively. Decreases in equity for the nine months ended September 30, 2010 included a net loss of $18.8 million and $256,000 in accrued dividend payments on the Preferred stock. The annual 5% dividend on the Preferred Stock together with the amortization of the discount will reduce net income (or increase the net loss) applicable to common stock by approximately $350,000 annually. Effective February 2010, the Corporation deferred regularly scheduled dividend payments on the $6.7 million in par outstanding on its Series A fixed rate, cumulative perpetual preferred stock (aggregate liquidation preference of $6.8 million) which was issued to the U.S. Treasury in February 2009. At September 30, 2010 the dividend payable to the Treasury Department totaled $300,000. The suspension of dividend payments is permissible under the terms of the TARP Capital Purchase Program, but the dividend is a cumulative dividend and failure to pay dividends for six dividend periods would trigger board of director appointment rights for the holder of the Series A Preferred Stock, (see further discussion under Capital Resources).
The provision for loan losses was $2.7 million in the third quarter of 2010 compared to $1.3 million for the third quarter of 2009. The significant increase in the provision was primarily driven by the continued deteriorating economic conditions in Michigan and weaknesses in the local real estate markets which resulted in downgrades to the credit ratings of certain loans in the portfolio and a significant increase in the balances of nonperforming loans. The Company continues to monitor real estate dependent loans and focus on asset quality. Non-performing loans totaled $23.9 million at the end of the third quarter of 2010, an increase of $8.3 million from December 31, 2009. Net charge offs for the quarter ended September 30, 2010 were $2.9 million compared to $880,000 for the same period in 2009. Year to date 2010 net charge offs totaled $8.0 million compared to $2.3 million for the same period a year ago.
Net gain on sale of loans decreased $134,000 for the quarter ended September 30, 2010 from $370,000 to $236,000 compared to the same period a year ago. The decrease is largely due to the decline in one to four family residential mortgage refinancing activity. Management expects current trends to continue through the remainder of the year and be more consistent with the gains recognized in 2008. Fees from overdraft protection program decreased $65,000, to $284,000 as of September 30, 2010 from $349,000 for the same period a year ago. Management expects income from this program to be less than 2010 due to the regulatory changes that became effective August 15, 2010 with the amendment to Regulation E and the need for customers to opt in to the program A gain of $39,000 was recognized on the sale of $3.0 million in U.S. Treasuries in the third quarter of 2010.
Non-interest income for the nine months ended September 30, 2010 decreased $1.1 million, or 28.6%, from $3.9 million to $2.8 million for the same period in 2009. Net gain on sale loans decreased $1.2 million for the nine months ended September 30, 2010 from $1.8 million to $585,000 compared to the same period a year ago. Fees and Service charges decreased $95,500 for the nine months ended September 30, 2010 compared to the same period a year ago. The decrease in fees and service charges is primarily due to a decrease in fees of $82,000 from the Overdraft protection program mentioned previously, a decrease in loan late charges of $58,000 and a decrease in all other fees of $19,000. Offsetting were increases of $41,000 in ATM income and $23,000 in early withdrawal penalties.
Noninterest expense remained relatively unchanged for the quarter ended September 30, 2010 compared to the same period a year ago.Salaries and employee benefits decreased $116,000. The decline in personnel expense was primarily attributable to a decline in general staffing, the discontinuance of our 401k match and the increased employee match for health insurance coverage. Foreclosed property expense decreased $81,000. Professional services increased $55,000 primarily due to increases in legal fees associated with non-performing loans. Other general and administrative expense increased $61,000 largely due to increased FDIC insurance premiums. Now account and ATM/Debit card processing increased $21,000. All other expenses increased $57,000.
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