Monarch Community Bancorp Inc. (MCBF, Financial) filed Quarterly Report for the period ended 2009-03-31.
Monarch Community Bank is a service-oriented organization dedicated to protecting their members' savings and providing affordable competitive loan opportunities to Branch and Hillsdale counties...and all the communities they serve. Monarch Community Bancorp Inc. has a market cap of $8.7 million; its shares were traded at around $4.25 with a P/E ratio of 60.7 and P/S ratio of 0.4. The dividend yield of Monarch Community Bancorp Inc. stocks is 8.5%.
Total deposits increased $9.1 million, or 4.7%, from $192.2 million at December 31, 2008 to $201.3 million at March 31, 2009. The increase can be attributed to an increase of $5.3 million in local certificates of deposit, an increase of $4.1 million in demand and Now accounts, an increase in money market accounts of $1.4 million and an increase of $376,000 in savings accounts. Brokered deposits decreased $2.0 million as management continues to try to reduce its reliance on wholesale funding. The increase in local certificates of deposits and money market accounts is largely due to managements efforts to remain competitive with interest rates in these categories of deposits. The increase in money markets accounts has provided funding so it has not been necessary for management to borrow additional FHLB advances or increase brokered deposits. Brokered deposits have been managed to provide additional liquidity or reduce excess liquidity depending on current conditions. Management expects future deposit growth to come from increased sales and marketing efforts to attract lower cost savings and checking accounts as well as product enhancement.
Total equity was $43.1 million at March 31, 2009 compared to $36.3 million at December 31, 2008. This represents 14.2% and 12.4% of total assets at March 31, 2009 and December 31, 2008, respectively. Increases in equity primarily resulted from the issuance of preferred stock in the amount of $6.8 million associated with the Capital Purchase Program and $179,000 in year-to-date net income. Decreases in equity for the three months ended March 31, 2009 included $184,000 in dividend payments. Management intends to utilize funds provided by the issuance of the preferred stock to invest in securities and pursue lending opportunities. Management considers its equity position to be strong.
Net gain on sale loans increased $444,000 for the quarter ended March 31, 2009 from $266,000 to $710,000 compared to the same period a year ago. The increase is largely due to the falling rate environment which has generated a significant amount of one to four family residential mortgage refinancing. Management expects this trend to continue through most of 2009. Fees and service charges decreased $56,000 for the quarter ended March 31, 2009 from $571,000 to $515,000 compared to the same period a year ago. This decrease was a result of a decrease in overdraft fees of $48,000 and a decrease in all other fees and charges of $8,000. Future increases in this source of income are dependent on the Bank increasing the number of checking account customers. Management does not expect significant increases in Bounce Protection income from its existing customer base.
Noninterest expense increased $189,000, or 8.1%, for the three months ended March 31, 2009 compared to the same period ending a year ago. Amortization of mortgage servicing rights increased $80,000 as a result of a continued increase in mortgage loan payoffs due to refinancing associated with the decrease of interest rates in the fourth quarter of 2008. Other general and administrative expenses increased $69,000, from $257,000 to $346,000; this is primarily due to the increase in FDIC insurance expense. Management expects an increase in FDIC insurance expense later this year due to the one time special assessment issued to all banks by the FDIC. Professional services increased $43,000, from $86,000 to 129,000. The increase is due to an increase in legal fees associated with the issuance of preferred stock and common stock warrants as part of the Capital Purchase Program transaction. ATM/Debit card processing increased $15,000 from $46,000 to $61,000 due to an increase in the issuance of atm/debit cards. This was primarily due to the reissuance of atm/debit cards associated with a compromised card processing vendor. Increases in salaries and employee benefits, occupancy and equipment expense and data processing totaled $18,000 for the quarter ended March 31, 2009 compared to the same period a year ago and are attributable to normal yearly increases. Repossessed property expense decreased $26,000, from $58,000 to $32,000, resulting from write downs on properties held in real estate owned taken in the first quarter of 2008. Management expects expenses associated with repossessed properties to be similar to that experienced in 2008 or higher as a result of the increased amount repossessed properties. Amortization of Core deposit intangible decreased $11,000 from $54,000 to 43,000, as amortization of this asset continues to slow from year to year.
The Banks total cash and cash equivalents increased by $13.1 million during the three months ended March 31, 2009 compared to a $682,000 increase for the same period in 2008. The primary sources of cash for the three months ended March 31, 2009 were $6.8 million increase in cash generated by the issuance of preferred stock, $9.1 million increase in deposits, $34.3 million in proceeds from the sale of mortgage loans, $2.7 million in maturities of available-for-sale investment securities and $6.8 of principal loan collections in excess of loan originations compared to $13.3 million increase in deposits, $12.4 million in proceeds from the sale of mortgage loans, $6.0 million in proceeds from FHLB advances and $1.0 million in maturities of available-for-sale investment securities. The primary uses of cash for the three months ended March 31, 2009 were $35.0 million of mortgage loans originated for sale, $3.5 million in repayments of FHLB advances $1.0 million in repayment of Fed funds purchased, and $8.6 million in purchases of available-for-sale investment securities compared to $13.1 million of mortgage loans originated for sale, $13.0 million in repayments of FHLB advances and $6.6 million loan originations in excess of principal collections.
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Monarch Community Bank is a service-oriented organization dedicated to protecting their members' savings and providing affordable competitive loan opportunities to Branch and Hillsdale counties...and all the communities they serve. Monarch Community Bancorp Inc. has a market cap of $8.7 million; its shares were traded at around $4.25 with a P/E ratio of 60.7 and P/S ratio of 0.4. The dividend yield of Monarch Community Bancorp Inc. stocks is 8.5%.
Highlight of Business Operations:
The allowance for loan losses was $3.2 million at March 31, 2009 compared to $2.7 million at December 31, 2008, an increase of $.5 million. This increase was primarily due to a provision for loan losses of $722,000, which was offset by net charge offs of $230,000 for the three months ended March 2009, (see Provision for Loan Losses below). Charge-offs for the three months ended March 31, 2009 included $161,000 of one-to-four family mortgage loans, $12,000 commercial loans not secured by real estate and $100,000 of consumer loans (including overdrafts). Recoveries consisted of $19,000 in consumer loans (including overdrafts), $23,000 in commercial loans not secured by real estate and $1,000 in one to four family mortgages. See Provision for Loan Losses below for further explanation regarding charge-offs.Total deposits increased $9.1 million, or 4.7%, from $192.2 million at December 31, 2008 to $201.3 million at March 31, 2009. The increase can be attributed to an increase of $5.3 million in local certificates of deposit, an increase of $4.1 million in demand and Now accounts, an increase in money market accounts of $1.4 million and an increase of $376,000 in savings accounts. Brokered deposits decreased $2.0 million as management continues to try to reduce its reliance on wholesale funding. The increase in local certificates of deposits and money market accounts is largely due to managements efforts to remain competitive with interest rates in these categories of deposits. The increase in money markets accounts has provided funding so it has not been necessary for management to borrow additional FHLB advances or increase brokered deposits. Brokered deposits have been managed to provide additional liquidity or reduce excess liquidity depending on current conditions. Management expects future deposit growth to come from increased sales and marketing efforts to attract lower cost savings and checking accounts as well as product enhancement.
Total equity was $43.1 million at March 31, 2009 compared to $36.3 million at December 31, 2008. This represents 14.2% and 12.4% of total assets at March 31, 2009 and December 31, 2008, respectively. Increases in equity primarily resulted from the issuance of preferred stock in the amount of $6.8 million associated with the Capital Purchase Program and $179,000 in year-to-date net income. Decreases in equity for the three months ended March 31, 2009 included $184,000 in dividend payments. Management intends to utilize funds provided by the issuance of the preferred stock to invest in securities and pursue lending opportunities. Management considers its equity position to be strong.
Net gain on sale loans increased $444,000 for the quarter ended March 31, 2009 from $266,000 to $710,000 compared to the same period a year ago. The increase is largely due to the falling rate environment which has generated a significant amount of one to four family residential mortgage refinancing. Management expects this trend to continue through most of 2009. Fees and service charges decreased $56,000 for the quarter ended March 31, 2009 from $571,000 to $515,000 compared to the same period a year ago. This decrease was a result of a decrease in overdraft fees of $48,000 and a decrease in all other fees and charges of $8,000. Future increases in this source of income are dependent on the Bank increasing the number of checking account customers. Management does not expect significant increases in Bounce Protection income from its existing customer base.
Noninterest expense increased $189,000, or 8.1%, for the three months ended March 31, 2009 compared to the same period ending a year ago. Amortization of mortgage servicing rights increased $80,000 as a result of a continued increase in mortgage loan payoffs due to refinancing associated with the decrease of interest rates in the fourth quarter of 2008. Other general and administrative expenses increased $69,000, from $257,000 to $346,000; this is primarily due to the increase in FDIC insurance expense. Management expects an increase in FDIC insurance expense later this year due to the one time special assessment issued to all banks by the FDIC. Professional services increased $43,000, from $86,000 to 129,000. The increase is due to an increase in legal fees associated with the issuance of preferred stock and common stock warrants as part of the Capital Purchase Program transaction. ATM/Debit card processing increased $15,000 from $46,000 to $61,000 due to an increase in the issuance of atm/debit cards. This was primarily due to the reissuance of atm/debit cards associated with a compromised card processing vendor. Increases in salaries and employee benefits, occupancy and equipment expense and data processing totaled $18,000 for the quarter ended March 31, 2009 compared to the same period a year ago and are attributable to normal yearly increases. Repossessed property expense decreased $26,000, from $58,000 to $32,000, resulting from write downs on properties held in real estate owned taken in the first quarter of 2008. Management expects expenses associated with repossessed properties to be similar to that experienced in 2008 or higher as a result of the increased amount repossessed properties. Amortization of Core deposit intangible decreased $11,000 from $54,000 to 43,000, as amortization of this asset continues to slow from year to year.
The Banks total cash and cash equivalents increased by $13.1 million during the three months ended March 31, 2009 compared to a $682,000 increase for the same period in 2008. The primary sources of cash for the three months ended March 31, 2009 were $6.8 million increase in cash generated by the issuance of preferred stock, $9.1 million increase in deposits, $34.3 million in proceeds from the sale of mortgage loans, $2.7 million in maturities of available-for-sale investment securities and $6.8 of principal loan collections in excess of loan originations compared to $13.3 million increase in deposits, $12.4 million in proceeds from the sale of mortgage loans, $6.0 million in proceeds from FHLB advances and $1.0 million in maturities of available-for-sale investment securities. The primary uses of cash for the three months ended March 31, 2009 were $35.0 million of mortgage loans originated for sale, $3.5 million in repayments of FHLB advances $1.0 million in repayment of Fed funds purchased, and $8.6 million in purchases of available-for-sale investment securities compared to $13.1 million of mortgage loans originated for sale, $13.0 million in repayments of FHLB advances and $6.6 million loan originations in excess of principal collections.
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