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BLOOMINGTON, IN — Monroe Bancorp
(the “Company”), NASDAQ: MROE, the independent
Bloomington-based holding company for Monroe Bank (the “Bank”),
reported a net income of $7,223,000 or $1.09 per basic and
diluted common share, for the year ended December 31, 2005,
compared to $6,705,000 or $1.01 per basic and diluted common
share for 2004. This represents a 7.7 percent increase in
net income.
Return on average shareholders’ equity (ROE) for 2005
was 14.93 percent, compared to 14.44 percent for the year
ended December 31, 2004. Return on average assets (ROA) for
the year ended December 31, 2005 was 1.09 percent, compared
to 1.10 percent for 2004.
“I’m pleased by the earnings growth that we achieved
during 2005,” said Mark D. Bradford, President and Chief
Executive Officer of Monroe Bancorp and Monroe Bank. “The
earnings growth is particularly gratifying in view of the
expenses that we have incurred as we prepare to open our first
full service branch in Hendricks County.”
Financial Performance
The Company's loan balance at December 31, 2005 was 10.1 percent
greater than the loan balance at December 31, 2004, with most
of the growth taking place in loans secured by commercial
real estate. Net interest income before the provision for
loan losses increased 4.8 percent to $20,824,000 for the year
ended December 31, 2005 compared to $19,864,000 for 2004.
The net interest margin compressed throughout 2005, declining
from 3.52 percent for the year ended December 31, 2004, to
3.37 percent for 2005. The decline in net interest margin
was largely the result of the increased cost of deposits and
the impact of the relatively flat yield curve on investment
and loan yields.
Noninterest income totaled $9,258,000 for the year ended December
31, 2005, compared to $8,302,000 in the corresponding period
of 2004. Included in noninterest income are net realized and
unrealized securities gains of $169,000 in 2005, and $432,000
in 2004. Excluding net realized and unrealized securities
gains, noninterest income for the year ended December 31,
2005 increased $1,219,000 or 15.5 percent over the 2004 amount.
“Growing noninterest income in areas such as deposit
fees, trust fees and fees from the sale of residential mortgages
is an important part of our business plan. The increase in
noninterest income helped offset the pressure on our net interest
margin”, said Mr. Bradford.
The trust and asset management area continues to be a strong
contributor to the success of the Company. Trust fees grew
to $1,545,000 for the year ended December 31, 2005, an increase
of $169,000 or 12.3 percent. Trust assets under management
totaled $237,026,000 at December 31, 2005. Service charges
on deposit accounts increased by $568,000 over the 2004 level,
an increase of 19.1 percent. Fees earned by the sale of residential
mortgages also showed good growth in 2005, up 17.6 percent
($185,000) from 2004.
Total noninterest expense increased 6.7 percent to $18,054,000
for year ended December 31, 2005, as compared to $16,921,000
for 2004. Included in noninterest expense is unrealized appreciation
related to the directors’ and executives’ deferred
compensation plan in the amount of $187,000 for 2005 and $259,000
for 2004. This unrealized appreciation had no impact on net
income. Non-interest expense, excluding the effect of the
unrealized appreciation, grew 7.2 percent, from $16,662,000
for the twelve months ended December 31, 2004 to $17,867,000
for 2005.
Asset Quality
The Company’s loan delinquency ratio, which is loan
balances past due 30 days or more as a percent of total loans,
was 0.45 percent at December 31, 2005, down from 0.92 percent
at December 31, 2004, a reduction of 51.1 percent. In addition
to the improved delinquency ratio, the Company’s focus
on improving asset quality produced a 49.9 percent reduction
in non-performing assets and 90-day past due loans year over
year. At December 31, 2005, non-performing assets and 90-day
past due loans totaled $2,032,000 (0.28 percent of total assets)
compared to $4,053,000 (0.64 percent of total assets) one
year earlier.
Financial Condition
Assets for the Company exceeded $700,000,000 for the first
time in 2005, ending the year at $713,060,000, an increase
of 12.5 percent from the December 31, 2004 total assets of
$633,970,000. Loans, including loans held for sale, totaled
$525,466,000 on December 31, 2005, a 10.1 percent increase
from total loans on December 31, 2004, which were $477,085,000.
Strong growth in time deposits, particularly deposits greater
than $100,000 (jumbo CDs), contributed to an overall deposit
increase of 19.2 percent. Total deposits at December 31, 2005
were $576,181,000 compared to $483,534,000 at December 31,
2004, an increase of $92,647,000. Deposits, excluding jumbo
CDs, increased by $44,251,000 or 11.1 percent during 2005.
Other Company News
The Company also listed the following among its accomplishments
and announcements in 2005:
- The Company’s annual cash dividend was increased
to $0.4745 for 2005. The dividend has increased each year
for the past 17 years. Additionally, the Company paid a 10
percent stock dividend on November 17, 2005.
- In April of 2005, Charles R. Royal, Jr. of the Royal
Group was named Chairman of the Board of Directors of Monroe
Bancorp, succeeding David Baer, who announced his retirement
at the Annual Meeting of Shareholders in April. Mr. Royal
has served as a director of the Company and Bank since 1987
and brings significant business expertise to the Bank.
- The Bank hired Scot Davidson as Senior Vice President
of Retail Banking in March of 2005. With over 25 years of
experience in the banking industry, Mr. Davidson is charged
with overseeing the retail banking and marketing functions
Bank-wide.
- In addition, the Bank hired Christopher Tietz as Senior
Vice President, Chief Credit Officer in October of 2005. Mr.
Tietz has been in the financial services industry for 20 years,
with extensive experience in business and commercial lending
and credit management.
- The Carmel loan production office opened at the end
of the first quarter of 2005, marking the Bank’s entry
into the attractive northern Indianapolis market. The construction
of the new full service Brownsburg banking center, which opened
for business on January 16, 2006, marked the beginning of
Monroe Bank's planned transfer of Hendricks County locations
from storefronts to full-service banking centers.
- Through volunteerism, Monroe Bank continued to demonstrate
its commitment to the communities in which it does business.
In October, Monroe Bank employees participated in their 10th
annual Day of Caring. Over 130 employees from the Bank’s
service areas were provided a paid half day off to volunteer
for local agencies. In addition, employees rallied to support
the relief efforts for the victims of Hurricane Katrina.
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® National Stock Market under the
symbol MROE.
See attachment 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
non-GAAP additional measures of operating results, noninterest
income, and noninterest expense adjusted to exclude certain
costs, expenses, gains and losses it believes 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
increase significantly; (2) changes in the interest rate
environment reduce interest margins; (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, are less favorable than expected;
(5) legislative or regulatory changes adversely affect the
business of the Company; and (6) changes in real estate
values or the real estate markets. 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.
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