BLOOMINGTON, IN — April 17, 2007 –- Monroe Bancorp, (NASDAQ: MROE), the independent Bloomington-based holding company for Monroe Bank, reported net income of $2,012,000, or $0.31 per basic and diluted common share, for the quarter ended March 31, 2007. Net income for the quarter was 13.5 percent greater than the $1,773,000 reported for same period of 2006 and earnings per share for the quarter was 14.8 percent greater than the $0.27 reported a year earlier.

“I am very pleased by the earnings growth that we were able to achieve during the first quarter of 2007. I am proud that the income growth is the result of a variety of activities and has taken place even though loan growth was relatively soft during the quarter,” said Mark D. Bradford, President and Chief Executive Officer.

Return on average equity was 15.33 percent for the first quarter of 2007 compared to 14.05 percent for the first quarter of 2006 and 14.59 percent for all of 2006. Return on average assets increased to 1.10 percent for the first quarter, compared to 1.01 percent for the first quarter of 2006 and 1.04 percent for all of 2006.

Financial Performance
Net interest income after the provision for loan losses increased 6.1 percent to $5,446,000 for the three months ended March 31, 2007 compared to $5,131,000 for the same period in 2006. The tax-equivalent net interest margin for the quarter ended March 31, 2007 was 3.45 percent, compared to 3.39 percent for the quarter ended December 31, 2006 and 3.40 percent for first quarter of 2006.

Noninterest income totaled $2,447,000 for the first three months of 2007 compared to $2,249,000 in the same period of 2006. The 8.8 percent or $198,000 increase in noninterest income is largely the result of a $78,000 gain on the sale of land (discussed later in this release), and increases in trust fees and commissions on investment sales offsetting a $40,000 decline in income from gains on sales of investments. Trust fees grew 18.6 percent to $485,000 for the three months ended March 31, 2007 compared to $409,000 for the same period of 2006. The increase in trust fees was driven by growth in trust assets under management. Trust assets under management reached $319,112,000 at March 31, 2007, growing 17.4 percent, or $47,346,000 over the $271,766,000 at December 31, 2006 and by 30.8 percent, or $75,136,000 over the March 31, 2006 total of $243,976,000. The revenue impact of the asset growth that took place in the first quarter was largely offset by the recognition of certain expenses (e.g., safekeeping asset transfer fees) associated with moving new trust assets to the Company. Management does not anticipate that trust assets will sustain this rate of growth on an ongoing basis.

Commissions earned on the sale of investment products totaled $232,000 for the first quarter of 2007 compared to $202,000 for the same period of 2006. The 14.9 percent increase is attributable to personnel changes, improved sales efforts and progress being made in the transition from a transaction based commission business into one that is management fee based.

Total noninterest expense increased to $5,093,000 for the three months ended March 31, 2007, compared to $4,822,000 for the same period of 2006. The 5.6 percent or $271,000 increase in noninterest expense is largely the result of a $161,000 or 5.7 percent increase in total compensation expense, and a $58,000 or 100.0 percent increase in loan related legal expense.

Asset Quality
Nonperforming assets and 90-day past due loans totaled $2,999,000 (0.40 percent of total assets) at March 31, 2007 compared to $1,620,000 (0.23 percent of total assets) at March 31, 2006 and $2,497,000 (0.33 percent of total assets) at December 31, 2006. While the trend in nonperforming assets and 90-day past due loans has recently been unfavorable, the overall level is still felt to be low.

Net charge-offs for the first quarter of 2007 totaled $213,000 or 0.15 percent of total loans. “I’m very pleased with our continued efforts to maintain credit quality,” said Mr. Bradford. “We will continue to apply our disciplined approach to credit quality as we grow our loan portfolio in the future.”

Financial Condition
Total assets grew 5.6 percent from March 31, 2006, reaching $751,621,000 on March 31, 2007. Loans, including loans held for sale, totaled $562,724,000 on March 31, 2007, a 4.1 percent increase from total loans on March 31, 2006, which were $540,386,000. Deposits increased 5.0 percent to $595,061,000 at March 31, 2007 compared to $566,721,000 a year earlier.

Additional Insights into First Quarter Results

· Sale of Brownsburg Land – The Company realized a $78,000 gain on the sale of a small parcel of land for a road-widening project. The sale of the land, which was in front of our Brownsburg office, will have no impact on its operation and minimal impact on its overall appearance.

· Stock Buyback Activity, Funded With Trust Preferred Subordinated Debentures – The Company repurchased 162,000 shares of its common stock during the first quarter at an average price including commission of $17.79. However, due to the timing of the purchases, the repurchase activity only reduced average outstanding shares for the quarter by 54,000. The Company has purchased a total of 292,000 shares at an average price including commission of $17.28 since the program was announced in June of 2006.

The Company’s repurchase activity during the first quarter was funded with proceeds from a trust preferred subordinated debenture and other debt. Net interest expense during the quarter associated with the stock buyback activity totaled $87,000.

Trust preferred subordinated debentures are being used as the primary source of funding for the Company’s stock repurchase activity. As of March 31, 2007 the Company had issued a total of $8,248,000 of trust preferred subordinated debentures at an average cost of 6.76 percent.

· Formation of a Real Estate Investment Trust - The Bank formed a Real Estate Investment Trust (REIT) involving approximately $80,000,000 of its existing commercial real estate loans during the fourth quarter of 2006. The REIT is structured such that it can be used by the Company to raise capital if needed. Due to startup expenses, the REIT did not have a material impact on the Company’s net income during the fourth quarter of 2006. However, the REIT increased the Company’s net income by $61,000 during the first quarter on 2007.

· Loan Related Legal Expense – As noted earlier, loan legal expense for the first quarter of 2007 was $58,000 greater than during the first quarter of 2006. Most of the increase is related to a case that has recently been resolved. Management is exploring options to recover amounts attributable to certain loans that were charged-off or written down in earlier periods related to this case.

Other News

The Company plans to open three full-service banking centers over the next eighteen months. Two of the banking centers will replace limited service offices in Avon and Plainfield, both high growth communities in Hendricks County, west of Indianapolis. These offices are expected to open in the fourth quarter of 2007. The third office will open in Noblesville, a high growth community located in Hamilton County, just north of Indianapolis. The Noblesville banking center is expected to open during the summer of 2008.

The Company will hold its Annual Meeting of Shareholders at 10 a.m., Thursday, April 26, 2007 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 NASDAQÒ Global Stock Market under the symbol MROE.

See attachments for additional financial information. For further information, contact: Mark D. Bradford, President and Chief Executive Officer, (812) 331-3455.
Use of Non-GAAP Financial Information
To supplement the Company's consolidated condensed financial statements presented on a GAAP basis, the Company has used a non-GAAP measures of reporting the net interest margin on a tax-equivalent basis which it believes is appropriate to enhance an overall understanding of the Company's past financial performance and also its prospects for the future. These adjustments to the Company’s GAAP results are made with the intent of providing both management and investors a more complete understanding of the underlying operational results and trends and the Company's marketplace performance. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the numbers prepared in accordance with generally accepted accounting principles in the United States.

Forward-Looking Statements
This release contains forward-looking statements about the Company which we believe are within the meaning of the Private Securities Litigation Reform Act of 1995. This release contains certain forward-looking statements with respect to the financial condition, results of operations, plans, objectives, future performance and business of the Company. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words "believe," "expect," "anticipate," "intend," "plan," "estimate" or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could" or "may" or words of similar meaning. These forward-looking statements, by their nature, are subject to risks and uncertainties. There are a number of important factors that could cause future results to differ materially from historical performance and these forward-looking statements. Factors that might cause such a difference include, but are not limited to: (1) competitive pressures among depository institutions; (2) changes in the interest rate environment; (3) prepayment speeds, charge-offs and loan loss provisions; (4) general economic conditions, either national or in the markets in which the Company does business; (5) legislative or regulatory changes adversely affecting the business of the Company; (6) changes in real estate values or the real estate markets; and (7) The Company’s business development efforts in new markets in and around Hendricks and Hamilton Counties. Further information on other factors which could affect the financial results of the Company is included in the Company's filings with the Securities and Exchange Commission.