BLOOMINGTON, Ind., July 16—Monroe Bancorp, (NASDAQ: MROE), the independent Bloomington-based holding company for Monroe Bank, reported net income for the quarter ended June 30, 2002 of $1,563,000 or $0.26 per common share, compared to $1,504,000 and $0.24 per common share for the same period in 2001, an increase of 3.9 percent.

The earnings growth rate reflects the impact of the Bank's recent entry into Hendricks County. Excluding the start-up operation in Hendricks County, the Company generated a 9.3 percent increase in net income. The period-to-period comparison is also affected by a $53,000 after-tax gain the Bank received during the second quarter of 2001 on the sale of a small piece of land to the City of Bloomington for a road construction project. Deducting this one-time gain from net income for the second quarter of 2001 would increase the net income growth rate to 13.3 percent.

" While our entry into Hendricks County is currently slowing the Company's earnings growth rate, we continue to be pleased by our success in attracting business in this rapidly growing market," said Mark D. Bradford, President and Chief Executive Officer. "Our Hendricks County initiative continues to perform ahead of our forecast."

Monroe Bank now has three banking centers in Hendricks County, west of Indianapolis. The Avon and Plainfield banking centers opened in September and October 2001, respectively, and the third banking center opened in Brownsburg in May of this year. As of June 30, 2002, the Bank had $40,213,000 in deposits and sweep accounts, and $25,866,000 in loans at its Hendricks County banking centers. Both totals are ahead of plan.

The Company’s net income for the six months ended June 30, 2002 was $3,062,000 or $0.50 per common share, compared to $2,951,000 and $0.48 per common share for the same period in 2001, an increase of 3.8 percent.

The Company's net interest income, after the provision for loan loss, for the first six months of 2002 was $8,722,000 or 11.8 percent greater than the same period of 2001. The Company also had considerable success growing its fee income businesses:

• Total non-interest income, excluding realized and unrealized security gains or losses, totaled $2,903,000 for the six months ended June 30, 2002, a 13.4 percent increase over the same period in 2001.
  
• Deposit-related fee income for the first six months of 2002 totaled $1,257,000, a 19.7 percent increase over the same period of 2001.
  
• Commissions earned on the sale of investment products for the six months ended June 30, 2002 were $411,000, or 32.6 percent greater than the same period of 2001.
  
• Revenue derived from the sale of fixed rate mortgages was up 26.1 percent for the quarter and 71.6 percent for the first six months of 2002 compared to the same periods of 2001.

" While we are encouraged by the progress shown by our fee income businesses, we consider the continued growth of these revenue sources to be a top priority for the Company," said Mr. Bradford.

The Bank also had strong growth in its lending and deposit acquisition businesses. Total deposits for the Company reached $403,496,000 as of June 30, 2002, an 11.5 percent increase from June 30, 2001. Total loans of $381,267,000 at June 30, 2002 increased 17.7 percent over the June 30, 2001 total of $323,825,000.

Total assets for the Company as of June 30, 2002 were $528,444,000 compared to $455,648,000 at June 30, 2001, a 16.0 percent increase. Return on equity (ROE) for the six months ended June 30, 2002 was 14.84 percent, compared to the ROE for the calendar year ending December 31, 2001 of 14.52 percent.

Monroe Bancorp, headquartered in Bloomington, Indiana, is an Indiana bank holding company with offices in Monroe, Jackson, Lawrence and Hendricks counties. Its wholly owned subsidiary, Monroe Bank, was established in Bloomington, Indiana in 1892, and offers a full range of financial, trust and investment services to its more than 20,000 retail and commercial customers. The Company's common stock is traded on the NASDAQÒ National Stock Market under the symbol MROE.

See attachment for additional financial information. For further information, contact: Mark D. Bradford (Bradford @ MonroeBank.com), President and Chief Executive Officer, (812) 331-3455.

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 are included in the Company's filings with the Securities and Exchange Commission.