Net Interest Margin
Loans, including loans held for sale, totaled $511,752,000 on September 30, 2005, an 11.9 percent increase from total loans on September 30, 2004, which were $457,331,000. Loan growth was largely driven by an increase in commercial real estate loans. Total deposits at September 30, 2005 were $539,823,000 compared to $464,023,000 at September 30, 2004, an increase of 16.3 percent. Approximately one-third of the $75,800,000 deposit growth during this period was in brokered CDs. Deposits, net of brokered CDs grew by 10.9 percent between September 30, 2005 and September 30, 2004.

Net interest income before the provision for loan losses increased 4.8 percent to $15,532,000 for the nine months ended September 30, 2005 compared to $14,825,000 for the same period in 2004. The tax equivalent net interest margin decreased to 3.51 percent for the first nine months of 2005 from 3.66 percent for the same period in 2004. The net interest margin for the nine months ended September 30, 2005 was 3.41 percent, compared to 3.55 percent for the same period in 2004, excluding tax-equivalent adjustments of $476,000 for 2005 and $463,000 for 2004.

Non-Interest Income
Non-interest income totaled $7,043,000 for the first nine months of 2005 compared to $6,070,000 for the corresponding period of 2004. Included in non-interest income are net realized and unrealized securities gains of $165,000 in the first nine months of 2005 and gains of $260,000 in the same period in 2004. Excluding net realized and unrealized securities gains and losses, non-interest income for the nine months ended September 30, 2005 increased $1,068,000 or 18.4 percent over the first nine months of 2004.

“I am pleased to see our efforts to develop a strong mix of non-interest income sources contribute at this level to our net income growth,” said Mr. Bradford.

Non-Interest Expense
Total non-interest expense increased $937,000 to $13,508,000 for the nine months ended September 30, 2005, as compared to $12,571,000 for the same period in 2004. Included in non-interest expense is unrealized appreciation related to the directors’ and executives’ deferred compensation plan in the amount of $126,000 for the first nine months of 2005 and $64,000 for the first nine months of 2004. This unrealized appreciation had no effect on net income. Non-interest expense, excluding the effect of the unrealized appreciation, grew from $12,507,000 during the first nine months of 2004 to $13,382,000 during the same period of 2005, an increase of 7.0 percent.

Asset Quality
Non-performing assets and 90-day past due loans totaled $2,604,000, or 0.38 percent of total assets on September 30, 2005. This is a 44.0 percent reduction, compared to $4,654,000, or 0.75 percent of total assets on September 30, 2004. Most of the improvement resulted from the sale of three non-performing assets.

Net charge-offs for the nine months ended September 30, 2005 were $571,000 compared to $1,180,000 for the nine months ended September 30, 2004.

Other News
Trust fees grew to $1,158,000 for the nine months ended September 30, 2005. This is a 12.0 percent increase over the same time period in 2004. Trust assets under management reached $234,887,000, a 13.0 percent increase over the $207,931,000 for the nine months ended September 30, 2004.

Fees from the origination and sale of residential mortgages totaled $1,021,000 for the nine months ended September 30, 2005, a 30.7 percent increase over the $781,000 earned during the same period of 2004. The results reflect our increased emphasis on business development calling efforts as the market transitions from a strong refinance market to a market where purchase transactions are a larger percentage of the available volume. Management believes that the Bank’s efforts to develop an effective mortgage origination business in its Central Indiana region are also starting to yield results.

Retail Services continues to grow as well, with the number of checking accounts increasing at an annualized rate of 7.42 percent as of September 30, 2005. This contributed to the increase in non-interest income. In addition, the impact of Monroe Bank’s growth in Central Indiana continues to be positive. The opening of the new full-service banking center in Brownsburg is slated for January 2006.

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.