BLOOMINGTON, Ind., October 22 -- Monroe Bancorp, (NASDAQ: MROE), the independent Bloomington-based holding company for Monroe Bank, reported net income for the quarter ended September 30, 2002 of $1,657,000 or $0.27 per common share, compared to $1,422,000 and $0.23 per common share for the same period in 2001, an increase of 16.5 percent.

These strong quarter-over-quarter earnings were highlighted by:

• Loan growth of 12.0 percent, as total loans grew to $390,364,000 at September 30, 2002, up from $348,518,000 at September 30, 2001. Loans originated at the Company's new Hendricks County banking centers accounted for $21,976,000 or 52.5 percent of the loan growth during this period. The Company's Hendricks County banking centers had total loans of $29,176,000 as of September 30, 2002.

• Non-interest income growth of $596,000, or 66.4 percent for the quarter ended September 30, 2002 compared to the quarter ended September 30, 2001. The growth in non-interest income was led by a $181,000 (36.9 percent) increase in service charges on deposit accounts, a $158,000 (195.1 percent) increase in revenue derived from the sale of fixed rate mortgages and a $151,000 gain on the sale of a security.
  
• Non-performing assets and 90-day past due loans totaled only $3,701,000 (0.70 percent of total assets) as of September 30, 2002 compared to $3,944,000 (0.83 percent of total assets) as of September 30, 2001. The improvement in this category is partially due to the recognition of $660,000 in net loan charge-offs during the third quarter of 2002, compared to $203,000 in the third quarter of 2001.

" We believe our focus on core lending, deposit gathering and fee income activities along with a strong commitment to the communities we serve helps insulate the Company from many of the pitfalls created by the weak national, state and local economy," said Mark D. Bradford, President and Chief Executive Officer. "While our increase in net charge-offs is evidence that we could not avoid all of the risks associated with a recession, we remain confident that putting our focus where it serves our customers best allows us to generate strong earnings growth even in difficult times.”

The Company’s net income for the nine months ended September 30, 2002 was $4,719,000 or $0.77 per common share, compared to $4,373,000 and $0.71 per common share for the same period in 2001, an increase of 7.9 percent.

The Company’s net interest income, after the provision for loan loss, for the first nine months of 2002 was $13,033,000 or 9.2 percent greater than the same period of 2001.
Total non-interest income grew to $4,485,000 for the nine months ended September 30, 2002, excluding realized and unrealized security gains or losses. This is a 21.6 percent increase from the $3,729,000 generated in same period in 2001.

• Revenue derived from the sale of fixed rate mortgages was up $321,000, or 103.2 percent, for the first nine months of 2002 compared to the same period of 2001.
  
• Deposit-related fee income for the first nine months of 2002 totaled $1,928,000, a $388,000 or 25.2 percent increase over the same period of 2001.
  
• Commissions earned on the sale of investment products for the nine months ended September 30, 2002 were $606,000, a $103,000 or 20.5 percent increase over the same period of 2001.
  
• Gains on the sale of securities totaled $197,000 for the nine months ending September 30, 2002, compared to $4,000 for the same period of 2001.

Total assets for the Company as of September 30, 2002 were $529,005,000 compared to $477,474,000 at September 30, 2001, a 10.8 percent increase. Return on equity (ROE) for the nine months ended September 30, 2002 was 14.98 percent, compared to the ROE of 14.89 percent for nine months ended September 30, 2001.

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 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.

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.