**UNITED STATES****SECURITIES AND EXCHANGE COMMISSION**
Washington, DC 20549

FORM 10-QSB

|[X]  | Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934
|---- | ---------------------------------------------------------------------------------
|     | **For the quarterly period ended March 31, 2003**                                
|or  
|[  ] | Transition report under Section 13 or 15(d) of the Exchange Act                  
|     | For the transition period from  ________ to ________                             
|    
|     | Commission file number:  000-49814                                               

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|Maryland*(State or other jurisdiction**of incorporation or organization)* | 04-3627031*(I.R.S. employer**identification no.)*
|------------------------------------------------------------------------- | -------------------------------------------------

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|PART I --      | FINANCIAL INFORMATION                                                                                               |       
|-------------- | ------------------------------------------------------------------------------------------------------------------- | ------
|               |                                                                                                                     |       
|Item 1 -       | Condensed Financial Statements:                                                                                     |       
|               |                                                                                                                     |       
|               | Condensed Consolidated Balance Sheets - March 31, 2003 and

December 31, 2002                                       | 1     
|               |                                                                                                                     |       
|               | Condensed Consolidated Statements of Income - Three Months

Ended March 31, 2003 and 2002                           | 2     
|               |                                                                                                                     |       
|               | Condensed Consolidated Statements of Changes in Stockholder's Equity - 

Three Months Ended March 31, 2003 and 2002 | 3     
|               |                                                                                                                     |       
|               | Condensed Consolidated Statements of Cash Flow - Three Months ended

March 31, 2003 and 2002                        | 4     
|               |                                                                                                                     |       
|               | Notes to Condensed Consolidated Financial Statements                                                                | 5     
|               |                                                                                                                     |       
|Item 2 -       | Management's Discussion and Analysis of Financial Condition and Results of
Operations                               | 6 - 10
|               |                                                                                                                     |       
|Item 3 -       | Controls and Procedures                                                                                             | 10    
|               |                                                                                                                     |       
|PART II --     | OTHER INFORMATION                                                                                                   |       
|Item 1 -       | Legal Proceedings                                                                                                   | 11    
|               |                                                                                                                     |       
|Item 2 -       | Changes in Securities                                                                                               | 11    
|               |                                                                                                                     |       
|Item 3 -       | Defaults Upon Senior Securities                                                                                     | 11    
|               |                                                                                                                     |       
|Item 4 -       | Submission of Matters to a Vote of Security Holders                                                                 | 11    
|               |                                                                                                                     |       
|Item 5 -       | Other Information                                                                                                   | 11    
|               |                                                                                                                     |       
|Item 6 -       | Exhibits and Reports on Form 8-K                                                                                    | 11    
|               |                                                                                                                     |       
|SIGNATURES     | 12                                                                                                                 
|               |                                                                                                                     |       
|CERTIFICATIONS | 13-14                                                                                                              

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|Condensed Consolidated Balance Sheets                   | (unaudited)                                  |                                           
|------------------------------------------------------- | -------------------------------------------- | ------------------------------------------
|                                                        | March 31,2003                                | December 31,
2002                         
|                                                        | (Dollars in thousands,except per share data)
|ASSETS                                                  |                                              |                                           
|                                                        |                                              |                                           
|Cash and due from banks                                 | $    7,019                                   | $    4,144                                
|Federal Funds sold and overnight deposit                | 25,425                                       | 16,063                                    
|                                                        | Total cash and cash equivalents              | 32,444                                    
|                                                        |                                              |                                           
|Securities-Available for sale                           | 18,366                                       | 17,160                                    
|Securities - Held to maturity                           | 257                                          | 274                                       
|Other securities                                        | 2,908                                        | 2,807                                     
|Real estate investment - Limited partnership, at equity | 1,519                                        | 1,554                                     
|Loans held for sale                                     | 2,052                                        | 1,527                                     
|Loans, net of allowance for loan losses                 | 147,215                                      | 145,162                                   
|Accrued interest receivable                             | 1,257                                        | 1,275                                     
|Foreclosed assets, net                                  | 2,250                                        | 2,022                                     
|Premises and equipment                                  | 4,476                                        | 4,569                                     
|Deferred income taxes                                   | 617                                          | 556                                       
|Other assets                                            | 812                                          | 872                                       
|                                                        |                                              |                                           
|                                                        | Total assets                                 | $214,173                                  
|                                                        |                                              |                                           
|LIABILITIES AND STOCKHOLDERS' EQUITY                    |                                              |                                           
|                                                        |                                              |                                           
|Deposits:                                               |                                              |                                           
|                                                        | Noninterest-bearing                          | $    5,059                                
|                                                        | Interest-bearing                             | 111,726                                   
|Total deposits                                          | 116,785                                      | 106,744                                   
|                                                        |                                              |                                           
|Federal Home Loan Bank advances                         | 57,500                                       | 52,500                                    
|Accrued expenses and other liabilities                  | 2,718                                        | 1,792                                     
|                                                        |                                              |                                           
|                                                        |                                              | Total liabilities                         
|                                                        |                                              |                                           
|Commitments and contingent liabilities                  | -                                            | -                                         
|                                                        |                                              |                                           
|Stockholders' Equity                                    |                                              |                                           
|                                                        | Common stock-$0.01 par value                 |                                           
|                                                        |                                              | authorized-20,000,000 shares              
|                                                        |                                              | issued and outstanding - 2,314,375 shares 
|                                                        |                                              | at March 31, 2003 and December 31, 2002   
|                                                        | Additional paid in capital                   | 22,149                                    
|                                                        | Retained earnings                            | 16,583                                    
|                                                        | Accumulated other comprehensive income       | 81                                        
|                                                        | Unearned compensation                        | (1,666)                                   
|                                                        |                                              | Total stockholders' equity                
|                                                        |                                              |                                           
|                                                        |                                              | Total liabilities and stockholders' equity

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|Condensed Consolidated Statements of Income | (unaudited)                                   |                                    
|------------------------------------------- | --------------------------------------------- | -----------------------------------
|                                            | Three MonthsEndedMarch 31,2003                | Three Months
EndedDecember 31,
2002
|                                            | (Dollars in thousands,
except per share data)
|Interest Income                             |                                               |                                    
|                                            | Loans, including fees                         | $2,961                             
|                                            | Investment securities                         | 146                                
|                                            | Federal funds sold and overnight deposits     | 62                                 
|                                            |                                               |                                    
|                                            |                                               |                                    
|Interest Expense                            |                                               |                                    
|                                            | Deposits                                      | 771                                
|                                            | Federal Home Loan Bank advances               | 779                                
|                                            |                                               |                                    
|                                            |                                               |                                    
|Net Interest Income                         | 1,619                                         | 1,589                              
|                                            |                                               |                                    
|Provision for Loan Losses                   | 225                                           | 124                                
|                                            |                                               |                                    
|Net Interest Income after Provision         |                                               |                                    
|                                            | for Loan Losses                               | 1,394                              
|                                            |                                               |                                    
|Noninterest Income                          |                                               |                                    
|                                            | Fees and service charges                      | 233                                
|                                            | Loan servicing fees                           | 49                                 
|                                            | Net gain on sale of loans                     | 385                                
|                                            | Net gain on disposal of                       |                                    
|                                            |                                               | premises and equipment             
|                                            | Other income                                  | 17                                 
|Total noninterest income                    | 684                                           | 356                                
|                                            |                                               |                                    
|Noninterest Expenses                        |                                               |                                    
|                                            | Salaries and employee benefits                | 875                                
|                                            | Occupancy and equipment                       | 192                                
|                                            | Data processing                               | 93                                 
|                                            | Mortgage banking                              | 106                                
|                                            | NOW account expense                           | 36                                 
|                                            | Professional services                         | 89                                 
|                                            | Office supplies and forms                     | 27                                 
|                                            | Advertising and promotion                     | 14                                 
|                                            | Other general and administrative              | 179                                
|                                            |                                               |                                    
|                                            |                                               |                                    
|Income - Before Income Taxes                | 467                                           | 154                                
|                                            |                                               |                                    
|Income Taxes                                | 148                                           | 53                                 
|                                            |                                               |                                    
|Net Income                                  | $   319                                       | $   101                            

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|                             | CommonStock                                   | AdditionalPaid inCapital   | RetainedEarnings | AccumulatedOtherComprehensiveIncome | UnearnedCompensationESOP | Total  
|---------------------------- | --------------------------------------------- | -------------------------- | ---------------- | ----------------------------------- | ------------------------ | -------
|                             | (Dollars in thousands,
except per share data)
|                             |                                               |                            |                  |                                     |                          |        
|Balance, January 1, 2002     | $     -                                       | $          -               | $15,365          | $       -                           | $          -             | $15,365
|                             |                                               |                            |                  |                                     |                          |        
|Comprehensive Income -       |                                               |                            |                  |                                     |                          |        
|                             | Net Income                                    | -                          | -                | 101                                 | -                        | -      
|                             |                                               |                            |                  |                                     |                          |        
|Balance March 31, 2002       | $     -                                       | $          -               | $15,466          | $       -                           | $          -             | $15,466
|                             |                                               |                            |                  |                                     |                          |        
|                             |                                               |                            |                  |                                     |                          |        
|Balance, January 1, 2003     | $  23                                         | $22,149                    | $16,379          | $    64                             | $(1,666)                 | $36,949
|                             |                                               |                            |                  |                                     |                          |        
|Comprehensive Income:        |                                               |                            |                  |                                     |                          |        
|                             | Net Income                                    | -                          | -                | 319                                 | -                        | -      
|                             | Change in unrealized gain                     |                            |                  |                                     |                          |        
|                             |                                               | on securities available    |                  |                                     |                          |        
|                             |                                               | for sale, net of tax of $9 | -                | -                                   | -                        | 17     
|                             |                                               |                            |                  |                                     |                          |        
|Total comprehensive income   |                                               |                            |                  |                                     |                          | 336    
|                             |                                               |                            |                  |                                     |                          |        
|Dividends Paid ($0.05/share) | -                                             | -                          | 115              | -                                   | -                        | 115    
|                             |                                               |                            |                  |                                     |                          |        
|Balance, March 31, 2003      | $  23                                         | $22,149                    | $16,583          | $ 81                                | $(1,666)                 | $37,170

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|                                                     |                                                                     |                                                      |                       |                                              |                                                     | Three MonthsEndedMarch 31,2003                      | Three MonthsEndedMarch 31,2002
|---------------------------------------------------- | ------------------------------------------------------------------- | ---------------------------------------------------- | --------------------- | -------------------------------------------- | --------------------------------------------------- | --------------------------------------------------- | ------------------------------
|                                                     |                                                                     |                                                      |                       |                                              |                                                     | (Dollars in thousands)                             
|                                                     |                                                                     |                                                      |                       |                                              |                                                     |                                                     |                               
|Cash Flows from Operating Activities                 |                                                                     |                                                     
|                                                     | Net income                                                          | $     319                                            | $     101            
|                                                     |                                                                     | Adjustments to reconcile net income to net cash from |                       |                                             
|                                                     |                                                                     |                                                      | operating activities: |                                              |                                                    
|                                                     |                                                                     |                                                      |                       | Depreciation                                 | 114                                                 | 117                                                
|                                                     |                                                                     |                                                      |                       | Provision for loan losses                    | 225                                                 | 124                                                
|                                                     |                                                                     |                                                      |                       | Amortization                                 | 198                                                 | 52                                                 
|                                                     |                                                                     |                                                      |                       | (Gain) Loss on sale of foreclosed assets     | 11                                                  | (21)                                               
|                                                     |                                                                     |                                                      |                       | Deferred income taxes                        | (68)                                                | (40)                                               
|                                                     |                                                                     |                                                      |                       | Mortgage loans originated for sale           | (13,734)                                            | (2,292)                                            
|                                                     |                                                                     |                                                      |                       | Proceeds from sale of mortgage loans         | 13,594                                              | 2,010                                              
|                                                     |                                                                     |                                                      |                       | Gain on sale of mortgage loans               | (385)                                               | (60)                                               
|                                                     |                                                                     |                                                      |                       | (Gain) on disposal of premises and equipment | -                                                   | (6)                                                
|                                                     |                                                                     |                                                      |                       | Net change in:                               |                                                     |                                                    
|                                                     |                                                                     |                                                      |                       |                                              | Trading assets                                      | -                                                   | (2)                           
|                                                     |                                                                     |                                                      |                       |                                              | Deferred loan fees                                  | (3)                                                 | (68)                          
|                                                     |                                                                     |                                                      |                       |                                              | Accrued interest receivable                         | 18                                                  | 6                             
|                                                     |                                                                     |                                                      |                       |                                              | Other assets                                        | (11)                                                | 32                            
|                                                     |                                                                     |                                                      |                       |                                              | Accrued expenses and other liabilities              | 926                                                 | (135)                         
|                                                     |                                                                     |                                                      |                       |                                              |                                                     | Net cash provided by (used in) operating activities | 1,204                         
|                                                     |                                                                     |                                                      |                       |                                              |                                                     |                                                     |                               
|Cash Flows from Investing Activities                 |                                                                     |                                                     
|                                                     | Proceeds from maturities of securities                              | 17                                                   | 27                   
|                                                     | Purchases of other securities                                       | (101)                                                | (50)                 
|                                                     | Purchase  of available for sale securities                          | (1,274)                                              | -                    
|                                                     | Purchase of real estate investment - Limited partnership            | -                                                    |                      
|                                                     | Loan originations and principal collections, net                    | (3,213)                                              | (4,970)              
|                                                     | Proceeds from sale of foreclosed assets                             | 699                                                  | 433                  
|                                                     | Proceeds from sale of premises and equipment                        | -                                                    | 6                    
|                                                     | Purchase of premises and equipment                                  | (21)                                                 | (27)                 
|                                                     | Loan to Employee Stock Ownership Plan                               | -                                                    | -                    
|                                                     |                                                                     |                                                      |                       |                                              | Net cash provided by (used in) investing activities | (3,893)                                             | (4,581)                       
|                                                     |                                                                     |                                                      |                       |                                              |                                                     |                                                     |                               
|Cash Flows from Financing Activities                 |                                                                     |                                                     
|                                                     | Net increase (decrease) in deposits                                 | 10,041                                               | (1,960)              
|                                                     | Proceeds from FHLB advances                                         | 5,000                                                | 6,000                
|                                                     | Repayment of FHLB Advances                                          | -                                                    | -                    
|                                                     | Issuance of Dividend                                                | (115)                                                | -                    
|                                                     |                                                                     |                                                      |                       |                                              | Net cash provided by financing activities           | 14,926                                              | 4,040                         
|                                                     |                                                                     |                                                      |                       |                                              |                                                     |                                                     |                               
|Net increase (decrease) in cash and cash equivalents | 12,237                                                              | (723)                                               
|                                                     | Cash and Cash Equivalents - January 1                               | 20,207                                               | 16,312               
|                                                     | Cash and Cash Equivalents - March 31                                | $32,444                                              | $15,589              
|                                                     |                                                                     |                                                      |                       |                                              |                                                     |                                                     |                               
|Supplemental Cash Flow Information:                  |                                                                     |                                                     
|                                                     | Cash paid for interest                                              | $  1,541                                             | $  1,648             
|                                                     | Cash paid for income taxes                                          | 110                                                  | 17                   
|                                                     | Noncash investing activity - loans transferred to foreclosed assets | 938                                                  | 413                  

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|                        | Three Months Ended March 31,      
|----------------------- | ----------------------------------
|                        | 2003                              
|                        | AverageOutstandingBalance         
|                        | (Dollars in Thousands)            
|                        |                                   
|Federal Funds sold and  |                                   
|                        | Overnight deposit                 
|Trading assets          | -                                 
|Investment securities   | 17,526                            
|Other securities        | 2,844                             
|Loans                   | 152,227                           
|                        | Total earning assets              
|                        |                                   
|Demand and NOW accounts | $13,600                           
|Money market accounts   | 9,941                             
|Savings deposit         | 15,458                            
|Certificates of deposit | 74,461                            
|FHLB advances           | 55,944                            
|                        | Total interest-bearing liabilities
|                        |                                   
|Net interest income     |                                   
|Net interest spread     |                                   
|Net interest margin     |                                   

|                                                     | March 31,2003          | December 31,
2002
|---------------------------------------------------- | ---------------------- | -----------------
|                                                     | (Dollars in thousands)
|                                                     |                        |                  
|Non-performing loans                                 | $   1,241              | $   2,955        
|Foreclosed assets, including real estate in judgment | 2,270                  | 2,059            
|Total non-performing assets                          | $   3,511              | $   5,014        
|                                                     |                        |                  
|Non-performing loans to total loans                  | .83%                   | 2.04%            
|Non-performing assets to total assets                | 1.64%                  | 2.53%            
|Allowance for loan losses to non-performing loans    | 143.91%                | 58.71%           
|Allowance for loan losses to loans receivable, net   | 1.19%                  | 1.18%            

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|      |              |      | MONARCH COMMUNITY BANCORP, INC.                                          
|----- | ------------ | ---- | -------------------------------------------------------------------------
|      |              |      |                                                                          
|Date: | May 13, 2003 | By:  | /s/ John R. Schroll
John R. Schroll
President and Chief Executive Officer
|      |              |      |                                                                          
|Date: | May 13, 2003 | And: | /s/ William C. Kurtz
William C. Kurtz
Senior Vice President and Treasurer

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**CERTIFICATION**

|1. | I have reviewed this quarterly report on Form 10-QSB of Monarch Community Bancorp, Inc.;                                                                                                                                                                                                                                                                                                 
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by this
quarterly report;                                                           
|  
|3. | Based on my knowledge, the financial statements, and other financial information included in this
quarterly report, fairly present in all material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in this quarterly report;                                                                              
|  
|4. | The registrant's other certifying officers and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and have;                                                                                                                                                                   
|  
|   | a.                                                                                                                                                                                                                                                                                                                                                                                       
|   | b.                                                                                                                                                                                                                                                                                                                                                                                       
|   | c.                                                                                                                                                                                                                                                                                                                                                                                       
|  
|5. | The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to
the registrant's auditors and the audit committee of registrant's board of directors (or persons
performing the equivalent functions):                                                                                                                                          
|  
|   | a.                                                                                                                                                                                                                                                                                                                                                                                       
|   | b.                                                                                                                                                                                                                                                                                                                                                                                       
|  
|6. | The registrant's other certifying officers and I have indicated in this quarterly report whether or not
there were significant changes in internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation, including any corrective actions
with regard to significant deficiencies and material weaknesses.

|Date: | May 13, 2003 | By: | /s/ John R. Schroll
John R. Schroll
President and Chief Executive Officer
|----- | ------------ | --- | -------------------------------------------------------------------------

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**CERTIFICATION**

|1. | I have reviewed this quarterly report on Form 10-QSB of Monarch Community Bancorp, Inc.;                                                                                                                                                                                                                                                                                                 
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by this
quarterly report;                                                           
|  
|3. | Based on my knowledge, the financial statements, and other financial information included in this
quarterly report, fairly present in all material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in this quarterly report;                                                                              
|  
|4. | The registrant's other certifying officers and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and have;                                                                                                                                                                   
|  
|   | a.                                                                                                                                                                                                                                                                                                                                                                                       
|   | b.                                                                                                                                                                                                                                                                                                                                                                                       
|   | c.                                                                                                                                                                                                                                                                                                                                                                                       
|  
|5. | The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to
the registrant's auditors and the audit committee of registrant's board of directors (or persons
performing the equivalent functions):                                                                                                                                          
|  
|   | a.                                                                                                                                                                                                                                                                                                                                                                                       
|   | b.                                                                                                                                                                                                                                                                                                                                                                                       
|  
|6. | The registrant's other certifying officers and I have indicated in this quarterly report whether or not
there were significant changes in internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation, including any corrective actions
with regard to significant deficiencies and material weaknesses.

|Date: | May 13, 2003 | By: | /s/ William C. Kurtz
William C. Kurtz
Senior Vice President and Treasurer
(Principal Financial Officer)
|----- | ------------ | --- | -------------------------------------------------------------------------------------------------------

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|ExhibitNumber | Document                                                                                          | Reference toPrior Filing orExhibit NumberAttached Hereto
|------------- | ------------------------------------------------------------------------------------------------- | --------------------------------------------------------
|              |                                                                                                   |                                                         
|3.1           | Registrant's Articles of Incorporation                                                            | *                                                       
|3.2           | Registrant's Bylaws                                                                               | *                                                       
|10.1          | Employment Agreement between Branch County
Federal Savings & Loan Association and John R.
Schroll | *                                                       
|10.2          | Registrant's Employee Stock Ownership Plan                                                        | *                                                       
|11            | Statement re computation of per share earnings                                                    | Not required                                            
|12            | Statements re computation of ratios                                                               | Not applicable                                          
|18            | Letter re: change in accounting principles                                                        | None                                                    
|22            | Published report regarding matters submitted to vote
of security holders                          | None                                                    
|99.1          | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                           | 99.1                                                    

*   	Filed on March 27, 2002 as an exhibit to the Registrant's Registration Statement on Form SB-2 (File No. 333-85018), and
incorporated herein by reference.

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