|[**X**]                                              | Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934**For the quarterly period ended June 30, 2002**
|---------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------
|or                                                  
|[   ]                                                | Transition report under Section 13 or 15(d) of the Exchange Act                                                                  
|For the transition period from  ________ to ________

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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 - June 30, 2002 and December 31, 2001                                            | 1     
|              |                                                                                                                        |       
|              | Condensed Consolidated Statements of Income - Three and Six Months Ended June 30,
2002 and 2001                        | 2     
|              |                                                                                                                        |       
|              | Condensed Consolidated Statements of Changes in Retained Earnings -  Three and Six
Months Ended June 30, 2002 and 2001 | 3     
|              |                                                                                                                        |       
|              | Condensed Consolidated Statements of Cash Flow - Six Months ended June 30, 2002 and
2001                               | 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                                                                                                                    
|              |                                                                                                                        |       
|CERTIFICATION | 12                                                                                                                    

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|                                                                          | June 30,

2002                               | December 31,
2001              
|------------------------------------------------------------------------- | -------------------------------------------- | -------------------------------
|                                                                          | (Dollars in thousands)                      
|ASSETS                                                                    |                                              |                                
|                                                                          |                                              |                                
|Cash and due from banks                                                   | $    5,331                                   | $    4,277                     
|Federal Home Loan Bank overnight time and other interest bearing deposits | 13,730                                       | 12,035                         
|                                                                          |                                              | Total cash and cash equivalents
|                                                                          |                                              |                                
|Trading assets                                                            | -                                            | 258                            
|Securities - Held to maturity                                             | 315                                          | 367                            
|Other securities                                                          | 2,602                                        | 2,552                          
|Real estate investment - Limited partnership, at equity                   | 1,500                                        | 1,500                          
|Loans held for sale                                                       | 1,007                                        | -                              
|Loans, net of allowance for loan losses                                   | 143,210                                      | 137,721                        
|Accrued interest receivable                                               | 1,243                                        | 1,201                          
|Foreclosed assets, net                                                    | 1,862                                        | 2,437                          
|Premises and equipment                                                    | 4,791                                        | 4,928                          
|Deferred income taxes                                                     | 566                                          | 485                            
|Other assets                                                              | 1,085                                        | 923                            
|                                                                          |                                              |                                
|                                                                          |                                              | Total assets                   
|                                                                          |                                              |                                
|LIABILITIES AND EQUITY                                                    |                                              |                                
|                                                                          |                                              |                                
|Deposits:                                                                 |                                              |                                
|                                                                          | Noninterest-bearing                          | $    4,660                     
|                                                                          | Interest-bearing                             | 102,242                        
|                                                                          |                                              | Total deposits                 
|                                                                          |                                              |                                
|Federal Home Loan Bank advances                                           | 51,500                                       | 45,500                         
|Accrued expenses and other liabilities                                    | 3,080                                        | 2,121                          
|                                                                          |                                              |                                
|                                                                          |                                              | Total liabilities              
|                                                                          |                                              |                                
|Commitments and contingent liabilities                                    | -                                            | -                              
|                                                                          |                                              |                                
|Equity                                                                    |                                              |                                
|                                                                          | Retained earnings - Substantially restricted | 15,760                         
|                                                                          |                                              |                                
|                                                                          |                                              | Total liabilities and equity   

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|                                    |                                       |                            | Three Months
Ended
June 30, 2002 | Three Months
Ended
June 30, 2001 | Six Months
Ended
June 30, 2002 | Six Months
Ended
June 30, 2001
|----------------------------------- | ------------------------------------- | -------------------------- | -------------------------------- | -------------------------------- | ------------------------------ | ------------------------------
|                                    |                                       |                            | (Dollars in thousands)          
|Interest Income                     |                                       |                            |                                  |                                 
|                                    | Loans, including fees                 | $3,133                     | $3,458                           | $6,270                           | $6,892                        
|                                    | Investment securities                 | 45                         | 63                               | 92                               | 120                           
|                                    | Federal Home Loan Bank                | 58                         | 204                              | 106                              | 400                           
|                                    |                                       | Total interest income      | 3,236                            | 3,725                            | 6,468                          | 7,412                         
|                                    |                                       |                            |                                  |                                 
|Interest Expense                    |                                       |                            |                                  |                                 
|                                    | Deposits                              | 856                        | 1,350                            | 1,741                            | 2,685                         
|                                    | Federal Home Loan Bank advances       | 790                        | 788                              | 1,548                            | 1,574                         
|                                    |                                       | Total interest expense     | 1,646                            | 2,138                            | 3,289                          | 4,259                         
|                                    |                                       |                            |                                  |                                 
|Net Interest Income                 | 1,590                                 | 1,587                      | 3,179                            | 3,153                           
|                                    |                                       |                            |                                  |                                 
|Provision for Loan Losses           | 53                                    | 150                        | 177                              | 300                             
|                                    |                                       |                            |                                  |                                 
|Net Interest Income after Provision |                                       |                            |                                  |                                 
|                                    | for Loan Losses                       | 1,537                      | 1,437                            | 3,002                            | 2,853                         
|                                    |                                       |                            |                                  |                                 
|Noninterest Income                  |                                       |                            |                                  |                                 
|                                    | Fees and service charges              | 224                        | 329                              | 434                              | 579                           
|                                    | Loan servicing fees                   | 49                         | 40                               | 98                               | 86                            
|                                    | Net gain on sale of loans             | 113                        | 113                              | 173                              | 195                           
|                                    | Net gain (loss) on trading activities | (2)                        | 3                                | (2)                              | 3                             
|                                    | Other income                          | 42                         | 77                               | 79                               | 85                            
|                                    |                                       | Total noninterest income   | 426                              | 562                              | 782                            | 948                           
|                                    |                                       |                            |                                  |                                 
|Noninterest Expenses                |                                       |                            |                                  |                                 
|                                    | Salaries and employee benefits        | 811                        | 844                              | 1,705                            | 1,678                         
|                                    | Occupancy and equipment               | 196                        | 215                              | 396                              | 433                           
|                                    | Data processing                       | 94                         | 181                              | 199                              | 258                           
|                                    | Mortgage banking                      | 39                         | 68                               | 91                               | 126                           
|                                    | NOW account expense                   | 44                         | 46                               | 85                               | 93                            
|                                    | Professional services                 | 40                         | 37                               | 102                              | 106                           
|                                    | Office supplies and forms             | 22                         | 47                               | 67                               | 93                            
|                                    | Advertising and promotion             | 24                         | 30                               | 42                               | 64                            
|                                    | Other general and administrative      | 239                        | 231                              | 489                              | 418                           
|                                    |                                       | Total noninterest expenses | 1,509                            | 1,699                            | 3,176                          | 3,269                         
|                                    |                                       |                            |                                  |                                 
|Income - Before Income Taxes        | 454                                   | 300                        | 608                              | 532                             
|                                    |                                       |                            |                                  |                                 
|Income Taxes                        | 160                                   | 84                         | 213                              | 165                             
|                                    |                                       |                            |                                  |                                 
|Net Income                          | $   294                               | $   216                    | $   395                          | $   367                         

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|                                  | Three Months
Ended
June 30, 2002 | Three Months
Ended
June 30, 2001 | Six Months
Ended
June 30, 2002 | Six Months
Ended
June 30, 2001
|--------------------------------- | -------------------------------- | -------------------------------- | ------------------------------ | ------------------------------
|                                  | (Dollars in thousands)          
|                                  |                                  |                                  |                                |                               
|RETAINED EARNINGS                 |                                  |                                  |                                |                               
|                                  |                                  |                                  |                                |                               
|Balance at beginning of period    | $15,466                          | $14,757                          | $15,365                        | $14,606                       
|                                  |                                  |                                  |                                |                               
|Comprehensive Income - Net Income | 294                              | 216                              | 395                            | 367                           
|                                  |                                  |                                  |                                |                               
|Balance at June 30                | $15,760                          | $14,973                          | $15,760                        | $14,973                       

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|                                          | Six Months
Ended
June 30, 2002                                      | Six Months
Ended
June 30, 2001
|----------------------------------------- | ------------------------------------------------------------------- | ------------------------------
|                                          | (Dollars in thousands)                                             
|                                          |                                                                     |                               
|Cash Flows from Operating Activities      |                                                                     |                               
|                                          | Net income                                                          | $     395                     
|                                          | Adjustments to reconcile net income to net cash from                |                               
|                                          |                                                                     | operating activities:         
|                                          |                                                                     |                               
|                                          |                                                                     |                               
|                                          |                                                                     |                               
|                                          |                                                                     |                               
|                                          |                                                                     |                               
|                                          |                                                                     |                               
|                                          |                                                                     |                               
|                                          |                                                                     |                               
|                                          |                                                                     |                               
|                                          |                                                                     |                               
|                                          |                                                                     |                               
|                                          |                                                                     |                               
|                                          |                                                                     |                               
|                                          |                                                                     |                               
|                                          |                                                                     |                               
|                                          |                                                                     |                               
|                                          |                                                                     |                               
|Cash Flows from Investing Activities      |                                                                     |                               
|                                          | Proceeds from maturities of securities                              | 52                            
|                                          | Purchase of other securities                                        | (50)                          
|                                          | Purchase of real estate investment - Limited partnership            | -                             
|                                          | Loan originations and principal collections, net                    | (6,339)                       
|                                          | Proceeds from sale of foreclosed assets                             | 1,374                         
|                                          | Proceeds from sale of premises and equipment                        | 7                             
|                                          | Purchase of premises and equipment                                  | (97)                          
|                                          |                                                                     |                               
|                                          |                                                                     |                               
|Cash Flows from Financing Activities      |                                                                     |                               
|                                          | Net increase in deposits                                            | 1,204                         
|                                          | Proceeds from FHLB advances                                         | 6,000                         
|                                          | Repayment of FHLB advances                                          | -                             
|                                          |                                                                     |                               
|                                          |                                                                     |                               
|Net increase in cash and cash equivalents | 2,749                                                               | 2,741                         
|Cash and Cash Equivalents - January 1     | 16,312                                                              | 13,562                        
|Cash and Cash Equivalents - June 30       | $19,061                                                             | $16,303                       
|                                          |                                                                     |                               
|Supplemental Cash Flow Information:       |                                                                     |                               
|                                          | Cash paid for interest                                              | $  3,308                      
|                                          | Cash paid for income taxes                                          | 145                           
|                                          | Noncash investing activity - loans transferred to foreclosed assets | 767                           

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|                                  |                                    | Six Months Ended June 30,
|--------------------------------- | ---------------------------------- | -------------------------
|                                  |                                    | 2002                     
|                                  |                                    | AverageOutstandingBalance
|                                  |                                    | (Dollars in thousands)   
|                                  |                                    |                          
|FHLB overnight time and other     |                                    |                          
|                                  | interest-bearing deposits          | $12,217                  
|Trading assets                    | 130                                | 3                        
|Securities - Held to maturity     | 342                                | 11                       
|Other securities                  | 2,566                              | 78                       
|Loans                             | 143,582                            | 6,270                    
|                                  | Total earning assets               | $158,837                 
|                                  |                                    |                          
|Interest-bearing deposit accounts | $104,639                           | 1,741                    
|FHLB advances                     | 50,650                             | 1,548                    
|                                  | Total interest-bearing liabilities | $155,289                 
|                                  |                                    |                          
|Net interest income               |                                    | $3,179                   
|Net interest spread               |                                    |                          
|Net interest margin               |                                    |                          

|                                                     | June 30,2002           | December 31,2001
|---------------------------------------------------- | ---------------------- | ----------------
|                                                     | (Dollars in thousands)
|                                                     |                        |                 
|Non-performing loans                                 | $   1,620              | $   2,975       
|Foreclosed assets, including real estate in judgment | 1,906                  | 2,573           
|Total non-performing assets                          | $   3,526              | $   5,548       
|                                                     |                        |                 
|Non-performing loans to total loans                  | 1.12%                  | 2.16%           
|Non-performing assets to total assets                | 1.99%                  | 3.29%           
|Allowance for loan losses to non-performing loans    | 106.11%                | 56.57%          
|Allowance for loan losses to loans receivable, net   | 1.20%                  | 1.22%           

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|      |                 |  | MONARCH COMMUNITY BANCORP, INC.
|----- | --------------- |  | -------------------------------
|      |                 |  |                                
|Date: | August 30, 2002 |  | By:                            
|      |                 |  |                                
|Date: | August 30, 2002 |  | By:                            

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 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.

|Date: | August 30, 2002 |  | By: | /s/ John R. Schroll
John R. Schroll
President and Chief Executive Officer
|----- | --------------- |  | --- | -------------------------------------------------------------------------

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 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.

|Date: | August 30, 2002 |  | By: | /s/ William C. Kurtz
William C. Kurtz
Senior Vice President and Treasurer
(Principal Financial Officer)
|----- | --------------- |  | --- | -------------------------------------------------------------------------------------------------------

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