##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
 FORM 10-Q
 þ
    
    Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended March 31, 2009
 or
 o
    
    Transition report under Section 13 or 15(d) of the Exchange Act
 For the transition period from  to
 Commission file number: 000-49814
 MONARCH COMMUNITY BANCORP, INC.
 (Exact name of registrant as specified in its charter)
 Maryland(State or other jurisdiction 
of incorporation or organization)
    
    04-3627031(I.R.S. employer
identification no.)
 (Address of principal executive offices)
 (Registrants telephone number)
 þ o
 o o
  Large Accelerated Filer o
Accelerated Filer o
Non-Accelerated Filer o
(Do not check if a smaller reporting company)
Smaller reporting company þ o þ




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##### 



Monarch Community Bancorp, Inc.
 PART I  FINANCIAL INFORMATIONItem 1  Condensed Financial Statements:Condensed Consolidated Balance Sheets  March 31, 2009 and
December 31, 2008Condensed Consolidated Statements of Income  Three Months
Ended March 31, 2009 and 2008
    
    
    2Condensed Consolidated Statements of Changes in Stockholders Equity 
Three Months Ended March 31, 2009 and 2008
    
    
    3Condensed Consolidated Statements of Cash Flows  Three Months Ended
March 31, 2009 and 2008
    
    
    4Notes to Condensed Consolidated Financial Statements
    
    
    5-7Item 2  Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    8-13Item 3  Quantitative and Qualitative Disclosures about Market Risk
    
    
    13Item 4T Controls and Procedures
    
    
    14PART II  OTHER INFORMATIONItem 1  Legal Proceedings
    
    
    14Item 1A  Risk Factors
    
    
    14Item 2  Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    14Item 3  Defaults Upon Senior Securities
    
    
    15Item 4  Submission of Matters to a Vote of Security Holders
    
    
    15Item 5  Other Information
    
    
    15Item 6  Exhibits
    
    
    15SIGNATURES
    
    
    15CERTIFICATIONS
    
    
    17-19EX-31.1EX-31.2EX-32




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##### Table of Contents



PART IFINANCIAL INFORMATION
 
 Item 1. CONDENSED FINANCIAL STATEMENTS
 
 Condensed Consolidated Balance Sheets
 (Unaudited)March 31,
    
    
    December 31,2009
    
    
    2008(Dollars in thousands,except per share data)AssetsCash and due from banks
    
    
    8,957
    
    
    
    677Federal Home Loan Bank overnight time and
other interest bearing deposits
    
    
    9,185
    
    
    
    6,272Total cash and cash equivalents
    
    
    18,142
    
    
    
    6,949Securities  Available for sale
    
    
    14,882
    
    
    
    8,916Securities  Held to maturity
    
    
    37
    
    
    
    37Other securities
    
    
    4,237
    
    
    
    4,237Loans held for sale
    
    
    2,287
    
    
    
    860Loans, net
    
    
    239,627
    
    
    
    247,542Foreclosed assets, net
    
    
    2,203
    
    
    
    2,076Premises and equipment
    
    
    4,419
    
    
    
    4,456Goodwill
    
    
    9,606
    
    
    
    9,606Core deposit intangible
    
    
    638
    
    
    
    681Other assets
    
    
    7,179
    
    
    
    7,124Total assets
    
    $
    303,257
    
    
    $
    291,807Liabilities and Stockholders EquityLiabilitiesDeposits:Non-interest bearing
    
    $
    14,854
    
    
    $
    13,883Interest bearing
    
    
    186,404
    
    
    
    178,273Total deposits
    
    
    201,258
    
    
    
    192,156Federal Home Loan Bank advances
    
    
    56,678
    
    
    
    60,178Fed Funds Purchased
    
    
    
    
    
    
    1,000Accrued expenses and other liabilities
    
    
    2,242
    
    
    
    2,203Total liabilities
    
    
    260,178
    
    
    
    255,537Stockholders EquityPreferred
stock  $.01 par value, 5,000,000 shares authorized, and 6,785
shares, fixed
rate cumulative perpetual preferred stock, series A, $1,000 per share
liquidation preference, issued and outstanding as of March 31, 2009
    
    
    6,731
    
    
    
    Common stock  $0.01 par value, 20,000,000 shares authorized, 2,046,102
shares issued and outstanding at March 31, 2009 and December 31, 2008
    
    
    20
    
    
    
    20Common stock warrants issued and outstanding 260,962 as of March 31, 2009
    
    
    56
    
    
    
    Additional paid-in capital
    
    
    21,154
    
    
    
    21,152Retained earnings
    
    
    15,864
    
    
    
    15,867Accumulated other comprehensive income
    
    
    92
    
    
    
    69Unearned compensation
    
    
    (838
    )
    
    
    (838
    )Total stockholders equity
    
    
    43,079
    
    
    
    36,270Total liabilities and stockholders equity
    
    $
    303,257
    
    
    $
    291,807
 1




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##### Table of Contents



Three Months
    
    
    Three MonthsEnded
    
    
    EndedMarch 31
    
    
    March 31,2009
    
    
    2008(Dollars in thousands, except per share data)Interest IncomeLoans, including fees
    
    $
    3,954
    
    
    $
    4,058Investment securities
    
    
    119
    
    
    
    170Federal funds sold and overnight deposits
    
    
    2
    
    
    
    58Total interest income
    
    
    4,075
    
    
    
    4,286Interest ExpenseDeposits
    
    
    1,319
    
    
    
    1,555Federal Home Loan Bank advances
    
    
    658
    
    
    
    659Total interest expense
    
    
    1,977
    
    
    
    2,214Net Interest Income
    
    
    2,098
    
    
    
    2,072Provision for Loan Losses
    
    
    722
    
    
    
    308Net Interest Income After Provision for Loan Losses
    
    
    1,376
    
    
    
    1,764Non-interest IncomeFees and service charges
    
    
    515
    
    
    
    571Loan servicing fees
    
    
    106
    
    
    
    109Net gain on sale of loans
    
    
    710
    
    
    
    266Other income
    
    
    42
    
    
    
    53Total non-interest income
    
    
    1,373
    
    
    
    999Non-interest ExpenseSalaries and employee benefits
    
    
    1,195
    
    
    
    1,191Occupancy and equipment
    
    
    272
    
    
    
    263Data processing
    
    
    207
    
    
    
    202Amortization of mortgage servicing rights
    
    
    199
    
    
    
    119Professional services
    
    
    129
    
    
    
    86Amortization of core deposit intangible
    
    
    43
    
    
    
    54NOW account processing
    
    
    46
    
    
    
    45ATM/Debit card processing
    
    
    61
    
    
    
    46Foreclosed property expense
    
    
    32
    
    
    
    58Other general and administrative
    
    
    326
    
    
    
    257Total non-interest expense
    
    
    2,510
    
    
    
    2,321Income  Before income taxes
    
    
    239
    
    
    
    442Income Taxes
    
    
    60
    
    
    
    110Net Income
    
    $
    179
    
    
    $
    332Dividends and amortization of discount on preferred stock
    
    $
    51
    
    
    $
    Net Income available to common stock
    
    $
    128
    
    
    $
    332Earnings Per ShareBasic
    
    $
    0.07
    
    
    $
    0.15Diluted
    
    $
    0.07
    
    
    $
    0.15
 2




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##### Table of Contents



AccumulatedPreferred Stock
    
    
    Common Stock
    
    
    Additional
    
    
    
    
    
    
    OtherNumber of
    
    
    
    
    
    
    Number of
    
    
    
    
    
    
    Paid in
    
    
    Retained
    
    
    Comprehensive
    
    
    UnearnedShares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    Income (Loss)
    
    
    Compensation
    
    
    TotalBalance  January 1, 2008
    
    
    
    
    
    
    
    
    
    
    2,322
    
    
    $
    23
    
    
    $
    23,828
    
    
    $
    16,341
    
    
    $
    52
    
    
    $
    (1,158
    )
    
    $
    39,086Vesting of 788 restricted shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10
    
    
    
    10Repurchase of 59,205 shares at
average price of $10.52/share
    
    
    
    
    
    
    
    
    
    
    (59
    )
    
    
    
    
    
    
    (628
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (628
    )Stock option expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3Comprehensive Income:Net Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    332
    
    
    
    
    
    
    
    
    
    
    
    332Change in unrealized loss on
securities available-for-sale,
net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    92
    
    
    
    
    
    
    
    92Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    424Dividends paid ($0.36/share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (204
    )
    
    
    
    
    
    
    
    
    
    
    (204
    )Balance  March 31, 2008
    
    
    
    
    
    
    
    
    
    
    2,263
    
    
    $
    23
    
    
    $
    23,203
    
    
    $
    16,469
    
    
    $
    144
    
    
    $
    (1,148
    )
    
    $
    38,691Balance  January 1, 2009
    
    
    
    
    
    
    
    
    
    
    2,047
    
    
    $
    20
    
    
    $
    21,152
    
    
    $
    15,867
    
    
    $
    69
    
    
    $
    (838
    )
    
    $
    36,270Issuance of preferred stock
    
    
    6785
    
    
    
    6785
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,785Discount on preferred stock
    
    
    
    
    
    
    (54
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (54
    )Common stock warrants
    
    
    261
    
    
    
    56
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    56Stock option expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2Comprehensive Income:Net Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    179
    
    
    
    
    
    
    
    
    
    
    
    179Change in unrealized loss on
securities available-for-sale,
net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23
    
    
    
    
    
    
    
    23Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    202Dividends paid ($0.09/share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (182
    )
    
    
    
    
    
    
    
    
    
    
    (182
    )Balance  March 31, 2009
    
    
    7,046
    
    
    
    6,787
    
    
    
    2,047
    
    
    
    20
    
    
    
    21,154
    
    
    
    15,864
    
    
    
    92
    
    
    
    (838
    )
    
    $
    43,079
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##### Table of Contents



Three Months EndedMarch , 312009
    
    
    2008(Dollars in thousands)Cash Flows From Operating ActivitiesNet Income
    
    $
    179
    
    
    $
    332Adjustments to reconcile net income to net cash from operating activitiesDepreciation and amortization
    
    
    369
    
    
    
    289Provision for loan losses
    
    
    722
    
    
    
    308Stock option expense
    
    
    2
    
    
    
    3Gain on sale of foreclosed assets
    
    
    (10
    )
    
    
    (16
    )Mortgage loans originated for sale
    
    
    (35,002
    )
    
    
    (13,132
    )Proceeds from sale of mortgage loans
    
    
    34,284
    
    
    
    12,415Gain on sale of mortgage loans
    
    
    (710
    )
    
    
    (266
    )Earned stock compensation
    
    
    
    
    
    
    10Net change in:Deferred loan fees
    
    
    28
    
    
    
    (39
    )Accrued interest receivable
    
    
    20
    
    
    
    146Other assets
    
    
    (283
    )
    
    
    270Accrued expenses and other liabilities
    
    
    36
    
    
    
    82Net cash provided by operating activities
    
    
    (365
    )
    
    
    402Cash Flows From Investing ActivitiesActivity in available-for-sale securities:Purchases
    
    
    (8,595
    )
    
    
    Proceeds from maturities of securities
    
    
    2,654
    
    
    
    1,049Activity in held-to-maturity securities:Purchases
    
    
    
    
    
    
    (7
    )Proceeds from maturities of securities
    
    
    
    
    
    
    5Loan originations and principal collections, net
    
    
    6,809
    
    
    
    (6,655
    )Proceeds from sale of foreclosed assets
    
    
    240
    
    
    
    496Purchase of premises and equipment
    
    
    (80
    )
    
    
    (73
    )Net cash provided by (used in) investing activities
    
    
    1,028
    
    
    
    (5,185
    )Cash Flows From Financing ActivitiesNet increase in deposits
    
    
    9,102
    
    
    
    13,297Repurchase of common stock
    
    
    
    
    
    
    (628
    )Issuance of preferred stock, net
    
    
    6,731
    
    
    
    Issuance of Warrants
    
    
    56
    
    
    
    Dividends paid
    
    
    (182
    )
    
    
    (204
    )Proceeds from FHLB advances
    
    
    
    
    
    
    6,000Repayment of FHLB advances
    
    
    (3,500
    )
    
    
    (13,000
    )Repayment of Fed Funds purchased
    
    
    (1,000
    )
    
    
    Net cash provided by financing activities
    
    
    11,207
    
    
    
    5,465Net Increase in Cash and Cash Equivalents
    
    
    11,870
    
    
    
    682Cash and
Cash Equivalents Beginning
    
    
    6,272
    
    
    
    13,842Cash and Cash Equivalents End
    
    $
    18,142
    
    
    $
    14,524Supplemental Cash Flow Information:Cash paid for:Interest
    
    
    1,992
    
    
    
    2,210Income taxes
    
    
    125
    
    
    
    125Noncash investing activities:Loans transferred to foreclosed assets
    
    
    357
    
    
    
    48
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##### Table of Contents



MONARCH COMMUNITY BANCORP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 ORGANIZATION
   BASIS OF PRESENTATION
     ALLOWANCE FOR LOAN LOSSES
    5




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##### Table of Contents



RECLASSIFICATIONS
  EARNINGS PER SHARE
  Three Months
    
    
    Three MonthsEnded
    
    
    EndedMarch 31, 2009
    
    
    March 31, 2008Basic earnings per shareNumerator:Net income
    
    $
    179
    
    
    $
    332Dividends and amortization of discount on preferred stock
    
    $
    51
    
    
    $
    Net Income available to common stock
    
    $
    128
    
    
    $
    332Denominator:Weighted average common shares outstanding
    
    
    2,046
    
    
    
    2,283Less: Average unallocated ESOP shares
    
    
    (74
    )
    
    
    (83
    )Less: Average non-vested RRP shares
    
    
    (7
    )
    
    
    (25
    )Weighted average common shares outstanding
for basic earnings per share
    
    
    1,965
    
    
    
    2,175Basic earnings per share
    
    $
    0.07
    
    
    $
    0.15Diluted earnings per shareNumerator:Net Income available to common stock
    
    $
    128
    
    
    $
    332Denominator:Weighted average common shares outstanding
for basic earnings per share
    
    
    1,965
    
    
    
    2,175Add: Dilutive effects of restricted stock,
stock options and warrants
    
    
    
    
    
    
    Weighted average common shares and dilutive
potential common shares outstanding
    
    
    1,965
    
    
    
    2,175Diluted earnings per share
    
    $
    0.07
    
    
    $
    0.15
 RECENT ACCOUNTING PRONOUNCEMENTS
   6




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RECENT ACCOUNTING PRONOUNCEMENTS (Continued)
 Determining Fair Value When the Volume and Level of Activity for the Asset or
Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly,
 Interim Disclosures about Fair Value of Financial Instruments,
 Recognition and Presentation of Other-Than-Temporary Impairments,
 FAIR VALUE MEASUREMENTS
      SignificantOtherQuoted Prices in Active
    
    Observable
    
    SignificantMarkets for Identical
    
    Inputs (Level
    
    Unobservable
    
    Balance at MarchAssets (Level 1)
    
    2)
    
    Inputs (Level 3)
    
    31, 2009AssetsInvestment securities- available  for  sale
    
    $
    6,229
    
    
    $
    8,653
    
    
    $
    
    
    
    $
    14,882
  7




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Balance at
    
    Quoted Prices in Active
    
    Significant Other
    
    SignificantMarch 31,
    
    Markets for Identical
    
    Observable Inputs
    
    Unobservable Inputs
    
    Change in Fair Value for the2009
    
    Assets (Level 1)
    
    (Level 2)
    
    (Level 3)
    
    quarter ended March 31, 2009Impaired Loans
accounted for under
SFAS 114
    
    $
    4,229
    
    
    $
    
    
    
    $
    
    
    
    $
    4,229
    
    
    $
    
 
 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
   FORWARD-LOOKING STATEMENTS
   CRITICAL ACCOUNTING POLICIES
  Allowance for Loan Losses
 Foreclosed Assets .
 8




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##### Table of Contents



Goodwill and Other Intangible Assets
 FINANCIAL CONDITION
 Assets
  Securities
  Loans
  March 31, 2009
    
    
    December 31, 2008Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent(Dollars in thousands)Real Estate Loans:One-to-four family
    
    $
    117,908
    
    
    
    48.4
    
    
    $
    124,855
    
    
    
    49.8Multi-family
    
    
    5,533
    
    
    
    2.3
    
    
    
    5,728
    
    
    
    2.2Commercial
    
    
    77,550
    
    
    
    31.9
    
    
    
    75,730
    
    
    
    30.2Construction or development
    
    
    7,942
    
    
    
    3.2
    
    
    
    9,499
    
    
    
    3.8Total real estate loans
    
    
    208,933
    
    
    
    85.8
    
    
    
    215,812
    
    
    
    86.0Other loans:Consumer loans:Home equity
    
    
    20,622
    
    
    
    8.5
    
    
    
    20,677
    
    
    
    8.2Other
    
    
    5,414
    
    
    
    2.2
    
    
    
    5,737
    
    
    
    2.3Total consumer loans
    
    
    26,036
    
    
    
    10.7
    
    
    
    26,414
    
    
    
    10.5Commercial Business Loans
    
    
    8,414
    
    
    
    3.5
    
    
    
    8,609
    
    
    
    3.5Total other loans
    
    
    34,450
    
    
    
    14.2
    
    
    
    
    
    
    
    14.0Total Loans
    
    
    243,383
    
    
    
    100.0
    %
    
    
    250,835
    
    
    
    100.0
    %Allowance for loan losses
    
    
    3,210
    
    
    
    
    
    
    
    2,719Less: Net deferred loan fees
    
    
    546
    
    
    
    
    
    
    
    574Total Loans, net
    
    $
    239,627
    
    
    
    
    
    
    $
    247,542
  9




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##### Table of Contents



Deposits
  Federal Home Loan Bank Advances
  Equity
  RESULTS OF OPERATIONS
Net Interest Income
   10




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##### Table of Contents



Three Months Ended March 31,
    
    
    Three Months Ended March 31,2009
    
    
    2008Average
    
    
    Interest
    
    
    
    
    
    
    Average
    
    
    InterestOutstanding
    
    
    Earned/
    
    
    Yield/
    
    
    Outstanding
    
    
    Earned/
    
    
    Yield/Balance
    
    
    Paid
    
    
    Rate
    
    
    Balance
    
    
    Paid
    
    
    Rate(dollars in thousands)Fed Funds and overnight deposits
    
    $
    10,800
    
    
    
    2
    
    
    
    0.08
    
    
    $
    9,268
    
    
    $
    58
    
    
    
    2.54
    %Investment securities
    
    
    9,937
    
    
    
    93
    
    
    
    3.80
    
    
    
    10,993
    
    
    
    119
    
    
    
    4.39Other securities
    
    
    4,174
    
    
    
    26
    
    
    
    2.53
    
    
    
    4,174
    
    
    
    50
    
    
    
    4.86Loans receivable
    
    
    248,694
    
    
    $
    3,954
    
    
    
    6.45
    
    
    
    230,676
    
    
    
    4,058
    
    
    
    7.13Total earning assets
    
    $
    273,605
    
    
    $
    4,075
    
    
    
    6.04
    
    
    $
    255,111
    
    
    $
    4,285
    
    
    
    6.81Demand and NOW Accounts
    
    $
    31,347
    
    
    $
    20
    
    
    
    0.26
    
    
    $
    31,276
    
    
    $
    25
    
    
    
    0.32Money market accounts
    
    
    41,547
    
    
    
    227
    
    
    
    2.22
    
    
    
    27,899
    
    
    
    231
    
    
    
    3.36Savings accounts
    
    
    18,341
    
    
    
    19
    
    
    
    0.42
    
    
    
    19,147
    
    
    
    20
    
    
    
    0.42Certificates of deposit
    
    
    104,690
    
    
    
    1,053
    
    
    
    4.08
    
    
    
    108,370
    
    
    
    1,278
    
    
    
    4.78Federal Home Loan Bank Advances
    
    
    58,666
    
    
    
    658
    
    
    
    4.55
    
    
    
    52,756
    
    
    
    659
    
    
    
    5.07Fed Funds Purchased
    
    
    86
    
    
    
    
    
    
    
    0.00
    
    
    
    
    
    
    
    
    
    
    
    0.00Total interest bearing liabilities
    
    $
    254,677
    
    
    
    1,977
    
    
    
    3.15
    
    
    $
    239,448
    
    
    
    2,213
    
    
    
    3.75Net interest income
    
    
    
    
    
    $
    2,098
    
    
    
    
    
    
    
    
    
    
    $
    2,072Net interest spread
    
    
    
    
    
    
    
    
    
    
    2.89
    
    
    
    
    
    
    
    
    
    
    
    3.06
    %Net interest margin
    
    
    
    
    
    
    
    
    
    
    3.07
    
    
    
    
    
    
    
    
    
    
    
    3.25
    %
 Provision for Loan Losses
    March 31, 2009
    
    
    December 31,2008(In thousands)Non-performing loans
    
    $
    5,506
    
    
    $
    2,571Real estate in judgement
    
    
    1,191
    
    
    
    1,327Foreclosed and repossessed assets
    
    
    1,011
    
    
    
    749Total non-performing assets
    
    $
    7,708
    
    
    $
    4,647Non-performing loans to total loans
    
    
    2.26
    %
    
    
    1.04
    %Non-performing assets to total assets
    
    
    2.54
    %
    
    
    1.59
    %Allowance for loan losses to non-performing loans
    
    
    58.30
    %
    
    
    105.76
    %Allowance for loan losses to net loans receivable
    
    
    1.34
    %
    
    
    1.10
    %
  11




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##### Table of Contents



Non-interest Income
   Non-interest Expense
  Federal Income Tax Expense
  LIQUIDITY
   12




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##### Table of Contents



CONTRACTUAL OBLIGATIONS AND OFF BALANCE SHEET ARRANGEMENTS
  Contractual Obligations
 Payments Due by PeriodLess than
    
    
    1-3
    
    
    3-5
    
    
    AfterTotal
    
    
    1 year
    
    
    years
    
    
    years
    
    
    5 years(Dollars in Thousands)Certificates of deposit
    
    $
    105,843
    
    
    $
    58,266
    
    
    $
    36,721
    
    
    $
    10,856
    
    
    $
    FHLB advances
    
    
    56,678
    
    
    
    17,160
    
    
    
    27,343
    
    
    
    12,175
    
    
    
    Total
    
    $
    162,521
    
    
    $
    75,426
    
    
    $
    64,064
    
    
    $
    23,031
    
    
    $
    
 Other Commitments
 Amount of commitment expiration per periodLess than
    
    
    1-3
    
    
    3-5
    
    
    AfterTotal
    
    
    1 year
    
    
    years
    
    
    years
    
    
    5 years(Dollars in Thousands)Commitments to grant loans
    
    $
    2,043
    
    
    $
    2,043
    
    
    $
    
    
    
    $
    
    
    
    $
    Unfunded commitments under HELOCs
    
    
    14,668
    
    
    
    1,433
    
    
    
    4,070
    
    
    
    2,612
    
    
    
    6,553Unfunded commitments under Commercial LOCs
    
    
    13,693
    
    
    
    2,457
    
    
    
    4,412
    
    
    
    2,170
    
    
    
    4,654Letters of credit
    
    
    10
    
    
    
    10
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    30,414
    
    
    $
    5,943
    
    
    $
    8,482
    
    
    $
    4,782
    
    
    $
    11,207
  CAPITAL RESOURCES
  
 ITEM 3. QUANTITATIVE AND QUALITIVE DISCLOSURES ABOUT MARKET RISK
 13




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##### Table of Contents



ITEM 4T. CONTROLS AND PROCEDURES
   
 PART II-OTHER INFORMATION
 
 Item 1. LEGAL PROCEEDINGS
  
 Item 1A. RISK FACTORS
  
 Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  14




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##### Table of Contents



(c)  Not applicable
 
 Item 3. DEFAULTS UPON SENIOR SECURITIES
  
 Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 Item 5. OTHER INFORMATION
  
 Item 6. EXHIBITS
  
 SIGNATURES
  MONARCH COMMUNITY BANCORP, INC.Date: May 15, 2009
    By:
    /s/ Donald L. DenneyDonald L. DenneyPresident and Chief Executive OfficerDate: May 15, 2009
    And:
    /s/ Rebecca S. CrabillRebecca S. CrabillSenior Vice President, Chief Financial Officer 15




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##### Table of Contents



INDEX TO EXHIBITS
 Exhibit No.
    
    Description of Exhibit3.1
    
    Articles Supplementary for the
Series A Preferred Stock (incorporated by reference from Form 8-K filed on February 9, 2009).4.1
    
    Warrant to purchase up to 260,962
shares of Common Stock issued February 6, 2009 (incorporated by reference from Form 8-K filed on February 12, 2009).10.1
    
    Letter Agreement dated February 6,
2009 including the Securities Purchase Agreement  Standard Terms
incorporated by reference therein between the Company and the U.S. Treasury (incorporated by reference from Form 8-K filed on February 12, 2009).10.2
    
    Form of Waiver of Senior Executive
Officers (incorporated by reference from Form 8-K filed on February 12, 2009).10.3
    
    Form of Omnibus Amendment Agreement
(incorporated by reference from Form 8-K filed on February 12, 2009).31.1
    
    Rule 13a-14(a) Certification of the
Corporations President and Chief Executive Officer.31.2
    
    Rule 13a-14(a) Certification of the
Corporations Chief Financial Officer.32
    
    Section 1350 Certification.
 16