##### 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 1934For the quarterly period ended June 30, 2005
 oro
    
    Transition report under Section 13 or 15(d) of the Exchange ActFor the transition period from ________ to ________
 Commission file number: 000-49814
 MONARCH COMMUNITY BANCORP, INC.
 (Exact name of registrant as specified in its charter)
 Maryland
    
    04-3627031(State or other jurisdiction
    
    (I.R.S. employerof incorporation or organization)
    
    identification no.)
 (Address of principal executive offices)
 (Registrants telephone number)
 þ o
 o þ




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Monarch Community Bancorp, Inc.
  PART I  FINANCIAL INFORMATIONItem 1  Condensed Financial Statements:Condensed Consolidated Balance Sheets  June 30, 2005 and
December 31, 2004
    
    
    1Condensed Consolidated Statements of Income  Three and Six Months
Ended June 30, 2005 and 2004
    
    
    2Condensed Consolidated Statements of Changes in Stockholders Equity 
Six Months Ended June 30, 2005 and 2004
    
    
    3Condensed Consolidated Statements of Cash Flow  Six Months ended
June 30, 2005 and 2004
    
    
    4Notes to Condensed Consolidated Financial Statements
    
    
    5Item 2  Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    6 - 11Item 3  Quantitative and Qualitative Disclosures about Market Risk
    
    
    12Item 4
 Controls and Procedures
    
    
    13PART II  OTHER INFORMATIONItem 1  Legal Proceedings
    
    
    14Item 2  Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    14Item 3  Defaults Upon Senior Securities
    
    
    14Item 4  Submission of Matters to a Vote of Security Holders
    
    
    14Item 5  Other Information
    
    
    14Item 6  Exhibits
    
    
    14SIGNATURES
    
    
    15Rule 13a-14(a) Certification of President and Chief Executive OfficerRule 13a-14(a) Certification of Chief Financial OfficerSection 1350 Certification




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##### Table of Contents



PART IFINANCIAL INFORMATION
 
 Item 1. CONDENSED FINANCIAL STATEMENTS
 
  (unaudited)June 30,
    
    
    December 31,2005
    
    
    2004(Dollars in thousands, except per share data)ASSETSCash and due from banks
    
    $
    9,418
    
    
    $
    9,529Federal Home Loan Bank overnight time and other interest bearing deposits
    
    
    9,787
    
    
    
    6,120Total cash and cash equivalents
    
    
    19,205
    
    
    
    15,649Securities-Available for sale
    
    
    12,728
    
    
    
    8,057Securities-Held to maturity
    
    
    257
    
    
    
    267Other investments
    
    
    4,830
    
    
    
    4,720Real Estate Investment  Limited partnership, at equity
    
    
    1,204
    
    
    
    1,278Loans held for sale
    
    
    949
    
    
    
    361Loans, net of allowance for loan losses
    
    
    211,712
    
    
    
    219,317Accrued interest and late charges
    
    
    1,200
    
    
    
    1,138Foreclosed assets, net
    
    
    2,038
    
    
    
    1,960Premises and equipment
    
    
    5,922
    
    
    
    6,444Deferred income taxes
    
    
    629
    
    
    
    612Goodwill
    
    
    9,606
    
    
    
    9,606Core deposit
    
    
    1,556
    
    
    
    1,752Other assets
    
    
    4,595
    
    
    
    5,969Total assets
    
    $
    276,431
    
    
    $
    277,130LIABILITIES AND STOCKHOLDERS EQUITYDeposits:Noninterest-bearing
    
    $
    7,424
    
    
    $
    5,198Interest-bearing
    
    
    162,046
    
    
    
    162,535Total deposits
    
    
    169,470
    
    
    
    167,733Federal Home Loan Bank advances
    
    
    61,659
    
    
    
    65,955Accrued expenses and other liabilities
    
    
    5,282
    
    
    
    4,023Total liabilities
    
    
    236,411
    
    
    
    237,711Commitments and contingent liabilities
    
    
    
    
    
    
    Stockholders equityCommon stock-$0.01 par value authorized-20,000,000 shares
issued and outstanding-2,708,692 shares at June 30, 2005
and 2,709,220 shares at December 31, 2004
    
    
    27
    
    
    
    27Additional paid in capital
    
    
    28,053
    
    
    
    28,059Retained earnings
    
    
    14,021
    
    
    
    13,529Accumulated other comprehensive income
    
    
    (32
    )
    
    
    2Unearned Compensation
    
    
    (2,049
    )
    
    
    (2,198
    )Total stockholders equity
    
    
    40,020
    
    
    
    39,419Total liabilities and stockholders equity
    
    $
    276,431
    
    
    $
    277,130
  1




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##### Table of Contents



Three Months
    
    
    Three Months
    
    
    Six Months
    
    
    Six MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedJune 30,
    
    
    June 30,
    
    
    June 30,
    
    
    June 30,2005
    
    
    2004
    
    
    2005
    
    
    2004(Dollars in thousands, except per share data)Interest IncomeLoans, including fees
    
    $
    3,538
    
    
    $
    3,373
    
    
    $
    7,101
    
    
    $
    5,914Investment securities
    
    
    170
    
    
    
    151
    
    
    
    326
    
    
    
    307Federal funds sold and overnight deposits
    
    
    55
    
    
    
    30
    
    
    
    102
    
    
    
    76Total interest income
    
    
    3,763
    
    
    
    3,554
    
    
    
    7,529
    
    
    
    6,297Interest ExpenseDeposits
    
    
    784
    
    
    
    703
    
    
    
    1,508
    
    
    
    1,309Federal Home Loan bank advances
    
    
    812
    
    
    
    882
    
    
    
    1,634
    
    
    
    1,680Total interest expense
    
    
    1,596
    
    
    
    1,585
    
    
    
    3,142
    
    
    
    2,989Net Interest Income
    
    
    2,167
    
    
    
    1,969
    
    
    
    4,387
    
    
    
    3,308Provisions for Loan Losses
    
    
    
    
    
    
    450
    
    
    
    (385
    )
    
    
    450Net Interest Income after Provision
for Loan Losses
    
    
    2,167
    
    
    
    1,519
    
    
    
    4,772
    
    
    
    2,858Noninterest IncomeFees and service charges
    
    
    531
    
    
    
    447
    
    
    
    997
    
    
    
    673Loan servicing fees
    
    
    116
    
    
    
    101
    
    
    
    229
    
    
    
    158Net gain on sale of loans
    
    
    123
    
    
    
    277
    
    
    
    260
    
    
    
    445Other income (loss)
    
    
    66
    
    
    
    141
    
    
    
    (145
    )
    
    
    175Total noninterest income
    
    
    836
    
    
    
    966
    
    
    
    1,341
    
    
    
    1,451Noninterest ExpensesSalaries and employees benefits
    
    
    1,254
    
    
    
    1,223
    
    
    
    2,531
    
    
    
    2,133Occupancy and equipment
    
    
    282
    
    
    
    238
    
    
    
    573
    
    
    
    435Data processing
    
    
    165
    
    
    
    174
    
    
    
    337
    
    
    
    273Mortgage banking
    
    
    111
    
    
    
    76
    
    
    
    215
    
    
    
    111Professional fees
    
    
    161
    
    
    
    142
    
    
    
    298
    
    
    
    241Amortization of core deposit intangible
    
    
    86
    
    
    
    110
    
    
    
    196
    
    
    
    110NOW account processing
    
    
    50
    
    
    
    33
    
    
    
    99
    
    
    
    65ATM/Debit card processing
    
    
    56
    
    
    
    52
    
    
    
    107
    
    
    
    74Foreclosed property expense
    
    
    31
    
    
    
    57
    
    
    
    67
    
    
    
    103Other general and administrative
    
    
    336
    
    
    
    303
    
    
    
    655
    
    
    
    540Total noninterest expense
    
    
    2,532
    
    
    
    2,408
    
    
    
    5,078
    
    
    
    4,085Income  Before Income Taxes
    
    
    471
    
    
    
    77
    
    
    
    1,035
    
    
    
    224Income Taxes
    
    
    120
    
    
    
    (19
    )
    
    
    272
    
    
    
    25Net Income
    
    $
    351
    
    
    $
    96
    
    
    $
    763
    
    
    $
    199Earnings Per ShareBasic
    
    $
    0.13
    
    
    $
    0.04
    
    
    $
    0.29
    
    
    $
    0.08Diluted
    
    $
    0.13
    
    
    $
    0.04
    
    
    $
    0.29
    
    
    $
    0.08
  2




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##### Table of Contents



Common Stock
    
    
    
    
    
    
    
    
    
    
    AccumulatedNumber
    
    
    
    
    
    
    Additional
    
    
    
    
    
    
    Otherof
    
    
    
    
    
    
    Paid in
    
    
    Retained
    
    
    Comprehensive
    
    
    UnearnedShares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    Income
    
    
    Compensation
    
    
    Total(Dollars in thousands, except per share data)Balance January 1, 2004
    
    
    2,399
    
    
    $
    24
    
    
    $
    23,352
    
    
    $
    16,567
    
    
    $
    75
    
    
    $
    (2,588
    )
    
    $
    37,430Issuance of 310,951 shares of common
stock at $14.75/share in connection
with purchase of MSB Financial, Inc.
    
    
    311
    
    
    
    3
    
    
    
    4,583
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,586Vesting of restricted shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    221
    
    
    
    221797 shares repurchased at $14.15/share
    
    
    (1
    )
    
    
    
    
    
    
    (11
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11
    )Comprehensive Income:Net Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    199
    
    
    
    
    
    
    
    
    
    
    
    199Change in unrealized gain on
securities available for sale
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (152
    )
    
    
    
    
    
    
    (152
    )Total Comprehensive Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    47Dividends paid ($0.10/share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (255
    )
    
    
    
    
    
    
    
    
    
    
    (255
    )Balance June 30, 2004
    
    
    2,709
    
    
    $
    27
    
    
    $
    27,924
    
    
    $
    16,511
    
    
    $
    (77
    )
    
    $
    (2,367
    )
    
    $
    42,029Balance January 1, 2005
    
    
    2,709
    
    
    $
    27
    
    
    $
    28,059
    
    
    $
    13,529
    
    
    $
    2
    
    
    $
    (2,198
    )
    
    $
    39,419Issuance of 1,000 shares of common
stock at $12.10/share in connection
with Restricted Stock Plan
    
    
    1
    
    
    
    
    
    
    
    12
    
    
    
    
    
    
    
    
    
    
    
    (12
    )
    
    $
    Vesting of restricted shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    161
    
    
    
    1611,528 shares repurchased at $12.10/share
    
    
    (2
    )
    
    
    
    
    
    
    (18
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (18
    )Comprehensive Income:Net Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    763
    
    
    
    
    
    
    
    
    
    
    
    763Change in unrealized gain (loss) on
securities available for sale
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (34
    )
    
    
    
    
    
    
    (34
    )Total Comprehensive Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    729Dividends paid ($0.10/share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (271
    )
    
    
    
    
    
    
    
    
    
    
    (271
    )Balance June 30, 2005
    
    
    2,708
    
    
    $
    27
    
    
    $
    28,053
    
    
    $
    14,021
    
    
    $
    (32
    )
    
    $
    (2,049
    )
    
    $
    40,020
  3




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##### Table of Contents



Six Months
    
    
    Six MonthsEnded
    
    
    EndedJune 30,
    
    
    June 30,2005
    
    
    2004(Dollars in thousands)Cash Flows from Operating ActivitiesNet Income
    
    $
    763
    
    
    $
    199Adjustments to reconcile net income to net cash from operating activities:Depreciation
    
    
    310
    
    
    
    214Provision for Loan Losses
    
    
    (385
    )
    
    
    450Amortization
    
    
    324
    
    
    
    402Stock dividends on other securities
    
    
    (100
    )
    
    
    (89
    )(Gain) Loss on sale of foreclosed assets
    
    
    20
    
    
    
    (34
    )Mortgage loans originated for sale
    
    
    (12,306
    )
    
    
    (13,952
    )Proceeds from sale of mortgage loans
    
    
    11,978
    
    
    
    13,899Gain on sale of mortgage loans
    
    
    (260
    )
    
    
    (445
    )(Gain) Loss on disposal of premises and equipment
    
    
    (45
    )
    
    
    Net change in:Deferred loan fees
    
    
    47
    
    
    
    (353
    )Accrued interest receivable
    
    
    (62
    )
    
    
    99Other assets
    
    
    1,233
    
    
    
    311Accrued expenses and other liabilities
    
    
    1,408
    
    
    
    2,399Net cash provided by (used in) operating activities
    
    
    2,925
    
    
    
    3,100Cash Flows from Investing ActivitiesProceeds from maturities of HTM securities
    
    
    10
    
    
    
    10Proceeds from sale and maturities of AFS securities
    
    
    1,188
    
    
    
    4,045Purchases of available for sale securities
    
    
    (5,922
    )
    
    
    (4,499
    )Purchases of other securities
    
    
    (10
    )
    
    
    (21
    )Proceeds from maturities of other securities
    
    
    
    
    
    
    5Loan originations and principal collections, net
    
    
    6,368
    
    
    
    (6,861
    )Proceeds from sale of foreclosed assets
    
    
    1,477
    
    
    
    1,358Proceeds from sale of premises and equipment
    
    
    343
    
    
    
    Purchases of premises and equipment
    
    
    (86
    )
    
    
    (87
    )Acquisition, net of cash acquired
    
    
    
    
    
    
    (12,779
    )Net cash provided by (used in) investing activities
    
    
    3,368
    
    
    
    (18,829
    )Cash Flows from Financing ActivitiesNet increase (decrease) in deposits
    
    
    1,737
    
    
    
    716Proceeds of FHLB advances
    
    
    1,000Repayment of FHLB advances
    
    
    (5,197
    )
    
    
    (131
    )Issuance of
Common Stock
    
    
    12
    
    
    
    4,586Repurchase of Common Stock
    
    
    (18
    )
    
    
    (11
    )Issuance of dividend
    
    
    (271
    )
    
    
    (255
    )Net cash provided by (used in) financing activities
    
    
    (2,737
    )
    
    
    4,905Net increase (decrease) in cash and cash equivalents
    
    
    3,556
    
    
    
    (10,824
    )Cash and cash equivalents -January 1
    
    
    15,649
    
    
    
    27,331Cash and cash equivalents -June 30
    
    $
    19,205
    
    
    $
    16,507Supplemental Cash Flow Information:Cash paid for interest
    
    
    3,308
    
    
    
    3,033Cash paid for income taxes
    
    
    
    
    
    
    Noncash investing activity  loans transferred to foreclosed assets
    
    
    1,575
    
    
    
    1,271
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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
     5




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##### Table of Contents



EARNINGS PER SHARE
  Three Months
    
    
    Three Months
    
    
    Six Months
    
    
    Six MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedJune 30, 2005
    
    
    June 30, 2004
    
    
    June 30, 2005
    
    
    June 30, 2004Weighted average shares outstanding
    
    
    2,708,825
    
    
    
    2,658,659
    
    
    
    2,709,022
    
    
    
    2,529,104Less: Average nonvested RRP shares
    
    
    (59,119
    )
    
    
    (72,412
    )
    
    
    (63,361
    )
    
    
    (78,793
    )Weighted average for basic EPS
    
    
    2,649,707
    
    
    
    2,586,247
    
    
    
    2,645,660
    
    
    
    2,450,311Dilutive effect of restricted stock and stock options
    
    
    
    
    
    
    51,037
    
    
    
    
    
    
    
    26,294Weighted average for dilutive EPS
    
    
    2,649,707
    
    
    
    2,637,284
    
    
    
    2,645,660
    
    
    
    2,476,605
 STOCK-BASED COMPENSATION
  Six months endedJune 30,
    
    June 30,2005
    
    2004As reported net income
    
    $
    763
    
    
    $
    199less: additional stock-based compensation determined
under the fair value method, net of tax
    
    
    44
    
    
    
    24$
    719
    
    
    $
    175As reported earnings per share
    
    $
    0.29
    
    
    $
    0.08Proforma earnings per share
    
    $
    0.27
    
    
    $
    0.07As reported earnings per diluted share
    
    $
    0.29
    
    
    $
    0.08Proforma earnings per diluted share
    
    $
    0.27
    
    
    $
    0.07
 
 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  6




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##### Table of Contents



FORWARD-LOOKING STATEMENTS
  CRITICAL ACCOUNTING POLICIES
  Allowance for Loan Losses
 Goodwill.
 FINANCIAL CONDITION
 Total Assets
  Securities
  Loans
  7




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##### Table of Contents



June 30, 2005
    
    
    December 31, 2004Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent(Dollars in thousands)Real estate loans:One-to four-family
    
    $
    136,722
    
    
    
    63.4
    %
    
    $
    141,251
    
    
    
    62.4
    %Multi-family
    
    
    3,497
    
    
    
    1.6
    
    
    
    4,042
    
    
    
    1.8Commercial
    
    
    34,352
    
    
    
    15.9
    
    
    
    42,746
    
    
    
    18.9Construction or development
    
    
    7,742
    
    
    
    3.6
    
    
    
    8,853
    
    
    
    3.9Total real estate loans
    
    
    182,313
    
    
    
    84.6
    
    
    
    196,892
    
    
    
    86.9Other loans:Consumer loans:Automobile
    
    
    2,560
    
    
    
    1.2
    
    
    
    2,631
    
    
    
    1.2Home equity
    
    
    15,806
    
    
    
    7.3
    
    
    
    14,234
    
    
    
    6.3Manufactured housing
    
    
    693
    
    
    
    0.3
    
    
    
    784
    
    
    
    0.3Other
    
    
    7,606
    
    
    
    3.5
    
    
    
    6,645
    
    
    
    2.9Total consumer loans
    
    
    26,665
    
    
    
    12.4
    
    
    
    24,294
    
    
    
    10.7Commercial business loans
    
    
    6,564
    
    
    
    3.0
    
    
    
    5,330
    
    
    
    2.4Total other loans
    
    
    33,229
    
    
    
    15.4
    
    
    
    29,624
    
    
    
    13.1Total loans
    
    
    215,542
    
    
    
    100.0
    %
    
    
    226,516
    
    
    
    100.0
    %Less:Allowance for loan losses
    
    
    3,178
    
    
    
    
    
    
    
    6,385Net deferred loan fees
    
    
    652
    
    
    
    
    
    
    
    808Loans in process
    
    
    
    
    
    
    
    
    
    
    6Total loans, net
    
    $
    211,712
    
    
    
    
    
    
    $
    219,317
   Deposits
  8




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##### Table of Contents



Federal Home Loan Bank Advances
  Equity
  RESULTS OF OPERATIONS
 Net Interest Income
     Six Months Ended June 30,2005
    
    2004Average
    
    Interest
    
    
    
    
    
    Average
    
    InterestOutstanding
    
    Earned/
    
    Yield/
    
    Outstanding
    
    Earned/
    
    Yield/Balance
    
    Paid
    
    Rate
    
    Balance
    
    Paid
    
    Rate(dollars in thousands)Fed Funds and overnight deposits
    
    $
    6,204
    
    
    $
    102
    
    
    
    3.32
    %
    
    $
    14,973
    
    
    $
    76
    
    
    
    1.02
    %Investment securities
    
    
    12,581
    
    
    
    227
    
    
    
    3.64
    
    
    
    19,665
    
    
    
    240
    
    
    
    2.45Other securities
    
    
    4,733
    
    
    
    99
    
    
    
    4.22
    
    
    
    3,546
    
    
    
    67
    
    
    
    3.79Loans receivable
    
    
    222,837
    
    
    
    7,101
    
    
    
    6.43
    
    
    
    171,440
    
    
    
    5,914
    
    
    
    6.92Total earning assets
    
    $
    246,355
    
    
    $
    7,529
    
    
    
    6.16
    
    
    $
    209,624
    
    
    $
    6,297
    
    
    
    6.02Demand and NOW Accounts
    
    $
    36,154
    
    
    $
    40
    
    
    
    0.22
    
    
    $
    18,717
    
    
    
    51
    
    
    
    0.55Money market accounts
    
    
    17,739
    
    
    
    90
    
    
    
    1.02
    
    
    
    11,833
    
    
    
    71
    
    
    
    1.20Savings accounts
    
    
    29,342
    
    
    
    61
    
    
    
    0.42
    
    
    
    18,078
    
    
    
    51
    
    
    
    0.57Certificates of deposit
    
    
    89,031
    
    
    
    1,318
    
    
    
    2.99
    
    
    
    70,672
    
    
    
    1,136
    
    
    
    3.22Federal Home Loan Bank Advances
    
    
    63,672
    
    
    
    1,634
    
    
    
    5.18
    
    
    
    60,141
    
    
    
    1,680
    
    
    
    5.60Total interest bearing liabilities
    
    $
    235,938
    
    
    
    3,143
    
    
    
    2.69
    
    
    $
    179,441
    
    
    
    2,989
    
    
    
    3.34Net interest income
    
    
    
    
    
    $
    4,386
    
    
    
    
    
    
    
    
    
    
    $
    3,308Net interest spread
    
    
    
    
    
    
    
    
    
    
    3.48
    %
    
    
    
    
    
    
    
    
    
    
    2.68
    %Net interest margin
    
    
    
    
    
    
    
    
    
    
    3.56
    %
    
    
    
    
    
    
    
    
    
    
    3.16
    %
 9




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##### Table of Contents



Provision for Loan Losses
     June 30, 2005
    
    
    December 31, 2004(Dollars in thousands)Non-performing loans
    
    $
    1,175
    
    
    $
    4,231Real estate in judgment
    
    
    1,257
    
    
    
    726Foreclosed and repossessed assets
    
    
    795
    
    
    
    1,243Total non-performing assets
    
    $
    3,227
    
    
    $
    6,200Non-performing loans to total loans
    
    
    .56
    %
    
    
    1.87
    %Non-performing assets to total assets
    
    
    1.17
    %
    
    
    2.23
    %Allowance for loan losses to non-performing loans
    
    
    270.5
    %
    
    
    150.9
    %Allowance for loan losses to loans receivable
    
    
    1.47
    %
    
    
    2.82
    %
    Noninterest Income
  10




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##### Table of Contents



Noninterest Expense
  1 2
 Federal Income Tax Expense
  LIQUIDITY
    11




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##### Table of Contents



CONTRACTUAL OBLIGATIONS
   Payments due by periodLess than
    
    1-3
    
    3-5
    
    AfterTotal
    
    One year
    
    Years
    
    Years
    
    5 Years(in thousands)Certificates of deposit
    
    $
    86,423
    
    
    $
    54,832
    
    
    $
    25,054
    
    
    $
    6,412
    
    
    $
    125FHLB advances
    
    
    61,659
    
    
    
    8,066
    
    
    
    19,762
    
    
    
    12,313
    
    
    
    21,518Total
    
    $
    148,082
    
    
    $
    62,898
    
    
    $
    44,816
    
    
    $
    18,725
    
    
    $
    21,643
  Amount of commitment expiration per periodLess than
    
    1-3
    
    3-5
    
    AfterTotal
    
    One year
    
    Years
    
    Years
    
    5 Years(in thousands)Commitments to grant loans
    
    $
    2,745
    
    
    $
    2,745
    
    
    $
    
    
    
    $
    
    
    
    $
    Unfunded commitments under HELOCs
    
    
    15,164
    
    
    
    797
    
    
    
    2,549
    
    
    
    3,639
    
    
    
    8,179Unfunded commitments under Commercial LOCs
    
    
    1,083
    
    
    
    1,057
    
    
    
    26
    
    
    
    
    
    
    
    Letters of credit
    
    
    114
    
    
    
    54
    
    
    
    60
    
    
    
    
    
    
    
    Total
    
    $
    19,106
    
    
    $
    4,653
    
    
    $
    2,635
    
    
    $
    3,639
    
    
    $
    8,179
  CAPITAL RESOURCES
  
 ITEM 3. QUANTITATIVE AND QUALITIVE DISCLOSURES ABOUT MARKET RISK
  12




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##### Table of Contents



Fair2005
    
    2006
    
    2007
    
    2008
    
    2009
    
    Thereafter
    
    Total
    
    ValueRATE-SENSITIVE ASSETSOvernight deposits
    
    $
    6,120
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    6,120
    
    
    $
    6,120Average interest rate
    
    
    1.85
    %Securities
    
    
    1,535
    
    
    
    770
    
    
    
    2,761
    
    
    
    
    
    
    
    2,968
    
    
    
    267
    
    
    
    8,301
    
    
    
    8,325Average interest rate
    
    
    2.06
    %
    
    
    3.05
    %
    
    
    3.42
    %
    
    
    
    
    
    
    4.21
    %
    
    
    4.30
    %Gross Loans
    
    
    23,112
    
    
    
    5,483
    
    
    
    9,915
    
    
    
    6,380
    
    
    
    10,889
    
    
    
    170,737
    
    
    
    226,516
    
    
    
    229,128Average interest rate
    
    
    6.00
    %
    
    
    7.63
    %
    
    
    7.33
    %
    
    
    7.02
    %
    
    
    6.60
    %
    
    
    6.46
    %RATE-SENSITIVE LIABILITIESSavings & interest bearing
demand deposits
    
    
    76,134
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    76,134
    
    
    
    76,134Average interest rate
    
    
    0.51
    %Certificates of deposit
    
    
    56,171
    
    
    
    13,297
    
    
    
    10,918
    
    
    
    4,164
    
    
    
    1,714
    
    
    
    137
    
    
    
    86,401
    
    
    
    87,380Average interest rate
    
    
    2.51
    %
    
    
    3.64
    %
    
    
    4.45
    %
    
    
    3.52
    %
    
    
    3.47
    %
    
    
    3.24
    %FHLB advances
    
    
    9,393
    
    
    
    8,585
    
    
    
    6,146
    
    
    
    20,153
    
    
    
    160
    
    
    
    21,518
    
    
    
    65,955
    
    
    
    68,155Average interest rate
    
    
    5.01
    %
    
    
    5.22
    %
    
    
    6.43
    %
    
    
    5.67
    %
    
    
    5.64
    %
    
    
    4.97
    %
 
 ITEM 4. CONTROLS AND PROCEDURES
   13




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##### Table of Contents



OTHER INFORMATION
 
 Item 1. LEGAL PROCEEDINGS
  Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  Item 3. DEFAULTS UPON SENIOR SECURITIES
  
 Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 1.
    
    Election of Directors with terms ending in 2008
 For
    
    
    WithholdHarold A. Adamson
    
    
    2,324,562
    
    
    
    95,590Lauren L. Bracy
    
    
    2,223,998
    
    
    
    195,854James R. Vozar
    
    
    2,194,470
    
    
    
    225,382
  TermExpiresMartin M. Mitchell
    
    
    2006Stephen M. Ross
    
    
    2006Gordon L. Welch
    
    
    2006Craig W. Dally
    
    
    2007Donald L. Denney
    
    
    2007Richard L. Dobbins
    
    
    2007
 2.
    
    Ratification of the appointment of Plante & Moran, PLLC as independent auditors
for the fiscal year ending December 31, 2005:
 For: 2,364,520
    
    Against: 53,032
    
    Abstain: 2,300
 Item 5. OTHER INFORMATION
  
 Item 6. EXHIBITS
  14




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##### Table of Contents



SIGNATURES
  MONARCH COMMUNITY BANCORP, INC.Date: August 11, 2005
    
    By:
    
    /s/ Donald L. DenneyDonald L. DenneyPresident and Chief Executive OfficerDate: August 11, 2005
    
    And:
    
    /s/ William C. KurtzWilliam C. KurtzSenior Vice President and Treasurer
 15




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##### Table of Contents



INDEX TO EXHIBITS
 Exhibit No.
    
    Description of Exhibit31.1
    
    Rule 13a-14(a) Certification of the Companys President and Chief Executive Officer.31.2
    
    Rule 13a-14(a) Certification of the Companys Chief Financial Officer.32
    
    Section 1350 Certification.
 16