Monarch Community Bancorp (MCBF) 8-K Monarch Community Bancorp, Inc. Announces First Quarter Earnings

EXHIBIT 99.1

MONARCH COMMUNITY BANCORP, INC.
ANNOUNCES FIRST QUARTER EARNINGS

COLDWATER, MICHIGAN, April 21, 2005 — Monarch Community Bancorp, Inc. (Nasdaq: MCBF), the parent company of Monarch Community Bank (“Bank”), today announced earnings of $412,000, or $0.16 per share, for the quarter ended March 31, 2005, compared to $103,000, or $0.04 per share, for the same period a year ago.

Net interest income increased $881,000, or 65.8%, for the quarter ended March 31, 2005 compared to the same period a year ago as a result of the acquisition of MSB Financial in April 2004. Also contributing to our increase in net earnings was a negative loan loss provision of $385,000 for the quarter ended March 31, 2005 compared to $0 for the same period a year ago. Offsetting the impact of the negative loan loss provision was a $275,000 charge to write down the value of a property held in Real Estate Owned.

At March 31, 2005, the Company’s total assets were $282.0 million, compared to $275.4 million at December 31, 2004. Securities available for sale increased $5.2 million and cash and cash equivalents increased $1.6 million which offset a decrease in loans of $1.9 million. Foreclosed assets increased $700,000 reflecting the Bank’s commitment to aggressively reduce problem loans. Total deposits increased $8.5 million, $5.7 million in CDs and $2.8 million in checking and savings accounts. The Bank is committed to increasing its checking and savings balances during 2005. Federal Home Loan Bank advances decreased $3.6 million due to payoffs of maturing advances.

Monarch Community Bank is headquartered in Coldwater, Michigan and operates six full service retail offices in Branch, Calhoun and Hillsdale counties, as well as a drive-thru only location in Branch County.

For additional information, visit Monarch Bancorp’s website at www.monarchcb.com.

Contact:

Donald L. Denney, CEO
(517) 278-4567 ext 278

Or

William C. Kurtz, CFO
(517) 278-4567 ext 260

MONARCH COMMUNITY BANCORP, INC.
Condensed Consolidated Balance Sheets

	(unaudited)
	March 31,			December 31,
	2005			2004
	(Dollars in thousands, except per share data)
ASSETS
Cash and due from banks	$	7,577		$	9,529
Federal Home Loan Bank overnight time and other interest bearing deposits		9,627			6,120
Total cash and cash equivalents		17,204			15,649
Securities-Available for sale		13,282			8,057
Securities-Held to maturity		262			267
Other investments		4,780			4,720
Real Estate Investment — Limited partnership, at equity		1,242			1,278
Loans held for sale		1,164			361
Loans, net of allowance for loan losses		217,443			219,317
Accrued interest and late charges		1,084			1,138
Foreclosed assets, net		2,650			1,960
Premises and equipment		6,155			6,444
Deferred income taxes		668			612
Goodwill		9,606			9,606
Core deposit		1,642			1,752
Other assets		4,853			4,287
Total assets	$	282,035		$	275,448
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Noninterest-bearing	$	6,662		$	5,198
Interest-bearing		169,553			162,535
Total deposits		176,215			167,733
Federal Home Loan Bank advances		62,405			65,955
Accrued expenses and other liabilities		3,830			2,341
Total liabilities		242,450			236,029
Commitments and contingent liabilities		—			—
Stockholder’s equity
Common stock-$0.01 par value authorized-20,000,000 shares issued and outstanding-2,709,220 shares at March 31, 2005 and December 31, 2004		27			27
Additional paid in capital		28,059			28,059
Retained earnings		13,806			13,529
Accumulated other comprehensive income		(109	)		2
Unearned Compensation		(2,198	)		(2,198	)
Total stockholder’s equity		39,585			39,419
Total liabilities and stockholder’s equity	$	282,035		$	275,448

Condensed Consolidated Statements of Income

	(unaudited)
	Three Months			Three Months
	Ended			Ended
	March 31,			March 31,
	2005			2004
	(Dollars in thousands)
Interest Income
Loans, including fees	$	3,563		$	2,541
Investment securities		156			156
Federal funds sold and overnight deposits		47			46
Total interest income		3,766			2,743
Interest Expense
Deposits		724			606
Federal Home Loan bank advances		822			798
Total interest expense		1,546			1,404
Net Interest Income		2,220			1,339
Provisions for Loan Losses		(385	)		—
Net Interest Income after Provision for Loan Losses		2,605			1,339
Noninterest Income
Fees and service charges		466			226
Loan servicing fees		113			57
Net gain on sale of loans		137			168
Net gain (loss) on sale of securities		—			—
Other income (loss)		(211	)		34
Total noninterest income		505			485
Noninterest Expenses
Salaries and employees benefits		1,277			938
Occupancy and equipment		291			197
Data processing		172			99
Mortgage banking		104			35
Professional fees		137			99
Amortization of core deposit intangible		110			—
NOW account processing		49			32
ATM/Debit card processing		51			22
Foreclosed property expense		36			46
Other general and administrative		319			209
Total noninterest expense		2,546			1,677
Income — Before Income Taxes		564			147
Income Taxes		152			44
Net Income	$	412		$	103
Earnings Per Share
Basic	$	0.16		$	0.04
Diluted	$	0.15		$	0.04