Monarch Community Bancorp (MCBF) 10-Q 2008 Q2 Quarterly report

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 June 30, 2008or

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

375 North Willowbrook Road, Coldwater, MI 49036
(Address of principal executive offices)

517-278-4566
(Registrant’s telephone number)

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes:þ No:o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filero  Accelerated filero  Non-accelerated filer  o
(Do not check if a smaller reporting company) Smaller reporting companyþ 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes:o No:þ

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practical date: At July 31, 2008, there were 2,107,368 shares of the issuer’s Common Stock outstanding.

Monarch Community Bancorp, Inc.
Index

PART I — FINANCIAL INFORMATION
Item 1 — Condensed Financial Statements:
Condensed Consolidated Balance Sheets — June 30, 2008 and December 31, 2007	1
Condensed Consolidated Statements of Income — Six Months Ended June 30, 2008 and 2007	2
Condensed Consolidated Statements of Changes in Stockholder’s Equity — Six Months Ended June 30, 2008 and 2007	3
Condensed Consolidated Statements of Cash Flows — Six Months Ended June 30, 2008 and 2007	4
Notes to Condensed Consolidated Financial Statements	5-7
Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations	7-14
Item 3 — Quantitative and Qualitative Disclosures about Market Risk	14
Item 4T— Controls and Procedures	15
PART II — OTHER INFORMATION
Item 1 — Legal Proceedings	15
Item 1A — Risk Factors	15
Item 2 — Unregistered Sales of Equity Securities and Use of Proceeds	15
Item 3 — Defaults Upon Senior Securities	16
Item 4 — Submission of Matters to a Vote of Security Holders	16
Item 5 — Other Information	16
Item 6 — Exhibits	16
SIGNATURES	17
CERTIFICATIONS	18-21
Certification of President and CEO
Certification of the CFO
Section 1350 Certifications

PART I—FINANCIAL INFORMATION

Item 1. CONDENSED FINANCIAL STATEMENTS

Condensed Consolidated Balance Sheets

	(Unaudited)
	June			December 31,
	2008			2007
	(Dollars in thousands,
	except per share data)
Assets
Cash and due from banks		7,962		$	7,691
Federal Home Loan Bank overnight time and other interest bearing deposits		857			6,151
Total cash and cash equivalents		8,819			13,842
Securities — Available for sale		10,945			11,084
Securities — Held to maturity		37			238
Other securities		4,237			4,237
Loans held for sale		148			422
Loans, net		238,527			224,797
Foreclosed assets, net		830			1,515
Premises and equipment		4,626			4,675
Goodwill		9,606			9,606
Core deposit intangible		766			862
Other assets		8,539			7,930
Total assets	$	287,080		$	279,208
Liabilities and Stockholders’ Equity
Liabilities
Deposits:
Non-interest bearing	$	16,206		$	13,609
Interest bearing		175,828			164,327
Total deposits		192,034			177,936
Federal Home Loan Bank advances		54,830			59,330
Accrued expenses and other liabilities		2,637			2,856
Total liabilities		249,501			240,122
Commitments and Contingencies		—			—
Stockholders’ Equity
Common stock — $0.01 par value, 20,000,000 shares authorized, 2,142,543 shares issued and outstanding at June 30, 2008 and 2,321,585 shares issued and outstanding at December 31, 2007		21			23
Additional paid-in capital		21,998			23,828
Retained earnings		16,521			16,341
Accumulated other comprehensive income		28			52
Unearned compensation		(989	)		(1,158	)
Total stockholders’ equity		37,579			39,086
Total liabilities and stockholders’ equity	$	287,080		$	279,208

See accompanying notes to condensed consolidated financial statements.

1

Condensed Consolidated Statements of Income (Unaudited)

	Three Months		Three Months		Six Months		Six Months
	Ended		Ended		Ended		Ended
	June 30,		June 30,		June 30,		June 30,
	2008		2007		2008		2007
	(Dollars in thousands, except per share data)
Interest Income
Loans, including fees	$	4,090	$	4,070	$	8,148	$	8,149
Investment securities		169		205		339		412
Federal funds sold and overnight deposits		29		121		87		262
Total interest income		4,288		4,396		8,574		8,823
Interest Expense
Deposits		1,483		1,541		3,038		3,170
Federal Home Loan Bank advances		643		767		1,302		1,491
Total interest expense		2,126		2,308		4,340		4,661
Net Interest Income		2,162		2,088		4,234		4,162
Provision for Loan Losses		448		245		757		470
Net Interest Income After Provision for Loan Losses		1,714		1,843		3,477		3,692
Non-interest Income
Fees and service charges		573		628		1,144		1,228
Loan servicing fees		111		110		220		221
Net gain on sale of loans		195		138		461		331
Net gain (loss) on sale of securities		2		—		2		(19	)
Other income		60		93		113		208
Total non-interest income		941		969		1,940		1,969
Non-interest Expense
Salaries and employee benefits		1,121		1,074		2,267		2,140
Occupancy and equipment		254		247		517		513
Data processing		189		179		391		366
Amortization of mortgage servicing rights		112		87		231		173
Professional services		107		145		193		250
Amortization of core deposit intangible		43		54		97		122
NOW account processing		42		47		87		91
ATM/Debit card processing		51		49		97		93
Foreclosed property expense		27		16		85		39
Other general and administrative		376		294		677		596
Total non-interest expense		2,322		2,192		4,641		4,383
Income — Before income taxes		332		620		775		1,278
Income Taxes		85		156		195		320
Net Income	$	247	$	464	$	580	$	958
Earnings Per Share
Basic	$	0.12	$	0.19	$	0.27	$	0.40
Diluted	$	0.12	$	0.19	$	0.27	$	0.40

See accompanying notes to condensed consolidated financial statements.

2

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited)

													Accumulated
	Common Stock												Other
	Number of						Additional Paid			Retained			Comprehensive			Unearned
	Shares			Amount			in Capital			Earnings			Income			Compensation			Total
Balance— January 1, 2007		2,534		$	25		$	26,191		$	15,319		$	(63	)	$	(1,486	)	$	39,986
Vesting of restricted shares																	173			173
2,108 shares repurchased at $11.83 share		(2	)					(24	)											(24	)
Stock option expenses								43												43
Comprehensive Income:
Net Income											958									958
Change in unrealized loss on securities available-for-sale, net of tax														(29	)					(29	)
Total comprehensive income																				929
Dividends paid ($0.14/share)		—			—			—			(354	)		—			—			(354	)
Balance— June 30, 2007		2,532		$	25			26,210			15,923			(92	)		(1,313	)		40,753
Balance— January 1 , 2008		2,322		$	23		$	23,828		$	16,341		$	52		$	(1,158	)	$	39,086
Vesting of restricted shares																	169			169
179,042 shares repurchased at an average price $10.24/share		(179	)		(2	)		(1,835	)											(1,837	)
Stock option expenses								5												5
Net Income											580									580
Change in unrealized loss on securities available-for-sale, net of tax														(24	)					(24	)
Total comprehensive income																				556
Dividends paid ($0.18/share)		—			—			—			(400	)		—			—			(400	)
Balance— June 30, 2008		2,143			21			21,998			16,521			28			(989	)		37,579

See accompanying notes to condensed consolidated financial statements.

3

Condensed Consolidated Statements of Cash Flows (Unaudited)

	Six Months Ended
	June, 30
	2008			2007
	(Dollars in thousands)
Cash Flows From Operating Activities
Net Income	$	580		$	958
Adjustments to reconcile net income to net cash from operating activities
Depreciation and amortization		574			534
Provision for loan losses		757			470
Stock option expense		5			43
Gain on sale of foreclosed assets		(35	)		(114	)
Mortgage loans originated for sale		(21,718	)		(13,850	)
Proceeds from sale of mortgage loans		21,196			13,716
Gain on sale of mortgage loans		(461	)		(331	)
(Gain) Loss on sale of available for sale securities		(2	)		19
Earned stock compensation		169			173
Gain on disposal of equipment		—			6
Net change in:
Deferred loan fees		(47	)		10
Accrued interest receivable		21			95
Other assets		(848	)		6
Accrued expenses and other liabilities		(208	)		(286	)
Net cash provided by operating activities		(17	)		1,449
Cash Flows From Investing Activities
Activity in available-for-sale securities:
Purchases		(2,269	)		(3,819	)
Proceeds from sales of securities		—			2,928
Proceeds from maturities of securities		2,364			2,101
Activity in held-to-maturity securities:
Purchases		(7	)		—
Proceeds from maturities of securities		208			—
Loan originations and principal collections, net		(13,723	)		2,727
Proceeds from sale of foreclosed assets		1,249			748
Proceeds from sale of premises and equipment		—			102
Purchase of premises and equipment		(189	)		(61	)
Net cash provided by (used in) investing activities		(12,367	)		4,726
Cash Flows From Financing Activities
Net increase in deposits		14,098			(9,858	)
Repurchase of common stock		(1,837	)		(24	)
Dividends paid		(400	)		(354	)
Proceeds from FHLB advances		8,500			13,500
Repayment of FHLB advances		(13,000	)		(10,500	)
Net cash provided by financing activities		7,361			(7,236	)
Net Increase in Cash and Cash Equivalents		(5,023	)		(1,061	)
Cash and Cash Equivalents— Beginning		13,842			15,297
Cash and Cash Equivalents —End	$	8,819		$	14,236
Supplemental Cash Flow Information:
Cash paid for:
Interest		4,343			4,733
Income taxes		325			450
Noncash investing activities:
Loans transferred to foreclosed assets		540			278
Issuance of common stock in connection with the 2003 RRP		—			—

See accompanying notes to condensed consolidated financial statements.

4

MONARCH COMMUNITY BANCORP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION

Monarch Community Bancorp, Inc. (the “Corporation”) was incorporated in 2002 under Maryland law to hold all of the common stock of Monarch Community Bank (the “Bank”), formerly known as Branch County Federal Savings and Loan Association. The Bank converted to a stock savings institution effective August 29, 2002. In connection with the conversion, the Corporation sold 2,314,375 shares of its common stock in a subscription offering.

Monarch Community Bank provides a broad range of banking services to its primary market area of Branch, Calhoun and Hillsdale counties in Michigan. The Bank operates six full service offices. The Bank owns 100% of First Insurance Agency. First Insurance Agency is a licensed insurance agency established to allow for the receipt of fees on insurance services provided to the Bank’s customers. The Bank also owns a 24.98% interest in a limited partnership formed to construct and operate multi-family housing units.

BASIS OF PRESENTATION

The condensed consolidated financial statements of the Corporation include the accounts of Monarch Community Bank and First Insurance Agency. All significant intercompany balances and transactions have been eliminated in consolidation. The condensed consolidated financial statements for interim periods are unaudited; however, in the opinion of the Corporation’s management, all adjustments, consisting only of normal recurring accruals, necessary for a fair presentation of the Corporation’s financial position and results of operations have been included.

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from those estimates and assumptions.

The accompanying financial statements have been prepared in accordance with the instructions for Form 10-Q and, therefore, do not include all information and footnotes required by generally accepted accounting principles in annual consolidated financial statements. These condensed consolidated financial statements should be read in conjunction with the Corporation’s Form 10-K for the year ended December 31, 2007 filed with the Securities and Exchange Commission.

The results of operations for the six month period ended June 30, 2008 are not necessarily indicative of the results to be expected for the full year period.

ALLOWANCE FOR LOAN LOSSES

The appropriateness of the allowance for loan losses is reviewed by management based upon our evaluation of then-existing economic and business conditions affecting our key lending areas and other conditions, such as credit quality trends (including trends in delinquencies, nonperforming loans and foreclosed assets expected to result from existing conditions), collateral values, loan volumes and concentrations, specific industry conditions within portfolio segments and recent loss experience in particular segments of the portfolio that existed as of the balance sheet date and the impact that these conditions were believed to have had on the collectibility of the loan. Senior management reviews these conditions at least quarterly.

To the extent that any of these conditions is evidenced by a specifically identifiable problem credit or portfolio segment as of the evaluation date, management’s estimate of the effect of this condition may be reflected as a specific allowance applicable to this credit or portfolio segment.

The allowance for loan losses is based on estimates of losses inherent in the loan portfolio. Actual losses can vary significantly from the estimated amounts. Our methodology as described permits adjustments to any loss factor used in the computation of the formula allowance in the event that, in management’s judgment, significant factors which affect the collectibility of the portfolio as of the evaluation date are not reflected in the loss factors. By assessing the estimated losses inherent in the loan portfolio on a quarterly basis, we are able to adjust specific and inherent loss estimates based upon any more recent information that has become available.

5

RECLASSIFICATIONS

Certain 2007 amounts have been reclassified to conform to the 2008 presentation.

EARNINGS PER SHARE

A reconciliation of the numerators and denominators used in the computation of the basic earnings per share and diluted earnings per share is presented below (000s omitted except per share data):

	Three Months			Three Months			Six Months			Six Months
	Ended			Ended			Ended			Ended
	June 30, 2008			June 30, 2007			June 30, 2008			June 30, 2007
Basic earnings per share
Numerator:
Net income	$	247		$	464		$	580		$	958
Denominator:
Weighted average common shares outstanding		2,209			2,532			2,246			2,533
Less: Average unallocated ESOP shares		(83	)		(93	)		(83	)		(93	)
Less: Average non-vested RRP shares		(15	)		(33	)		(35	)		(38	)
Weighted average common shares outstanding for basic earnings per share		2,111			2,406			2,128			2,402
Basic earnings per share	$	0.12		$	0.19		$	0.27		$	0.40
Diluted earnings per share
Numerator:
Net income	$	247		$	464		$	580		$	958
Denominator:
Weighted average common shares outstanding for basic earnings per share		2,111			2,406			2,128			2,402
Add: Dilutive effects of restricted stock and stock options		—			—			—			—
Weighted average common shares and dilutive potential common shares outstanding		2,111			2,406			2,128			2,402
Diluted earnings per share	$	0.12		$	0.19		$	0.27		$	0.40

RECENT ACCOUNTING PRONOUNCEMENTS

In February 2007, FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities”. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. Early adoption was permitted subject to specific requirements outlined in the new Statement. Therefore, calendar-year companies were able to adopt SFAS No. 159 for their first quarter 2007 financial statements.  The Company did not adopt the standard early, therefore SFAS No. 159 will become applicable for years beginning January 1, 2008.

The new Statement allows entities to choose, at specified election dates, to measure eligible financial assets and liabilities at fair value that are not otherwise required to be measured at fair value. If a company elects the fair value option for an eligible item, changes in that item’s fair value in subsequent reporting periods must be recognized in current earnings. SFAS 159 also establishes presentation and disclosure requirements designed to draw comparison between entities that elect different measurement attributes for similar assets and liabilities.

FAIR VALUE MEASUREMENTS

In general, fair values determined by Level 1 inputs use quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

Fair values determined by Level 2 inputs use other inputs that are observable, either directly or indirectly. These Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and other inputs such as interest rates and yield curves that are observable at commonly quoted intervals.

Level 3 inputs are unobservable inputs, including inputs that are available in situations where there is little, if any, market activity for the related asset or liability.

6

In instances where inputs used to measure fair value fall into different levels in the above fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest level input that is significant to the valuation. The Company’s assessment of the significance of particular inputs to these fair value measurements requires judgment and considers factors specific to each asset or liability.

The following table present information about the Company’s assets and liabilities measured at fair value on a recurring basis at June 30, 2008, and the valuation techniques used by the Company to determine those fair values.

			Significant
			Other		Significant
	Quoted Prices in Active		Observable		Unobservable
	Markets for Identical		Inputs (Level		Inputs (Level	Balance at June 30,
	Assets (Level 1)		2)		3)	2008
Assets
Investment securities- available — for — sale	$	7,752	$	3,193		$	10,945

The Company also has assets that under certain conditions are subject to measurement at fair value on a non-recurring basis. These assets include held to maturity investments and loans. The Company had no impairment charges for changes in fair value for assets measured on a recurring basis.

Other assets, including bank-owned life insurance, goodwill, intangible assets and other assets acquired in business combinations, are also subject to periodic impairment assessments under other accounting principles generally accepted in the United States of America. These assets are not considered financial instruments. Effective February 12, 2008, the FASB issued a staff position, FSP FAS 157-2, which delayed the applicability of FAS 157 to non-financial instruments. Accordingly, these assets have been omitted from the above disclosures.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the condensed consolidated financial statements of the Corporation and the accompanying notes.

The Corporation is not aware of any market or institutional trends, events, or circumstances that will have or are likely to have a material effect on liquidity, capital resources, or results of operations except as discussed herein. Also, the Corporation is not aware of any current recommendations by regulatory authorities that will have such effect if implemented.

FORWARD-LOOKING STATEMENTS

In addition to historical information, the following discussion contains “forward-looking statements” that involve risks and uncertainties. All statements regarding the expected financial position, business and strategies are forward-looking statements and the Corporation intends for them to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The words “anticipates,” “believes,” “estimates,” “seeks,” “expects,” “plans,” “intends,” and similar expressions, as they relate to the Corporation or management, are intended to identify forward-looking statements. The Corporation believes that the expectations reflected in these forward-looking statements are reasonable based on our current beliefs and assumptions; however, these expectations may prove to be incorrect.

Factors which could have a material adverse effect on our operations include, but are not limited to, changes in interest rates, changes in the relative difference between short and long-term interest rates, general economic conditions, legislative/regulatory changes, monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board, the quality or composition of the loan or investment portfolios, including levels of non-performing assets, demand for loan products, deposit flows, competition, demand for financial services in our market area, our operating costs and accounting principles and guidelines. These risks and uncertainties should be considered in evaluating forward-looking statements and you should not rely too much on these statements.

CRITICAL ACCOUNTING POLICIES

The nature of the financial services industry is such that, other than described below, the use of estimates and management judgment is not likely to present a material risk to the financial statements. In cases where estimates or management judgment are required, internal controls and processes are established to provide assurance that such estimates and management judgments are materially correct to the best of management’s knowledge.

7

Allowance for Loan Losses. Accounting for loan classifications, accrual status, and determination of the allowance for loan losses is based on regulatory guidance. This guidance includes, but is not limited to, generally accepted accounting principles, the uniform retail credit classification and account management policy issued by the Federal Financial Institutions Examination Council, the joint policy statement on the allowance for loan losses methodologies issued by the Federal Financial Institutions Examination Council and guidance issued by the Securities and Exchange Commission. Accordingly, the allowance for loan losses includes a reserve calculation based on an evaluation of loans determined to be impaired, risk ratings, historical losses, loans past due, collateral values and cost of disposal and other subjective factors.

Foreclosed Assets.Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value at the date of the foreclosure, establishing a new cost basis. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less estimated selling expenses, which consist primarily of commissions that will be paid to an independent real estate agent upon sale of the property. Revenue and expenses from operations and changes in the valuation allowance are included in net expenses from foreclosed assets.

Goodwill and Other Intangible Assets. Goodwill represents the excess of the cost of an acquisition over the fair value of net identifiable tangible and intangible assets acquired. Under the provisions of SFAS 142, goodwill is no longer amortized into the income statement over an estimated life, but rather is tested at least annually for impairment. Impairment of goodwill is evaluated by reporting unit and is based on a comparison of the recorded balance of goodwill to the applicable market value or discounted cash flows. To the extent that impairment may exist, the current carrying amount is reduced by the estimated shortfall. Intangible assets which have finite lives are amortized over their estimated useful lives and are subject to impairment testing.

FINANCIAL CONDITION

Assets

Total assets increased $7.9 million, or 2.8%, to $287.1 million at June 30, 2008 compared to $279.2 million at December 31, 2007. Management attributes this growth to a strategy for 2008 that emphasizes growth in the commercial business and real estate loan portfolio.

Securities

Securities decreased to $10.9 million at June 30, 2008 compared to $11.1 million at December 31, 2007. The decrease was attributable to $1.0 million security being called in the first quarter due to decreasing market interest rates. This decrease was offset by the purchase of $1.0 million security in the 2^nd quarter as a result of efforts to increase yield by purchasing short term investments.

Loans

The Bank’s net loan portfolio increased by $13.7 million, or 6.1%, from $224.8 million at December 31, 2007 to $238.5 million at June 30, 2008. The following table presents information concerning the composition of our loan portfolio in dollar amounts and in percentages as of the dates indicated:

8

	June 30, 2008						December 31, 2007
	Amount		Percent				Amount		Percent
	(Dollars in thousands)
Real Estate Loans:
One-to-four family	$	124,140		51.5			$	126,780		55.8	%
Multi-family		5,828		2.4				5,594		2.5
Commercial		71,218		29.5				56,714		25.0
Construction or development		5,514		2.3				6,409		2.8
Total real estate loans		206,700		85.7				195,497		86.0
Other loans:						��
Consumer loans:
Home equity		19,897		8.3				20,430		9.0
Other		6,251		2.6				7,014		3.1
Total consumer loans		26,148		10.8				27,444		12.1
Commercial Business Loans		8,281		3.4				4,228		1.9
Total other loans		34,429		14.3				31,672		14.0
Total Loans		241,129		100.0	%			227,169		100.0	%
Allowance for loan losses		2,006						1,824
Less: Net deferred loan fees		596						548
Loans in process		—						—
Total Loans, net	$	238,527					$	224,797

One-to-four family loans decreased as a result of a $4.6 million decrease in adjustable rate mortgages and a $1.8 million decrease in all other mortgages (including fixed rate mortgages), this decrease was offset by an increase in balloon loans of $3.5 million. Continuing with the strategy adopted in 2007, the Bank sold a large percentage of new one to four family loan originations. Commercial real estate loans increased $14.5 million and commercial business loans increased $4.1 million due to the continued focus on growth in commercial lending. The Bank has made inroads in the local market but also continues to originate large commercial real estate loans outside the market area. For the last several years the Bank has originated loans in areas outside the market area where the economy is perceived to be better than the local economy. The Bank also relies on good underwriting standards and maintaining current financial information to mitigate the risk associated with lending outside the market area. The Bank expects future loan growth to come primarily from commercial lending with a focus on in-market lending.

The allowance for loan losses was $2,006,000 at June 30, 2008 compared to $1,824,000 at December 31, 2007, an increase of $182,000. This increase was primarily due a provision for loan losses of $757,000, which was offset by net charge offs of $575,000 for the six months ended June 2008, (see “Provision for Loan Losses” below). Charge-offs for the six months ended June 30, 2008 included $356,000 of one-to-four family mortgage loans, $55,000 of home equity lines of credit, $39,000 of commercial loans collateralized by real estate and $224,000 of consumer loans (including overdrafts). Recoveries consisted of $97,000 in consumer loans (including overdrafts) and $2,000 in commercial loans collateralized by real estate. See “Provision for Loan Losses” below for further explanation regarding charge-offs.

Deposits

Total deposits increased $14.1 million, or 7.9%, from $177.9 million at December 31, 2007 to $192.0 million at June 30, 2008. The increase can be attributed to a $12.4 million increase in money market accounts, $2.6 million increase in non-interest bearing accounts, offset by a decrease of $500,000 in interest bearing demand and NOW accounts and a decrease of $400,000 in certificates of deposits. The increase in money market accounts is largely due to management’s efforts to remain competitive with interest rates in this category of deposits. The increase in money markets as well as non-interest bearing accounts has provided funding so it has not been necessary for management to replace the maturing certificates of deposits. Brokered deposits have been managed to provide additional liquidity or reduce excess liquidity depending on current conditions. Management expects future deposit growth to come from increased sales and marketing efforts to attract lower cost savings and checking accounts as well as product enhancement.

9

Federal Home Loan Bank Advances

Total Federal Home Loan Bank (FHLB) advances decreased to $54.8 million as of June 30, 2008 from $59.3 at December 31, 2007. Total proceeds from and repayments of FHLB advances for the six months ended June 30, 2008 total were $8.5 million and $13.5 million respectively. Management is attempting to reduce its reliance on borrowed funds through the growth of deposits, including brokered deposits. Should this strategy not succeed, management anticipates the need for future borrowings to fund loan growth. See “Net Interest Income” below, and also see “Liquidity” later in this report regarding available borrowings.

Equity

Total equity was $37.6 million at June 30, 2008 compared to $39.1 million at December 31, 2007. This represents 13.1% and 14.0% of total assets at June 30, 2008 and December 31, 2007, respectively. Increases in equity primarily resulted from $580,000 in year-to-date net income. Decreases in equity for the six months ended June 30, 2008 included $1,837,000 in stock repurchases and $400,000 in dividend payments. Management considers its equity position to be strong.

As of June 30, 2008, the previously disclosed stock repurchase program has resulted in 177,000 shares repurchased with 51,000 remaining shares to be repurchased.

RESULTS OF OPERATIONS

Net Interest Income

Net interest income before any provision for loan losses increased $74,000 for the quarter ended June 30, 2008 compared to the same period in 2007. The Bank's net interest margin increased to 3.33% for the quarter ended June 30, 2008 from 3.25% for the quarter ended June 30, 2007 as our deposit costs decreased more than our loan yields.

Net interest income before any provision for loan losses increased $72,000 for the six months ended June 30, 2008 compared to the same period in 2007. The Bank’s net interest margin increased to 3.29% for the six months ended June 30, 2008 from 3.22% for the six months ended June 30, 2007 as our deposit costs decreased more than our loan yields compared to the same period a year ago.

Our net interest margin increased primarily due to the decrease in costs associated with our borrowings and increases in lower costing deposit balances as compared to the same period a year ago. Interest income from loans represented 95.0% of total interest income for the six months ended June 30, 2008 compared to 92.4% for the same period in 2007. The Bank’s ability to maintain its net interest margin is heavily dependent on future loan demand and its ability to attract core deposits to offset the effect of higher cost certificates of deposits and borrowings.

The following table presents, for the periods indicated, the total dollar amount of interest income from average interest-earning assets and the resultant yields, as well as the interest expense on average interest-bearing liabilities, expressed both in dollars and rates. No tax equivalent adjustments were made.

	Six Months Ended June 30,							Six Months Ended June 30,
	2008							2007
	Average		Interest					Average		Interest
	Outstanding		Earned/		Yield/			Outstanding		Earned/		Yield/
	Balance		Paid		Rate			Balance		Paid		Rate
	(dollars in thousands)
Fed Funds and overnight deposits	$	9,323	$	87		1.87	%	$	10,266	$	262		5.15	%
Investment securities		10,849		235		4.34			14,334		318		4.47
Other securities		4,174		104		5.00			4,174		94		4.54
Loans receivable		233,220		8,148		7.01			229,480		8,149		7.16
Total earning assets	$	257,566	$	8,574		6.68		$	258,254	$	8,823		6.89
Demand and NOW Accounts	$	32,413	$	49		0.30		$	32,601	$	34		0.21
Money market accounts		31,469		491		3.13			23,069		428		3.74
Savings accounts		19,273		41		0.43			22,559		47		0.42
Certificates of deposit		106,224		2,457		4.64			110,521		2,662		4.86
Federal Home Loan Bank Advances		52,557		1,302		4.97			54,362		1,490		5.53
Total interest bearing liabilities	$	241,936		4,340		3.60		$	243,112		4,661		3.87
Net interest income			$	4,234						$	4,162
Net interest spread						3.08	%						3.02	%
Net interest margin						3.29	%						3.22	%

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Provision for Loan Losses

The Bank recorded a provision for loan losses of $448,000 for the quarter ended June 30, 2008 compared to $245,000 for the quarter ended June 30, 2007. Net charge-offs for the quarter ended June 30, 2008 totaled $228,000 compared to $160,000 for the same period a year ago. While charge off activity continues to consist mostly of 1-4 family residential mortgage loans, there has been an increase in consumer loans as well for the quarter ended June 2008.

The Bank recorded a $757,000 provision for loan losses for the six months ended June 30, 2008 compared to $470,000 for the same period in 2007, an increase of $287,000. Management believes the increase in provision was necessary to maintain adequate reserves. The level of non-performing assets, net charge-offs, loan impairment, and loan growth were primary considerations in determining the need for the increased provision. The level of nonperforming assets increased from December 31, 2007, however, the amount of real estate in judgment and foreclosed and repossessed properties decreased. Management continues to be aggressive in valuing repossessed properties in efforts to sell quickly and in maintaining moderate levels of non-performing assets. This continues to be a challenge due to the current housing market and the weakened economy. Non-performing loans increased from December 31, 2007, as a result of several commercial real estate and commercial business loans developing into 90 day plus delinquencies. Net charge-offs for the six months ended June 30, 2008 totaled $575,000 compared to $311,000 for the six months ended June 30, 2007. The net charge-offs consisted primarily of one to four family loans and consumer loans. If the level of non-performing assets and/or the trend of net charge-offs continues additional provisions for loan losses may be needed.

The following table presents non-performing assets and certain asset quality ratios at June 30, 2008 and December 31, 2007.

	June 30, 2008			December 31, 2007
	(In thousands)
Non-performing loans	$	1,947		$	865
Real estate in judgement		331			630
Foreclosed and repossessed assets		499			885
Total non-performing assets	$	2,777		$	2,380
Non-performing loans to total loans		0.81	%		0.38	%
Non-performing assets to total assets		0.97	%		0.85	%
Allowance for loan losses to non-performing loans		103.10	%		210.80	%
Allowance for loan losses to net loans recieveable		0.83	%		0.81	%

The Bank had 26 non-performing loan relationships as of June 30, 2008 compared to 13 non-performing loan relationships as of
December 31, 2007.

Non-interest Income

Non-interest income for the quarter ended June 30, 2008 decreased $28,000, or 2.9%, from $969,000 to $941,000 compared to the same period a year ago. Fees and Service charges decreased $55,000 for the quarter ended June 30, 2008 from $628,000 to $573,000 compared to the same period a year ago. This decrease was a result of a decrease in brokered loan income of $45,000, a decrease in construction and commercial loan fees of $14,000 and a decrease in overdraft fees of $39,000. These decreases were offset by a decrease in costs associated with our overdraft protection program of $29,000, an increase in atm/debit card income of $11,000 and an increase in all other fees of $3,000. Management expects the downward trend in brokered loan income to continue through 2008 and beyond as activity in this area of the market has slowed. Other income decreased $33,000 for the quarter ended June 30, 2008 from $93,000 to $60,000 as a result of decreases in net gain on sale of foreclosed assets of $30,000 and a decrease in rental income of $11,000 which were offset by a decrease in net losses associated with the sale of fixed assets and an increase of $8,000 in all other income. The decrease in rental income is expected to continue as the Bank ceased the rental of one of its sites at the end of 2007. The decreases in fees and service charges and other income are offset by an increase in gain on sale of loans for the quarter ended June 30, 2008 of $57,000 from $138,000 to $195,000.

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Non-interest income for the six months ended June 30, 2008 decreased $29,000, or 1.5%, from $2.0 million to $1.9 million for the same period in 2007. Fees and Service charges decreased $84,000 for the six months ended June 30, 2008 from $1.2 million to $1.1 million compared to the same period a year ago. This decrease was a result of a decrease in brokered loan income of $96,000, a decrease in construction and commercial loan fees of $28,000, a decrease of overdraft fees of $15,000 a decrease of $7,000 in deposit account service charges and a decrease in all other fees of $6,000. These decreases were offset by a decrease in costs associated with our overdraft protection program of $52,000, an increase in atm/debit card income of $16,000 and an increase in all other fees of $3,000. Other income decreased $95,000 for the six months ended June 30, 2008 from $208,000 to $113,000 as a result of decreases in net gain on sale of foreclosed assets of $80,000, a decrease in rental income of $25,000 and a decrease in all other income of $3,000 which were offset by a decrease in net losses associated with sale of fixed assets of $7,000. The decreases in fees and service charges and other income are offset by an increase in gain on sale of loans for the six months ended June 30, 2008 of $130,000 from $331,000 to $461,000. A gain of $2,000 on the sale of securities for the six months ended June 30, 2008 compared to a net loss of $19,000 for the same period in 2007 also offset the decreases in fees and service charges and other income.

Non-interest Expense

Noninterest expense increased $130,000, or 5.9%, to $2.3 million for the three months ended June 30, 2008 compared to $2.2 million for the same period ending June 30, 2007. Salaries and employee benefits expense increased $47,000 as a result of normal increases in salaries and wages, an increase in staffing and utilization of contracted personnel. The Bank has 85 full-time equivalent employees as of June 30, 2008 compared to 80 full-time equivalent employees as of June 30, 2007. Other general and administrative expenses increased $82,000 from $294,000 to $376,000 for the quarter ended June 30, 2008 compared to the same period a year ago. These increases include an increase in advertising of $33,000, an increase in loan related fees of $17,000, and an increase in costs associated with FDIC insurance of $29,000. The increase in advertising reflects the Bank’s efforts to utilize sources of media as a means of promoting products and services and participation in community activities. The increase in loan related fees can be directly linked to the additional fees implemented in the secondary market at the end of the first quarter and is a by-product of the increase in the gain on sale of loans. Amortization of mortgage servicing rights increased $25,000 (from $87,000 to $112,000) as a result of a continued increase in mortgage loan payoffs due to refinancing associated with the decrease of interest rates in the first quarter. Foreclosed property expense increased $11,000, from $16,000 to $27,000 as a result of increases in expenses associated with preparing the properties for sale. Data processing increased $10,000 (from $179,000 to $189,000) due to an increase in service bureau charges and one-time charges related to upgrading the Company’s network communications. Occupancy and equipment expense increased $7,000 from $247,000 to $254,000. These increases were offset by decreases in professional services of $38,000 (from $145,000 to $107,000). This area of expense was higher in 2007 due to the Company’s attempt to execute a going private transaction. Amortization of Core Deposit Intangible decreased $11,000 (from $54,000 to $43,000).

Noninterest expense increased $258,000, or 5.9%, to $4.6 million for the six months ended June 30, 2008 compared to $4.4 million for the same period in 2007. Salaries and employee benefits expense increased $127,000, from $2.1 million to $2.3 million, due to reasons mentioned in the preceding paragraph. Other general and administrative expenses increased $83,000, from $596,000 to $679,000 for the six months ended June 30, 2008 compared to the same period a year ago. These increases include an increased in advertising of $49,000, an increase in loan related fees of $25,000. Theses increases were offset by a decrease in all other general and administrative expenses of $24,000. Repossessed property expense increased $46,000, from $39,000 to $85,000, resulting from write downs on properties held in real estate owned and additional expenses associated with preparing the properties for sale. Amortization of mortgage servicing rights increased $57,000 (from $173,000 to $230,000) as a result of an increase in mortgage loan payoffs due to refinancing associated with the decrease of interest rates in the first quarter. Data processing increased $24,000, from $366,000 to $390,000 due to implementation of network upgrades and costs associated with the installation of a new telephone system. Professional services decreased $57,000, from $250,000 to $193,000; this area of expense was higher in 2007 due reason mentioned in the preceding paragraph. Amortization of Core deposit intangible decreased $26,000, from $122,000 to $96,000, as amortization of this asset continues to slow from year to year.

Federal Income Tax Expense

The Company’s provision for federal income taxes decreased $71,000 for the quarter ended June 30, 2008 compared to the same period in 2008 as our net income before taxes decreased $288,000. The effective tax rate for the quarter ended June 30, 2008 remained consistent with the same period in 2007, at 25.2% of income before tax. The difference between the effective tax rates and the federal corporate income tax rate of 34% is attributable to the low income housing credits available to the Bank from the investment in the limited partnership as well as fluctuation of permanent book and tax differences such as non-taxable income and non-deductible expenses.

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LIQUIDITY

The Bank’s liquidity, represented by cash, overnight funds and investments, is a product of our operating, investing, and financing activities. The Bank’s primary sources of funds are deposits, amortization, prepayments and maturities of outstanding loans, and funds provided from operations. While scheduled payments from the amortization of loans are a relatively predictable source of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions and competition. The Bank also generates cash through borrowings. The Bank utilizes Federal Home Loan Bank advances to leverage its capital base and provide funds for its lending and investment activities, and to enhance its interest rate risk management.

Liquidity management is both a daily and long-term function of business management. Excess liquidity is generally invested in short-term investments such as overnight deposits. On a longer-term basis, the Bank maintains a strategy of investing in various investments and lending products. The Bank uses its sources of funds primarily to meet its ongoing commitments, to pay maturing certificates of deposit and savings withdrawals and to fund loan commitments. Certificates of deposit scheduled to mature in one year or less at June 30, 2008 totaled $60.4 million. Management believes that a significant portion of these certificates of deposit will remain with the Bank provided the Bank pays a rate of interest that is competitive both in the local and national markets.

If necessary, additional funding sources include additional deposits and Federal Home Loan Bank advances. Deposits can be obtained in the local market area and from out of market sources; however, this may require the Bank to offer interest rates higher than those of the competition. At June 30, 2008 and based on current collateral levels, the Bank could borrow an additional $21.1 million from the Federal Home Loan Bank at prevailing interest rates. This borrowing capacity can be increased in the future if the Bank pledges additional collateral to the Federal Home Loan Bank. The Company anticipates that it will continue to have sufficient funds, through deposits and borrowings, to meet its current commitments.

The Bank’s total cash and cash equivalents decreased by $5.0 million during the six months ended June 30, 2008 compared to a $1.0 million decrease for the same period in 2007. The primary sources of cash for the six months ended June 30, 2008 were $14.1 million increase in deposits, $21.2 million in proceeds from the sale of mortgage loans, $8.5 million in proceeds from FHLB advances and $2.4 million in maturities of available-for-sale investment securities compared to increases of $13.7 million in proceeds from the sale of mortgage loans, and $5.0 million in proceeds from sales and maturities of available-for-sale investment securities for the six months ended June 30, 2007. The primary uses of cash for the six months ended June 30, 2008 were $21.7 million of mortgage loans originated for sale, $13.0 million in repayments of FHLB advances, $13.7 million loan originations in excess of principal collections and $2.3 million in purchases of available-for-sale investment securities compared to $10.5 million in repayments of FHLB advances, $13.9 million in loans originated for sale, and $3.8 million in purchases of available-for-sale investment securities.

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CONTRACTUAL OBLIGATIONS AND OFF BALANCE SHEET ARRANGEMENTS

The Corporation has certain obligations and commitments to make future payments under contracts. At June 30, 2008, the aggregate contractual obligations and commitments are:

Contractual Obligations

	Payments Due by Period
			Less than		1-3		3-5		After
	Total		1 year		years		years		5 years
	(Dollars in Thousands)
Certificates of deposit	$	100,290	$	60,390	$	30,211	$	9,689	$	—
FHLB advances		54,830		20,152		21,328		13,350		—
Total	$	155,120	$	80,542	$	51,539	$	23,039	$	—

Other Commitments

	Amount of commitment expiration per period
			Less than		1-3		3-5		After
	Total		1 year		years		years		5 years
	(Dollars in Thousands)
Commitments to grant loans	$	10,650	$	10,650	$	—	$	—	$	—
Unfunded commitments under HELOCs		15,441		1,631		3,726		3,741		6,343
Unfunded commitments under Commercial LOCs		4,870		688		1,093		923		2,166
Letters of credit		16		16		—		—		—
Total	$	30,977	$	12,985	$	4,819	$	4,664	$	8,509

Commitments to grant loans are governed by the Bank’s credit underwriting standards, as established by the Bank’s Loan Policy. The Bank’s policy is to grant Home Equity Lines of Credits (HELOCs) for periods of up to 15 years.

CAPITAL RESOURCES

The Bank is subject to various regulatory capital requirements. As of June 30, 2008, the Bank met the regulatory standards to be classified as “well capitalized.” The Bank’s regulatory capital ratios as of June 30, 2008 were as follows: Tier 1 leverage ratio 9.61%, Tier 1 risk-based capital ratio 11.95%; and total risk-based capital, 12.86%. The regulatory capital requirements to be considered well capitalized are 5.0%, 6.0%, and 10.0%, respectively. Management considers the Bank’s capital to be adequate to support anticipated growth and does not anticipate needing to seek additional capital in the foreseeable future.

ITEM 3. QUANTITATIVE AND QUALITIVE DISCLOSURES ABOUT MARKET RISK

The Corporation’s primary market risk exposure is interest rate risk (“IRR”). Interest rate risk refers to the risk that changes in market interest rates might adversely affect the Corporation’s net interest income or the economic value of its portfolio of assets, liabilities, and off-balance sheet contracts. Interest rate risk is primarily the result of an imbalance between the price sensitivity of the Corporation’s assets and its liabilities (including off-balance sheet contracts). Such imbalances can be caused by differences in the maturity, repricing and coupon characteristics of assets and liabilities, and options, such as loan prepayment options, interest rate caps and floors, and deposit withdrawal options. These imbalances, in combination with movement in interest rates, will alter the pattern of the Corporation’s cash inflows and outflows, affecting the earnings and economic value of the Corporation.

The Corporation’s primary tool for assessing IRR is a model that uses scenario analysis to evaluate the IRR exposure of the Bank by estimating the sensitivity of the Bank’s portfolios of assets, liabilities, and off-balance sheet contracts to changes in market interest rates. To measure the sensitivity of the Bank’s Net Portfolio Value (NPV) to changes in interest rates, the (NPV) model estimates what would happen to the economic value of each type of asset, liability, and off-balance sheet contract under six different interest rate scenarios. The model estimates the NPV that would result following instantaneous, parallel shifts in the Treasury yield curve of -300, -200, -100, +100, +200, +300 basis points. Management then compares the resulting NPV and the magnitude of change in NPA to regulatory and industry guidelines to determine if the company’s IRR is acceptable. Management believes, based on data from the model, as of June 30, 2008, and indicates that the Bank’s IRR level remains minimal.

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ITEM 4T. CONTROLS AND PROCEDURES

An evaluation of the Corporation’s disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”)) as of June 30, 2008 was carried out under the supervision and with the participation of the Corporation’s Chief Executive Officer, Chief Financial Officer and several other members of the Corporation’s senior management. The Company’s Chief Executive Officer and Chief Financial Officer concluded that the Corporation’s disclosure controls and procedures as currently in effect are effective in ensuring that the information required to be disclosed by the Corporation in the reports it files or submits under the Exchange Act is (i) accumulated and communicated to the Corporation’s management (including the Chief Executive Officer and Chief Financial Officer) in a timely manner, and (ii) recorded, processed, summarized and reported within time periods specified in the SEC’s rules and forms. There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that occurred during the quarter ended June 30, 2008, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

The Corporation intends to continually review and evaluate the design and effectiveness of its disclosure controls and procedures and to improve its controls and procedures over time and to correct any deficiencies that it may discover in the future. The goal is to ensure that senior management has timely access to all material financial and non-financial information concerning the Corporation’s business. While the Corporation believes the present design of its disclosure controls and procedures is effective to achieve its goal, future events affecting its business may cause the Corporation to modify its disclosure controls and procedures.

PART II—OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

The Corporation and the Bank are from time-to-time involved in legal proceedings arising out of, and incidental to, their business. Management, based on its review with counsel of all actions and proceedings affecting the Corporation and the Bank, has concluded that the aggregate loss, if any, resulting from the disposition of these proceedings should not be material to the Corporation’s financial condition or results of operations.

Item 1A. RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2007, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K are not the only risks facing our Corporation. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
(c)

ISSUER PURCHASES OF EQUITY SECURITIES

	(a)		(b)		(c)		(d)
					Total Number of Shares		Maximum Number (or
					(or Unit) Purchased as		Approximate Dollar Value) of
	Total Number of				Part of Publicly		Shares (or Units) that may yet
	Shares (or Units)		Average Price paid		Anounced Plans or		Be Purchased Under the
Period	Purchased		per Share (or Unit)		Programs		Plans or Program
4/01/08-4/30/08		44,950	$	10.19		44,950		168,275
5/01/08-5/31/08		39,470	$	10.12		39,470		130,105
6/01/08-6/30/08		33,500	$	9.94		33,500		95,305
Total		117,920	$	10.10		117,920		95,305

The table above details repurchases by Monarch Community Bancorp during the three months ended June 30, 2008. Stock repurchased during the first two months of 2008 completed the Program initiated in 2007. Our board of directors approved the repurchase by us of up to an aggregate of 228,000 shares of our common stock pursuant to the Program in 2008. The expiration date of this Program is December 31, 2008. Unless terminated earlier by resolution of our board of directors, the Program will expire on the earlier of such expiration date or when we have repurchased all shares authorized for repurchase under the Program.

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Item 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

1. Election of Directors with terms ending in 2011

Harold A. Adamson	For: 1,612,471	Withheld: 350,964
James W. Gordon	For: 1,625,412	Withheld: 338,023
Karl F. Loomis	For: 1,620,408	Withheld: 343,027

The following are the names of the directors (and remaining terms) whose terms continued after the meeting:

Stephen M. Ross	Term Expires: 2009
Martin M. Mitchell	Term Expires: 2009
Gordon L. Welch	Term Expires: 2009
Craig W. Dally	Term Expires: 2010
Donald L. Denney	Term Expires: 2010
Richard L. Dobbins	Term Expires: 2010

2. Ratification of appointment of Plante & Moran, LLP as independent auditors for the fiscal year ending December 31, 2008:

For: 1,905,947 Against: 54,575 Abstain: 2,912

Item 5. OTHER INFORMATION

Not applicable

Item 6. EXHIBITS

See the index to exhibits.

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SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	MONARCH COMMUNITY BANCORP, INC.
Date: August 13, 2008	By:	/s/ Donald L. Denney
		Donald L. Denney
		President and Chief Executive Officer

Date: August 13, 2008	And:	/s/ Rebecca S. Crabill
		Rebecca S. Crabill
		Senior Vice President, Chief Financial Officer

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INDEX TO EXHIBITS

Exhibit No.	Description of Exhibit
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.

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