EXHIBIT 99.1
PRESS RELEASE
Monadnock Bancorp, Inc. 603.924.9654
1 Jaffrey Road www.monadnockbank.com
Peterborough, NH 03458
FOR IMMEDIATE RELEASE
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For Additional Information Contact:
Karl F. Betz, SVP, CFO & Treasurer (603) 924-9654
kbetz@monadnockbank.com
Monadnock Bancorp, Inc. Announces Third Quarter and YTD Results
Peterborough, New Hampshire - October 24, 2006 - Monadnock Bancorp, Inc.
(over-the-counter bulletin board: MNKB), the holding company for Monadnock
Community Bank announced net income for the three and nine months ended
September 30, 2006 of $36,000 and $66,000, respectively, compared with net
income of $15,000 and a net loss of $60,000, respectively, for the three and
nine months ended September 30, 2005. Basic and diluted earnings per share were
$0.03 and $0.06, respectively, for the three and nine months ended September
30, 2006 compared to $0.02 and ($0.07), respectively, for the three and nine
months ended September 30, 2005.
Net income for the third quarter was $9,000 ($14,000 on a pre-tax basis) higher
than anticipated as a result of a change in the Federal Home Loan Bank ("FHLB")
dividend schedule. The FHLB of Boston declared and paid a half year dividend in
the third quarter rather than a quarterly dividend in each of the second and
third quarters of 2006.
The increase in earnings for the three months ended September 30, 2006 compared
with the same period a year earlier was primarily attributable to an increase
in net interest and dividend income of $105,000, an increase in noninterest
income of $20,000, partially offset by an increase in noninterest expense of
$91,000.
The increase in earnings for the nine months ended September 30, 2006 compared
with the same period a year earlier was primarily attributable to an increase
in net interest and dividend income of $282,000, an increase in noninterest
income of $8,000, partially offset by an increase in noninterest expense of
$69,000 and an increase in the provision for loan losses of $13,000 as compared
to a benefit of $20,000 for the prior comparable period.
Net interest and dividend income increased $105,000, or 22.5%, to $571,000 for
the three months ended September 30, 2006 compared to $466,000 for the three
months ended September 30, 2005, reflecting a $299,000, or 32.5%, increase in
interest and dividend income, and a $194,000, or 42.7%, increase in interest
expense. The interest rate spread was 2.15% for the three months ended
September 30, 2006 compared to 2.14% for the three months ended September 30,
2005. The net interest margin for the three months ended September 30, 2006 was
2.75% compared to 2.43% for the same period a year ago. The impact of the delay
in the declaration of the FHLB dividend noted above resulted in an increase in
the interest rate spread and net interest margin of 7 basis points,
respectively, for the quarter ended September 30, 2006.
Net interest and dividend income increased $282,000, or 21.7%, to $1.6 million
for the nine months ended September 30, 2006 compared to $1.3 million for the
nine months ended September 30, 2005, reflecting a $760,000, or 30.0%, increase
in interest and dividend income, and a $478,000, or 38.7%, increase in interest
expense. The interest rate spread was 2.26% and 2.09% for the nine months ended
September 30, 2006 and 2005, respectively. The net interest margin was 2.70%
and 2.36% for the nine months ended September 30, 2006 and 2005, respectively.
The increase in interest rate spread and net interest margin for the three and
nine months ended September 30, 2006 compared with the same periods a year ago
was a combination of a change in the mix of assets to higher yielding loans,
partially offset by a change in the mix of liabilities to more interest rate
sensitive products such as time certificates.
Total assets increased by $11.5 million, or 15.2%, to $87.3 million at
September 30, 2006 compared to $75.8 million at December 31, 2005. The increase
primarily reflected growth in our net loan portfolio of $8.3 million, or 18.7%,
to $52.8 million at September 30, 2006 from $44.5 million at December 31, 2005.
Loan growth was primarily concentrated in one- to four-family residential
lending, commercial and commercial real estate lending as well as short-term
construction lending which grew $3.3 million, $3.0 million and $1.1 million,
respectively, during the first nine months of 2006. The increase in
concentration of new loan production in commercial lending is part of the
overall business strategy of Monadnock Community Bank. Total deposits increased
by $7.3 million, or 13.7%, to $60.5 million at September 30, 2006 from $53.2
million at December 31, 2005 with the largest increase in time certificates
which increased $9.7 million during the first nine months of 2006.
Total nonperforming assets decreased from $350,000 or 0.46% of total assets at
December 31, 2005 to $0 or 0.00% of total assets at September 30, 2006.
President and Chief Executive Officer William M. Pierce, Jr. said, "We are
pleased to report solid growth in our loan and deposit portfolios for 2006. We
will continue to focus on the strategic objectives of maintaining a community
focus in the areas we serve, providing a high quality of service to our
customers and diligently working to improve our franchise and shareholder
value." For additional information visit www.monadnockbank.com.
FORWARD-LOOKING STATEMENTS:
Statements contained in this news release that are not historical facts may
constitute "forward-looking statements" (within the meaning of Section 21E of
the Securities Exchange Act of 1934, as amended), which involve significant
risks and uncertainties. The Company intends such forward-looking statements to
be covered by the safe harbor provisions for forward-looking statements
contained in the Private Securities Litigation Reform Act Of 1995, and is
including this statement for purposes of invoking these safe harbor provisions.
The Company's ability to predict results or the actual effect of future plans
or strategies is inherently uncertain. Factors which could have a material
adverse effect on our operations include, but are not limited to, changes in
interest rates, general economic conditions, economic conditions in the state
of New Hampshire and Massachusetts, legislative and regulatory changes,
monetary and fiscal policies of the U.S. Government, including policies of the
U.S. Treasury and the Federal Reserve Board, fiscal policies of the New
Hampshire and Massachusetts State Government, the quality or composition of our
loan or investment portfolios, demand for loan products, competition for and
the availability of loans that we purchase for our portfolio, deposit flows,
competition, demand for financial services in our market areas and accounting
principles and guidelines, acquisitions and the integration of acquired
businesses, asset-liability management, the financial and securities markets
and the availability of and costs associated with sources of liquidity. These
risks and uncertainties should be considered in evaluating forward-looking
statements and undue reliance should not be placed on such statements.