Monarch Financial Holdings, Inc. (Nasdaq:MNRK) (Nasdaq:MNRKP), the
bank holding company for Monarch Bank, reported their best all-time
and third quarter profits in the Company's history. Third quarter
2012 highlights are:
- Record 3rd quarter net income of $3,763,403, up 76%
- Net income available to common shareholders was up 93%
- Basic earnings per share of $0.56, up 93%
- Total assets reach $1.1 billion
- Non-performing assets drop to 0.48% of total assets
- $788 million in mortgage loans closed
"The third quarter of 2012 was a fantastic period for Monarch in
so many ways and represents our 15th quarter of record performance.
Strong and profitable mortgage loan closings, improved credit
costs, and strong net interest income drove our bottom line
results," stated Brad E. Schwartz, Chief Executive
Officer. "Our asset quality continues to improve with
non-performing assets dropping below one-half of one percent, the
lowest level of non-performing assets in four years. Monarch's
conservative approach to risk, combined with our aggressive focus
on smart and profitable growth, continues to drive our
performance. Our recently announced expansion into the
Williamsburg/Peninsula markets, the launch of Monarch Bank Private
Wealth, and our affiliation with Raymond James Financial are all
designed to further drive our franchise value and non-interest
income growth."
Net income was $3,763,403 for the third quarter of 2012, up 76%
from the same period in 2011, which was the Company's previous
record third quarter with $2,137,230 in net income. The
quarterly annualized return on average equity (ROE) was 18.24%, and
the quarterly return on average assets (ROA) was
1.43%. Quarterly basic earnings per share were $0.56, compared
to $0.29 per share in the same quarter of 2011, a 93%
improvement. Diluted earnings per share were $0.44, compared
to $0.25 per share in the same quarter of 2011, a 76%
improvement.
For the first nine months of 2012 net income was a record
$9,056,496 compared to $5,171,578 for the same period in 2011, a
75% increase. We have exceeded our 2011 annual net income by
almost $2 million. The nine month annualized return on average
equity (ROE) was 15.23%, and the annualized return on average
assets (ROA) was 1.25%. Year to date basic earnings per share
were $1.31 compared to $0.67 for the same period in
2011. Diluted earnings per share were $1.06 compared to $0.60
per share in the same quarter of 2011, a 77% improvement.
Total assets at September 30, 2012 increased to $1.11 billion
driven primarily by growth in our mortgage loans held for sale
portfolio. Loans held for investment grew $31 million year
over year, while mortgage loans held for sale grew by $224
million. Deposits increased $170 million year over year, with
strong growth in demand deposits. Short term time deposits and
borrowings have been used to support the growth in our short-term
loans held for sale portfolio which has increased due to the high
level of mortgage purchase and refinance activity. This
funding strategy, coupled with our focus on generating commercial
demand deposits through our cash management team, continues to
drive down overall funding costs and protect our net interest
margin.
"We are pleased to report net loan growth given the extremely
competitive lending environment and our higher credit
standards. Core deposits continue to grow, with checking and
money market account growth leading the way. Checking accounts
now represent over 30% of our core deposits," stated Neal Crawford,
President of Monarch Bank. "We are also proud of recently
being recognized as the second largest community bank in the entire
Hampton Roads MSA by deposits."
Non-performing assets were 0.48%, which remains significantly
below that of our local, state, and national peer group. This
was down from 0.85% in the second quarter of 2012, 0.85% at
year-end 2011, and 0.99% one year ago. Non-performing assets
were $5.4 million, comprised of $4.1 million in non-accrual loans
and $1.3 million in other real estate owned. There were only
two residential properties held at quarter end in other real estate
owned. The Company was aggressive in recognizing losses and
disposing of non-performing assets during the
quarter. Provision expense for the third quarter was $899
thousand compared to $1.7 million for the same period in
2011. The allowance for loan losses represents 1.74% of total
loans held for investment and 265% of non-performing
loans.
Average equity to average assets was 8.18% during 2012, down
from 9.25% one year prior. Total risk-based capital to risk
weighted assets at Monarch Bank equaled 13.28%, significantly
higher than the required level to meet the highest rating of "Well
Capitalized" by federal banking regulators. Monarch was again
awarded the highest 5-Star "Superior" rating by Bauer Financial, an
independent third-party bank rating agency that rates banks on
safety and soundness.
Net interest income, our number one driver of profitability,
increased 22% or $1.9 million during the third quarter of 2012
compared to the same quarter in 2011. Our net interest margin
was 4.30% compared to 4.51% in 2011, and was 4.38% year to date
compared to 4.44% during the same period of 2011. The higher
volume of lower rate mortgage loans held for sale, while providing
interest income growth, contributed to the decline in this ratio
during each period in 2012.
Non-interest income grew by $10.4 million during the third
quarter over the previous year, while non-interest expenses grew by
$10.0 million, reducing net overhead expense by $319 thousand for
the third quarter compared to the previous year. Two-thirds of
the increases in non-interest expense are variable commissions and
incentives primarily related to increased mortgage production.
Mortgage revenue continues to be the number one driver
of non-interest income. $788 million in mortgage loans were
closed during the quarter, which was a new Company
record. Home purchase mortgage loans represented 40% of total
closed loans for the quarter.
"Not only did we surpass 2011's record $1.6 billion in volume of
mortgage loan closings, but we are on track to hit the $2 billion
mark in closings in October. As of September 30, 2012 we have
closed 7,309 loans for a total volume of $1.94 billion," stated
William T. Morrison, CEO of Monarch Mortgage. "The recent
activities by the Federal Reserve Bank to reduce long-term rates
drove our refinance volume higher in the third quarter. We are
proud to have closed 45% of our year to date volume for new and
existing home purchases."
Monarch Financial Holdings, Inc. is the one-bank holding company
for Monarch Bank. Monarch Bank is a community bank with eleven
banking offices in Chesapeake, Virginia Beach, Norfolk, Suffolk,
and Williamsburg Virginia. OBX Bank, a division of Monarch
Bank, operates offices in Kitty Hawk and Nags Head, North
Carolina. Services are also provided through over fifty ATMs
located in the South Hampton Roads area and the Outer Banks of
North Carolina. Monarch Mortgage and our affiliated mortgage
companies have over thirty offices with locations in Virginia,
North Carolina, Maryland, and South Carolina. Our
subsidiaries/ divisions include Monarch Bank, OBX Bank, Monarch
Mortgage (secondary mortgage origination), OBX Bank Mortgage
(secondary mortgage origination), Coastal Home Mortgage, LLC
(secondary mortgage origination), Regional Home Mortgage, LLC
(secondary mortgage origination), Monarch Home Funding, LLC
(secondary mortgage origination), Monarch Bank Private Wealth
(investment, trust, planning and private banking), Monarch
Investments (investment and insurance solutions), Real Estate
Security Agency, LLC (title agency) and Monarch Capital, LLC
(commercial mortgage brokerage). The shares of common stock of
Monarch Financial Holdings, Inc. are publicly traded on the Nasdaq
Capital Market under the symbol "MNRK", and shares of our
convertible preferred stock are publicly traded on the Nasdaq
Capital Market under the symbol "MNRKP".
This press release may contain "forward-looking statements,"
within the meaning of federal securities laws that involve
significant risks and uncertainties. Statements herein are based on
certain assumptions and analyses by the Company and are factors it
believes are appropriate in the circumstances. Actual results could
differ materially from those contained in or implied by such
statements for a variety of reasons including, but not limited to:
changes in interest rates; changes in accounting principles,
policies, or guidelines; significant changes in the economic
scenario: significant changes in regulatory requirements; and
significant changes in securities markets. Consequently, all
forward-looking statements made herein are qualified by these
cautionary statements and the cautionary language in the Company's
most recent Form 10-K and 10-Q reports and other documents filed
with the Securities and Exchange Commission. The Company does not
undertake to update forward-looking statements to reflect
circumstances or events that occur after the date the
forward-looking statements are made.
Consolidated Balance
Sheets |
Monarch Financial
Holdings, Inc. and Subsidiaries |
(In thousands) |
Unaudited |
|
|
|
|
September 30, |
December 31, |
September 30, |
|
2012 |
2011 |
2011 |
ASSETS: |
|
|
|
Cash and due from banks |
$ 26,035 |
$ 20,091 |
$ 16,625 |
Interest bearing bank balances |
641 |
1,467 |
575 |
Federal funds sold |
8,191 |
10,188 |
12,199 |
|
|
|
|
Investment securities, at fair value |
10,328 |
9,187 |
8,778 |
|
|
|
|
Loans held for sale |
382,095 |
211,555 |
158,577 |
|
|
|
|
Loans held for investment, net of
unearned income |
627,256 |
607,612 |
596,333 |
Less: allowance for loan losses |
(10,890) |
(9,930) |
(10,301) |
Net loans |
616,366 |
597,682 |
586,032 |
|
|
|
|
Bank premises and equipment, net |
23,449 |
23,094 |
22,884 |
Restricted equity securities, at
cost |
8,346 |
6,421 |
6,177 |
Bank owned life insurance |
7,132 |
6,946 |
6,886 |
Goodwill |
775 |
775 |
775 |
Intangible assets, net |
327 |
461 |
506 |
Accrued interest receivable and other
assets |
26,727 |
20,920 |
19,220 |
|
|
|
|
Total assets |
$ 1,110,412 |
$ 908,787 |
$ 839,234 |
|
|
|
|
LIABILITIES: |
|
|
|
Demand deposits---non-interest
bearing |
$ 182,080 |
$ 133,855 |
$ 125,481 |
Demand deposits---interest bearing |
40,865 |
40,930 |
28,364 |
Money market deposits |
313,985 |
269,750 |
281,250 |
Savings deposits |
21,531 |
17,916 |
20,579 |
Time deposits |
329,246 |
277,641 |
261,878 |
Total deposits |
887,707 |
740,092 |
717,552 |
|
|
|
|
FHLB borrowings |
105,027 |
70,927 |
24,400 |
Short term borrowings |
5,000 |
-- |
-- |
Trust preferred subordinated debt |
10,000 |
10,000 |
10,000 |
Accrued interest payable and other
liabilities |
17,148 |
10,921 |
11,434 |
Total liabilities |
1,024,882 |
831,940 |
763,386 |
|
|
|
|
STOCKHOLDERS' EQUITY: |
|
|
|
Preferred stock, $5 par value, 1,185,300
shares authorized; none issued |
-- |
-- |
-- |
Noncumulative perpetual preferred stock,
series B, liquidation value of $20.0 million, $5 par value; 800,000
shares authorized, 793,300 issued and outstanding at September 30,
2012, 800,000 issued and outstanding at December 31, 2011 and
September 30, 2011 |
3,967 |
4,000 |
4,000 |
Common stock, $5 par, 20,000,000 shares
authorized; issued - 6,029,475 shares (includes nonvested shares of
87,550) at September 30, 2012 and 5,999,989 shares (includes
nonvested shares of 83,550) at December 31, 2011 and
5,950,639 shares (includes nonvested shares of 4,500) at September
30, 2011 |
29,709 |
29,582 |
29,731 |
Capital in excess of par value |
22,871 |
22,476 |
22,455 |
Retained earnings |
27,586 |
20,538 |
19,449 |
Accumulated other comprehensive loss |
(218) |
(363) |
(401) |
Total Monarch Financial Holdings,
Inc. stockholders' equity |
83,915 |
76,233 |
75,234 |
Noncontrolling interest |
1,615 |
614 |
614 |
Total equity |
85,530 |
76,847 |
75,848 |
|
|
|
|
Total liabilities and stockholders'
equity |
$ 1,110,412 |
$ 908,787 |
$ 839,234 |
|
Consolidated Statements
of Income |
Monarch Financial
Holdings, Inc. and Subsidiaries |
Unaudited |
|
Three Months Ended |
Nine Months Ended |
|
September 30, |
September 30, |
|
2012 |
2011 |
2012 |
2011 |
INTEREST INCOME: |
|
|
|
|
Interest on federal funds sold |
$ 3,973 |
$ 10,598 |
$ 19,135 |
$ 50,599 |
Interest on other bank accounts |
4,713 |
1,624 |
13,159 |
2,728 |
Dividends on equity securities |
38,500 |
37,499 |
140,974 |
120,947 |
Interest on investment securities |
52,670 |
49,263 |
149,991 |
139,403 |
Interest and fees on loans |
11,719,849 |
10,093,295 |
33,454,639 |
29,137,009 |
Total interest income |
11,819,705 |
10,192,279 |
33,777,898 |
29,450,686 |
INTEREST EXPENSE: |
|
|
|
|
Interest on deposits |
1,207,004 |
1,541,184 |
3,755,695 |
4,873,947 |
Interest on trust preferred subordinated
debt |
123,422 |
124,200 |
369,697 |
369,900 |
Interest on other borrowings |
99,723 |
25,666 |
199,837 |
67,759 |
Total interest expense |
1,430,149 |
1,691,050 |
4,325,229 |
5,311,606 |
NET INTEREST INCOME |
10,389,556 |
8,501,229 |
29,452,669 |
24,139,080 |
PROVISION FOR LOAN LOSSES |
898,598 |
1,738,821 |
4,313,677 |
3,839,971 |
|
|
|
|
|
NET INTEREST INCOME AFTER PROVISION FOR LOAN
LOSSES |
9,490,958 |
6,762,408 |
25,138,992 |
20,299,109 |
|
|
|
|
|
NON-INTEREST INCOME: |
|
|
|
|
Mortgage banking income |
25,651,606 |
15,014,519 |
62,387,895 |
35,223,779 |
Service charges and fees |
458,572 |
401,035 |
1,340,188 |
1,212,184 |
Other income |
450,951 |
788,082 |
1,152,987 |
1,385,559 |
Total non-interest income |
26,561,129 |
16,203,636 |
64,881,070 |
37,821,522 |
NON-INTEREST EXPENSE: |
|
|
|
|
Salaries and employee benefits |
7,944,646 |
5,736,339 |
21,669,084 |
16,750,931 |
Commissions and incentives |
14,501,486 |
7,912,804 |
33,586,352 |
16,946,009 |
Occupancy and equipment |
1,827,114 |
1,492,494 |
5,141,293 |
4,265,407 |
Loan expense |
2,226,109 |
1,811,906 |
6,025,563 |
4,762,926 |
Marketing expense |
632,996 |
413,842 |
1,636,813 |
1,117,870 |
Data processing |
360,284 |
305,063 |
1,069,616 |
888,911 |
Other expenses |
2,317,353 |
2,098,964 |
6,068,856 |
5,226,989 |
Total non-interest expense |
29,809,988 |
19,771,412 |
75,197,577 |
49,959,043 |
|
|
|
|
|
INCOME BEFORE TAXES |
6,242,099 |
3,194,632 |
14,822,485 |
8,161,588 |
Income tax provision |
(2,111,207) |
(969,166) |
(5,089,042) |
(2,650,097) |
NET INCOME |
4,130,892 |
2,225,466 |
9,733,443 |
5,511,491 |
|
|
|
|
|
Less: Net income attributable to
noncontrolling interest |
(367,489) |
(88,236) |
(676,947) |
(339,913) |
NET INCOME ATTRIBUTABLE TO MONARCH FINANCIAL
HOLDINGS, INC |
$ 3,763,403 |
$ 2,137,230 |
$ 9,056,496 |
$ 5,171,578 |
|
|
|
|
|
Preferred stock dividend and accretion of
preferred stock discount |
(386,734) |
(390,000) |
(1,166,734) |
(1,170,000) |
NET INCOME AVAILABLE TO COMMON
STOCKHOLDERS |
$ 3,376,669 |
$ 1,747,230 |
$ 7,889,762 |
$ 4,001,578 |
NET INCOME PER COMMON SHARE: |
|
|
|
|
Basic |
$ 0.56 |
$ 0.29 |
$ 1.31 |
$ 0.67 |
Diluted |
$ 0.44 |
$ 0.25 |
$ 1.06 |
$ 0.60 |
|
Financial
Highlights |
Monarch Financial
Holdings, Inc. and Subsidiaries |
|
|
|
|
|
(Dollars in thousands, |
|
|
|
|
except per share data) |
Three Months Ended September
30, |
Nine Months Ended September
30, |
|
2012 |
2011 |
2012 |
2011 |
EARNINGS |
|
|
|
|
Interest income |
$ 11,820 |
$ 10,192 |
$ 33,778 |
$ 29,451 |
Interest expense |
1,430 |
1,691 |
4,325 |
5,312 |
Net interest income |
10,390 |
8,501 |
29,453 |
24,139 |
Provision for loan losses |
899 |
1,739 |
4,314 |
3,840 |
Noninterest income |
26,561 |
16,204 |
64,881 |
37,822 |
Noninterest expense |
29,810 |
19,772 |
75,198 |
49,959 |
Pre-tax net income |
6,242 |
3,194 |
14,822 |
8,162 |
Minority interest in net
income |
368 |
88 |
677 |
340 |
Income taxes |
2,111 |
969 |
5,089 |
2,650 |
Net income |
3,763 |
2,137 |
9,056 |
5,172 |
|
|
|
|
|
PER COMMON SHARE |
|
|
|
|
Earnings per share - basic |
$ 0.56 |
$ 0.29 |
$ 1.31 |
$ 0.67 |
Earnings per share - diluted |
0.44 |
0.25 |
1.06 |
0.60 |
Common stock - per share dividends |
0.05 |
-- |
0.14 |
0.08 |
Book value |
|
|
10.63 |
9.28 |
Tangible book value |
|
|
10.45 |
9.06 |
Closing market price (adjusted) |
|
|
9.75 |
6.51 |
Average Basic Shares Outstanding |
6,029,475 |
5,953,747 |
6,000,502 |
5,962,559 |
Average Diluted Shares Outstanding |
8,546,071 |
8,657,230 |
8,523,509 |
8,670,440 |
|
|
|
|
|
FINANCIAL RATIOS |
|
|
|
|
Return on average assets |
1.43% |
1.04% |
1.25% |
0.88% |
Return on average stockholders'
equity |
18.24 |
11.39 |
15.23 |
9.46 |
Net interest margin (FTE) |
4.30 |
4.51 |
4.38 |
4.44 |
Non-interest revenue/Total revenue |
69.2 |
61.4 |
65.8 |
56.2 |
Efficiency - Consolidated |
80.6 |
79.9 |
79.6 |
80.4 |
Efficiency - Bank only |
52.6 |
54.6 |
53.2 |
56.6 |
Average equity to average assets |
7.85 |
9.13 |
8.18 |
9.25 |
Total risk based capital -
Consolidated |
|
|
12.55 |
13.43 |
Total risk based capital - Bank only |
|
|
13.28 |
12.94 |
|
|
|
|
|
PERIOD END BALANCES |
|
|
|
|
Total loans held for sale |
|
|
$ 382,095 |
$ 158,577 |
Total loans held for investment |
|
|
627,256 |
596,333 |
Interest-earning assets |
|
|
1,039,743 |
783,415 |
Assets |
|
|
1,110,412 |
838,884 |
Total deposits |
|
|
887,707 |
717,552 |
Other borrowings |
|
|
120,027 |
34,400 |
Stockholders' equity |
|
|
83,915 |
75,234 |
|
|
|
|
|
AVERAGE BALANCES |
|
|
|
|
Total loans held for sale |
$ 327,378 |
$ 118,011 |
$ 267,261 |
$ 108,944 |
Total loans held for investment |
616,728 |
592,590 |
610,471 |
575,230 |
Interest-earning assets |
969,687 |
757,481 |
906,354 |
736,012 |
Assets |
1,044,966 |
815,178 |
971,361 |
790,666 |
Total deposits |
890,772 |
709,374 |
837,432 |
689,317 |
Other borrowings |
46,320 |
15,471 |
33,759 |
12,998 |
Stockholders' equity |
82,070 |
74,408 |
79,440 |
73,135 |
|
|
|
|
|
ALLOWANCE FOR LOAN LOSSES |
|
|
|
|
Beginning balance |
$ 10,724 |
$ 9,480 |
$ 9,930 |
$ 9,038 |
Provision for loan losses |
899 |
1,739 |
4,314 |
3,840 |
Charge-offs |
823 |
958 |
3,720 |
3,093 |
Recoveries |
90 |
40 |
366 |
516 |
Ending balance |
10,890 |
10,301 |
10,890 |
10,301 |
Net charge-off loans to average
loans |
0.12 |
0.15 |
0.55 |
0.45 |
|
|
|
|
|
ASSET QUALITY RATIOS |
|
|
|
|
Nonperforming assets to total assets |
|
|
0.48% |
0.99% |
Allowance for loan losses to total loans
held for investment |
|
|
1.74 |
1.73 |
Allowance for loan losses to
nonperforming loans |
|
|
265.16 |
165.56 |
|
|
|
|
|
COMPOSITION OF RISK ASSETS |
|
|
|
|
Nonperforming loans: |
|
|
|
|
90 days past due |
|
|
$ -- |
$ 75 |
Nonaccrual & Restructured debt |
|
|
4,107 |
6,147 |
OREO |
|
|
1,250 |
2,106 |
Nonperforming assets |
|
|
5,357 |
8,328 |
CONTACT: Brad E. Schwartz - (757) 389-5111, www.monarchbank.com
Monarch Financial Holdings - Series B Noncumulative Convertible Perpetual Preferred Stock (MM) (NASDAQ:MNRKP)
Historical Stock Chart
From Aug 2024 to Sep 2024
Monarch Financial Holdings - Series B Noncumulative Convertible Perpetual Preferred Stock (MM) (NASDAQ:MNRKP)
Historical Stock Chart
From Sep 2023 to Sep 2024