Chesapeake, VA - Monarch Financial Holdings , Inc. (Nasdaq:
MNRK,MNRKP), the bank holding company for Monarch Bank,
reported record annual and fourth quarter profitability.
Asset quality continued to improve with non-performing assets
dropping further below one percent. Annual and fourth quarter
2011 highlights are:
- Fourth quarter net income of $1,954,034, up 10.7% from same
quarter in 2010
- Annual net income of $7,125,612, up 19.8% from 2010
- 27% increase in annual net income available to common
shareholders
- 21% increase in annual basic earnings per share
- 12% increase in annual diluted earnings per share, reaching
$0.84
- 10% asset growth for the year, up $83 million
- 9% loans held for investment growth for the year, up $49
million
- $1.6 billion in mortgage loans closed in 2011
- Non-performing assets 0.85% to total assets, remain
significantly below peer
Net income for 2011 was $7,125,612 compared to $5,949,391 for
the previous year. The annualized return on average equity
(ROE) was 9.66%, and the annualized return on average assets
(ROA) was 0.88%. Year-to-date 2011 diluted earnings per share
were $0.84, compared to $0.75 the previous year, a 12.0%
increase. For the fourth quarter of 2011 net income was
$1,954,034, a notable
increase compared to $1,764,940 for the same period in 2010.
The quarterly annualized return on average equity (ROE) was
10.26 %, and the annualized return on average assets (ROA)
was 0.87%. Quarterly basic earnings per share were $0.26 and
diluted earnings per share were $0.23, an improvement over
the fourth quarter of 2010 when basic earnings per share were
$0.24 and diluted earnings per share were
$0.23.
"I am pleased to announce our third year of record financial
performance, despite continued stress in banking and in our
local markets. Our focus on relationship banking resulted in
increases in our loan portfolio, in checking accounts and
core deposits, and in mortgage loan originations. Asset
quality improved as we continued to work with our clients
while aggressively charging off non-performing loans. Year
over year we again improved our profitability while
maintaining a strong capital position." stated
Brad Schwartz, Chief Executive Officer. "I am extremely proud
of our mortgage leadership and operations, which broke a new
record for closed loans in a challenging environment. The
past several years have separated the strong performing bank
and mortgage companies from the weak, and we expect
2012 to be another great year for Monarch and our
shareholders."
Total assets at December 31, 2011 were $908.5 million, up
$82.9 million or 10% from $825.6 million one year prior.
Total loans held for investment increased $49 million to $607
million. Mortgage loans held for sale increased $36 million
to $212 million, up 21% from 2010. Deposits increased $34.4
million to $740.1 million, up 4.9% from 2010. Demand deposit
accounts grew $44.8 million, with local core deposits growing
$75 million as the company reduced its reliance of wholesale
deposits to fund growing mortgage operations.
"The focus for 2011 was to grow our loan portfolio and to
support both bank and mortgage loan growth with local core
deposit growth. We accomplished these goals with tremendous
growth in checking accounts, as well as strong increases in
our outstanding loans and client base." stated Neal Crawford,
President of Monarch Bank. "Considerable growth opportunities
remain in Hampton Roads and in the Outer Banks of North
Carolina for our style of relationship banking and we expect
similar growth to continue into 2012 and beyond."
The company continues to experience better asset quality
performance than its local and national peers. Non-performing
assets were below the 1% threshold and represented 0.85% of
total assets at year end 2011, down from 1.30% on December
31, 2010. Non-performing assets totaled $7.8 million compared
to $10.8 million one year prior, down $3.0 million. Year-end
non-performing assets were comprised of $178,000 in loans
past due 90 days or more and still accruing interest,
$4,217,000 in non- accrual loans, and $3,369,000 in other
real estate held for sale. In early January 2012 $1.0 million
of other real estate was sold and is no longer owned by the
bank.
The Company was aggressive in recognizing losses and
disposing of non-performing assets throughout the year.
Provision for loan loss expense totaled $6.3 million in 2011
compared to $8.6 million in 2010. Credit costs improved with
$5.4 million in net loan charge-offs compared to $8.9 million
in 2010. While our non-performing assets declined, our
allowance for loan losses represents
1.63% of total loans held for investment, compared to 1.62%
one year earlier. Our allowance for loan losses to
non-performing loans has more than doubled from 100% at year
end 2010 to 226% at year end
2011.
Average equity to average assets remained strong and improved
to 9.16% as of December 31,
2011, compared to 8.89% one year prior. Total risk-based
capital to risk weighted assets, a measurement used by
regulators to determine if a banking company is well
capitalized, equaled 12.43%, significantly
higher than the 10% required to be "Well Capitalized", the
highest rating of capital strength by bank regulatory
standards. Monarch Bank was recently awarded its eighth
"5-Star, Superior" rating from Bauer Financial, an
independent bank rating company that rates banks from zero to
five stars based on safety and soundness metrics.
Cash dividends for common stockholders equaled $0.16 per
common share during the year, a
14% improvement over 2010. Including our preferred
shareholders, $2.5 million or 35% of net income was returned
to shareholders in the form of dividends throughout the year.
While basic earnings per share improved 21% for the year
ended December 31, 2011, diluted earnings per share increased
at a 12% rate. The number of average diluted shares
outstanding used in the 2011 calculation assumes the
conversion of our preferred shares to common stock, and in
2010 we did not assume that conversion. Had we used the same
methodology in 2010 the diluted earnings per share would have
been $0.71, and the increase in diluted earnings per share
for 2011 would have been 18%.
Net interest income increased 10.3% or $3.1 million in 2011
compared to 2010 due to a combination of earning asset growth
and declines in funding costs. The net interest margin
improved to
4.51% for 2011 compared to 4.22% in 2010, with the net
interest margin improving to 4.69% for the fourth quarter of
2011 compared to 4.21% for the same period in 2010.
Non-interest income remained a significant component of total
revenue and represented 57.5% of total revenue for 2011
compared to 57.6% in 2010. Monarch Mortgage continues to be
the primary driver of non-interest income. Monarch Mortgage
and our related mortgage operations closed $1.644 billion in
mortgage loans in 2011, up from $1.618 billion in 2010.
Monarch Mortgage is a retail mortgage lender and does not
participate in the subprime or wholesale mortgage markets.
Non-interest expense grew
8.5%, with the majority of the increase related to bank and
mortgage expansion.
Monarch Financial Holdings, Inc. is the one-bank holding
company for Monarch Bank. Monarch Bank is a community bank
with nine banking offices in Chesapeake, Virginia Beach, and
Norfolk, 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, and "Monarch Online" consumer, mobile and business
internet banking (monarchbank.com). 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
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.
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Contact: Brad E. Schwartz - (757) 389-5111,
www.monarchbank.com
Date: January 30, 2012
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