Monroe Federal Bancorp, Inc. (OTC: MFBI)

Monroe Federal Bancorp Inc is a savings and loan holding company incorporated in May 2024. It became the holding company for Monroe Federal Savings and Loan Association after the mutual to stock conversion was completed on October 23 2024. In the conversion the company sold 5 26,438 shares of common stock at a price of 10.00 dollars per share. Monroe Federal Bancorp conducts its operations primarily through its wholly owned subsidiary Monroe Federal a federally chartered savings association headquartered at 24 East Main Street Tipp City Ohio 45371. The subsidiary operates a main office and three branch offices located in Tipp City Dayton and Vandalia Ohio. At March 31 2025 the consolidated entity reported total assets of 144.3 million dollars total loans of 107.8 million dollars total deposits of 120.7 million dollars and stockholders equity of 12.1 million dollars. The company’s principal activity is accepting deposits from the public and investing those funds mainly in one to four family residential mortgage loans and to a lesser extent in commercial real estate loans multi family loans construction and land development loans commercial and industrial loans home equity lines of credit and consumer loans. Monroe Federal is subject to examination and regulation by the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation and is a member of the Federal Home Loan Bank of Cincinnati. As of March 31 2025 the company employed 23 full time and 4 part time employees and is classified as an emerging growth company under federal securities law.

Monroe Federal Bancorp generates revenue primarily from interest income earned on its loan and investment portfolios. At March 31 2025 the loan portfolio consisted of 69.9 million dollars in one to four family residential mortgage loans representing 64.6 percent of total loans 1.6 million dollars in multi family loans representing 1.5 percent 24.2 million dollars in commercial real estate loans representing 22.4 percent 2.5 million dollars in construction and land development loans representing 2.3 percent 4.3 million dollars in commercial and industrial loans representing 3.9 percent 4.4 million dollars in home equity loans and lines of credit representing 4.1 percent and 1.3 million dollars in consumer loans representing 1.2 percent. Interest income from these loans constitutes the core of the company’s earnings. In addition the firm holds investment securities including U S government agency securities mortgage backed securities issued by government sponsored enterprises and state and municipal securities which provide supplemental interest revenue. The company reports that noninterest income is not a significant component of its total revenue. Historically Monroe Federal has retained the loans it originates and does not sell servicing rights although it is developing the infrastructure needed to sell longer term one to four family residential mortgage loans to mitigate interest rate risk. This development is expected to increase noninterest expenses in future periods.

Monroe Federal Bancorp operates in a competitive environment within its primary market area which includes Miami and Montgomery Counties in Ohio and surrounding communities. The region contains a mix of large money center banks regional banks community banks savings institutions and credit unions such as Wright Patt Credit Union which is affiliated with Wright Patterson Air Force Base. According to FDIC data as of June 30 2024 the company ranked eleventh among fifteen FDIC insured institutions in Miami County with a deposit market share of 2.8 percent and thirteenth among twenty FDIC insured institutions in Montgomery County with a deposit market share of 0.68 percent. The company maintains a strong capital position with a total risk based capital ratio exceeding 10 percent a tier one risk based capital ratio above 8 percent a leverage ratio greater than 5 percent and a common equity tier one ratio above 6.5 percent reflecting its well capitalized status. It also satisfies the qualified thrift lender test holding approximately 83.5 percent of its portfolio assets in qualified thrift investments and has received a satisfactory rating under the Community Reinvestment Act. These factors support its ability to compete despite the presence of larger financial institutions.

The company’s customer base consists of individuals families and small to medium sized businesses residing principally in its market area. Deposit holders include retail customers who maintain savings accounts money market accounts certificates of deposit and individual retirement accounts. Borrowers comprise homeowners seeking residential mortgages owners of commercial real estate properties builders engaged in construction and land development projects and operators of small businesses requiring commercial and industrial loans or home equity lines of credit. The firm also attracts deposits from local employers and employees; major employers in the area such as Upper Valley Medical Center Clopay Corporation F&P America CareSource Dayton Children s Hospital and The Reynolds and Reynolds Company provide a stable source of potential depositors and borrowers. By emphasizing personalized service long standing community relationships and a reputation for safety Monroe Federal Bancorp seeks to retain and grow its customer base.