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MONARCH ANNOUNCED A 12.5% INCREASE IN THE QUARTERLY COMMON STOCK CASH DIVIDEND SUMMER 2015 VOLUME 28 Member FDIC • EQUAL HOUSING LENDERMonarch Bank Turns “Sweet Sixteen”Building Lasting Relationships Through Exceptional ServiceAfter our hAppy celebration for the Big With over a billion dollars in assets, over monthly housing payment through ten thousand clients and recently being refinancing. During the recent financialFifteen last year we found it fitting to move on named 18th among the Top 200 Publicly crisis Monarch was one of the few banksand celebrate the next stage in our remarkable Traded Community Banks by American that continued to lend to those in ourgrowth. From humble beginnings in an attic Banker tells us our style of banking is community. We actually grew loans forin Chesapeake in 1998 and the opening of working. Why do so many now bank with our builders and developers to supportMonarch Bank in 1999, we have matured into Monarch? Our mission of “Building Lasting construction projects during those toughthe second largest community bank in Hampton Relationships through Exceptional Service” years. Many of our larger competitors wereRoads. It is truly sweet to turn sixteen this year. has driven us from the beginning to focus nowhere to be found, and many of ourWe are grateful for those employees, shareholders on doing the right thing for the client, for community bank competitors were tooand clients that were there in the early days, the community, for the shareholder, and focused on survival to make a loan. A keyand for those who have joined the Monarch of course for our employees. We know we aspect to a good relationship is loyalty,family along the way. Since the beginning we need to provide our clients with exceptional and we remained loyal to our clientshave strived to serve the community as only service to keep them coming back. From during those tough years.a local bank can. Why has Monarch achieved offering new products, to mobile photosuccess? There are many reasons including deposit, to investment advice, to just answering It has been sixteen wonderful years, andgiving back to the community with our charitable the phone with a caring voice – all of this we look forward to hitting futuregiving, providing for the families of our 650 is driven by our mission. milestones as a community bank thatemployees, and returning above average stock is focused on building a better communityperformance to our shareholders. Over the past five years we have financed and making a difference in the lives of all over 24,000 new homes, and helped another 12,000 homeowners reduce their our stakeholders. u14th Annual Charity Golf TournamentSAve the dAte for fun, fellowship and generosity at the 14th Annual William F. “Tree” WilliamMF.eRmooruinatlree,Jr.Rountree, Jr., Memorial Golf Tournament. The Monarch Charities 501(c)(3) tournament 14 TH ANNUAL GOLF TOURNAMENTbenefits local children’s charities in our community and has raised over $1.5 million dollars todate. Tournament players enjoy 18 holes of golf on two championship courses at NAS Oceana. SRhAeoAwgtuiagscrtudtrinasot,SnRiot,aaDnfrf:itln1:en01: :1e53r::03,000 SWepetdenmebsedra1y6,Over the years, the spirit, camaraderie and generosity has been aplenty. Aeropines Golf ClubIn 2014, more than $240,000 was raised to benefit over 40 charities across Hampton NAS OceanaRoads and on the Outer Banks of North Carolina. This success was made possible bythe generosity of our contributing sponsors, namely our title sponsor Wheeler REIT, andpresenting sponsors Schaubach Companies, W.M. Jordan and Gold Key PHR. With noplans of slowing down, the golf committee is preparing to make the 2015 tournamenteven more successful.To join us, contact Chrissy Peele at (757)389-5112 or [email protected] andreserve your sponsorship today! u

FINANCIAL UPDATE FOCUS On Cash Management First Quarter 2015 our teAm of dedicated cash management Highlights are: professionals specialize in helping medium-to- large sized businesses in Hampton Roads make • Net income of $3,461,207, up 36% efficient use of their funds. With over 115 years • Diluted earnings per share of $0.32, up 33% of banking experience between them, they • Quarterly cash dividend of $0.08 per share provide start-to-finish solutions to help our • Return on Average Equity of 12.98% business clients enhance cash flow, improve • Non-performing assets low at 0.39% of accounting and automate payments. This is no small task, especially when solutions are total assets customized to meet the specific needs of each • $487 million in mortgage loans closed, business. up 80% To understand more about all that cash management entails, we asked the team SHAREHOLDER to answer the common questions they receive in the field each day. Below are 12.5% Increase in their responses: Quarterly Cash Dividend How Much Time Can I Save? transactions before they impact yourThe Board of Directors announced a 12.5%increase in the quarterly common stock cash Between our personalized service and account.dividend to $0.09 per common share, payableon June 12, 2015, to shareholders of record on competitive selection of treasury services, How Can I Offset My Fees?May 25, 2015. This is the fifth year in a row that our client’s payment processing can becash dividends have been increased due to our handled without having to leave the Our analysis account offers one of thefinancial success. office. We offer mobile photo deposit, highest earnings credit available in the automated payment and collection local market, currently 1%. An Earning OUR TEAM processing via ACH and many other Credit Rate (ECR), allows businesses the products to help clients manage their opportunity to reduce or eliminate monthly Introducing Ben business without much more than a click fees. The ECR is calculated based on the Vanderberry monthly balance of deposit accounts and is or a call. Ben Vanderberry has recently used to offset any monthly activity charges. joined the company as Executive Is Online Banking Secure? If your total account activity charges areVice President, to further support the growth ofMonarch Bank Private Wealth. He has over thirty Our online business banking system less than your earnings credit there will beyears of experience in banking with the majority offers reporting and transaction initiation no service charge to your account for theof his experience in wealth management, private services 24 hours a day, 7 days a week. month. If they are greater, the differencebanking and commercial lending. The system provides easy internet access will be charged to your account. Any excessA graduate of Virginia Military Institute, he with the added protection of security earnings credit provides you the opportunitypreviously worked for SunTrust Bank as the private and user authentication. Our Multifactor to utilize more services to help your businesswealth management group credit strategy Authentication feature is additional become even more profitable, more efficientofficer, mid-Atlantic credit advisory services protection against anyone trying to gain and reduce fraud.manager, and regional private wealth managerfor Hampton Roads. 1%access from unrecognized computers. How Long Does It Take to Set Up the Process?“Ben is a results oriented banker with a richunderstanding of the Hampton Roads market. It simply requires the It can vary dependingHis credit skills and previous oversight of private use of an encrypted on services and productsbank lending throughout the southeastern U.S. access code as well as needed, but most processeswill add greatly to our ability to provide loans to the ID’s and passwords are ready for use withinhigh net-worth clients in our markets,” stated to authenticate the 3-5 days.E. Neal Crawford, President. user. Additionally, ourMonarch Bank Private Wealth Positive Pay service To learn more, contact aWorld Trade Center allows you to reviewOffice: 757-961-0645 Cash Management Officer potentially fraudulent EARNINGS CREDIT at 757-389-5154. u Take advantage of one of the highest earnings credit in the area. NEW! COMING SOON! Enroll in e-statements and access Monarch Bank is proud to offer ACH POSITIVE PAY, starting Fall 2015. analysis statements online. We encourage all of our clients to take advantage of this state-of-the-art fraud protection.

The New Face of HomebuyingThe rise of the millennial homeownerIf someone sAId Millennials had the potential to become home buyers and buyers. The current low interest rates also make buying that first home even more affordable.”completely change the housing market, would you believe them? The factof the matter is as such a large part of the U.S. population, Millennials are Right now, Millennials are accounting for 31% of all home purchases,in the best position to find and buy a new home. With over 80 million showing plenty of promise for the future of the market. Additionally,people comprising this generation, their sheer numbers alone will help to Millennials are hitting the age where many are starting families. A familystart driving the housing market back in the right direction. is a large investment, but the desire for a family also helps to drive the desire to find a more permanent home.Most Millennials believe their student loans and lack of accumulated creditwill be obstacles for financing the home of their dreams. Helping our clients Regardless of your “generation”to understand their options and navigate the complexity of a mortgage we can help you navigateloan is something we do every day at Monarch Mortgage. the complexities of finding the right mortgage loan to“Many still believe you need high incomes, large down payments, and perfect fund your dream home. Callcredit to get a mortgage,” Jack Lane, President of Monarch Mortgage, said. us at 757-390-2200. u“The truth is that the average mortgage borrower does not put down 20%,and there are many loan programs for first-time and lower income homeMonarch Bank Has Landed in Town Center!Clouds And the occasional rain shower could not dampen our spirits in mind. It features desks instead of teller lines and drive-thru banking enhancements, allowing clients to see and hear their banker through aas we celebrated the grand opening of our Town Center office this past high definition monitor. Our Town Center team, led by office Privatemonth. Keeping with the unique vibe of the Town Center area, we decided Banker Vita Kenney, are well-versed in supporting our client’s needsto change things up to commemorate the occasion. The picnic-themed including business formation, succession planning, lending and cashluncheon featured fare from some of Virginia Beach’s most popular gourmet flow management as well as personal and mortgage needs. With thefood trucks, Malbons BBQ, Sofrito and Twisted Sisters while local musician new convenient location, upgraded layout and motivated banking teamDavid Carter provided live entertainment. in place, this office is poised to handle the ongoing growth of Virginia Beach’s Central Business District, known as Town Center. Contact us atMuch like the grand opening luncheon, the branch experience of the the office number at 757-416-7300. uTown Center office is just as distinctive. Located at Columbus St. &Constitution Dr. this office was built with the universal banker model

MONARCH OFFICES Camp GromChesapeake / Business Banking our CommItment to the community is1435 Crossways Blvd., Ste. 200 ......(757) 955-8624 evident by making the largest donation inGreat Bridge the history of Monarch Children’s Charity1034 S. Battlefield Blvd. ...................(757) 482-2727 to Camp Grom. This community-changing project is the only camp of its kind on theGreenbrier East Coast. Designed to give wounded veterans, children & adults with disabilities or750 Volvo Parkway.............................(757) 222-2100 special needs, a place of their own. Activities, educational programs, entertainment and social gatherings are designed to inspire independence & confidence while empoweringNorfolk / Business Banking and improving quality of life. u101 West Main Street........................(757) 644-6860 Heart Of Ghent 10KWorld Trade Center Run, Cheer, Shop!101 West Main Street........................(757) 228-7576 We Are proud to again serve as the presenting sponsor of The GhentGhent500 W. 21st Street ..............................(757) 623-0055 Business Association’s Heart of Ghent 10K run/walk and kids’ fun run on Saturday, September 26. In its 4th year, this race has become aVirginia Beach / Business Banking fan favorite as a family-oriented run/walk through the historic300 32nd Street ..................................(757) 309-4575 and scenic Ghent neighborhood. For more information on the race, visit HeartofGhent10k.com. uHilltop1635 Laskin Road ...............................(757) 309-4809 saturday, september 26, 2015Kempsville5225 Providence Road .....................(757) 769-7500Lynnhaven100 Lynnhaven Parkway..................(757) 463-4100Oceanfront / 31 Ocean300 32nd Street ..................................(757) 491-2000Town Center4525 Columbus Street......................(757) 416-7300Newport News / One City Center11815 Fountain Way .........................(757) 585-2387Williamsburg / Private Wealth5235 Monticello Avenue .................(757) 206-1600Richmond / Glen Allen4198 Cox Road ....................................(804) 925-5829Monarch Mortgage HQ300 32nd Street, Ste. 200.................(757) 390-22001435 Cro ssways Blvd.Ch e sap eake , VA 23320