Exhibit 99.1

MONARCH FINANCIAL EXCEEDS $1 BILLION ……

AND REPORTS RECORD FINANCIAL PERFORMANCE

Chesapeake, VA - Monarch Financial Holdings, Inc. (Nasdaq: MNRK, 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 15^th 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.

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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.

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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

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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.

##

Contact:	Brad E. Schwartz – (757) 389-5111, www.monarchbank.com
Date:	October 18, 2012

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Consolidated Balance Sheets

Monarch Financial Holdings, Inc. and Subsidiaries

(In thousands)

Unaudited

	September 30, 2012			December 31, 2011			September 30, 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 September 30,						Nine Months Ended 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