Malaga Financial Corporation Reports First Quarter 2014 Net Income of $2.7 Million
25 April 2014 - 10:07AM
Business Wire
Pre-Tax ROE 19.16%
Malaga Financial Corporation (OTCBB:MLGF), the parent
company of Malaga Bank FSB, today reported that net income for the
quarter ended March 31, 2014 was $2,733,000 ($0.46 per share basic
and $0.45 fully diluted), an increase of $29,000 or 1% from net
income of $2,704,000 ($0.46 per share basic and fully diluted) for
the quarter ended March 31, 2013. Net income in the first quarter
resulted in a pre-tax return on average equity of 19.16%.
The Company did not have any real estate owned and only one
delinquent consumer loan in the amount of $5,000 at March 31, 2014.
The Company’s allowance for loan losses was $2,882,000, or 0.34% of
total loans, at March 31, 2014.
Net interest income totaled $7,373,000 in the first quarter of
2014, an increase of $202,000 or 3% from the first quarter of 2013.
This increase resulted from an increase in average interest earning
assets of $60,095,000, offset by a decrease in the interest spread
from 3.44% to 3.30%. The decrease in the interest spread was due to
a 0.40% decline in the weighted average yield on interest earning
assets, while the weighted average rate on interest-bearing
liabilities declined only 0.26%.
Operating expenses increased 4% in the first quarter of 2014, to
$2,788,000 from $2,686,000 in the first quarter of 2013. Increased
costs were primarily related to compensation and professional
service fees.
Randy C. Bowers, President and CEO, remarked, “We are pleased to
report earnings are strong and stable and our overall financial
health is 'superior' as evidenced by our 25 consecutive quarters of
5 star ratings from Bauer Financial, Inc. Five stars is their
highest rating and an indication that our institution is one of the
strongest in the United States. A primary contributor to that
success is how our team of associates continues to provide
exceptional service to our clients.”
Malaga’s total assets increased by 8% to $910 million at March
31, 2014 compared to $843 million at March 31, 2013. The loan
portfolio at March 31, 2014 was $844 million, an increase of $64
million or 8% from March 31, 2013. Malaga originates loans
principally for its own portfolio and not for sale.
Malaga funds its assets with a mix of retail deposits, wholesale
deposits and FHLB borrowings. Retail deposits totaled $598 million
as of March 31, 2014, a $35 million or 6% increase from $562
million at March 31, 2013. The continued retail deposit growth
combined with earnings growth and increase in FHLB borrowings was
used to fund loan growth of $64 million. The weighted average cost
of funds for the first three months of 2014 was 0.82% versus 1.08%
for the first three months of 2013. The decrease was due primarily
to a higher mix of lower cost overnight Federal Home Loan Bank
borrowings.
As of March 31, 2014, Malaga Bank was in compliance with all
applicable regulatory capital requirements and was deemed
“well-capitalized” under applicable regulations. Core capital and
risk-based capital ratios were 13.20% and 22.90%, respectively, at
March 31, 2014, significantly exceeding the minimum “well
capitalized” requirements of 5% and 10%, respectively. In the first
quarter, Malaga Financial paid a quarterly dividend for the 38th
consecutive quarter.
Mr. Bowers concluded, “As we begin our 30th year serving the
South Bay we look forward to continuing to support our community
and its various organizations, reward our shareholders and to
provide a safe and friendly place to encourage banking
locally.”
Malaga Bank, a subsidiary of Malaga Financial Corporation, is a
full-service community bank headquartered on the Palos Verdes
Peninsula with six offices located in the South Bay area of Los
Angeles. Since 1985, Malaga Bank has been delivering competitive
banking services to residents and businesses of the South Bay,
including real estate loan products custom-tailored to consumers
and investors. As the largest community bank in the South Bay,
Malaga is proud of its continuing tradition of relationship-based
banking and legendary customer service. The Bank’s web site is
located at www.malagabank.com.
Malaga Financial CorporationRandy BowersPresident and Chief
Executive Officer310-375-9000rbowers@malagabank.com
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