MLGF.. $11.45
Malaga Financial Corporation Reports Record Earnings
Business Wire - Jul 30 at 16:30 NONE
Company Symbols: NASDAQ-OTCBB:MLGF
25% Increase in Second Quarter and 38% Increase Year to Date
PALOS VERDES ESTATES, Calif.--(BUSINESS WIRE)-- Malaga Financial Corporation (OTCBB: MLGF), the parent company of Malaga Bank FSB, today reported that net income for the quarter ended June 30, 2009 was $2,218,000 ($0.39 basic and $0.38 fully diluted earnings per share), an increase of $447,000 or 25% from net income of $1,771,000 ($0.31 per share basic and fully diluted) for the quarter ended June 30, 2008. Net income for the six months ended June 30, 2009 was $4,629,000 ($0.81 basic and $0.80 fully diluted earnings per share) as compared to $3,363,000 ($0.59 basic and fully diluted earnings per share) for the six months ended June 30, 2008, a 38% increase.
Net income increased primarily due to continued growth in interest earning assets and improvement in the interest rate spread.
Despite the continuing deterioration of the real estate market in Southern California, Malaga did not have any delinquent loans or non-performing assets at June 30, 2009. The Company's allowance for loan losses at June 30, 2009 was $2,818,000 or 0.37% of total loans.
Net interest income totaled $6,440,000 in the second quarter of 2009, up $1,318,000 or 26% from the second quarter of 2008. This increase resulted from a $66 million or 9% increase in average interest earning assets to $770 million and a 0.53% increase in the interest rate spread to 3.23%. The improvement in the interest rate spread was due to a 1.24% decline in the weighted average cost of funds, while the weighted average yield on interest earning assets declined only 0.71%. Malaga's liabilities reprice more rapidly than its interest earning assets, and thus Malaga will generally see an improvement in its interest rate spread during periods of declining market interest rates.
Non-interest expenses increased 26% in the second quarter of 2009, to $2,783,000 from $2,214,000 in the second quarter of 2008. The increase is primarily attributed to $502,000 increase in FDIC insurance premiums, including a special assessment of approximately $355,000. FDIC increased these premiums on all FDIC-insured banks as a means of offsetting losses to its insurance fund as a result of the bank failures attributable to the economic recession and credit crisis.
Randy C. Bowers, President and CEO of Malaga, remarked, "We are pleased to continue reporting such stellar operating results, in spite of the extremely difficult environment for financial institutions and increased FDIC premiums. Our asset quality remains strong, with no delinquent loans or non-performing assets. We continue to build on our success and have expanded and relocated our Torrance branch to our new location at the corner of Crenshaw Blvd. and Rolling Hills Road in order to better serve our customers."
Malaga's total assets were $793 million at June 30, 2009 compared to $723 million at June 30, 2008, an increase of $70 million or 10%. The loan portfolio at June 30, 2009 was $759 million versus $688 million at June 30, 2008, an increase of $71 million. Malaga originates loans principally for its own portfolio and not for sale. At June 30, 2009, the loan portfolio was comprised of the following types of loans outstanding: multi-family loans - 74%; single family residential loans - 14%; commercial real estate loans - 7%; home equity lines of credit - 3%; and commercial and other loans - 2%.
Malaga funds its assets with a mix of deposits and FHLB borrowings. Retail deposits totaled $333 million as of June 30, 2009, up from $298 million at June 30, 2008, a 12% increase. Wholesale deposits and FHLB borrowings totaled $382 million at June 30, 2009 versus $354 million at June 30, 2008, an 8% increase. The weighted average cost of funds for the second quarter of 2009 was 2.34% versus 3.58% for the second quarter of 2008.
Malaga's stockholders' equity was $58.4 million at June 30, 2009, or $10.11 per fully diluted common share. The Company has paid a quarterly dividend for 20 consecutive quarters.
As of June 30, 2009, 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 8.77% and 14.04%, respectively, at June 30, 2009 significantly exceeding the minimum "well capitalized" requirements of 5% and 10% respectively.
Malaga Bank, a subsidiary of Malaga Financial Corporation, is a full-service community bank headquartered on the Palos Verdes Peninsula with branch offices located on the Peninsula, in Torrance and now in San Pedro. Now in its 25th year, 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 Bank is proud of its continuing tradition of relationship-based banking and legendary customer service. Malaga Bank's web site is www.malagabank.com.
Source: Malaga Financial Corporation
