MGLF.. $14.25
Malaga Financial Corporation Reports Record Quarterly Earnings and No Delinquent Loans or Non-Performing Assets
PALOS VERDES ESTATES, Calif., Oct 09, 2009 (BUSINESS WIRE) -- Malaga Financial Corporation (MLGF, Trade ), the parent company of Malaga Bank FSB, today reported that net income for the quarter ended September 30, 2009 was $2,501,000 ($0.44 basic and $0.43 fully diluted earnings per share), an increase of $718,000 or 40% from net income of $1,783,000 ($0.31 per share basic and fully diluted) for the quarter ended September 30, 2008. This was the highest quarterly net income in Malaga's history. Net income for the nine months ended September 30, 2009 was $7,130,000 ($1.24 basic and $1.23 fully diluted earnings per share) as compared to $5,146,000 ($0.90 basic and fully diluted earnings per share) for the nine months ended September 30, 2008, a 39% 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 September 30, 2009. The Company's allowance for loan losses at September 30, 2009 was $2,834,000 or 0.37% of total loans.
Net interest income totaled $6,638,000 in the third quarter of 2009, up $1,392,000 or 27% from the third quarter of 2008. This increase resulted from a $61 million or 9% increase in average interest earning assets to $766 million and a 0.59% increase in the interest rate spread to 3.28%. The improvement in the interest rate spread was due to a 1.26% decline in the weighted average cost of funds, while the weighted average yield on interest earning assets declined only 0.66%. 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 11% in the third quarter of 2009, to $2,501,000 from $2,245,000 in the third quarter of 2008. The increase is primarily attributed to $162,000 increase in FDIC insurance premiums and $114,000 increase in compensation related costs.
Randy C. Bowers, President and CEO of Malaga, remarked, "We are pleased to continue to report record operating results, in spite of an extremely challenging environment for financial institutions. Our asset quality remains strong as a result of our prudent lending practices. For the seventh consecutive quarter, we have been designated a five-star rated bank, the highest rating available from BauerFinancial. We take pride in continuing to provide a strong and safe place to bank for our customers, shareholders and communities."
Malaga's total assets were $796 million at September 30, 2009 compared to $737 million at September 30, 2008, an increase of $59 million or 8%. The loan portfolio at September 30, 2009 was $760 million versus $702 million at September 30, 2008, an increase of $59 million. Malaga originates loans principally for its own portfolio and not for sale. At September 30, 2009, the loan portfolio was comprised of the following types of loans outstanding: multi-family loans -- 74%; single family residential loans -- 15%; commercial real estate loans -- 7%; home equity lines of credit -- 3%; and commercial and other loans - 1%.
Malaga funds its assets with a mix of deposits and FHLB borrowings. Retail deposits totaled $362 million as of September 30, 2009, up from $309 million at September 30, 2008, a 17% increase. Wholesale deposits and FHLB borrowings totaled $355 million at September 30, 2009 and 2008. The increase in total assets for the quarter was funded primarily by increase in retail deposits and earnings. The weighted average cost of funds for the third quarter of 2009 was 2.13% versus 3.31% for the third quarter of 2008.
Malaga's stockholders' equity was $60.5 million at September 30, 2009, or $10.43 per fully diluted common share. The Company has paid a quarterly dividend for 20 consecutive quarters.
As of September 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 9.06% and 14.79%, respectively, at September 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
Malaga Financial Corporation
Randy Bowers
President and Chief Executive Officer
310-375-9000
rbowers@malagabank.com
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