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MLGF.. $12.45

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10 bagger   Friday, 02/05/10 12:34:45 AM
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MLGF.. $12.45

I own this and one other {FPBF $25.00 Bid) and will hold both.. This is possibly the best small bank in America.. The only problem is that it is in Califorina..

Malaga Financial Corporation in Its 25th Year of Operations Reports Record Earnings with a 34% Increase for 2009

Feb 4, 2010 19:47:01 (ET)

PALOS VERDES ESTATES, Calif., Feb 04, 2010 (BUSINESS WIRE) -- Malaga Financial Corporation (MLGF, Trade ), the parent company of Malaga Bank FSB, today reported that net income for the year ended December 31, 2009 was $9,494,000 ($1.65 per share basic and $1.64 per share fully diluted), an increase of $2,418,000 or 34% from net income of $7,076,000 ($1.24 per share basic and fully diluted) for the year ended December 31, 2008. This record annual net income resulted in an ROAE of 16.71% for the year and was achieved in spite of a $1,044,000 increase in FDIC insurance premiums in 2009. Malaga continues to have no non-performing assets or delinquent loans.

Net income for the fourth quarter was $2,364,000 ($0.41 per share basic and fully diluted) compared to $1,930,000 ($0.34 per share basic and fully diluted) for the fourth quarter of 2008, an increase of 22%.

Net income increased in 2009 primarily as a result of a $5,297,000 increase in net interest income due to a $57 million growth in average interest earning assets and an increase in interest rate spread from 2.74% in 2008 to 3.29% in 2009. The interest rate spread increased primarily due to our average cost of funds declining faster than our average yield on interest earning assets.

Malaga recorded a provision for loan losses of $120,000 in 2009 as compared to $329,000 in 2008. The lower provision in 2009 was attributable to lower net loan growth of $35 million in 2009 versus $59 million in 2008. Malaga's allowance for loan losses was $2.8 million, or 0.37% of loans, at December 31, 2009.

Operating expenses increased $1,535,000 or 17% from $8,924,000 in 2008 to $10,459,000 in 2009. This increase was due primarily to a $1,044,000 increase in FDIC insurance premiums. In addition, salaries and related benefits increased $504,000 due primarily to lower cost offset of deferred loan origination costs as a result of lower loan origination volume.

Randy C. Bowers, President and CEO, remarked, "We are pleased to report record earnings in our 25th year of operations. Our long-term commitment to prudent underwriting and our focus on loan terms that facilitate the timely repayment of debt has provided our shareholders, customers, employees and the community with one of the strongest community banks in the nation. Our financial strength has allowed us to continue to support and partner with various community organizations that are so important to the communities we serve."

Malaga's total assets reached $811 million at December 31, 2009 compared to $764 million at December 31, 2008. The loan portfolio at December 31, 2009 was $762 million, an increase of $35 million or 5% from December 31, 2008. Malaga originates loans principally for its own portfolio and not for sale.

Total deposits were $494 million at December 31, 2009, a 34% increase. The net increase in deposits of $125 million was utilized to fund net loan growth of $35 million and reduce FHLB borrowings by $94 million in 2009.

In December 2009, in order to obtain funds to increase the regulatory capital of Malaga Bank, Malaga Financial commenced a private offering up to $10 million principal amount of 9.25% Senior Subordinated Notes at par. As of December 31, 2009, Malaga Financial had issued $7,250,000 of the Notes and had contributed the proceeds to Malaga Bank as capital. In January 2010, Malaga Financial issued and additional $2,750,000 of the Notes, completing the offering. The Notes bear interest at a rate of 9.25% per annum, payable quarterly, and are due and payable on the earlier to occur of December 31, 2016 or upon a change of control. The Notes are subordinated to all borrowings (other than the outstanding junior subordinated debentures) and may not be prepaid prior to maturity. The increased regulatory capital at Malaga Bank will enable it to pursue growth opportunities and will provide a further cushion against any losses or reserves on its loan portfolio in this recessionary economy.

As of December 31, 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 10.10% and 17.04%, respectively, at December 31, 2009 and substantially exceeded the minimum "well-capitalized" requirements of 5% and 10% respectively. In the fourth quarter, Malaga Financial paid a quarterly dividend for the 21st consecutive quarter.

Mr. Bowers concluded, "With our increased capital levels, Malaga Bank is well positioned to take advantage of growth opportunities that may become available in our market areas. The Bank continues to receive a five-star rating, the highest rating available from Bauer Financial and has recently been awarded the "Best Professional Business for 2009" by the Palos Verdes Chamber of Commerce.

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 San Pedro. Celebrating its 25th anniversary in 2010, 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. Come and experience the Malaga Bank difference. The Bank's web site is located at www.malagabank.com .

SOURCE: Malaga Financial Corporation

Malaga Financial Corporation
Randy Bowers
President and Chief Executive Officer

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