Malaga Financial Corporation Reports Record Earnings in First Quarter 2010
Apr 28, 2010 20:55:59 (ET)
PALOS VERDES ESTATES, Calif., Apr 28, 2010 (BUSINESS WIRE) -- Malaga Financial Corporation (MLGF, Trade ), the parent company of Malaga Bank FSB, today reported that net income for the quarter ended March 31, 2010 was $2,440,000 ($0.42 per share basic and fully diluted), an increase of $29,000 or 1% from net income of $2,411,000 ($0.42 per share basic and fully diluted) for the quarter ended March 31, 2009. Net income increased due to continued growth in interest earning assets and excellent credit quality. Net income in the first quarter was the highest first quarter net income in the Company's 25 year history.
The Company did not have any delinquent loans or non-performing assets at March 31, 2010. The Company's allowance for loan losses was $2,840,000 or 0.37% of total loans, at March 31, 2010.
Net interest income totaled $6,642,000 in the first quarter of 2010, up $160,000 or 2% from the first quarter of 2009. This increase resulted from a $44 million or 6% increase in average interest earning assets to $798 million, partially offset by a 0.07% decrease in the interest rate spread to 3.15%. The decrease in the interest rate spread was due to a 0.51% decline in the weighted average yield on interest earning assets, while the weighted average cost of funds declined only 0.44%.
Operating expenses increased 3% in the first quarter of 2010, to $2,603,000 from $2,524,000 in the first quarter of 2009. Increased costs resulted primarily from $107,000 in salary and related benefits.
Randy C. Bowers, President and CEO, remarked, "We are pleased to report record first quarter earnings in spite of the prolonged recessionary environment that has negatively impacted the banking and real estate sectors along with the general economy. Our loan portfolio has continued to perform exceptionally well and our strategic initiatives have proven to be effective during this difficult economic period."
Malaga's total assets reached $829 million at March 31, 2010 compared to $780 million at March 31, 2009. The loan portfolio at March 31, 2010 was $768 million, an increase of $23 million or 3% from March 31, 2009. 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 $451 million as of March 31, 2010, a $124 million or 38% increase from $327 million at March 31, 2009. The robust retail deposit growth was used to repay wholesale deposits and FHLB borrowings, which decreased $96 million or 25% from $377 million at March 31, 2009 to $281 million at March 31, 2010. The weighted average cost of funds for the first three months of 2010 was 2.18% versus 2.62% for the first three months of 2009.
As of March 31, 2010, 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 10.54% and 17.63%, respectively, at March 31, 2010 significantly exceeding the minimum "well capitalized" requirements of 5% and 10% respectively. In the first quarter, Malaga Financial paid a quarterly dividend for the 22nd consecutive quarter.
Mr. Bowers concluded, "Our continued focus on financial strength, personalized service and community partnership has provided our customers, shareholders and the community a safe place to bank for 25 years. Our strategy continues to be moderate internal growth combined with prudent loan underwriting and diligent cost control. Malaga Bank remains a five-star rated bank, the highest rating available from Bauer Financial."
Malaga Bank, a subsidiary of MFC, is a full-service community bank headquartered on the Palos Verdes Peninsula with branch offices located on the Peninsula, in Torrance and San Pedro. 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 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 .
SOURCE: Malaga Financial Corporation
Malaga Financial Corporation
President and Chief Executive Officer