Malaga Financial Corporation Reports Third Quarter 2014 Net Income of $2.8 Million
October 14 2014 - 7:57PM
Business Wire
Pre-Tax ROE 19.20%
Malaga Financial Corporation (OTCBB:MLGF), the parent
company of Malaga Bank FSB, today reported net income for the
quarter ended September 30, 2014 was $2,828,000 ($0.47 per share
basic and fully diluted), an increase of $17,000 from income of
$2,811,000 for the quarter ended June 30, 2014 and a decrease of
$118,000 or 4% from net income of $2,946,000 ($0.50 per share basic
and $0.49 per share fully diluted) for the quarter ended September
30, 2013. Net income for the nine months ended September 30, 2014
was $8,372,000 ($1.39 basic and fully diluted earnings per share)
as compared to $8,714,000 ($1.47 basic and $1.46 fully diluted
earnings per share) for the nine months ended September 30, 2013, a
4% decrease. Net income decreased from the prior year primarily due
to an increase in allowance for loan losses resulting from growth
in outstanding loans and decrease in capitalized compensation
related costs due to decrease in loans originated. Net income for
the first nine months of 2014 resulted in an annualized pre-tax
return on average equity of 19.20%.
The Company did not have any delinquent loans or real estate
owned at September 30, 2014. The Company’s allowance for loan
losses was $2,963,000, or 0.34% of total loans, at September 30,
2014.
Net interest income totaled $7,445,000 in the third quarter of
2014, and was comparable to third quarter of 2013. During the same
period, average interest earning assets increased by $66 million
while interest rate spread decreased from 3.44% to 3.20%. The
decrease in the interest spread was due to a 0.37% decline in the
weighted average yield on interest earning assets, while the
weighted average rate on interest-bearing liabilities declined only
0.13%.
Operating expenses increased 3% in the third quarter of 2014, to
$2,649,000 from $2,571,000 in the third quarter of 2013. Increased
costs resulted primarily from decrease in capitalized compensation
related costs due to decrease in loans originated.
Randy C. Bowers, President and CEO, remarked, “Results of
operations for the first nine months of 2014 reflect the continued
execution of our business plan. Earnings remain strong and asset
quality is excellent. We continue to achieve moderate growth in
both our deposit base and loan portfolio. We are cautiously
optimistic as we plan for the remainder of 2014 and beyond.”
Malaga’s total assets increased by 7% to $937 million at
September 30, 2014 compared to $872 million at September 30, 2013.
The loan portfolio at September 30, 2014 was $865 million, an
increase of $55 million or 7% from September 30, 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. Deposits totaled $699 million as of
September 30, 2014, a $71 million or 11% increase from $628 million
at September 30, 2013. FHLB borrowings totaled $105 million at
September 30, 2014, a $13 million or 11% decrease from $118 million
at September 30, 2013. The weighted average cost of funds for the
third quarter of 2014 was 0.78% versus 0.91% for the third quarter
of 2013. The decrease was due primarily to a higher mix of lower
cost state funds and overnight Federal Home Loan Bank
borrowings.
As of September 30, 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 13.21% and 23.34%, respectively, at
September 30, 2014 significantly exceeding the minimum “well
capitalized” requirements of 5% and 10% respectively. In the third
quarter, Malaga Financial paid a quarterly dividend for the 40th
consecutive quarter.
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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