Malaga Financial Corporation Reports Increased Earnings in 4th Quarter
January 23 2015 - 8:05PM
Business Wire
Malaga Financial Corporation (OTCBB:MLGF), the parent
company of Malaga Bank FSB, today reported that net income for the
quarter ended December 31, 2014 was $2,839,000 ($0.48 basic and
$0.47 fully diluted earnings per share), an increase of $59,000 or
2% from net income of $2,780,000 ($0.47 basic and fully diluted
earnings per share) for the quarter ended December 31, 2013. Net
income for the twelve months ended December 31, 2014 was
$11,211,000 ($1.87 basic and $1.86 fully diluted earnings per
share) as compared to $11,494,000 ($1.94 basic and $1.93 fully
diluted earnings per share) for the twelve months ended December
31, 2013, a 2% decrease. Earnings for the twelve months ended
December 31, 2014 resulted in a pre-tax return on average equity of
19.10%.
The Company did not have any delinquent loans or foreclosed real
estate owned at December 31, 2014. The Company’s allowance for loan
losses was $2,949,000, or 0.34% of total loans, at December 31,
2014.
For 2014, net interest income totaled $29,692,000, an increase
of $49,000 or 0.2% from 2013. This increase reflected higher
average interest-earning assets of $62 million, offset by decrease
of 0.24% in the interest rate spread to 3.22%. The decrease in the
interest rate spread is primarily attributable to a decrease in
yield on average interest-earning assets of 0.38%, primarily from a
decrease in loan portfolio yield. Partially offsetting this was a
decrease of 0.14% in the average cost of funds. The decrease in the
average cost of funds was due to a combination of a higher mix of
lower cost overnight Federal Home Loan Bank (FHLB) borrowings and
maturity and repricing of longer-term FHLB borrowings.
Operating expenses remained stable with an increase of $427,000
or 4% to $10,871,000 in 2014 from $10,444,000 in 2013. The increase
is primarily in compensation related costs.
Randy C. Bowers, President and CEO, commented, “We are pleased
to report a positive trend in earnings for the fourth quarter. As a
result we declared a special yearend dividend for the third
consecutive year. We appreciate the loyalty of our shareholders and
are delighted to be able to enhance their return on
investment.”
Malaga’s total assets increased $60.4 million or 7% to $947
million at December 31, 2014. The loan portfolio at December 31,
2014 was $876 million, an increase of $49 million or 6% from
December 31, 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. Retail deposits totaled $598 million
as of December 31, 2014, a $24 million or 4% increase from $574
million at December 31, 2013. Wholesale deposits, comprised mainly
of State of California certificates of deposit, totaled $111
million as of December 31, 2014, $50 million or 84% increase from
$61 million at December 31, 2013. The retail and wholesale deposit
growth was used to fund the increase in loans and decrease in FHLB
borrowings. FHLB borrowings decreased $23 million or 18% from $128
million at December 31, 2013 to $105 million at December 31,
2014.
As of December 31, 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 13.25% and 24.08%, respectively, at
December 31, 2014, significantly exceeding the minimum “well
capitalized” requirements of 5% and 10% respectively.
In the fourth quarter, the Company declared a quarterly cash
dividend of 20 cents per share, payable in January 2015 and a
special dividend of 10 cents per share payable in 2014. The
quarterly dividend reflected a 14% increase in the quarterly
dividend amount in effect for the past four quarters.
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 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 Bowers, 310-375-9000President
and Chief Executive Officerrbowers@malagabank.com
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