Malaga Financial Corporation Reports 13% Increase in First Quarter Earnings

Rhea-AI Summary

Malaga Financial Corporation (OTCPink:MLGF) reported a net income of $4,716,000 for Q1 2021, a 13% increase compared to $4,184,000 in Q1 2020. The company achieved an annualized return on equity of 11.90% and return on assets of 1.43%. Total assets rose by 6% to $1.332 billion. Net interest income increased by 9% to $9,604,000, while operating expenses rose by 3% to $3,132,000. The bank remains well-capitalized, with core capital and risk-based capital ratios at 12.85% and 22.43%, respectively. Notably, the bank had no delinquent loans.

Positive

• Net income increased by 13% to $4,716,000.
• Annualized return on average equity rose to 11.90%.
• Net interest income grew by 9% to $9,604,000.
• Total assets increased by 6% to $1.332 billion.
• The bank had no delinquent loans or foreclosed real estate.

Negative

• Operating expenses increased by 3% to $3,132,000.

PALOS VERDES ESTATES, Calif., April 16, 2021 (GLOBE NEWSWIRE) -- Malaga Financial Corporation “Company” (OTCPink:MLGF), the parent company of Malaga Bank FSB, today reported that net income for the quarter ended March 31, 2021 was $4,716,000 ($0.61 basic and fully diluted earnings per share), an increase of $532,000 or 13% from net income of $4,184,000 ($0.54 basic and fully diluted earnings per share) for the quarter ended March 31, 2020. For the first quarter of 2021, the Company’s annualized return on average equity was 11.90% and the annualized return on average assets was 1.43%, as compared to 11.39% and 1.34%, respectively, for the same period in 2020.

The Company did not have any delinquent loans or foreclosed real estate owned at March 31, 2021. The Company’s allowance for loan losses was $3,686,000, or 0.31% of total loans, at March 31, 2021.

Net interest income totaled $9,604,000 in the first quarter of 2021, an increase of $789,000 or 9% from the first quarter of 2020. This increase was due primarily to an increase in excess interest-earning assets over interest-bearing liabilities of $13 million, and an increase of 0.12% in the interest rate spread to 2.90%. The increase in the interest rate spread is primarily attributable to a decrease of 0.42% in the average cost of funds offset by a 0.30% decrease in the yield on average interest-earning assets.

In the first quarter of 2021, operating expenses increased 3% to $3,132,000 from $3,034,000 in the first quarter of 2020. The increase is primarily attributed to increases in compensation of $68,000 and data processing of $21,000.

Randy C. Bowers, Chairman, President and CEO, commented, “The dedicated efforts of our staff in serving our clients under extremely challenging circumstances continues to produce excellent financial results. We are pleased to report a significant increase in earnings for the 1^st Quarter 2021 compared with the same period in the prior year. We look forward to continued improvement in the economy and the results of efforts to reduce the effect of the pandemic over the remainder of 2021. We are optimistic about the future and look forward to better days ahead.”

Malaga’s total assets increased by 6% to $1.332 billion at March 31, 2021 compared to $1.251 billion at March 31, 2020. The loan portfolio at March 31, 2021 was $1.202 billion, an increase of $44 million or 4% from March 31, 2020. 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 $746 million as of March 31, 2021, a $94 million increase from $652 million at March 31, 2020. Wholesale deposits, comprised mainly of State of California certificates of deposit and brokered deposits, totaled $127 million as of March 31, 2021, a $12 million decrease from $139 million at March 31, 2020. FHLB borrowings decreased $14 million or 5% from $289 million at March 31, 2020 to $275 million at March 31, 2021.

As of March 31, 2021, 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 12.85% and 22.43%, respectively, at March 31, 2021, 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 six offices located in the South Bay area of Los Angeles. Malaga Bank has been named by DepositAccounts.com as one of the Top 200 Healthiest Banks out of the 5,035 banks analyzed across the United States. A more detailed breakdown of Malaga Bank’s A+ health score may be found in the health section of its dedicated page at www.depositaccounts.com/banks/malaga-bank-fsb.html#health. For over ten years Malaga Bank has been consistently recommended by one of the nation’s leading independent bank rating and research firms, Bauer Financial Inc. Malaga Bank was awarded Bauer’s premier Top 5-Star rating for the 53^rd consecutive quarter as of December 2020. 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.

Contact:

Randy Bowers Chairman, President and Chief Executive Officer Malaga Financial Corporation 310-375-9000 rbowers@malagabank.com

FAQ

What were Malaga Financial Corporation's earnings for Q1 2021?

Malaga Financial Corporation reported a net income of $4,716,000 for Q1 2021.

How much did net interest income increase for Malaga Financial Corporation?

Net interest income for Q1 2021 increased by 9% to $9,604,000.

What is the annualized return on equity for Malaga Financial Corporation for Q1 2021?

The annualized return on average equity was 11.90% for Q1 2021.

Did Malaga Financial Corporation have any delinquent loans as of March 31, 2021?

No, Malaga Financial Corporation did not have any delinquent loans as of March 31, 2021.

How did the total assets of Malaga Financial Corporation change from Q1 2020 to Q1 2021?

Total assets increased by 6% to $1.332 billion compared to $1.251 billion in Q1 2020.