Malaga Financial Corporation Reports 9% Increase in Earnings for the First Six Months of 2021

Rhea-AI Summary

Malaga Financial Corporation (OTCPink:MLGF) reported increased net income for the six months ending June 30, 2021, totaling $9,622,000 ($1.25 EPS), which is a 9% rise from the same period in 2020. For Q2 2021, net income was $4,906,000 ($0.64 EPS), up 6% year-over-year. Key factors for income growth included a $424,000 rise in net interest income and a 22% increase in other operating income. Total assets rose 6% to $1.393 billion. The bank maintained excellent asset quality and compliance with capital requirements, with core capital ratios at 12.67%.

Positive

• Net income increased 9% for the six months ended June 30, 2021.
• Total assets rose 6% to $1.393 billion.
• Net interest income in Q2 2021 increased by $424,000 or 5% year-over-year.
• The company maintained no delinquent loans or foreclosures.

Negative

• Interest rate spread decreased from 2.90% to 2.87%.

PALOS VERDES ESTATES, Calif., July 15, 2021 (GLOBE NEWSWIRE) -- Malaga Financial Corporation (OTCPink:MLGF), the parent company of Malaga Bank FSB, today reported that net income for the six months ended June 30, 2021 was $9,622,000 ($1.25 basic and fully diluted earnings per share) compared to $8,804,000 ($1.14 basic and fully diluted earnings per share, as adjusted for the stock dividend declared on November 13, 2020) for the same period ended June 30, 2020, an increase of $818,000 or 9%. Net income for the quarter ended June 30, 2021 was $4,906,000 ($0.64 basic and fully diluted earnings per share), an increase of $286,000 or 6% from net income of $4,620,000 ($0.60 basic and fully diluted earnings per share, as adjusted for the stock dividend declared on November 13, 2020) for the quarter ended June 30, 2020. Net income for the quarter ended June 30, 2021 was $4,906,000 ($0.64 basic and fully diluted earnings per share), an increase of $190,000 or 4% from net income of $4,716,000 ($0.61 basic and fully diluted earnings per share) for the quarter ended March 31, 2021. For the first six months of 2021, the Company’s annualized return on average equity was 12.04% and the annualized return on average assets was 1.43%.

The increase in earnings of $190,000 for the second quarter of 2021 compared to first quarter of 2021 was primarily attributable to a $148,000 increase in net interest income after provision for loan losses, a $74,000 increase in other operating income, and a $101,000 decrease in other operating expenses, partially offset by a $133,000 increase in income tax expense.

Net interest income totaled $9,792,000 in the second quarter of 2021, an increase of $424,000 or 5% from the same period in 2020. This resulted primarily due to an increase in excess interest-bearing assets over interest-bearing liabilities of $15.6 million, offset by a decrease in the interest rate spread from 2.90% to 2.87%. The decrease in the interest rate spread is primarily attributable to a decrease of 0.25% in yield on average interest-earning assets offset by a decrease of 0.22% in yield on average interest-bearing liabilities.

Other operating income increased 22% in the second quarter of 2021 to $262,000 from $214,000 in the second quarter of 2020. Income increased primarily due to timing of annual safe deposit box fees.

Operating expenses increased 1% in the second quarter of 2021 to $3,031,000 from $2,987,000 in the second quarter of 2020.  

The Company had no delinquent loans or loans with deferred payments and no foreclosed real estate owned at June 30, 2021. The Company’s allowance for loan losses was $3,727,000, or 0.30% of total loans, at June 30, 2021.

Randy C. Bowers, Chairman, President and CEO, commented, “We are pleased to report record earnings for both the quarter and first half of 2021. As a result of the efforts of our colleagues, earnings continue to improve, asset quality remains excellent and expenses continue to be well controlled. Trends are positive and we are optimistic about the future”

Malaga’s total assets increased by 6% to $1.393 billion at June 30, 2021 compared to $1.316 billion at June 30, 2020. The loan portfolio at June 30, 2021 was $1.237 billion, an increase of $48.9 million or 4% from June 30, 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 $780.6 million as of June 30, 2021, an $86.7 million increase from $693.9 million at June 30, 2020. Wholesale deposits increased $7.0 million or 5% from $150.9 million at June 30, 2020 to $157.9 million at June 30, 2021. Wholesale deposits are primarily comprised of State of California certificates of deposit in the amount of $60.0 million and $80.8 million of brokered long-term certificates of deposits as of June 30, 2021. FHLB borrowings decreased $25 million or 8% from $295 million at June 30, 2020 to $270 million at June 30, 2021.

As of June 30, 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 12.67% and 21.90%, respectively, at June 30, 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 54th consecutive quarter as of March 2021. 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 of the Board, President and Chief Executive Officer
	Malaga Financial Corporation
	310-375-9000
	rbowers@malagabank.com

FAQ

What were the earnings for Malaga Financial Corporation in Q2 2021?

Malaga Financial Corporation reported net income of $4,906,000 in Q2 2021, translating to $0.64 earnings per share.

How did Malaga Financial Corporation's net income change in 2021?

Net income increased by $818,000 or 9% for the six months ended June 30, 2021, compared to the same period in 2020.

What is the asset status of Malaga Financial Corporation?

As of June 30, 2021, Malaga Financial Corporation's total assets were $1.393 billion, a 6% increase from the previous year.