Malaga Financial Corporation Reports Increase in First Quarter Earnings

Rhea-AI Summary

Malaga Financial Corporation (OTCPink:MLGF) reported a net income of $4.8 million for Q1 2022, reflecting a 2% increase from Q1 2021. Earnings per share rose to $0.59. The bank’s total assets grew 12% to $1.496 billion, with a 2% increase in the loan portfolio. Net interest income increased by 3% to $9.9 million, despite a decline in interest rate spread. Operating expenses rose 8% to $3.4 million. The company maintains a well-capitalized status, with core capital ratios significantly above required thresholds.

Positive

• Net income increased by 2% to $4.8 million.
• Total assets grew by 12% to $1.496 billion.
• Net interest income increased by 3% to $9.9 million.
• No delinquent loans or foreclosed properties reported.
• Well-capitalized status with core capital ratios at 12.20%.

Negative

• Operating expenses increased by 8% to $3.4 million.
• Annualized return on average equity decreased to 11.20% from 11.90%.
• Annualized return on average assets decreased to 1.29% from 1.43%.
• Interest rate spread decreased by 0.27% to 2.63%.

PALOS VERDES ESTATES, Calif., April 12, 2022 (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, 2022 was $4,795,000 ($0.59 basic and fully diluted earnings per share), an increase of $79,000 or 2% from net income of $4,716,000 ($0.58 basic and fully diluted earnings per share, as adjusted for the stock dividend declared on October 25, 2021) for the quarter ended March 31, 2021. For the first quarter of 2022, the Company’s annualized return on average equity was 11.20% and the annualized return on average assets was 1.29%, as compared to 11.90% and 1.43%, respectively, for the same period in 2021.

The Company did not have any delinquent loans or foreclosed real estate owned at March 31, 2022. The Company’s allowance for loan losses was $3,737,000, or 0.30% of total loans, at March 31, 2022.

Net interest income totaled $9,875,000 in the first quarter of 2022, an increase of $271,000 or 3% from the first quarter of 2021. This increase was due primarily to an increase in excess interest-earning assets over interest-bearing liabilities of $13 million offset by a decrease of 0.27% in the interest rate spread to 2.63%. The decrease in the interest rate spread is primarily attributable to a decrease of 0.36% in the yield on average interest-earning assets offset by a 0.09% decrease in the average cost of funds.

In the first quarter of 2022, operating expenses increased 8% to $3,369,000 from $3,132,000 in the first quarter of 2021. The increase is primarily attributed to increases in compensation of $102,000, general and administrative expenses of $56,000, and professional services of $46,000.

Randy C. Bowers, Chairman, President and CEO, commented, “In spite of several new challenges that we are facing in 2022 we are pleased to report a modest increase in first quarter earnings. Higher inflation, rapidly rising interest rates and economic uncertainty in addition to geopolitical unrest all contribute to a highly volatile operating environment. We also continue to deal with the effects of the pandemic. We are grateful for the efforts of our staff in achieving these results in very difficult times. We are hopeful that we will see improvement in these circumstances over the remainder of the year.”

Malaga’s total assets increased by 12% to $1.496 billion at March 31, 2022 compared to $1.332 billion at March 31, 2021. The loan portfolio at March 31, 2022 was $1.229 billion, an increase of $27 million or 2% from March 31, 2021. 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 $861 million as of March 31, 2022, a $115 million increase from $746 million at March 31, 2021. Wholesale deposits, comprised mainly of State of California certificates of deposit and brokered deposits, totaled $188 million as of March 31, 2022, a $61 million increase from $127 million at March 31, 2021. FHLB borrowings decreased $25 million or 9% from $275 million at March 31, 2021 to $250 million at March 31, 2022.

As of March 31, 2022, 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 12.20% and 22.11%, respectively, at March 31, 2022, 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 awarded an A+ financial health rating by DepositAccounts.com. 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 57th consecutive quarter as of December 2021. 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.

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

FAQ

What were the earnings results for Malaga Financial Corporation in Q1 2022?

Malaga Financial Corporation reported a net income of $4.8 million, or $0.59 per share, for Q1 2022.

How did Malaga Financial's assets change in Q1 2022?

Total assets increased by 12% to $1.496 billion compared to the previous year.

What was the net interest income for Malaga Financial in the first quarter of 2022?

Net interest income for Q1 2022 was $9.9 million, a 3% increase from Q1 2021.

What was the annualized return on equity for Malaga Financial in Q1 2022?

The annualized return on average equity for Q1 2022 was 11.20%.