Malaga Financial Corporation Reports Record Earnings Year-To-Date 2021

Rhea-AI Summary

Malaga Financial Corporation (OTCPink: MLGF) reported a net income of $19.6 million for 2021, a 7% increase from the previous year, translating to $2.42 earnings per share. For Q4 2021, net income rose 5% to $4.96 million or $0.61 per share. Total assets increased to $1.474 billion, and the loan portfolio grew by 4% to $1.246 billion. Net interest income also rose by 5% to $39.55 million. The company maintained strong credit quality with no delinquent loans, showcasing robust financial health.

Positive

• Net income up 7% to $19.6 million for 2021.
• Earnings per share increased to $2.42.
• Total assets rose to $1.474 billion, a 12% increase in retail deposits.
• Strong credit quality with no delinquent loans.

Negative

• Annualized return on average equity slightly declined to 12.04%.
• Interest rate spread decreased to 2.84%.

PALOS VERDES ESTATES, Calif., Jan. 27, 2022 (GLOBE NEWSWIRE) -- Malaga Financial Corporation, “Company” (OTCPink:MLGF), the parent company of Malaga Bank FSB, today reported that net income for the twelve months ended December 31, 2021 was $19,602,000 ($2.42 basic and fully diluted earnings per share) compared to $18,335,000 ($2.27 basic and fully diluted earnings per share, as adjusted for the stock dividend declared on October 25, 2021) for the twelve months ended December 31, 2020, a 7% increase. Net income for the quarter ended December 31, 2021 was $4,963,000 ($0.61 basic and fully diluted earnings per share), an increase of $220,000 or 5% from net income of $4,743,000 for the quarter ended December 31, 2020 ($0.59 basic and fully diluted earnings per share, as adjusted for the stock dividend declared on October 25, 2021). For the twelve months ended December 31, 2021, the Company’s annualized return on average equity was 12.04% and the annualized return on average assets was 1.41%, as compared to 12.15% and 1.43%, respectively, for the same period in 2020.

The Company did not have any delinquent loans over 30 days or real estate owned at December 31, 2021, or any loans modified as a result of the COVID-19 pandemic. The Company’s allowance for loan losses was $3,798,000, or 0.30% of total loans, at December 31, 2021.

For 2021, net interest income totaled $39,552,000, an increase of $1,913,000 or 5% from 2020. This increase reflected higher average interest-earning assets of $105.8 million offset by a decrease of 0.07% in the interest rate spread to 2.84%. The decrease in the interest rate spread is primarily attributable to a decrease in the yield on average interest-earning assets of 0.30% offset by a decrease in the average cost of funds of 0.23%.

Provision for loan losses decreased $52,000 to $110,000 in 2021 from $162,000 in 2020. The decrease is primarily due to continued positive trends in multi-family vacancy factors and unemployment and continued excellent credit quality of the Company’s loan portfolio despite the negative effects presented by the unprecedented pandemic over the past 21 months.

Other operating income increased 11% in 2021 to $868,000 from $785,000 in 2020. Income increased primarily due to deposit related fees.

Operating expenses increased $186,000 or 2% to $12,478,000 in 2021 from $12,292,000 in 2020. The increase is primarily attributed to increases in compensation of $136,000, data processing $49,000, deposit insurance premiums of $29,000, and general and administrative expenses of $24,000 offset by a decrease in professional services of $47,000.

Randy C. Bowers, Chairman, President and CEO, remarked, “We are pleased to once again report record earnings for the full year in addition to excellent credit quality and expense control. These accomplishments are the result of the extraordinary work of our team in very challenging conditions. We appreciate their dedicated efforts and our ability to continue to provide additional compensation along with stringent safety measures during the ongoing pandemic.”

Malaga Bank’s total assets increased to $1.474 billion at December 31, 2021 compared to $1.312 billion at December 31, 2020. The loan portfolio at December 31, 2021 was $1.246 billion, an increase of $53.0 million or 4% from December 31, 2020. Malaga originates loans principally for its own portfolio and not for sale.

Malaga Bank funds its assets with a mix of retail deposits, wholesale deposits and FHLB borrowings. Retail deposits totaled $827.9 million as of December 31, 2021, a $90.6 million or 12% increase from $737.3 million at December 31, 2020. Wholesale deposits increased $72.7 million or 62% from $116.6 million at December 31, 2020. Wholesale deposits were primarily comprised of State of California certificates of deposit in the amount of $60.0 million and $109.2 million of brokered long-term certificates of deposit at December 31, 2021. FHLB borrowings were $265.0 million as of December 31, 2021, a $15.0 million decrease from $280.0 million at December 31, 2020.

As of December 31, 2021, Malaga Bank was in compliance with all applicable regulatory capital requirements and was deemed “well-capitalized” under those regulations. Core capital and risk-based capital ratios were 12.30% and 22.02%, respectively, at December 31, 2021, significantly exceeding the minimum “well-capitalized” requirements of 5% and 10%, respectively.

In the fourth quarter, the Company declared a quarterly cash dividend of 25 cents per share payable in January 2022, and a special stock dividend of 5% per share payable on December 30, 2021, to shareholders of record as of December 17, 2021.

Mr. Bowers concluded, “We appreciate the support and loyalty of our employees, shareholders and Board of Directors and look forward to the coming year.”

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 56th consecutive quarter as of September 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 is the net income for Malaga Financial Corporation for 2021?

Malaga Financial Corporation reported a net income of $19.6 million for 2021.

How much did the earnings per share increase for MLGF in 2021?

Earnings per share for MLGF increased to $2.42 in 2021.

What was the total asset value for Malaga Bank at the end of 2021?

The total asset value for Malaga Bank was $1.474 billion at the end of 2021.

How much did net interest income increase for MLGF in 2021?

Net interest income for MLGF increased by 5% to $39.55 million.

What was the interest rate spread for Malaga Financial Corporation in 2021?

The interest rate spread for Malaga Financial Corporation decreased to 2.84% in 2021.