Malaga Financial Corporation Reports Record Earnings

Rhea-AI Summary

Malaga Financial Corporation (OTCPink:MLGF) reported a net income of $15.38 million for the nine months ending September 30, 2022, reflecting a 5% increase year-over-year. For Q3 2022, the net income was $5.61 million, up 12% from the previous year. Net interest income rose by 11% to $11.12 million, driven by increased interest-earning assets and a wider interest rate spread. The company maintained strong asset quality with no delinquent loans, and total assets grew 3% to $1.477 billion.

Positive

• Net income for Q3 2022 increased by 12% to $5.61 million.
• Net interest income rose by 11% to $11.12 million.
• Total assets grew by 3% to $1.477 billion.
• No delinquent loans or foreclosed properties as of September 30, 2022.
• Well-capitalized with core capital ratio at 12.57%.

Negative

• Loan portfolio decreased by 1%, down $11.7 million year-over-year.
• Operating expenses increased by 8% to $3.31 million.

PALOS VERDES ESTATES, Calif., Oct. 19, 2022 (GLOBE NEWSWIRE) -- Malaga Financial Corporation “Company” (OTCPink:MLGF), the parent company of Malaga Bank FSB, today reported that net income for the nine months ended September 30, 2022 was $15,379,000 ($1.89 basic and fully diluted earnings per share) compared to $14,639,000 ($1.81 basic and $1.80 fully diluted earnings per share, as adjusted for the stock dividend declared on October 25, 2021) for the same period ended September 30, 2021, an increase of $740,000 or 5%. Net income for the quarter ended September 30, 2022, was $5,605,000 ($0.69 basic and fully diluted earnings per share), an increase of $588,000 or 12% from net income of $5,017,000 ($0.62 basic and $0.61 fully diluted earnings per share, as adjusted for the stock dividend declared on October 25, 2021) for the quarter ended September 30, 2021. For the first nine months of 2022, the Company’s annualized return on average equity was 11.77% and the annualized return on average assets was 1.38%.

Net interest income totaled $11,120,000 in the third quarter of 2022, an increase of $1,069,000 or 11% from the same period in 2021. This resulted primarily from an increase in excess interest-bearing assets over interest-bearing liabilities of $13.1 million and an increase in the interest rate spread from 2.84% to 2.96%. The increase in the interest rate spread is primarily attributable to an increase of 0.16% in yield on average interest-earning assets offset by an increase of 0.04% in yield on average interest-bearing liabilities.

Other operating income increased 3% in the third quarter of 2022 to $212,000 from $206,000 in the third quarter of 2021. Income increased primarily due to deposit related fees.

Operating expenses increased 8% in the third quarter of 2022 to $3,309,000 from $3,070,000 in the third quarter of 2021 primarily due to a 7% increase in compensation.

The Company had no delinquent loans or loans with deferred payments and no foreclosed real estate owned at September 30, 2022. The Company’s allowance for loan losses was $3,760,000, or 0.30% of total loans, at September 30, 2022.

Randy C. Bowers, Chairman, President and CEO, commented, “In a difficult operating environment we are pleased to report record earnings for both the quarter and first nine months of 2022. The year has presented challenges that were not anticipated at the start of 2022, however, our business plan has proven to be resilient with the result that earnings continue to improve, asset quality remains excellent, and expenses are well controlled. We expect further challenges going forward but remain cautiously optimistic about the remainder of this year and 2023.”

The Company’s total assets increased by 3% to $1.477 billion at September 30, 2022, compared to $1.429 billion at September 30, 2021. The loan portfolio at September 30, 2022, was $1.234 billion, a decrease of $11.7 million or 1% from September 30, 2021. The Company originates loans principally for its own portfolio and not for sale.

The Company funds its assets with a mix of retail deposits, wholesale deposits and FHLB borrowings. Retail deposits totaled $851.3 million as of September 30, 2022, a $45.2 million increase from $806.1 million at September 30, 2021. Wholesale deposits increased $11.1 million or 7% from $161.8 million at September 30, 2021, to $172.9 million at September 30, 2022. Wholesale deposits are primarily comprised of State of California certificates of deposit in the amount of $51.0 million and $109.0 million of long-term brokered certificates of deposits. FHLB borrowings decreased $20.0 million or 7% from $270.0 million at September 30, 2021, to $250.0 million at September 30, 2022.

As of September 30, 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 12.57% and 23.27%, respectively, 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 59th consecutive quarter as of June 2022. 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 are Malaga Financial Corporation's earnings for Q3 2022?

Malaga Financial Corporation reported earnings of $5.61 million for Q3 2022.

How much did Malaga Financial Corporation's net income grow in the first nine months of 2022?

Net income grew by 5% to $15.38 million in the first nine months of 2022.

What was the total asset value of Malaga Financial Corporation as of September 30, 2022?

Total assets were valued at $1.477 billion as of September 30, 2022.

What is the interest income increase reported by Malaga Financial Corporation?

Net interest income increased by 11% to $11.12 million in Q3 2022.

What is the status of Malaga Financial Corporation’s loan portfolio?

As of September 30, 2022, the loan portfolio decreased by 1% to $1.234 billion.