Malaga Financial Corporation Reports 21% Increase in First Quarter Earnings

PALOS VERDES ESTATES, Calif., April 24, 2020 (GLOBE NEWSWIRE) -- Malaga Financial Corporation (OTCPink:MLGF), the parent company of Malaga Bank FSB, today reported that net income for the quarter ended March 31, 2020 was $4,184,000 ($0.57 basic and fully diluted earnings per share), an increase of $727,000 or 21% from net income of $3,457,000 ($0.47 basic and fully diluted earnings per share) for the quarter ended March 31, 2019. For the first quarter of 2020, the Company’s annualized return on average equity was 11.39% and the annualized return on average assets was 1.34%, as compared to 10.05% and 1.26%, respectively, for the same period in 2019.

The Company did not have any delinquent loans or foreclosed real estate owned at March 31, 2020. The Company’s allowance for loan losses was $3,581,000, or 0.31% of total loans, at March 31, 2020.

Net interest income totaled $8,815,000 in the first quarter of 2020, an increase of $860,000 or 11% from the first quarter of 2019. This increase reflected higher average interest-earning assets of $154 million offset by a decrease of 0.08% in the interest rate spread to 2.78%. The decrease in the interest rate spread is primarily attributable to the decrease in the yield on average interest-earning assets of 0.08%.

In the first quarter of 2020, operating expenses decreased 4% to $3,034,000 from $3,159,000 in the first quarter of 2019. Decreased costs were primarily related to compensation expenses.

Randy C. Bowers, Chairman, President and CEO, commented, “We are pleased to report a significant increase in earnings for the 1^st Quarter 2020 compared with the prior year. This is primarily a result of substantial growth in our loan portfolio coupled with tight cost control. Capital levels are strong, quality remains excellent and our efficiency ratio continues to be one of the best in the industry. As we are working through the challenge presented by the effects of the coronavirus pandemic we feel fortunate to have the benefit of a strong balance sheet and a dedicated staff of colleagues making exceptional efforts to serve our customers while keeping everyone safe. We are optimistic about the future and look forward to better days ahead.”

Malaga’s total assets increased by 12% to $1.251 billion at March 31, 2020 compared to $1.117 billion at March 31, 2019. The loan portfolio at March 31, 2020 was $1.158 billion, an increase of $138 million or 14% from March 31, 2019. 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 $652 million as of March 31, 2020, an $8 million decrease from $660 million at March 31, 2019. Wholesale deposits, comprised mainly of State of California certificates of deposit, totaled $139 million as of March 31, 2020, a $42 million increase from $96.9 million at March 31, 2019. FHLB borrowings increased $92 million or 47% from $197 million at March 31, 2019 to $289 million at March 31, 2020.

As of March 31, 2020, 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 12.70% and 21.93%, respectively, at March 31, 2020, 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 the 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 . 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 49th consecutive quarter as of December 2019. 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 .