PALOS VERDES ESTATES, Calif., July 15, 2022 (GLOBE NEWSWIRE) — Malaga Financial Corporation “Company” (OTCPink: MLGF), the parent company of Malaga Bank FSB, today announced that net income for the six months ended June 30, 2022 was $9,774,000 (basic and fully diluted earnings per share of $1.20) compared to $9,622,000 $ (basic and fully diluted earnings per share of $1.19, adjusted for the stock dividend declared on October 25, 2021) for the same period ended June 30, 2021, an increase of $152,000 or 2%. Net earnings for the three months ended June 30, 2022 were $4,979,000 ($0.61 basic and diluted per share), an increase of $73,000 or 1% over net earnings of $4,906,000 ($0.61 basic and diluted per share, adjusted for share dividend declared October 25, 2021) for the three months ended June 30, 2021, and an increase of $184,000 or 4 % of net earnings of $4,795,000 ($0.59 basic and diluted earnings per share) for the quarter ended March 31, 2022. For the first half of 2022, the Company’s annualized return on average equity was of 11.34% and the annualized return on average assets was 1.31%.
The increase in earnings of $73,000 for the second quarter of 2022 compared to the second quarter of 2021 is mainly due to an increase of $388,000 in net interest income after provision for loan losses, offset by an increase of $285,000 in other operating expenses and an increase of $31,000 in income tax expense.
Net interest income totaled $10,120,000 in the second quarter of 2022, an increase of $328,000 or 3% compared to the same period in 2021. This was mainly due to an increase in surplus assets bearing interest on interest bearing liabilities of $12.6 million, offset by a decrease in the interest rate spread from 2.87% to 2.70%. The decrease in the interest rate spread is mainly attributable to a 0.22% decrease in the return on average interest-bearing assets offset by a 0.05% decrease in the return on average interest-bearing liabilities.
Operating expenses increased 9% in the second quarter of 2022 to $3,316,000 from $3,031,000 in the second quarter of 2021. This increase was primarily due to an increase in compensation of $189,000. $, rent for offices and utilities of $45,000 and general and administrative expenses of $37,000.
As of June 30, 2022, the Company had no 30-day past due or deferred payment loans and no foreclosed properties. The Company’s allowance for loan losses was $3,717,000, or 0.30% of total loans, as of June 30, 2022.
Randy C. Bowers, Chairman, President and Chief Executive Officer, said, “During this period of growing uncertainty in the economy, we are pleased to report increased earnings for the quarter and the first half of 2022. Thanks to the efforts of our colleagues, earnings continue to improve, asset quality remains excellent and expenses continue to be well contained.
Malaga Bank’s total assets increased by 9% to $1.519 billion as of June 30, 2022 from $1.393 billion as of June 30, 2021. The loan portfolio as of June 30, 2022 was $1.223 billion, a decrease of $14.1 million or 1% from June 30, 2021. 2021. Malaga lends primarily for its own portfolio and not for sale.
Malaga funds its assets with a combination of retail deposits, wholesale deposits and FHLB borrowing. Retail deposits totaled $888.4 million as of June 30, 2022, an increase of $107.8 million from $780.6 million as of June 30, 2021. Wholesale deposits increased by $25.1 million or 16%, from $157.9 million as of June 30, 2021 to $183.0 million as of June 30, 2022. amount of $60.0 million and $109.1 million of long-term certificates of deposit traded as of June 30, 2022. FHLB borrowings decreased $20.0 million or 7% from 270, $0 million as of June 30. 2021 to $250.0 million as of June 30, 2022.
As of June 30, 2022, Malaga Bank was in compliance with all applicable regulatory capital requirements and was considered “well capitalized” under applicable regulations. Tier 1 and risk-based capital ratios were 12.39% and 22.71%, respectively, as of June 30, 2022, significantly exceeding the “well capitalized” minimum requirements of 5% and 10%, respectively.
Malaga Bank, a subsidiary of Malaga Financial Corporation, is a full-service community bank based on the Palos Verdes Peninsula with six offices located in the South Bay area of Los Angeles. Malaga Bank received an A+ financial health rating by DepositAccounts.com. A more detailed breakdown of Malaga Bank’s A+ health score can be found in the health section of its dedicated page at www.depositaccounts.com/banks/malaga-bank-fsb.html#health. For more than ten years, Malaga Bank has been consistently recommended by one of the country’s leading independent bank rating and research firms, Bauer Financial Inc. Malaga Bank received Bauer’s first Top 5 Star rating for the 58 consecutive quarter from March 2022. Since 1985, Malaga has offered competitive banking services to South Bay residents and businesses, including home loan products tailored to consumers and investors. As the largest community bank in the South Bay, Malaga prides itself on its continuing tradition of relationship-based banking and legendary customer service. The Bank’s website can be found at www.malagabank.com.
|Chairman of the Board, President and Chief Executive Officer|
|Malaga Financial Company|