Malaga Financial Corporation (OTCBB:MLGF), the parent company of Malaga Bank FSB, today reported that net income for the quarter ended June 30, 2011 was $2,748,000 ($0.47 basic and $0.46 fully diluted earnings per share), an increase of $116,000 or 4% from net income of $2,632,000 ($0.45 basic and $0.44 fully diluted earnings per share) for the quarter ended June 30, 2010. Net income for the six months ended June 30, 2011 was $5,460,000 ($0.93 basic and $0.92 fully diluted earnings per share) as compared to $5,072,000 ($0.87 basic and $0.86 fully diluted earnings per share) for the six months ended June 30, 2010, an 8% increase. Earnings for the second quarter and first six months were the highest in Malaga Financial’s history for those periods.
The Company did not have any delinquent loans or real estate owned at June 30, 2011. The Company’s allowance for loan losses was $2,837,000, or 0.36% of total loans, at June 30, 2011.
Net interest income totaled $7,125,000 in the second quarter of 2011, up $238,000 or 3% from the second quarter of 2010. This increase resulted from a $5 million or 1% increase in average interest earning assets to $802 million, and an increase of 0.10% in the interest rate spread to 3.42%. The increase in the interest rate spread was due to a decline in the weighted average cost of funds of 0.28%, which exceeded the 0.18% decline in the weighted average yield on interest earning assets.
Operating expenses remained stable with a small increase of 1% in the second quarter of 2011, to $2,583,000 from $2,562,000 in the second quarter of 2010.Randy C. Bowers, President and CEO, remarked, “We are pleased to continue to report record earnings in spite of ongoing weak economic conditions. The hard work of our staff and disciplined execution of our business plan has produced exceptional results, as evidenced by our annualized return on average equity of 14.69% and our lack of delinquent loans or foreclosures.”
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