Malaga Financial Corporation Reports Record Earnings For 6th Consecutive Year; Increases Dividend By 25%
Malaga Financial Corporation (OTCBB: MLGF), the parent company of Malaga Bank FSB, today reported that net income for the quarter ended December 31, 2011 was $2,906,000 ($0.50 basic and fully diluted earnings per share), an increase of $192,000 or 7% from net income of $2,714,000 ($0.46 basic and fully diluted earnings per share) for the quarter ended December 31, 2010. Net income for the twelve months ended December 31, 2011 was $11,115,000 ($1.90 basic and $1.89 fully diluted earnings per share) as compared to $10,494,000 ($1.80 basic and $1.78 fully diluted earnings per share) for the twelve months ended December 31, 2010, a 6% increase. Earnings for the fourth quarter and twelve months were the highest in Malaga’s history for those periods and resulted in a pre-tax return on average equity of 25.05%.
The Company did not have any delinquent loans or foreclosed real estate owned at December 31, 2011. The Company’s allowance for loan losses was $2,881,000, or 0.36% of total loans, at December 31, 2011.
For 2011, net interest income totaled $28,977,000, an increase of $1,505,000 or 5% from 2010. This increase resulted primarily from an increase of 0.18% in the interest rate spread to 3.45%. The increase in the interest rate spread was due to a decline in the weighted average cost of funds of 0.34%, which exceeded the 0.16% decline in the weighted average yield on interest earning assets. The decrease in the average cost of funds was due to maturity and repricing of certificates of deposits at lower rates and decrease in the outstanding Federal Home Loan Bank borrowings in the amount of $23,000,000 at higher interest rates.
Operating expenses remained stable with a nominal increase of $91,000 to $10,305,000 from $10,214,000 in 2010.Randy C. Bowers, President and CEO, remarked, “We are pleased to continue to report record earnings which along with our strong capital position has allowed us to significantly increase dividends to our shareholders. Our results for both the 4th quarter and year 2011 reflect the disciplined execution of our business plan emphasizing high asset quality, strong cost control and modest growth during a period of uncertain economic conditions.”
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