Malaga Financial Corporation (OTCBB:MLGF), the parent company of Malaga Bank FSB, today reported that net income for the quarter ended September 30, 2012 was $2,761,000 ($0.47 basic and $0.46 fully diluted earnings per share), an increase of $12,000 from net income of $2,749,000 ($0.47 basic and fully diluted earnings per share) for the quarter ended September 30, 2011. Net income for the nine months ended September 30, 2012 was $8,932,000 ($1.51 basic and $1.50 fully diluted earnings per share) as compared to $8,209,000 ($1.40 basic and $1.39 fully diluted earnings per share) for the nine months ended September 30, 2011, a 9% increase. Earnings for the third quarter and first nine months were the highest in Malaga Financial’s history for those periods and resulted in an annualized pre-tax return on average equity of 24.05%.
At September 30, 2012, the Company reported one delinquent loan and no real estate owned. The delinquent loan is a single family loan with an outstanding principal balance of $87,000 and was one payment delinquent. The Company’s allowance for loan losses was $2,817,000, or 0.36% of total loans, at September 30, 2012.
Net interest income totaled $7,151,000 in the third quarter of 2012, a small decrease from $7,169,000 in the third quarter of 2011. This decrease resulted primarily due to net increase of $46,000 in amortization of net deferred loan costs. Our interest rate spread was 3.47% in the third quarter of 2012 and was comparable to third quarter of 2011 at 3.46%.
Operating expenses increased 5% in the third quarter of 2012, to $2,699,000 from $2,570,000 in the third quarter of 2011. The increase is due primarily to costs related to the opening of our Torrance-Skypark branch in August 2012.Randy C. Bowers, President and CEO, remarked, “Our financial strength has allowed us to continue to expand our retail banking operations and open our new Torrance-Skypark Branch.”