Malaga Financial Corporation (OTCBB:MLGF), the parent company of Malaga Bank FSB, today reported that net income for the quarter ended September 30, 2013 was $2,946,000 ($0.50 basic and $0.49 fully diluted earnings per share), an increase of $185,000 or 7% from net income of $2,761,000 ($0.47 basic and $0.46 fully diluted earnings per share) for the quarter ended September 30, 2012. Net income for the nine months ended September 30, 2013 was $8,714,000 ($1.47 basic and $1.46 fully diluted earnings per share) as compared to $8,932,000 ($1.51 basic and $1.50 fully diluted earnings per share) for the nine months ended September 30, 2012, a 2% decrease. Net income for the third quarter increased primarily due to an increase in net interest income. Net income for the first nine months of 2013 resulted in an annualized pre-tax return on average equity of 21.48%.
The Company did not have any delinquent loans or real estate owned at September 30, 2013. The Company’s allowance for loan losses was $2,792,000, or 0.34% of total loans, at September 30, 2013.
Net interest income totaled $7,446,000 in the third quarter of 2013, an increase of $295,000 or 4% from the third quarter of 2012. The increase in net interest income reflected higher average interest-earning assets of $44 million, partially offset by a decrease in the interest spread from 3.47% to 3.44% from the third quarter 2012 to the third quarter of 2013. The decrease in the interest spread was due to a 0.37% decline in the weighted average yield on interest earning assets, while the weighted average rate on interest-bearing liabilities declined only 0.34%.
Operating expenses decreased 5% in the third quarter of 2013, to $2,571,000 from $2,699,000 in the third quarter of 2012. Decreased costs resulted primarily from an increase in capitalized compensation related costs due to an increase in loans originated.
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