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.”

Malaga’s total assets reached $824 million at June 30, 2011 compared to $818 million at June 30, 2010. The loan portfolio at June 30, 2011 was $781 million, an increase of $10 million or 1% from June 30, 2010. Malaga originates loans principally for its own portfolio and not for sale.

Malaga funds its assets with a mix of retail deposits, wholesale deposits and FHLB borrowings. Retail deposits totaled $487 million as of June 30, 2011, a $28 million or 6% increase from $459 million at June 30, 2010. The retail deposit growth was used to repay wholesale deposits and FHLB borrowings, which decreased $31 million or 12% from $264 million at June 30, 2010 to $232 million at June 30, 2011. The weighted average cost of funds for the second quarter of 2011 was 1.80% versus 2.08% for the second quarter of 2010.

As of June 30, 2011, Malaga Bank was in compliance with all applicable regulatory capital requirements and was deemed “well-capitalized” under applicable regulations. Core capital and risk-based capital ratios were 11.92% and 19.62%, respectively, at June 30, 2011, significantly exceeding the minimum “well capitalized” requirements of 5% and 10% respectively.

Mr. Bowers concluded, “We are also delighted to announce being recognized by SNL Financial, an information services company, as the top performing thrift in the United States for the 12-month period ended March 31, 2011 out of the 100 largest publicly traded thrifts. This is the second consecutive year that we have received this number one ranking. ”

Malaga Bank, a subsidiary of MFC, is a full-service community bank headquartered on the Palos Verdes Peninsula with five offices located in the South Bay area of Los Angeles. In its 27 th year, Malaga Bank has been delivering competitive banking services to residents and businesses of the South Bay, including real estate loan products custom-tailored to consumers and investors. As the largest community bank in the South Bay, Malaga is proud of its continuing tradition of relationship-based banking and legendary customer service. The Bank’s web site is located at www.malagabank.com.

Copyright Business Wire 2010

If you liked this article you might like

Value Plays Among the Thrift Stocks

Value Plays Among the Thrift Stocks