Randy C. Bowers, President and CEO, remarked, “We are pleased with our continued strong earnings and the exceptional performance of the loan portfolio in the second quarter. The consistent execution of our business plan and focus on generating high quality earning assets while controlling costs has allowed us to reward our shareholders with our 37 th consecutive quarterly dividend.”Malaga’s total assets increased 5% to $870 million at June 30, 2013 compared to $833 million at June 30, 2012. Fed Funds Sold increased $31 million as of June 30, 2013 due to an increase in on-balance sheet liquidity. The loan portfolio at June 30, 2013 was $805 million, an increase of $11 million or 1% from June 30, 2012. 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 $551 million as of June 30, 2013, a $42 million or 8% increase from $509 million at June 30, 2012. The continued retail deposit growth was used to repay FHLB borrowings, which decreased $21 million or 14% from $155 million at June 30, 2012 to $134 million at June 30, 2013. The weighted average cost of funds for the second quarter of 2013 was 0.96% versus 1.27% for the second quarter 2012. The decrease was due primarily to a lower interest rate environment and the change to lower cost deposits from higher cost FHLB borrowings. As of June 30, 2013, 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 13.21% and 22.92%, respectively, at June 30, 2013, significantly exceeding the minimum “well capitalized” requirements of 5% and 10%, respectively. Malaga Bank, a subsidiary of Malaga Financial Corporation, is a full-service community bank headquartered on the Palos Verdes Peninsula with six offices located in the South Bay area of Los Angeles. For over 28 years, 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.
Malaga Financial Corporation (OTCBB:MLGF), the parent company of Malaga Bank FSB, today reported that net income for the quarter ended June 30, 2013 was $3,064,000 ($0.51 per share basic and fully diluted), a decrease of $53,000 or 2% from net income of $3,117,000 ($0.52 per share basic and fully diluted) for the quarter ended June 30, 2012. Net income for the six months ended June 30, 2013 was $5,768,000 ($0.97 basic and fully diluted earnings per share) as compared to $6,171,000 ($1.04 basic and fully diluted earnings per share) for the six months ended June 30, 2012, a 7% decrease. Net income decreased primarily due to a decrease in net interest income and an increase in the provision for loan losses due to increase in total loans outstanding. Net income for the first six months of 2013 resulted in an annualized pre-tax return on average equity of 21.59%. The Company did not have any delinquent loans or real estate owned at June 30, 2013. The provision for loan losses increased $84,000 in the second quarter 2013 as compared to second quarter 2012, due to an increase in total loans outstanding. The Company’s allowance for loan losses was $2,831,000, or 0.35% of total loans, at June 30, 2013. Net interest income totaled $7,643,000 in the second quarter of 2013, a decrease of $88,000 or 1% from the second quarter of 2012. This decrease resulted from a decrease in the interest spread from 3.71% to 3.60%, partially offset by an increase of $19 million or 2% in average interest earning assets to $827 million. The decrease in the interest spread was due to a 0.42% decline in the weighted average yield on interest earning assets, while the weighted average rate on interest-bearing liabilities declined only 0.31%. Operating expenses decreased 3% in the second quarter of 2013, to $2,508,000 from $2,577,000 in the second quarter of 2012. Decreased costs resulted primarily from an increase in capitalized compensation related costs due to an increase in loans originated.