Malaga Financial Corporation Reports Record Earnings

Rhea-AI Summary

Malaga Financial (OTCPink:MLGF) reported record earnings for the first nine months of 2024. Net income reached $17,339,000 ($1.93 per share), a 1% increase from the same period in 2023. However, Q3 2024 net income decreased by 3% to $5,548,000 ($0.62 per share) compared to Q3 2023.

Key financial highlights include:

• Annualized return on average equity: 11.39%
• Annualized return on average assets: 1.61%
• Net interest income in Q3 2024: $11,044,000 (3% decrease)
• Interest rate spread increased from 2.82% to 2.95%
• Operating expenses decreased by 3% to $3,427,000 in Q3 2024

The company's total assets decreased by 10% to $1.404 billion, while the loan portfolio decreased by 4% to $1.232 billion. Malaga Bank maintains strong capital ratios, with core capital at 15.59% and risk-based capital at 27.11%, exceeding 'well-capitalized' requirements.

Positive

• Record net income of $17,339,000 for the first nine months of 2024, a 1% increase year-over-year
• Interest rate spread increased from 2.82% to 2.95%
• Operating expenses decreased by 3% in Q3 2024
• Strong capital ratios: core capital at 15.59% and risk-based capital at 27.11%
• Excellent asset quality with no foreclosed real estate owned

Negative

• Q3 2024 net income decreased by 3% compared to Q3 2023
• Net interest income in Q3 2024 decreased by 3% year-over-year
• Total assets decreased by 10% to $1.404 billion
• Loan portfolio decreased by 4% to $1.232 billion
• Retail deposits decreased by $107.9 million

PALOS VERDES ESTATES, Calif., Oct. 15, 2024 (GLOBE NEWSWIRE) -- Malaga Financial Corporation “Company” (OTCPink:MLGF), the parent company of Malaga Bank FSB, today reported that net income for the nine months ended September 30, 2024 was $17,339,000 ($1.93 basic and fully diluted earnings per share) compared to $17,198,000 ($1.92 basic and fully diluted earnings per share, as adjusted for the stock dividend declared on November 9, 2023) for the same period ended September 30, 2023, an increase of $141,000 or 1%. Net income for the quarter ended September 30, 2024, was $5,548,000 ($0.62 basic and fully diluted earnings per share), a decrease of $181,000 or 3% from net income of $5,729,000 ($0.64 basic and fully diluted earnings per share, as adjusted for the stock dividend declared on November 9, 2023) for the quarter ended September 30, 2023. For the first nine months of 2024, the Company’s annualized return on average equity was 11.39% and the annualized return on average assets was 1.61%.

Net interest income totaled $11,044,000 in the third quarter of 2024, a decrease of $381,000 or 3% from the same period in 2023. This resulted primarily from a decrease in average interest-earning assets of $142.3 million offset by an increase in the interest rate spread from 2.82% to 2.95%. The increase in the interest rate spread is primarily attributable to an increase of 0.34% in yield on average interest-earning assets offset by an increase of 0.21% in yield on average interest-bearing liabilities.

Other operating income increased $1,000 in the third quarter of 2024 to $217,000 from $216,000 for the same period in 2023.

Operating expenses decreased 3% in the third quarter of 2024 to $3,427,000 from $3,535,000 in the third quarter of 2023. The decrease is primarily attributed to decreases in compensation of $66,000, and general and administrative expenses of $49,000.

The Company had two delinquent consumer loans collateralized by certificates of deposit which were fully paid off in early October 2024. The Company had no foreclosed real estate owned at September 30, 2024. The Company’s allowance for loan losses was $3,719,000, or 0.30% of total loans, at September 30, 2024.

Randy C. Bowers, Chairman, President and CEO, commented, “As we strive to adapt to an uncertain and rapidly changing operating environment, we are pleased to report earnings for the first nine months of 2024 remain strong and stable with a modest increase over the prior year. While earnings continue to improve, asset quality remains excellent, capital levels are strong, and expenses are well controlled. We anticipate the remainder of 2024 and 2025 will be challenging, however are reasonably optimistic regarding our ability to continue to achieve favorable results.”

The Company’s total assets decreased by 10% to $1.404 billion at September 30, 2024, compared to $1.554 billion at September 30, 2023. The loan portfolio at September 30, 2024, was $1.232 billion, a decrease of $50.2 million or 4% from September 30, 2023. The Company originates loans principally for its own portfolio and not for sale.

The Company funds its assets with a mix of retail deposits, wholesale deposits and FHLB borrowings. Retail deposits totaled $731.3 million as of September 30, 2024, a $107.9 million decrease from $839.2 million at September 30, 2023. Wholesale deposits increased $14.8 million or 9% from $159.6 million at September 30, 2023, to $174.4 million at September 30, 2024. Wholesale deposits are primarily comprised of State of California certificates of deposit in the amount of $51.0 million and $123.4 million of long-term brokered certificates of deposits. FHLB borrowings decreased $70.0 million or 21% from $330.0 million at September 30, 2023, to $260.0 million at September 30, 2024. The decrease in FHLB borrowings is an interest rate risk management strategy related to the decrease in net loan growth.

As of September 30, 2024, 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 15.59% and 27.11%, respectively, 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 fifteen years Malaga Bank has been consistently recommended by one of the nation’s leading independent bank rating and research firms, Bauer Financial Inc. Malaga Bank was awarded Bauer’s premier Top 5-Star rating for the 67^th consecutive quarter as of June 2024. Since 1985 Malaga 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.

Contact:	Randy Bowers
	Chairman of the Board, President and Chief Executive Officer
	Malaga Financial Corporation
	310-375-9000
	rbowers@malagabank.com

FAQ

What was Malaga Financial 's (MLGF) net income for the first nine months of 2024?

Malaga Financial reported a net income of $17,339,000 for the first nine months of 2024, which is a 1% increase from the same period in 2023.

How did Malaga Financial 's (MLGF) Q3 2024 performance compare to Q3 2023?

Malaga Financial 's Q3 2024 net income was $5,548,000, a decrease of 3% compared to $5,729,000 in Q3 2023.

What were Malaga Financial 's (MLGF) key financial ratios for the first nine months of 2024?

For the first nine months of 2024, Malaga Financial 's annualized return on average equity was 11.39%, and the annualized return on average assets was 1.61%.

How did Malaga Financial 's (MLGF) total assets change in Q3 2024?

Malaga Financial 's total assets decreased by 10% to $1.404 billion at September 30, 2024, compared to $1.554 billion at September 30, 2023.

What were Malaga Financial 's (MLGF) capital ratios as of September 30, 2024?

As of September 30, 2024, Malaga Bank's core capital ratio was 15.59% and risk-based capital ratio was 27.11%, both significantly exceeding the minimum 'well-capitalized' requirements.