Malaga Financial Corporation Reports Record Annual Earnings in 2023

PALOS VERDES ESTATES, Calif., Jan. 23, 2024 (GLOBE NEWSWIRE) -- Malaga Financial Corporation, “Company” (OTCPink:MLGF), the parent company of Malaga Bank FSB, today reported that net income for the twelve months ended December 31, 2023 was $22,981,000 ($2.56 basic and fully diluted earnings per share) compared to $21,352,000 ($2.38 basic and fully diluted earnings per share, as adjusted for the stock dividend declared on November 9, 2023) for the twelve months ended December 31, 2022, an 8% increase. Net income for the quarter ended December 31, 2023, was $5,783,000 ($0.64 basic and fully diluted earnings per share), a decrease of $190,000 or 3% from net income of $5,973,000 for the quarter ended December 31, 2022 ($0.67 basic and fully diluted earnings per share, as adjusted for the stock dividend declared on November 9, 2023). For the twelve months ended December 31, 2023, the Company’s annualized return on average equity was 12.08% and the annualized return on average assets was 1.52%, as compared to 12.15% and 1.43%, respectively, for the same period in 2022.

The Company did not have any delinquent loans over 30 days or real estate owned at December 31, 2023. The Company’s allowance for credit losses was $3,908,000, or 0.31% of total loans, at December 31, 2023.

For 2023, net interest income totaled $45,934,000, an increase of $3,087,000 or 7% from 2022. This increase reflected higher average interest-earning assets of $23.3 million and an increase of 0.06% in the interest rate spread to 2.91%. The increase in the interest rate spread is primarily attributable to an increase in the yield on average interest-earning assets of 0.95% offset by an increase in the average cost of funds of 0.89%. The overall increase in yields is due to a continued increase in interest rates for most of 2023.

Provision for loan losses increased $46,000 to $73,000 in 2023 from $27,000 in 2022. The increase is primarily due to an increase in net loan growth of $18.7 million for 2023 versus $5.1 million for 2022. The Company’s loan portfolio continues to exhibit excellent credit quality.

Other operating income increased 7% in 2023 to $972,000 from $905,000 in 2022. Income increased primarily due to deposit related fees.

Operating expenses increased $826,000 or 6% to $14,207,000 in 2023 from $13,381,000 in 2022. The increase is primarily attributed to increases in compensation of $446,000, deposit insurance premium of $268,000, and office rent and utilities of $96,000.