Malaga Financial Corporation Reports Record Annual Earnings in 2023 - Seite 2

Randy C. Bowers, Chairman, President and CEO, remarked, “2023 was an extremely challenging year as we continued to deal with increasing interest rates and inflationary pressure on expenses. Additionally, we encountered exceptionally weak loan demand and heightened competition for deposits from large banks, pushing the cost of funds higher. We are pleased that in spite of these issues we were able to report record annual earnings for the full year. We anticipate that the operating environment in 2024 will continue to be difficult with a high degree of uncertainty in a variety of areas. We are considering the various scenarios as we plan for 2024 and going forward.”

Malaga Bank’s total assets decreased to $1.475 billion at December 31, 2023, compared to $1.509 billion at December 31, 2022 and is primarily a result of outflow of excess liquidity caused by decrease in deposits. The loan portfolio at December 31, 2023 was $1.269 billion, an increase of $18.7 million from December 31, 2022. Malaga originates loans principally for its own portfolio and not for sale.

Malaga Bank funds its assets with a mix of retail deposits, wholesale deposits and FHLB borrowings. Retail deposits totaled $764.9 million as of December 31, 2023, a $85.3 million or 10% decrease from $850.2 million at December 31, 2022. This decrease was consistent with an industry-wide trend as depositors moved excess liquidity into alternate investments such as real estate, stock market, treasury securities and to pay down debt. Wholesale deposits increased $7.6 million or 5% from $159.6 million at December 31, 2022. Wholesale deposits were primarily comprised of State of California certificates of deposit in the amount of $51.0 million and $116.2 million of brokered long-term certificates of deposit at December 31, 2023. FHLB borrowings were $320.0 million as of December 31, 2023, a $30.0 million increase from $290.0 million at December 31, 2022.

As of December 31, 2023, Malaga Bank was in compliance with all applicable regulatory capital requirements and was deemed “well-capitalized” under those regulations. Core capital and risk-based capital ratios were 13.76% and 26.39%, respectively, at December 31, 2023, significantly exceeding the minimum “well-capitalized” requirements of 5% and 10%, respectively.

In the fourth quarter, the Company declared a quarterly cash dividend of 25 cents per share payable in January 2024, and a special stock dividend of 5% per share payable on December 29, 2023, to shareholders of record as of December 15, 2023.