Malaga Financial Corporation Reports Record Earnings Year-to-Date 2020 19% Increase

PALOS VERDES ESTATES, Calif., Jan. 26, 2021 (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, 2020 was $18,335,000 ($2.38 basic and fully diluted earnings per share) compared to $15,387,000 ($2.01 basic and $2.00 fully diluted earnings per share, as adjusted for the stock dividend declared on November 13, 2020) for the twelve months ended December 31, 2019, a 19% increase. Net income for the quarter ended December 31, 2020 was $4,743,000 ($0.62 basic and fully diluted earnings per share), an increase of $456,000 or 11% from net income of $4,287,000 for the quarter ended December 31, 2019 ($0.56 basic and fully diluted earnings per share, as adjusted for the stock dividend declared on November 13, 2020). For the twelve months ended December 31, 2020, the Company’s annualized return on average equity was 12.15% and the annualized return on average assets was 1.43%, as compared to 10.94% and 1.33%, respectively, for the same period in 2019.

The Company did not have any delinquent loans over 30 days or real estate owned at December 31, 2020, nor did it have any material exposure to loans modified as a result of the COVID-19 pandemic. The Company’s allowance for loan losses was $3,686,000, or 0.31% of total loans, at December 31, 2020.

For 2020, net interest income totaled $37,638,000, an increase of $4,568,000 or 14% from 2019. This increase reflected higher average interest-earning assets of $126.7 million and an increase of 0.10% in the interest rate spread to 2.92%. The increase in the interest rate spread is primarily attributable to a decrease in the average cost of funds of 0.29% offset by an decrease in the yield on average interest-earning assets of 0.19 %.

Provision for loan losses decreased $191,000 to $162,000 in 2020 from $353,000 in 2019. The decrease is primarily due to lower growth in the loan portfolio from $149.0 million in 2019 to $53.6 million in 2020.

Other operating income decreased 10% in 2020 to $785,000 from $870,000 in 2019. Income decreased primarily due to deposit related fees.

Operating expenses increased $517,000 or 4% to $12,292,000 in 2020 from $11,775,000 in 2019. The increase is primarily attributed to increases in deposit insurance premiums of $262,000, data processing $92,000, professional services $62,000 and general and administrative expenses of $54,000. In 2019, the company received a one-time deposit insurance premium credit of $230,000 from the FDIC for our contributions to the Deposit Insurance Fund (DIF).