Malaga Financial Corporation Reports Strong First Quarter Earnings - Seite 2

In the first quarter of 2024, operating expenses increased 2% to $3,540,000 from $3,487,000 in the first quarter of 2023. The increase is primarily attributed to increases in deposit insurance premiums of $61,000, data processing of $15,000, and office rent and utilities of $10,000 offset by decreases in general and administrative expenses of $28,000 and depreciation and amortization of $10,000.

Randy C. Bowers, Chairman, President and CEO, commented, “We are pleased to report strong earnings for the first quarter of 2024. The operating environment has been challenging with continued pressure on the net interest margin and the impact of inflation on expenses. There is considerable uncertainty with regards to interest rates and the economy for the remainder of the year, in addition to the various other issues we must consider as we plan for the future. We are anticipating the effect of a variety of potential scenarios to be better prepared to adapt as appropriate and are cautiously optimistic about the remainder of the year.”

Malaga’s total assets decreased to $1.456 billion at March 31, 2024, compared to $1.499 billion at March 31, 2023. The loan portfolio at March 31, 2024 was $1.263 billion, a decrease of $25 million or 2% from March 31, 2023. 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 $750 million as of March 31, 2024, a $40 million decrease from $790 million at March 31, 2023. Much of this outflow was a result of depositors seeking higher returns in alternative investments. Wholesale deposits, comprised mainly of State of California certificates of deposit and brokered deposits, totaled $169 million as of March 31, 2024, a $9 million increase from $160 million at March 31, 2023. FHLB borrowings decreased $25 million or 7% from $335 million at March 31, 2023, to $310 million at March 31, 2024. Malaga Bank utilizes FHLB borrowings and longer-term wholesale deposits as a tool to manage interest rate risk associated with growth of the loan portfolio.

As of March 31, 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 14.51% and 25.61%, respectively, at March 31, 2024, significantly exceeding the minimum “well-capitalized” requirements of 5% and 10%, respectively.