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PALOS VERDES ESTATES, Calif., April 12, 2022 (GLOBE NEWSWIRE) -- Malaga Financial Corporation “Company” (OTCPink:MLGF), the parent company of Malaga Bank FSB, today reported that net income for the quarter ended March 31, 2022 was $4,795,000 ($0.59 basic and fully diluted earnings per share), an increase of $79,000 or 2% from net income of $4,716,000 ($0.58 basic and fully diluted earnings per share, as adjusted for the stock dividend declared on October 25, 2021) for the quarter ended March 31, 2021. For the first quarter of 2022, the Company’s annualized return on average equity was 11.20% and the annualized return on average assets was 1.29%, as compared to 11.90% and 1.43%, respectively, for the same period in 2021.
The Company did not have any delinquent loans or foreclosed real estate owned at March 31, 2022. The Company’s allowance for loan losses was $3,737,000, or 0.30% of total loans, at March 31, 2022.
Net interest income totaled $9,875,000 in the first quarter of 2022, an increase of $271,000 or 3% from the first quarter of 2021. This increase was due primarily to an increase in excess interest-earning assets over interest-bearing liabilities of $13 million offset by a decrease of 0.27% in the interest rate spread to 2.63%. The decrease in the interest rate spread is primarily attributable to a decrease of 0.36% in the yield on average interest-earning assets offset by a 0.09% decrease in the average cost of funds.
In the first quarter of 2022, operating expenses increased 8% to $3,369,000 from $3,132,000 in the first quarter of 2021. The increase is primarily attributed to increases in compensation of $102,000, general and administrative expenses of $56,000, and professional services of $46,000.
Randy C. Bowers, Chairman, President and CEO, commented, “In spite of several new challenges that we are facing in 2022 we are pleased to report a modest increase in first quarter earnings. Higher inflation, rapidly rising interest rates and economic uncertainty in addition to geopolitical unrest all contribute to a highly volatile operating environment. We also continue to deal with the effects of the pandemic. We are grateful for the efforts of our staff in achieving these results in very difficult times. We are hopeful that we will see improvement in these circumstances over the remainder of the year.”
Malaga’s total assets increased by 12% to $1.496 billion at March 31, 2022 compared to $1.332 billion at March 31, 2021. The loan portfolio at March 31, 2022 was $1.229 billion, an increase of $27 million or 2% from March 31, 2021. Malaga originates loans principally for its own portfolio and not for sale.