Malaga Financial Corporation Reports Record Earnings for 5th Consecutive Year by EON


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									Malaga Financial Corporation Reports Record
Earnings for 5th Consecutive Year
January 26, 2011 05:15 PM Eastern Time  

PALOS VERDES ESTATES, Calif.--(EON: Enhanced Online News)--Malaga Financial Corporation
(OTCBB:MLGF), the parent company of Malaga Bank FSB, today reported that net income for the year ended
December 31, 2010 was $10,494,000 ($1.80 per share basic and $1.78 per share fully diluted), an increase of
$1,000,000 or 11% from net income of $9,494,000 ($1.65 per share basic and $1.64 per share fully diluted) for
the year ended December 31, 2009. This record annual net income resulted in an ROAE of 15.58% for the year
and was achieved in spite of the on-going challenging economic and regulatory environment in 2010.

Net income for the fourth quarter was $2,714,000 ($0.46 per share basic and fully diluted) compared to
$2,364,000 ($0.41 per share basic and fully diluted) for the fourth quarter of 2009, an increase of 15% and a new
quarterly record.

Net income increased in 2010 primarily as a result of a $1,345,000 increase in net interest income due to a
continued increase in weighted average interest-earning assets and an increase in interest rate spread from 3.24% in
2009 to 3.27% in 2010.

Malaga continues to have exceptional credit quality and no delinquent loans as of December 31, 2010. Malaga
recorded a provision for loan losses of $41,000 in 2010 as compared to $120,000 in 2009. The lower provision in
2010 was attributable to lower net loan growth of $7 million in 2010 versus $35 million in 2009. Malaga’s allowance
for loan losses was $2.8 million, or 0.37% of loans, at December 31, 2010.

Operating expenses decreased $245,000 or 2% from $10.5 million in 2009 to $10.2 million in 2010. This decrease
was due primarily to a $471,000 decrease in FDIC insurance premiums related to special assessments in 2009,
offset by an increase in salaries and related benefits of $147,000 and depreciation of $73,000.

Randy C. Bowers, President and CEO, remarked, “We are pleased to report record earnings for the 5th
consecutive year. These numbers were achieved in an extremely challenging period and are the result of the hard
work of our dedicated employees who provide exceptional service to our loyal clients on a daily basis.” 

Malaga’s total assets increased slightly to $814 million at December 31, 2010 compared to $811 million at
December 31, 2009. The loan portfolio at December 31, 2010 was $769 million, an increase of $7 million or 1%
from December 31, 2009. Malaga originates loans principally for its own portfolio and not for sale.

Total deposits were $521 million at December 31, 2010, a 5% increase. The net increase in deposits of $27 million
was utilized to reduce FHLB borrowings by $36 million in 2010.

As of December 31, 2010, 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 11.52%
and 19.40%, respectively, at December 31, 2010 and substantially exceeded the minimum “well-capitalized” 
requirements of 5% and 10% respectively. In the fourth quarter, Malaga Financial paid a quarterly dividend for the
25th consecutive quarter.

Mr. Bowers concluded, “In 2010, the Company was recognized by SNL Financial as the top-performing thrift in the
United States for the most recent 12 month period ending March 31, 2010. As a result of our financial strength, we
are able to continue to support and partner with various community organizations, which further improves the
communities that we serve.” 
Malaga Bank, a subsidiary of Malaga Financial Corporation, is a full-service community bank headquartered on the
Palos Verdes Peninsula with branch offices located on the Peninsula, in Torrance and San Pedro. Celebrating its
25th anniversary in 2010, Malaga Bank has been delivering competitive banking services to residents and businesses
of the South Bay, including real estate loan products custom-tailored to consumers and investors. As the largest
community bank in the South Bay, Malaga is proud of its continuing tradition of relationship-based banking and
legendary customer service. Come and experience the Malaga Bank difference. The Bank’s web site is located at

Malaga Financial Corporation
Randy Bowers
President and Chief Executive Officer


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