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RMG Capital Corporation announced a net loss of $8 thousand or $.027 per share for the quarter ended March 31, 2009, compared to a net income of $1.29 million or $0.42 per share for the quarter ended March 31, 2008. The first quarter 2009 reduction in earnings is attributable to an increase in the provision for loan losses. At March 31, 2009, RMG Capital had total assets of $762.1 million as compared with $721.9 million at March 31, 2008.
RMG Corporation's wholly owned subsidiary, Fullerton Community Bank ("FCB") earned $223 thousand during the first quarter. Although FCB's net interest income increased slightly to $7 million during the quarter, the Bank's net interest margin declined to 3.81% as the impact of the Bank's nonperforming loans reduced asset yields during the quarter.
The provision for loan losses plus REO charges totaled $1.8 million for the quarter compared to $230 thousand through March 31, 2008. Total reserves of $12.3 million currently comprise 1.77% of the entire loan portfolio, more than doubling reserve levels of 0.79% during last year's comparable period. Chairman & CEO Tom Meyer commented that, "We expect to reserve heavily throughout 2009 since it is clear that real estate collateral values have not yet stabilized. However, we are encouraged that our delinquent loan totals and nonperforming loan totals showed no further migration during the first quarter." Delinquent loans of $33.1 million (4.77%) of the total loan portfolio were virtually unchanged from year end. Nonperforming loans (90 days or more past due) equaled $27.8 million or 4.0% of the total loan portfolio. Meyer added, "We have already reduced our exposure to speculative construction and land loans by $8.8 million, and hope to shrink it to less than 5% of the portfolio by year end." The construction and land loan portfolio comprised 7.5% of total loans as of March 31, 2009.
SBA and Business Banking CRE 1st T/D loans total $213 million. This represents 32% of FCB's outstanding loans. These are owner occupied properties with an average loan-to-value at initial boarding of less than 50%. Delinquent CRE 1st T/D loans were 1.8% of total CRE loans at quarter end. Multi-family loans of $211 million represent 31% of the Bank's loan portfolio. These loans are all underwritten with a minimum debt coverage ratio of 1.15 times or greater. The majority of multi-family loans were made prior to 2007. Delinquent multi-family loans are 1.4% and all delinquencies are less than 60 days. Traditional single family mortgage loans comprise another $56 million, or 8% of total loans. FCB discontinued mortgage originations in the second quarter of 2004. The majority of loans currently outstanding have over six years of seasoning. There are no sub-prime, Alt-A, or Option ARMs in the portfolio. No single family loan was delinquent at the end of the quarter. Finally, non-CRE Business Banking and consumer loan portfolios, each representing 7% of FCB's total loan portfolio, reported delinquency ratios each below 1% as of March 31, 2009.
Operationally, the Bank continues to make significant progress attracting lower cost core deposits, primarily from new business banking relationships. While not yet evident from first quarter results, the Bank is experiencing a modest uptick in noninterest income, particularly in the secondary market for SBA loans. Meyer observed that, "We are excited that the secondary market for full U.S. government guaranteed SBA loans has reopened, after a virtual shutdown during the past year."
As of March 31, 2009, FCB exceeded all regulatory capital requirements and is considered "well-capitalized" with a Tier 1 Core Capital ratio of 8.46%, Total Risk Based Capital Ratio of 10.79% and Tier 1 Risked Based Capital Ratio of 9.86%.
RMG Capital Corporation is the holding company for Fullerton Community Bank. The Bank is a community focused full-service bank which is headquartered in Fullerton, California and has been serving southern California since 1927. The Bank currently has eight retail branches, two regional business banking offices, and an SBA division operating in southern California.
The statements contained in this news release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations, estimates and projections about RMG Capital Corporation and its subsidiary Fullerton Community Bank's business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, the Company's actual results or performance may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including but not limited to the general business environment, the California real estate market, competitive conditions in the business and geographic areas in which the Company conducts its business and regulatory actions or changes. The Company disclaims any obligation to subsequently revise or update any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
RMG Capital Corporation
Consolidated Statement of Financial Condition (Unaudited)
Assets 03/31/09 03/31/08
------------- -------------
Cash and Due from Banks $ 18,030,000 $ 12,586,000
Federal Funds Sold 0 0
------------- -------------
Total cash and cash equivalents 18,030,000 12,586,000
Loans, net 680,935,000 648,355,000
Investment Securities HTM 0 998,000
Mortgage-backed Securities AFS, at fair value 2,702,000 3,517,000
Mortgage-backed Securities HTM 17,869,000 22,821,000
Accrued Interest Receivable 3,251,000 3,646,000
Investments in Real Estate, net 2,026,000 3,146,000
Real Estate Acquired through Foreclosure 3,480,000 248,000
Federal Home Loan Bank Stock, at cost 9,800,000 8,910,000
Cash Surrender Value of Life Insurance 7,938,000 7,676,000
Premises and Equipment, net 5,900,000 6,039,000
Other Assets 7,867,000 3,925,000
Land and Other Development Costs 2,392,000 0
------------- -------------
Total Assets $ 762,190,000 $ 721,867,000
============= =============
Liabilities and Stockholders' Equity
Liabilities
Deposit Accounts $ 529,725,000 $ 458,372,000
FHLB Borrowings 156,400,000 185,100,000
Other Borrowings 1,000,000 1,000,000
Junior Subordinated Debentures 18,558,000 18,558,000
Accounts Payable and other Liabilities 8,869,000 8,824,000
------------- -------------
Total Liabilities 714,552,000 671,854,000
------------- -------------
Minority Interest and Noncontrolling Interest
in Consolidated Subsidiary 0 0
Stockholders' Equity
Preferred stock, no par value; 1,000,000
shares authorized: 5,000 shares issued and
outstanding 4,823,000 4,823,000
Common stock, no par value; 10,000,000 shares
authorized; 2,808,633 shares issued and
outstanding 3,424,000 3,250,000
Accumulated other comprehensive Income (loss) 13,000 18,000
Retained earnings 39,378,000 41,922,000
------------- -------------
Total Stockholders' Equity 47,638,000 50,013,000
------------- -------------
$ 762,190,000 $ 721,867,000
============= =============
RMG Capital Corporation
Consolidated Statement of Financial Condition (Unaudited)
Year-to-Date Year-to-Date
03/31/09 03/31/08
------------ -------------
Interest income:
Interest on loans $ 10,134,000 $ 11,389,000
Interest and dividends on investments 234,000 426,000
------------ -------------
Total Interest Income 10,368,000 11,815,000
------------ -------------
Interest expense:
Interest on deposit accounts 1,943,000 2,929,000
Other interest expense 1,831,000 2,169,000
------------ -------------
Total Interest Expense 3,774,000 5,098,000
------------ -------------
Net Interest Income before provision for
loan losses 6,594,000 6,717,000
------------ -------------
Provision for loan losses 1,295,000 228,000
------------ -------------
Net Interest Income 5,299,000 6,489,000
------------ -------------
Noninterest income:
Loan servicing and other fees 639,000 701,000
Real estate operations, net (530,000) -
Gain on sale of loans, net - 93,000
Other 74,000 87,000
------------ -------------
Total noninterest income 183,000 881,000
------------ -------------
Noninterest expense:
Compensation and other employee benefits 3,820,000 3,661,000
Occupancy 338,000 355,000
Equipment rental and data processing 249,000 246,000
Other expense and supplies 123,000 116,000
Other 1,003,000 896,000
------------ -------------
Total noninterest expense 5,533,000 5,274,000
------------ -------------
Income before income tax provision (51,000) 2,096,000
Income tax provision (43,000) 811,000
------------ -------------
Net Income $ (8,000) $ 1,285,000
============ =============
Contact: Tom Meyer Chairman & Chief Executive Officer RMG Capital Corp. Fullerton Community Bank (714) 578-7500
SOURCE: RMG Capital Corporation
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