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RMG Capital Corporation Reports 2010 Results


March 29, 2011 - Fullerton, CA

RMG Capital Corporation (PINKSHEETS: RMGC),parent company of Fullerton Community Bank ("FCB"), reported net income of$764 thousand, or $0.27 per share, for the fourth quarter of 2010, comparedto a net loss of $3.053 million ($1.09 per share) in 2009. For full year2010, RMG reported a net loss of $1.077 million, or $0.38 per share,compared with a net loss of $4.109 million, or $1.46 per share, for fullyear 2009.

"Our third consecutive profitable quarter at FCB confirms that our strategyof aggressively managing our problem assets while minimizing losses ispaying off," said Tom Meyer, Chairman and Chief Executive Officer of RMGCapital. Over the final three quarters of 2010, FCB earned $939 thousand,compared to a loss of $4.8 million during the three quarters leading up toMarch 2010. The turnaround was driven by sharply lower loan and REO losses($6.4 million compared to $14.9 million). Improved SBA fee income and areduction in non-interest expense also contributed to the positive trends.

Loan balances ended the year at $533.0 million, down 8.7% from the previousyear. Customers paid down loans, new loan demand remained restrained andmost new SBA production was sold into the secondary market. Owner-occupiedcommercial real estate ($188 million) and multifamily ($189 million)remained the largest loan segments of FCB's portfolio.

FCB's asset quality continues to improve; classified assets (including REO)declined substantially to $38.1 million, compared to $49.8 million atSeptember 2010 and $59.1 million at year end 2009. Delinquent loans stoodat 4.15% of total loans at year end, compared to 3.78% at the end of thethird quarter, and 5.36% at year end 2009. Non-performing assets stood at$22.7 million at year end, compared to $31.7 million in March 2010.

"We are pleased with the continued reduction in our classified assets andwill continue to work to reduce them even further," commented Mr. Meyer."The risk in our balance sheet because of these reductions is significantlyless than it was a year ago."

FCB's Texas Ratio also improved. It stood at 32.2% as of quarter end,compared to 35.6% in September, 36.8% in June and 45.5% in March. A widelyused measure to gauge banks' credit problems, the Texas Ratio is calculatedby dividing non-performing assets (loans plus REO) by Tier 1 Capital plusAllowance for Loan Losses.

Regulatory capital ratios of FCB continued to exceed regulatory standards,and all showed marked improvement during the quarter. The chart below showsthe steady regulatory capital ratio growth since December 2008.


12/31/08 12/31/09 6/30/10 12/31/10
-------- -------- -------- --------

Total Risk-Based Capital 10.57% 12.12% 12.22% 13.03%

Tier 1 Capital 8.34% 8.38% 8.50% 8.68%

Tier 1 Risk-Based Capital 9.58% 10.87% 10.96% 11.77%

"Fullerton Community Bank has made great strides in improving its capitalposition without diluting existing stakeholders," said Mr. Meyer. "Theimproved capital ratios are another indication of the Bank's financialrecovery."

FCB's Real Estate Owned portfolio stood at $3.2 million at year end, downfrom $9.5 million at year end 2009 and $11.9 million at September 2010, asthe bank successfully sold off a number of foreclosed properties in thefourth quarter.

FCB increased the number of checking and savings accounts from 14,916 atthe end of 2009 to 15,855 at the end of 2010. In addition, the Bank wasable to reduce its reliance on higher cost CDs. CDs were 44% of totaldeposits at the end of 2009 and ended 2010 at 37%. FCB reduced its advanceswith the Federal Home Loan Bank by 7% since December 2009, further reducingits reliance on higher cost borrowing.

Management continues to focus on "right-sizing" the Bank given its capitalposition and economic environment. Total assets declined by 6% over thelast 12 months while employee compensation costs fell 12%.

RMG Capital Corporation and SubsidiariesConsolidated Statement of Financial Condition (Unaudited) Assets 12/31/10 12/31/09 ------------- -------------Cash and Due from Banks $ 99,240,000 $ 73,185,000Loans, net 533,025,000 583,895,000Investment Securities Available for Sale, at fair value 0 5,746,000Mortgage-backed Securities Available for Sale, at fair value 6,486,000 9,435,000Mortgage-backed Securities Held to Maturity 11,147,000 13,787,000Accrued Interest Receivable 2,262,000 2,755,000Investments in Real Estate, ventures 600,000 700,000Federal Home Loan Bank Stock, at cost 8,709,000 9,800,000Cash Surrender Value of Life Insurance 8,210,000 7,947,000Premises and Equipment, net 5,550,000 5,980,000Other Real Estate Owned 3,159,000 9,490,000Other Assets 12,154,000 14,349,000 ------------- ------------- Total Assets $ 690,542,000 $ 737,069,000 ============= ============= Liabilities and Stockholders' Equity ------------- -------------Liabilities Deposit Accounts $ 510,386,000 $ 548,248,000 FHLB Borrowings 108,900,000 117,300,000 Other Borrowings 965,000 1,000,000 Junior Subordinated Debentures 18,558,000 18,558,000 Accounts Payable and other Liabilities 9,218,000 8,472,000 ------------- ------------- Total Liabilities 648,027,000 693,578,000 ------------- ------------- 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; 2,816,319 shares issued and outstanding 3,389,000 3,361,000 Accumulated other comprehensive Income (loss) 104,000 31,000 Retained earnings 34,199,000 35,276,000 ------------- ------------- Total Stockholders' Equity 42,515,000 43,491,000 ------------- ------------- $ 690,542,000 $ 737,069,000 ============= ============= RMG Capital CorporationConsolidated Statement of Income (Unaudited) Quarter Quarter Ending Year-to-Date Ending Year-to-Date 12/31/10 12/31/10 12/31/09 12/31/09 ------------ ------------ ------------ ------------Interest income: Interest on loans $ 7,827,000 $ 32,789,000 $ 8,984,000 $ 38,357,000 Interest and dividends on investments 193,000 876,000 281,000 960,000 ------------ ------------ ------------ ------------ Total Interest Income 8,020,000 33,665,000 9,265,000 39,317,000 ------------ ------------ ------------ ------------ Interest expense: Interest on deposit accounts 1,164,000 4,922,000 1,724,000 7,474,000 Other interest expense 1,372,000 6,077,000 1,656,000 7,010,000 ------------ ------------ ------------ ------------ Total Interest Expense 2,536,000 10,999,000 3,380,000 14,484,000 ------------ ------------ ------------ ------------ Net Interest Income before provision for loan losses 5,484,000 22,666,000 5,885,000 24,833,000 ------------ ------------ ------------ ------------ Provision for loan losses 391,000 5,955,000 7,707,000 11,963,000 ------------ ------------ ------------ ------------ Net Interest Income 5,093,000 16,711,000 (1,822,000) 12,870,000 ------------ ------------ ------------ ------------ Noninterest income: Loan servicing and other fees 814,000 3,035,000 671,000 2,619,000 Gain on sale of loans, net 232,000 580,000 144,000 655,000 Other 1,575,000 1,815,000 436,000 895,000 ------------ ------------ ------------ ------------ Total noninterest income 2,621,000 5,430,000 1,251,000 4,169,000 ------------ ------------ ------------ ------------ Noninterest expense: Compensation and other employee benefits 2,462,000 11,618,000 2,670,000 13,142,000 Occupancy 378,000 1,453,000 391,000 1,458,000 Equipment rental and data processing 228,000 944,000 253,000 998,000 Office expense and supplies 112,000 486,000 131,000 526,000 Real estate operations, net (2,000) (2,000) (929,000) 1,126,000 Loss on sales of REO, net 8,000 309,000 (34,000) 36,000 Losses on REO valuation and operations, net 1,436,000 3,783,000 963,000 2,327,000 Other 1,855,000 6,010,000 1,915,000 5,378,000 ------------ ------------ ------------ ------------ Total noninterest expense 6,477,000 24,601,000 5,360,000 24,991,000 ------------ ------------ ------------ ------------ Income before income tax provision 1,237,000 (2,460,000) (5,931,000) (7,952,000) Income tax provision 473,000 (1,383,000) (2,878,000) (3,843,000) ------------ ------------ ------------ ------------ Net Income $ 764,000 $ (1,077,000) $ (3,053,000) $ (4,109,000) ============ ============ ============ ============

Contact:
Tom Meyer
Chairman and Chief Executive Officer
RMG Capital Corporation
Fullerton Community Bank
(714) 578-7500

MarketWire

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