SOURCE: RMG Capital Corporation

November 21, 2008 20:32 ET

RMG Capital Corporation Reports Third Quarter Earnings

FULLERTON, CA--(Marketwire - November 21, 2008) - RMG Capital Corporation (OTCBB: RMGC), the holding company for Fullerton Community Bank, F.S.B. in Fullerton, California, announced results for the third quarter of 2008.

RMG Capital Corporation announced year-to-date net income of $3.02 million or $.98 per share compared to $3.56 million or $1.17 per share for the same period 2007. This represents a decrease of $540 thousand year to date, when compared with the 2007 nine month results. The 2008 results include a one-time deferred compensation charge of $1.1 million. At September 30, 2008, RMG Capital had total assets of $769.2 million as compared with $708.3 million at December 31, 2007 and $695.4 million at September 30, 2007. "This is one of the most challenging economic and banking environments we have ever faced," commented Tom Meyer, Bank President. "In light of this environment, I am pleased that the September 2008 year-to-date RMG net income, net of the one-time deferred compensation charge, is greater than the comparable net income of September 2007 year-to-date results. This is attributable to a diversified loan portfolio that is not overly concentrated in the most troubled credit sectors and our ability to keep our funding costs low."

Net interest income after provisions for loan losses totaled $19.3 million year-to-date, an increase of 11.7% or $2.03 million from a year ago. Net interest spread for the Bank increased to an average of 4.06% through September 30, 2008, compared to an average of 3.40% through September 30, 2007. The cost of funds on deposits and borrowings decreased from 3.41% on December 31, 2007 to 2.20% as of September 30, 2008. As of September 30, 2008 the efficiency ratio for the Bank was 67.5% compared to 67.8% at December 31, 2007.

Non-performing loans as of September 30, 2008 were 3.03% of total loans as compared to .74% as of June 30, 2007. The provision for loan losses was increased during the third quarter by $1.29 million resulting in overall reserves of 1.04% of total loans as of September 30, 2008. "Our loan portfolio is well diversified," said Meyer, "but we are taking a more aggressive approach to setting reserves due to the current state of the southern California economy and deteriorating conditions for real estate development." As a percent of total loans, land loans represent 2.86% of the portfolio and construction loans total 5.37%.

The Return on Average Equity and Return on Average Assets for the nine months ended September 30, 2008 were 8.10% and .55% respectively, compared to 10.52% and .70% for the same period in 2007 respectively. "These are unprecedented financial times," continued Meyer, "and we are gratified for the continued support and growth from our core customers and the confidence they have placed in the Bank."

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 and two regional business banking offices operating in southern California. The SBA division of the Bank, Business Community Capital, serves a broad constituency throughout the state of California and Nevada.

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 and Subsidiaries
Consolidated Statement of Financial Condition (Unaudited)




Assets                                           09/30/08       09/30/07
                                              -------------  --------------
Cash and Due from Banks                       $  17,121,000  $   14,842,000
Federal Funds Sold                                        0               0
                                              -------------  --------------
      Total cash and cash equivalents            17,121,000      14,842,000

Loans, net                                      692,601,000     617,847,000
Investment Securities HTM                                 0         994,000
Mortgage-backed Securities AFS, at fair value     2,870,000       4,996,000
Mortgage-backed Securities HTM                   20,119,000      25,164,000
Accrued Interest Receivable                       3,676,000       3,663,000
Investments in Real Estate, net                   3,029,000       3,970,000
Real Estate Acquired through Foreclosure            458,000               0
Federal Home Loan Bank Stock, at cost             9,589,000       6,399,000
Cash Surrender Value of Life Insurance            7,818,000       7,528,000
Premises and Equipment, net                       5,885,000       5,869,000
Other Assets                                      6,015,000       4,134,000
                                              -------------  --------------
      Total Assets                            $ 769,181,000  $  695,406,000
                                              =============  ==============


Liabilities and Stockholders' Equity
Liabilities
   Deposit Accounts                           $ 492,810,000  $  497,620,000
   FHLB Borrowings                              194,400,000     113,900,000
   Other Borrowings                               1,237,000      11,000,000
   Junior Subordinated Debentures                18,558,000      18,558,000
   Accounts Payable and other Liabilities        10,630,000       6,141,000
                                              -------------  --------------
      Total Liabilities                         717,635,000     647,219,000
                                              -------------  --------------

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; 2,808,633 shares
    issued and outstanding                        3,509,000       3,757,000
   Accumulated other comprehensive Income
    (loss)                                           (2,000)         23,000
   Retained earnings                             43,216,000      39,584,000
                                              -------------  --------------
      Total Stockholders' Equity                 51,546,000      48,187,000
                                              -------------  --------------
                                              $ 769,181,000  $  695,406,000
                                              =============  ==============




RMG Capital Corporation
Consolidated Statement of Income (Unaudited)



                                               For the six    For the six
                                               months ended   months ended
                                                 09/30/08       09/30/07
                                               -------------  -------------
Interest income:
   Interest on loans                           $  33,608,000  $  34,955,000
   Interest and dividends on investments           1,296,000        381,000
                                               -------------  -------------
      Total Interest Income                       34,904,000     35,336,000
                                               -------------  -------------

Interest expense:
   Interest on deposit accounts                    6,899,000     12,577,000
   Other interest expense                          6,340,000      4,989,000
                                               -------------  -------------
      Total Interest Expense                      13,239,000     17,566,000
                                               -------------  -------------
      Net Interest Income before provision for
       loan losses                                21,665,000     17,770,000
                                               -------------  -------------

Provision for loan losses                          2,319,000        450,000
                                               -------------  -------------
      Net Interest Income                         19,346,000     17,320,000
                                               -------------  -------------

Noninterest income:
   Loan servicing and other fees                   2,124,000      1,709,000
   Real estate operations, net                      -234,000        119,000
   Gain on sale of loans, net                        124,000        335,000
   Other                                             254,000        521,000
                                               -------------  -------------
      Total noninterest income                     2,268,000      2,684,000
                                               -------------  -------------

Noninterest expense:
   Compensation and other employee benefits       12,077,000      9,768,000
   Occupancy                                       1,071,000      1,014,000
   Equipment rental and data processing              782,000        766,000
   Other expense and supplies                        406,000        434,000
   Other                                           2,626,000      2,605,000
                                               -------------  -------------
      Total noninterest expense                   16,962,000     14,587,000
                                               -------------  -------------
      Income before income tax provision           4,652,000      5,417,000

Income tax provision                               1,623,000      1,854,000
                                               -------------  -------------

      Net Income                               $   3,029,000  $   3,563,000
                                               -------------  -------------

Contact Information

  • Contact:
    Tom Meyer
    Vice President, RMG Capital Corp.
    President, Fullerton Community Bank
    (714) 578-7500