SOURCE: RMG Capital Corporation

May 26, 2011 14:16 ET

RMG Capital Corporation Reports Earnings for First Quarter of 2011

FULLERTON, CA--(Marketwire - May 26, 2011) - RMG Capital Corporation (PINKSHEETS: RMGC) (OTCQB: RMGC), parent company of Fullerton Community Bank ("FCB"), reported net income of $92 thousand, or $0.03 per share, for the first quarter of 2011, compared to a net loss of 2.06 million ($0.73 per share) in the first quarter of 2010.

The improved performance compared to the previous year was largely attributable to $2.5 million less in provisions for loan losses and $1.2 million less for losses on REO, plus a $300,000 gain on sale of SBA loans; these positive trends were partially offset by reduced net interest income as the bank's loan balances fell. Over the last twelve months, RMG Capital has earned over $1 million.

"We are pleased to report RMG Capital's fourth consecutive profitable quarter as we continue to benefit from our ability to successfully reduce our problem assets while improving fee income and building customer relationships," said Tom Meyer, Chairman and Chief Executive Officer of RMG Capital. "Our credit costs have been steadily declining, and are now at their lowest quarterly levels since the third quarter of 2008."

Net loan balances continued to decline, ending the quarter at $520 million, down 2% from year end and 10% year over year. Business and SBA loan demand was sluggish through the first quarter as government incentive programs for SBA loans expired at year end. Owner-occupied commercial real estate and multi-family remain the largest loan segments of the FCB's portfolio.

FCB's asset quality continued to improve; classified assets declined to $37.8 million, compared to $38.1 million at year end and $58.5 million a year ago. Delinquent loans stood at 3.08% of total loans, compared to 4.15% at year end and 5.17% a year ago. Non-performing assets were $19.5 million, compared to $22.7 million at year end and $31.7 million a year ago.

FCB's Texas Ratio stood at 27.9% as of quarter end, compared to 32.2% at year end and 45.5% a year ago. A widely used measure to gauge banks' credit problems, the Texas Ratio is calculated by dividing non-performing assets by Tier 1 Capital plus Allowance for Loan Losses.

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

-------------------------------------------------------------------------
                              12/31/08   12/31/09   12/31/10   3/31/11

-------------------------------------------------------------------------
Total Risk-Based
 Capital Ratio                  10.57%     12.12%    13.03%    13.38%
-------------------------------------------------------------------------
Tier 1 Capital Ratio             8.34%      8.38%     8.68%     8.80%
-------------------------------------------------------------------------
Tier 1 Risk-Based
 Capital Ratio                   9.58%     10.87%    11.77%    12.12%
-------------------------------------------------------------------------

FCB's Real Estate Owned portfolio stood at $2.7 million at the end of the quarter, down from $3.2 million at year end and $7.7 million a year ago. REO balances will fluctuate as the bank continues to work out troubled assets.

Total checking balances were $138.1 million at March 31, 2010, representing 9,600 accounts. They increased to $146.8 million and 10,800 accounts at March 31, 2011. The reliance on CDs to fund the bank was also reduced. One year ago 42% of deposits were CDs. At the end of the first quarter of 2011 this dropped to 37%. The reduction in higher cost funding was also evident in the 7% reduction in Federal Home Loan Bank term advances over the last twelve months. Liquidity remains strong with cash balances of over $100 million at the end of the quarter.


RMG Capital Corporation and Subsidiaries
Consolidated Statement of Financial Condition (Unaudited)

Assets                                            03/31/11      03/31/10
                                                ------------- -------------
Cash and Due from Banks                         $ 109,374,000 $  56,156,000
Loans, net                                        519,554,000   580,241,000
Investment Securities Available for Sale, at
 fair value                                                 0     5,761,000
Mortgage-backed Securities Available for Sale,
 at fair value                                      6,044,000     8,834,000
Mortgage-backed Securities Held to Maturity        10,147,000    12,935,000
Accrued Interest Receivable                         2,201,000     2,616,000
Investments in Real Estate, ventures                  600,000       600,000
Federal Home Loan Bank Stock, at cost               8,364,000     9,800,000
Cash Surrender Value of Life Insurance              8,275,000     8,011,000
Premises and Equipment, net                         6,072,000     5,931,000
Other Real Estate Owned                             2,668,000     7,427,000
Other Assets                                       11,074,000    14,772,000
                                                ------------- -------------
   Total Assets                                 $ 684,373,000 $ 713,084,000
                                                ============= =============


Liabilities and Stockholders' Equity

Liabilities
 Deposit Accounts                               $ 507,802,000 $ 528,128,000
 FHLB Borrowings                                  106,900,000   115,300,000
 Other Borrowings                                           0     1,000,000
 Junior Subordinated Debentures                    18,558,000    18,558,000
 Accounts Payable and other Liabilities             8,487,000     8,629,000
                                                ------------- -------------
   Total Liabilities                              641,747,000   671,615,000
                                                ------------- -------------

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                                      3,397,000     3,374,000
  Accumulated other comprehensive Income (loss)       117,000        56,000
  Retained earnings                                34,289,000    33,216,000
                                                ------------- -------------
   Total Stockholders' Equity                      42,626,000    41,469,000
                                                ------------- -------------
                                                $ 684,373,000 $ 713,084,000
                                                ============= =============




RMG Capital Corporation
Consolidated Statement of Income (Unaudited)

                                                Year-to-Date  Year-to-Date
                                                  03/31/11      03/31/10
                                                ------------  ------------
Interest income:
  Interest on loans                             $  7,542,000  $  8,247,000
  Interest and dividends on investments              192,000       239,000
                                                ------------  ------------
    Total Interest Income                          7,734,000     8,486,000
                                                ------------  ------------

Interest expense:
  Interest on deposit accounts                     1,096,000     1,306,000
  Other interest expense                           1,301,000     1,592,000
                                                ------------  ------------
    Total Interest Expense                         2,397,000     2,898,000
                                                ------------  ------------
    Net Interest Income before provision for
     loan losses                                   5,337,000     5,588,000
                                                ------------  ------------

Provision for loan losses                            850,000     3,367,000
                                                ------------  ------------
    Net Interest Income                            4,487,000     2,221,000
                                                ------------  ------------

Noninterest income:
  Loan servicing and other fees                      700,000       701,000
  Gain on sale of loans, net                         333,000             -
  Other                                               90,000        87,000
                                                ------------  ------------
    Total noninterest income                       1,123,000       788,000
                                                ------------  ------------

Noninterest expense:
  Compensation and other employee benefits         3,222,000     3,255,000
  Occupancy                                          334,000       355,000
  Equipment rental and data processing               202,000       243,000
  Office expense and supplies                        125,000       135,000
  Real estate operations, net                         (2,000)            -
  Loss on sales of REO, net                          (11,000)       (1,000)
  Losses on REO valuation                             98,000     1,176,000
  Other                                            1,527,000     1,316,000
                                                ------------  ------------
    Total noninterest expense                      5,495,000     6,479,000
                                                ------------  ------------
    Income before income tax provision               115,000    (3,470,000)

Income tax provision                                  23,000    (1,410,000)
                                                ------------  ------------

    Net Income                                  $     92,000  $ (2,060,000)
                                                ============  ============

Contact Information

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