Malaga Financial Corporation Reports Record Quarterly Earnings

PALOS VERDES ESTATES, Calif., April 16, 2026 (GLOBE NEWSWIRE) -- Malaga Financial Corporation “Company” (OTCIQ:MLGF), the parent company of Malaga Bank FSB, today reported that net income for the quarter ended March 31, 2026 was $6,063,000 ($0.61 basic and fully diluted earnings per share), an increase of $659,000 or 12% from net income of $5,404,000 ($0.55 basic and fully diluted earnings per share, as adjusted for the stock dividend declared on November 14, 2025) for the quarter ended March 31, 2025. For the first quarter of 2026, the Company’s annualized return on average equity was 10.77% and the annualized return on average assets was 1.69%, as compared to 10.16% and 1.55%, respectively, for the same period in 2025. Book value per share as of March 31, 2026 was $22.89.

The Company did not have any delinquent loans or foreclosed real estate owned at March 31, 2026. The Company’s allowance for credit losses was $3,785,000, or 0.31% of total loans, at March 31, 2026.

Net interest income totaled $11,859,000 in the first quarter of 2026, an increase of $730,000 or 7% from the first quarter of 2025. This increase is due to an overall increase in average-interest earning assets of $47.4 million and an increase of 0.07% in interest spread to 3.05%. The increase in interest spread is primarily attributable to a 0.14% increase in yield on average interest-earning assets, which includes a special Federal Home Loan Bank (FHLB) cash dividend of $264,000, offset by 0.07% increase in average cost of funds.

In the first quarter of 2026, operating expenses decreased 6% to $3,481,000 from $3,711,000 in the first quarter of 2025. The decrease is primarily attributed to decreases in general and administrative expenses of $335,000 mainly due to recovery of prior quarter deposit-related fraud, offset by increases in compensation of $65,000 and data processing of $62,000.

Randy C. Bowers, Chairman, President and CEO, commented, “We are pleased to report record first quarter 2026 earnings of $6,063,000 which includes one-time interest income of $264,000 related to special FHLB cash dividends and $307,000 recovery of prior quarter deposit related fraud. First quarter of 2026 presented continued volatility with increasing uncertainty in both economic markets and the political environment. We anticipate the remainder of the year to continue to be challenging, however our fundamentals remain strong with excellent credit quality, disciplined expense control, and robust capital levels. We appreciate the efforts of our colleagues and loyalty of our shareholders as we continue to adapt in this difficult environment.”

Malaga’s total assets increased to $1.443 billion at March 31, 2026, compared to $1.381 billion at March 31, 2025. The loan portfolio at March 31, 2026, was $1.235 billion, an increase of $9 million or 1% from March 31, 2025. Malaga originates loans principally for its own portfolio and not for sale.

Malaga funds its assets with a mix of retail deposits, wholesale deposits, and FHLB borrowings. Retail deposits totaled $725 million as of March 31, 2026, a $12 million increase from $714 million at March 31, 2025. Wholesale deposits, comprised mainly of State of California certificates of deposit and longer-term institutional and brokered deposits, totaled $214 million as of March 31, 2026, a $12 million decrease from $226 million at March 31, 2025. FHLB borrowings increased $50 million or 25% from $200 million at March 31, 2025, to $250 million at March 31, 2026. Malaga Bank utilizes FHLB borrowings and longer-term wholesale deposits as a tool to manage interest rate risk.

As of March 31, 2026, 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 16.60% and 28.01%, respectively, at March 31, 2026, significantly exceeding the minimum “well-capitalized” requirements of 5% and 10%, respectively.

Malaga Bank, a subsidiary of Malaga Financial Corporation, is a full-service community bank headquartered on the Palos Verdes Peninsula with six offices located in the South Bay area of Los Angeles. For over fifteen years Malaga Bank has been consistently recommended by one of the nation’s leading independent bank rating and research firms, Bauer Financial Inc. Malaga Bank was awarded Bauer’s premier Top 5-Star rating for the 73rd consecutive quarter as of December 2025. Since 1985, 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. The Bank’s web site is located at .