Malaga Financial Corporation Reports Record Earnings for the Third Quarter and First Nine Months of 2026
PALOS VERDES ESTATES, Calif., Oct. 16, 2026 (GLOBE NEWSWIRE) — Malaga Financial Corporation “Company” (OTCIQ:MLGF), the parent company of Malaga Bank FSB, today reported that net income for the nine months ended September 30, 2026 was $18,028,000 ($1.82 basic and fully diluted earnings per share) compared to $16,431,000 ($1.66 basic and fully diluted earnings per share, as adjusted for the stock dividend declared on November 14, 2025) for the same period ended September 30, 2025, an increase of $1,597,000 or 10%. For the first nine months of 2026, the Company’s annualized return on average equity was 10.52% and the annualized return on average assets was 1.66%.
The $1,597,000 increase in year-to-date net income was primarily due to $2,631,000 increase in net interest income after provision for loan losses, a $307,000 identity fraud recovery, partially offset by $622,000 increase in other operating expenses and $670,000 increase in income taxes.
Net income for the quarter ended September 30, 2026, was $6,270,000 ($0.63 basic and fully diluted earnings per share), an increase of $789,000 or 14% from net income of $5,481,000 ($0.55 basic and fully diluted earnings per share, as adjusted for the stock dividend declared on November 14, 2025) for the quarter ended September 30, 2025.
Net interest income totaled $12,324,000 in the third quarter of 2026, an increase of $1,426,000 or 13% from the same period in 2025. This resulted primarily from an increase in the interest rate spread from 2.88% to 3.15%, and by an increase in excess of interest-earning assets over interest-bearing liabilities of $8.5 million. The increase in the interest rate spread is primarily attributable to an increase of 0.32% in yield on average interest-earning assets offset by an increase of 0.05% in rate paid on average interest-bearing liabilities.
Other operating income decreased $11,000 in the third quarter of 2026 to $207,000 from $218,000 for the same period in 2025.
Operating expenses increased 5% in the third quarter of 2026 to $3,616,000 from $3,445,000 in the third quarter of 2025. The increase is primarily attributed to an increase in data processing of $76,000 and compensation of $92,000.
The Company had no delinquent loans and no foreclosed real estate owned at September 30, 2026. The Company’s allowance for loan losses was $3,797,000, or 0.31% of total loans, at September 30, 2026.
Randy C. Bowers, Chairman, President and CEO, commented, “We are pleased to report record year-over-year earnings for both the third quarter and the first nine months of 2026. These positive earnings trends along with excellent asset quality and tight expense control position us well for favorable performance for the remainder of the year. Despite a highly competitive and volatile operating environment, we remain optimistic about our momentum and thank our entire team for their efforts in achieving these results.”
The Company’s total assets increased by 2% to $1.463 billion at September 30, 2026, compared to $1.428 billion at September 30, 2025. The loan portfolio at September 30, 2026, was $1.237 billion, an increase of $24.9 million or 2% from September 30, 2025. The Company originates loans principally for its own portfolio and not for sale.
The Company funds its assets with a mix of retail deposits, wholesale deposits and FHLB borrowings. Retail deposits totaled $725.7 million as of September 30, 2026, a $2.2 million increase from $723.5 million at September 30, 2025. Wholesale deposits increased $20.5 million or 10% from $211.2 million at September 30, 2025, to $231.7 million at September 30, 2026. Wholesale deposits are primarily comprised of State of California certificates of deposit in the amount of $51.0 million, long-term institutional deposits of $9.4 million and $171.3 million of long-term brokered certificates of deposits. FHLB borrowings increased $5.0 million or 2% from $240.0 million at September 30, 2025, to $245.0 million at September 30, 2026. The Company utilizes long-term certificates of deposit (retail and wholesale) and FHLB borrowings to manage interest rate risk.
As of September 30, 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 16.85% and 28.09%, respectively, 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 75th consecutive quarter as of June 2026. Since 1985 Malaga has been delivering competitive banking services to residents and businesses of 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 www.malagabank.com.
Contact: Randy Bowers
Chairman of the Board, President and Chief Executive Officer
Malaga Financial Corporation
310-375-9000
rbowers@malagabank.com
