Malaga Financial Corporation Reports Earnings for the First Nine Months of 2025

Rhea-AI Summary

Malaga Financial Corporation (OTCIQ:MLGF) reported net income of $16.431M for the nine months ended September 30, 2025, or $1.74 per share, down 5% from $17.339M ($1.84 per share) a year earlier, partly due to a one-time $500K 2024 Employment Retention Credit (ERC).

Quarterly net income was $5.481M ($0.58 per share), down 1% year-over-year. Annualized returns were ROAE 10.15% and ROAA 1.57%. Total assets rose 2% to $1.428B; loans declined 2% to $1.212B. Wholesale deposits grew 21% to $211.2M; retail deposits fell to $723.5M. Capital ratios remained strong: core 16.47%, risk-based 29.72%, classified as “well-capitalized.”

Positive

• Core capital ratio of 16.47%
• Risk-based capital ratio of 29.72%
• Total assets increased 2% to $1.428B
• Wholesale deposits up 21% to $211.2M
• Annualized ROAE of 10.15%

Negative

• Net income down 5% YoY for nine months
• Loan portfolio declined 2% to $1.212B
• Retail deposits decreased $7.8M from prior year
• Quarterly net income down 1% YoY

PALOS VERDES ESTATES, Calif., Oct. 09, 2025 (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, 2025 was $16,431,000 ($1.74 basic and fully diluted earnings per share) compared to $17,339,000 ($1.84 basic and fully diluted earnings per share, as adjusted for the stock dividend declared on November 15, 2024) for the same period ended September 30, 2024, a decrease of $908,000 or 5%. This decrease was in part a result of the one-time Employment Retention Credit (ERC) credit of $500,000 reported as non-operating income in 2024. Net income for the quarter ended September 30, 2025, was $5,481,000 ($0.58 basic and fully diluted earnings per share), a decrease of $67,000 or 1% from net income of $5,548,000 ($0.59 basic and fully diluted earnings per share, as adjusted for the stock dividend declared on November 15, 2024) for the quarter ended September 30, 2024. For the first nine months of 2025, the Company’s annualized return on average equity was 10.15% and the annualized return on average assets was 1.57%.

Net interest income totaled $10,929,000 in the third quarter of 2025, a decrease of $115,000 or 1% from the same period in 2024. This resulted primarily from a decrease in the interest rate spread from 2.95% to 2.88%, offset partially by an increase in excess of interest-earning assets over interest-bearing liabilities of $18.2 million. The decrease in the interest rate spread is primarily attributable to an increase of 0.10% in rate paid on average interest-bearing liabilities offset by an increase of 0.03% in yield on average interest-earning assets.

Other operating income increased $1,000 in the third quarter of 2025 to $218,000 from $217,000 for the same period in 2024.

In the third quarter of 2025, the Company collected IRS refund of $930,000 related to the 2024 ERC and recorded $145,000 in related net interest income.

Operating expenses increased 1% in the third quarter of 2025 to $3,445,000 from $3,427,000 in the third quarter of 2024. The increase is primarily attributed to an increase in depreciation and amortization of $19,000 due to bank-wide replacement of computers.

The Company had no delinquent loans and no foreclosed real estate owned at September 30, 2025. The Company’s allowance for loan losses was $3,703,000, or 0.31% of total loans, at September 30, 2025.

Randy C. Bowers, Chairman, President and CEO, commented, “We are pleased to report earnings for the first nine months of 2025 remain strong and stable, posting a modest decrease over the prior year, especially considering the rapidly changing operating environment and impact of the 2024 ERC credit in prior year earnings. Asset quality remains excellent, capital levels are strong, and expenses are well controlled. We anticipate the remainder of 2025 and 2026 will be challenging, however are reasonably optimistic regarding our ability to continue to achieve favorable results.”

The Company’s total assets increased by 2% to $1.428 billion at September 30, 2025, compared to $1.404 billion at September 30, 2024. The loan portfolio at September 30, 2025, was $1.212 billion, a decrease of $20.3 million or 2% from September 30, 2024. 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 $723.5 million as of September 30, 2025, a $7.8 million decrease from $731.3 million at September 30, 2024. Wholesale deposits increased $36.8 million or 21% from $174.4 million at September 30, 2024, to $211.2 million at September 30, 2025. Wholesale deposits are primarily comprised of State of California certificates of deposit in the amount of $51.0 million and $160.2 million of long-term brokered certificates of deposits. FHLB borrowings decreased $20.0 million or 8% from $260.0 million at September 30, 2024, to $240.0 million at September 30, 2025. The Company utilizes long-term certificates of deposit (retail and wholesale) and FHLB borrowings to manage interest rate risk.

As of September 30, 2025, 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 16.47% and 29.72%, 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 71^st consecutive quarter as of June 2025. Since 1985 Malaga 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 www.malagabank.com.

Contact:	Randy Bowers
	Chairman of the Board, President and Chief Executive Officer
	Malaga Financial Corporation
	310-375-9000
	rbowers@malagabank.com

FAQ

What were Malaga Financial (MLGF) nine-month 2025 earnings per share?

Nine months ended Sept 30, 2025 EPS was $1.74 basic and diluted.

Why did Malaga (MLGF) net income fall 5% in first nine months of 2025?

The decrease reflects comparatives including a $500K one-time 2024 ERC credit.

What are Malaga Bank’s capital ratios reported on Sept 30, 2025 (MLGF)?

Core capital ratio was 16.47% and risk-based capital ratio 29.72%.

How did Malaga Financial’s (MLGF) deposits change through Sept 30, 2025?

Retail deposits fell to $723.5M while wholesale deposits rose to $211.2M.

What was Malaga Financial’s (MLGF) loan portfolio size on Sept 30, 2025?

Total loans were $1.212B, a 2% decrease year-over-year.

Is Malaga Bank considered well-capitalized on Sept 30, 2025 (MLGF)?

Yes; the bank met regulatory thresholds and was designated well-capitalized.

What were Malaga Financial’s (MLGF) annualized returns through Sept 30, 2025?

Annualized return on average equity was 10.15% and on average assets 1.57%.