Malaga Financial (OTCIQ:MLGF) reported net income of $11.76 million for the six months ended June 30, 2026, up from $10.95 million a year earlier, with EPS rising to $1.19 from $1.11. Annualized return on average equity was 10.37% and return on average assets 1.63%; book value per share reached $23.21.
Second-quarter 2026 net income was $5.70 million (EPS $0.58), about 3% above Q2 2025. Earnings growth was mainly driven by higher net interest income after provision for loan losses and fraud recoveries, partly offset by higher operating and tax expenses. Q2 net interest income rose to $11.59 million, supported by a $63.9 million increase in average interest-earning assets, while the interest rate spread held at 2.97%.
Total assets grew 4% year over year to $1.449 billion and loans increased 3% to $1.242 billion. As of June 30, 2026, the company reported no 30-day delinquent loans, no deferred-payment loans, and no foreclosed real estate, with an allowance for credit losses of $3.81 million (0.31% of total loans). Funding reflected modestly lower retail deposits, higher wholesale deposits, and a $30 million increase in FHLB borrowings. Malaga Bank remained “well-capitalized,” with core and risk-based capital ratios of 16.76% and 27.91%, both well above regulatory minimums.
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Positive
Six-month net income up to $11.76M from $10.95M
Q2 2026 net income increased 3% to $5.70M
Q2 net interest income rose $571K to $11.59M
Total assets grew 4% to $1.449B; loans up 3% to $1.242B
Zero 30-day delinquencies, no deferred loans, no foreclosed real estate
Core and risk-based capital ratios 16.76% and 27.91%, above well-capitalized thresholds
Negative
Q2 operating expenses increased 10% to $3.76M
Retail deposits declined $3.0M to $715.5M year over year
Wholesale deposits rose $17.9M and FHLB borrowings $30.0M, increasing non-core funding reliance
Other operating expenses and income tax expense rose for both the quarter and six-month period
News Market Reaction – MLGF
+3.46%
+3.46%Session close to close
In the Jul 10 session, MLGF gained 3.46%, reflecting a moderate positive market reaction.
PALOS VERDES ESTATES, Calif., July 10, 2026 (GLOBE NEWSWIRE) -- Malaga Financial Corporation “Company” (OTCIQ:MLGF), the parent company of Malaga Bank FSB, today reported that net income for the six months ended June 30, 2026, was $11,758,000 ($1.19 basic and fully diluted earnings per share) compared to $10,950,000 ($1.11 basic and fully diluted earnings per share, as adjusted for the stock dividend declared on November 14, 2025) for the same period ended June 30, 2025. For the first six months of 2026, the Company’s annualized return on average equity was 10.37% and the annualized return on average assets was 1.63%. Book value per share stood at $23.21 as of June 30, 2026.
The $808,000 increase in net income was primarily due to a $1,205,000 increase in net interest income after provision for loan losses, a $307,000 identity fraud recovery, a $84,000 decrease in nonoperating expenses, partially offset by a $451,000 increase in other operating expenses and $339,000 increase in income tax expense.
Net income for the quarter ended June 30, 2026, was $5,695,000 ($0.58 basic and fully diluted earnings per share), representing a 3% increase of $149,000 from net income of $5,546,000 ($0.56 basic and fully diluted earnings per share, as adjusted for the stock dividend declared on November 14, 2025) reported in the second quarter of 2025.
The $149,000 second-quarter earnings increase over the prior year was driven primarily by a $496,000 increase in net interest income after provision for loan losses, a $68,000 decrease in nonoperating expenses offset by a $339,000 increase in other operating expenses and a $64,000 increase in income tax expenses.
Net interest income totaled $11,587,000 in the second quarter of 2026, up $571,000 from the same period in 2025, driven primarily by a $63.9 million increase in average interest-earning assets. The interest rate spread held steady at 2.97% for the second quarter of both 2025 and 2026. The yield on average interest-earning assets rose by 0.06%, matching a 0.06% increase in the rate paid on average interest-bearing liabilities over the same period.
The $68,000 reduction in second-quarter nonoperating expenses was primarily due to a $17,000 check fraud recovery, compared to a $51,000 check fraud expense during the second quarter of 2025.
Operating expenses for the second quarter of 2026 increased 10% to $3,762,000, up from $3,423,000 in the second quarter of 2025. This increase is primarily attributed to a $212,000 increase in compensation, an $85,000 increase in data processing related to new fraud detection automation, and a $17,000 increase in facilities maintenance and repairs.
As of June 30, 2026, the Company reported zero 30-day delinquent loans, zero loans with deferred payments and no foreclosed real estate owned. The Company’s allowance for credit losses was $3,808,000, or 0.31% of total loans, at June 30, 2026.
Randy C. Bowers, Chairman, President, and CEO, commented, “We are pleased to report year-over-year earnings growth for both the second quarter and the first half 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.”
Malaga Bank’s total assets grew by 4% to $1.449 billion at June 30, 2026, compared to $1.397 billion at June 30, 2025. The loan portfolio rose to $1.242 billion, marking an increase of $32.9 million or 3% from June 30, 2025. Malaga continues its core strategy of originating 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 $715.5 million as of June 30, 2026, a $3.0 million decrease from $718.5 million at June 30, 2025. Wholesale deposits increased $17.9 million or 9% from $206.5 million at June 30, 2025, to $224.4 million at June 30, 2026. Wholesale deposits were primarily comprised of $165.6 million brokered and $7.8 million institutional long-term certificates of deposits and $51.0 million State of California certificates of deposits as of June 30, 2026. FHLB borrowings increased $30.0 million or 13% from $225.0 million at June 30, 2025, to $255.0 million at June 30, 2026. The increase in FHLB borrowings is an interest rate risk management strategy related to the increase in net loan growth.
As of June 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 16.76% and 27.91%, respectively, at June 30, 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 74thconsecutive quarter as of March 2026. Since 1985, Malaga Bank 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 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
How did Malaga Financial (MLGF) perform financially in the first half of 2026?
Malaga Financial reported higher earnings in the first half of 2026, with net income of $11.76 million and EPS of $1.19. According to Malaga Financial, this compares with $10.95 million and $1.11 EPS a year earlier, reflecting improved net interest income and recoveries.
What were Malaga Financial (MLGF) second-quarter 2026 earnings and EPS?
Malaga Financial posted second-quarter 2026 net income of $5.70 million, or $0.58 per share. According to Malaga Financial, this represents an increase from $5.55 million, or $0.56 per share, in the second quarter of 2025, driven mainly by higher net interest income.
How did Malaga Financial’s net interest income and spread change in Q2 2026?
Net interest income for Q2 2026 rose to $11.59 million, up $571,000 year over year. According to Malaga Financial, the interest rate spread held steady at 2.97%, as yields on interest-earning assets and rates on interest-bearing liabilities each increased by 0.06%.
What is the asset quality of Malaga Financial (MLGF) as of June 30, 2026?
Malaga Financial reported exceptionally strong asset quality at June 30, 2026, with no 30-day delinquent loans, no deferred-payment loans, and no foreclosed real estate. According to Malaga Financial, the allowance for credit losses was $3.81 million, or 0.31% of total loans.
How did Malaga Financial’s assets, loans, and deposits change year over year by Q2 2026?
By June 30, 2026, total assets grew 4% to $1.449 billion and loans rose 3% to $1.242 billion. According to Malaga Financial, retail deposits declined $3.0 million to $715.5 million, while wholesale deposits increased $17.9 million to $224.4 million.
What are Malaga Financial’s (MLGF) capital ratios and regulatory status in 2026?
Malaga Financial’s subsidiary, Malaga Bank, remained “well-capitalized” at June 30, 2026, with a core capital ratio of 16.76% and a risk-based capital ratio of 27.91%. According to Malaga Financial, both ratios substantially exceed the 5% and 10% well-capitalized thresholds.
How did Malaga Financial fund loan growth in the first half of 2026?
Malaga Financial funded loan and asset growth using a mix of retail deposits, wholesale deposits, and FHLB borrowings. According to Malaga Financial, wholesale deposits rose to $224.4 million and FHLB borrowings increased by $30.0 million to $255.0 million by June 30, 2026.
