Malaga Financial Corp (OTCIQ: MLGF), the parent of Malaga Bank FSB, on Wednesday posted a 7% drop in first-half earnings, citing the prior year’s Employment Retention Credit (ERC) and lower net interest income. Net income fell to $10.95 million, or $1.16 per share, for the six months ended June 30, from $11.79 million, or $1.25 per share, a year earlier.
Quarterly income also dipped 4% to $5.55 million due to reduced interest income, a smaller recovery for loan loss provisions, and increased nonoperating expense—primarily from check fraud. Operating expenses decreased 1%.
Malaga’s total assets slipped 2% to $1.397 billion, with its loan portfolio down to $1.209 billion. Retail deposits declined 3% while wholesale deposits rose 18%. FHLB borrowings were down 20%, reflecting a strategic response to slowing loan growth.
The bank reported no delinquent loans or foreclosed properties, and retained its “well-capitalized” status with core and risk-based capital ratios at 16.57% and 28.92%, respectively.
CEO Randy C. Bowers said economic and political volatility persisted in Q2 but praised the bank’s expense discipline and credit quality.