Magyar Bancorp, Inc.

An important element of the Company’s compensation strategy is our Executive Incentive Program (the “Program”), which provides cash incentives to our Chief Executive Officer and our Executive Vice President. The Program was established in consultation with an experienced compensation consulting firm and is reviewed annually by the Compensation Committee. The Program includes pre-established individual metric target goals, an additional incentive pool based on a pre-established level of pre-tax, pre-incentive income and a discretionary component determined by the Compensation Committee.

The individual metric target goals for 2025 included net interest margin, return on assets, and deposit growth. Each target goal has a minimum, target and maximum threshold resulting in the award of a percentage of base salary ranging from 5% to 10% for each category. The additional incentive pool awards 30% of the pre-tax, pre-incentive income that exceeds a target level established by the Compensation Committee, up to a maximum 40% of base salary.

The Program also establishes a minimum level of pre-tax, pre-incentive income for incentive payments to be accrued and paid to executives. Should pre-tax, pre-incentive income fall below the minimum level, no payments will be accrued or paid. For 2025 that amount was $10.2 million, based on a projected return-on-asset ratio of 0.75%. The actual pre-tax, pre-incentive income for 2024 was $12.5 million, exceeding target by $203,000. The actual pre-tax, pre-incentive income for 2025 was $15.1 million, exceeding target by $2.1 million.

In determining the performance on the discretionary portion of the Program, the Committee considers its assessment of the participating executives’ performance as well as the Company’s performance compared with its peers. For 2025, in light of strong performance on operational, strategic, financial metrics, and in consideration of the significant individual and collective achievements of the executive team, the Committee approved individual payouts based upon factors such as individual executive accomplishments (not already covered by the individual metric target goals), regulatory compliance, board interaction, strategic goals, and leadership.

The following table summarizes the incentive awards paid to executives for their achievements in fiscal year 2025:

Our Chief Lending Officer is the only other NEO listed in the Summary Compensation Table above. The Chief Lending Officer’s subjective goal attainment is recommended by the Chief Executive Officer, and is then ratified by the Compensation Committee. In determining the amount of incentive compensation to be paid, our Chief Executive Officer considered factors such as the Company’s performance, the executive’s performance, the attainment of strategic goals, and the Company’s regulatory standing, among other factors. The incentive compensation paid to our Chief Lending Officer for 2025 was $90,000.

Pay Versus Performance Table

As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of SEC Regulation S-K, we are providing the following information about the relationship between “compensation actually paid” to our Principal Executive Officer (“PEO”) and to our Non-PEO NEOs and certain financial performance of the Company. Compensation actually paid, as determined under Securities and Exchange Commission requirements, does not reflect the actual amount of compensation earned by or paid to our executive officers during a covered year.

(1)The PEO for each of 2025, 2024 and 2023 is Mr. Fitzgerald.

(2)The non-PEO named executive officers for 2025, 2024 and 2023 are Mr. Ansari and Mr. Brown.

(3) The dollar amounts reported represent the "compensation actually paid," or CAP, to the PEO and the Non-PEO, NEOs, respectively as computed in accordance with Item 402(v) of Securities and Exchange Commission Regulation S-K The dollar amounts do not reflect the actual amount of compensation earned by or paid to the PEO or the Non-PEO NEOs.

Compensation actually paid for each of the years presented in the table, as calculated in accordance with SEC regulations and presented in the Summary Compensation Table (“SCT”), was as follows:

For 2024 to 2025, the compensation actually paid to our PEO and the average of the compensation actually paid to the other Non-PEO NEOs increased by 19% and 23%, respectively, compared to a 44% increase in our TSR and a 25% increase in net income over the same time horizon.

For 2023 to 2024, the compensation actually paid to our PEO and the average of the compensation actually paid to the other Non-PEO NEOs increased by 25% and 30%, respectively, compared to a 23% increase in our TSR and a 1% increase in net income over the same time horizon.

For 2022 to 2023, the compensation actually paid to our PEO and the average of the compensation actually paid to the other Non-PEO NEOs decreased by 41% and 48% respectively, compared to a 23% decrease in our TSR and a 3% decrease in net income over the same time horizon.

Benefit Plans

Employment Agreements. In 2021, Magyar Bancorp entered into updated employment agreements with John S. Fitzgerald, President and Chief Executive Officer of Magyar Bancorp and Magyar Bank and Jon Ansari, Executive Vice President and Chief Financial Officer of Magyar Bancorp and Magyar Bank. Mr. Fitzgerald’s agreement has an initial term of 36 calendar months and Mr. Ansari’s agreement has an initial term of 24 calendar months. Commencing on the first anniversary of the effective date, and continuing on each annual anniversary thereafter, the agreements renew for an additional period such that the remaining term is 36 months for Mr. Fitzgerald and 24 months for Mr. Ansari, unless written notice of non-renewal is provided.

Under the agreements, the current base salary of Mr. Fitzgerald is $585,000 per year and for Mr. Ansari is $430,000 per year. The base salary may be increased but not decreased. In addition, Mr. Fitzgerald and Mr. Ansari are entitled to participate, at no cost to the executives, in all benefit plans provided uniformly to other permanent full-time employees of Magyar Bank. Each of Mr. Fitzgerald and Mr. Ansari will be provided with the business and personal use of an automobile (which will be owned or leased by Magyar Bancorp) and Magyar Bancorp will pay for Mr. Fitzgerald’s country club membership.

If Mr. Fitzgerald or Mr. Ansari voluntarily terminate their employment, or their employment is terminated for cause, no benefits are provided under either executive’s employment agreement. In the event of (i) the involuntary termination of the executive’s employment for any reason other than termination for cause, disability or retirement, or (ii) executive’s resignation upon the occurrence of certain events constituting “constructive termination,” including failure to reelect or reappoint the executive to his current position, a material reduction in his duties, functions or responsibilities, a relocation of executive’s principal place of employment by more than 35 miles from the corporate office (without executive’s consent), a material reduction in the benefits or perquisites provided to the executive from those being provided as of the effective date of the agreement (other than a reduction that is part of a bank-wide reduction in pay or benefits) or a breach by Magyar Bancorp of the agreement, the executive would be entitled to a severance benefit. Mr. Fitzgerald would be entitled to a cash severance payment equal to three times his then base salary and Mr. Ansari would be entitled to a cash severance payment equal to two times his then base salary. In addition, each executive would be entitled to 24 months of employer-paid life insurance and non-taxable medical and dental coverage substantially identical to the coverage maintained for the executive prior to his termination. If one or more of these welfare benefits cannot be provided because the executive is no longer an employee or, due to certain rules or regulations or if providing such benefits would subject Magyar Bancorp or the executive to penalties, then Magyar Bancorp will make a cash payment to the executive equal to the value of such benefits, as determined by the premium otherwise paid for such coverage. Based on their current base salaries, in the event that the severance payment provisions of an executive’s employment agreement are triggered other than following a change in control, Mr. Fitzgerald would be entitled to a cash severance payment in the amount of approximately $1,755,000 and Mr. Ansari would be entitled to a cash severance benefit of $860,000.

If Mr. Fitzgerald’s or Mr. Ansari’s employment is involuntarily terminated (including a constructive termination, as described above) at any time following a change in control of Magyar Bancorp or Magyar Bank, the executive would be entitled to a change in control severance benefit equal to three times, in the case of Mr. Fitzgerald, or two times, in the case of Mr. Ansari, the sum of his highest base salary plus the higher of the last year’s bonus(es) or the average annual bonuses over the prior three years. In addition, each executive would be entitled to 24 months of employer-paid life insurance and non-taxable medical and dental coverage substantially identical to the coverage maintained for the executive prior to his termination, under the same terms and conditions as set forth in the prior paragraph. In the event that these severance payment provisions of the employment agreement were triggered following a change in control occurring on the last day of the 2025 fiscal year (assuming the base salaries of the executives was as described above), Mr. Fitzgerald would have been entitled to a cash severance payment in the amount of approximately $3,195,000 and Mr. Ansari would have been entitled to a cash severance payment in the amount of approximately $1,500,000.

The employment agreements provide that in the event of an involuntary termination of employment without cause or a termination for good reason, other than following a change in control, for a period of one year following any termination of employment, the executive will not solicit employees to terminate his or her employment and accept employment or become affiliated with, or provide services to any business that competes with the business of Magyar Bancorp or Magyar Bank, or any of their direct or indirect subsidiaries or affiliates. The agreements also provide that, other than following a change in control, generally, the executives will not compete with Magyar Bank or Magyar Bancorp for a period of one year following their termination of employment with Magyar Bank or Magyar Bancorp by accepting employment with any competing financial institution with an office within 25 miles of a Magyar Bank office.

Change-in-Control Agreement. In 2019, Magyar Bancorp and Magyar Bank entered into a one-year change-in-control agreement with Peter M. Brown, Senior Vice President and Chief Lending Officer of Magyar Bank. Following a change in control of Magyar Bancorp or Magyar Bank, Mr. Brown would be entitled under the agreement to a payment if his employment is terminated, other than for just cause, or if he voluntarily terminates his employment for good reason. Mr. Brown will have good reason to terminate if, without his written consent, he is not reappointed to the position he held immediately prior to the change in control, or he has a material reduction in his base salary and benefits, or a relocation of his principal place of employment by more than 30 miles from its location immediately prior to the change in control. In such event, Mr. Brown would be entitled to receive a cash severance payment equal to the sum of his base salary and the highest rate of bonus awarded to him during the prior three years, payable in a lump sum. In the event that these severance payment provisions of the change-in-control agreement were triggered following a change in control occurring on the last day of the 2025 fiscal year, Mr. Brown would have been entitled to a cash severance payment in the amount of approximately $338,500. In addition to the cash payment, Mr. Brown would be entitled to receive group health and medical coverage, at no cost, for a period of 12 months from the date of termination. Payments under the change in control agreement are limited so that they will not constitute an excess parachute payment under Section 280G of the Internal Revenue Code of 1986.

Outstanding Equity Awards at Year End. The following table provides information concerning unexercised options and stock awards that had not vested as of September 30, 2025 for the named executive officers.

Practices Related to the Grant of Equity Awards. Neither the Board of Directors nor the Compensation Committee has a predetermined schedule with respect to the grant of stock options. Neither the Board of Directors nor the Compensation Committee take into account material non-public information when determining the timing or terms of equity awards, nor does the Company time disclosure of material non-public information for the purpose of affecting the value of executive compensation. During the year ended September 30, 2024, the Companydid not grant any stock options to the named executive officers.

***2022 Equity Incentive Plan.***The Company’s stockholders approved the Magyar Bancorp, Inc. 2022 Equity Incentive Plan (the “Equity Incentive Plan”) which provides officers, employees, and directors of the Company and the Bank with additional incentives to promote the Company’s growth and performance. Most of the companies that the Company competes with for directors and management-level employees are public companies that offer equity compensation as part of their overall director and officer compensation programs. By approving the Equity Incentive Plan, the Company’s stockholders have given the Company flexibility needed to continue to attract and retain highly qualified officers and directors by offering a competitive compensation program that is linked to the performance of the Company’s common stock.

The Equity Incentive Plan authorized the issuance or delivery to participants of up to 547,400 shares of the Company’s common stock pursuant to grants of incentive and non-qualified stock options and restricted stock awards. Of this number, the maximum number of shares of Company common stock that may be issued under the Equity Incentive Plan pursuant to the exercise of stock options is 391,000, and the maximum number of shares of Company common stock that may be issued as restricted stock awards is 156,400 shares.

The Company’s employees and outside directors are eligible to receive awards under the Equity Incentive Plan. Awards may be granted in a combination of restricted stock awards, incentive stock options, and nonqualified stock options. The exercise price of stock options granted under the Equity Incentive Plan may not be less than the fair market value on the date the stock option is granted. Stock options are subject to vesting conditions and restrictions as determined by members of the Compensation Committee (the “Committee”) who are “Disinterested Board Members”as defined in the Equity Incentive Plan. Stock awards under the Equity Incentive Plan are granted only in whole shares of common stock. All shares of restricted stock and all stock option grants is subject to conditions established by the Committee that are set forth in the applicable award agreement.

No cash dividends will be paid on the restricted stock awards unless and until a recipient vests in the underlying share(s) of restricted stock. Upon the vesting of an award, any dividends declared but not paid during the vesting period will be paid within 30 days following the vesting date. Any stock dividends paid on shares subject to a restricted stock award will be subject to the same restrictions and will vest at the same time as the shares of underlying restricted stock. Unvested dividends will be forfeited to the same extent the underlying restricted stock is forfeited.

Defined Benefit Pension Plan. Magyar Bank sponsors the Magyar Savings Bank Retirement Plan, which is a qualified, tax-exempt defined benefit plan (the “Retirement Plan”). The Retirement Plan was frozen as to new accruals effective as of February 15, 2006. Magyar Bank annually contributes an amount to the plan necessary to satisfy the minimum funding requirements established under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). The regular form of retirement benefit is a life annuity (if the participant is single) and a joint and survivor annuity (if the participant is married); however, various alternative forms of joint and survivor annuities may be selected instead. In the event a participant dies before his annuity starting date, death benefits will generally be paid to the participant’s surviving spouse in the form of a pre-retirement survivor annuity.

A participant who retires on his normal retirement date is entitled to an annual benefit equal to his accrued benefit based on a retirement benefit formula equal to the sum of 35% of the participant’s average annual compensation plus 22.75% of his average annual compensation in excess of covered compensation. However, participants who have earned less than 35 years of service at the end of the plan year in which they attain normal retirement age will be entitled to reduced benefits. The minimum amount of annual retirement benefit provided to participants who retire on their normal retirement date will be equal to 1.5% of the participant’s average annual compensation multiplied by the participant’s number of years of service, up to a maximum of 30 years. Of the Named Executive Officers, only Mr. Fitzgerald and Mr. Ansari participate in the Retirement Plan.

Executive Supplemental Retirement Income Agreements. Magyar Bank adopted an Executive Supplemental Retirement Income Agreement for each of Jon Ansari and for John Fitzgerald effective as of January 1, 2006 (“2006 SERPs”). The 2006 SERPs are designed to provide an annual benefit to Mr. Ansari at age 65 of $141,143 and to Mr. Fitzgerald at age 65 of $102,362. For these purposes, Messrs. Ansari and Fitzgerald have each established a secular trust in connection with the adoption of the 2006 SERPs. In the fiscal year ended September 30, 2025, Magyar Bank contributed $40,895 and $43,792 to the secular trusts established for Mr. Ansari and Mr. Fitzgerald, respectively, under the 2006 SERP.

Magyar Bank adopted a Supplemental Executive Retirement Plan for each of Jon Ansari and John Fitzgerald effective as of May 23, 2019 (“2019 SERPs”). The 2019 SERPs are designed to provide an annual benefit to Mr. Ansari at age 65 of $78,681 and to Mr. Fitzgerald at age 65 of $160,923, each for a period of 15 years. In accordance with the 2019 SERPs, Magyar Bank will accrue for the benefit of each executive with an accrued liability balance. In the fiscal year ended September 30, 2025, Magyar Bank accrued $25,640 and $167,326 for Mr. Ansari and Mr. Fitzgerald, respectively, under the 2019 SERP.