Magyar Bancorp, Inc.
For the period ended Mar 31, 2026. Filed May 13, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 13, 2026
MGYR$21.90-0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-12-31; filed 2026-02-13.
0001174947-26-000170
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-13.
0001174947-26-000591
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 48 previous paragraphs and 74 current paragraphs.
19 unchanged; 21 reworded; 27 added; 8 removed; 0 previous and 7 current paragraphs rearranged.
Tables are not compared: 3 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (27)
Current report
Investment securities. Investment securities totaled $99.2 million at March 31, 2026, reflecting an increase of $10.7 million, or 12.1%, from $88.4 million at September 30, 2025. The increase resulted from purchases of mortgage-backed securities totaling $14.5 million, partially offset by payments from mortgage-backed securities totaling $3.8 million during the six months ended March 31, 2026. There was no credit losses recorded for the Company’s investment securities during the six months ended March 31, 2026.
Current report
Allowance for Credit Losses. The allowance for on-balance sheet credit losses increased by $249 thousand to $8.6 million, or 0.98% of total loans receivable during the six months ended March 31, 2026 compared with $8.4 million at September 30, 2025, while the reserve for off-balance sheet commitments increased to $235 thousand at March 31, 2026 from $198 thousand at September 30, 2025. The higher provision for credit losses resulted from growth in loans receivable as well as higher specific reserves on construction loans, partially offset by lower expected loss rates driven by improving economic conditions impacting residential and commercial real estate loans.
Current report
The Company implemented a digital marketing campaign focused on the Bank's primary market area, targeting prospective customers with a competitive rate on short term certificates of deposit. The campaign produced positive results and was a contributor to the increase in deposits during the six months ended March 31, 2026.
Current report
*Interest and Dividend Income.*Interest and dividend income increased by $1.4 million, or 10.6%, to $14.9 million for the three months ended March 31, 2026 compared with $13.5 million for the three months ended March 31, 2025. The increase was attributable to a 25-basis point increase in the yield on interest earning assets to 5.93% for the three months ended March 31, 2026 from 5.68% for the three months ended March 31, 2025, as well as an increase in the average balance of net loans receivable between the periods.
Current report
Interest expense on borrowings increased by $174 thousand, or 78.0%, to $397 thousand for the three months ended March 31, 2026 from $223 thousand for the three months ended March 31, 2025. The average balance of borrowings increased by $16.9 million, or 52.7%, to $49.0 million for the three months ended March 31, 2026 compared to $32.1 million for the three months ended March 31, 2025 while the average cost of the borrowings increased by 47 basis points to 3.28% from 2.81%, respectively.
Current report
Provision for Credit Losses. The provision for credit losses increased by $286 thousand, or 953.3%, to $256 thousand for the three months ended March 31, 2026 compared with a $30 thousand net recovery for the three months ended March 31, 2025. The higher provision for credit losses resulted from higher commercial real estate and construction loan balances, which generally require higher provisions for credit loss, that more than offset contraction in the Company’s residential mortgage loan portfolio.
Current report
The Company recorded $3 thousand in net loan recoveries during the three months ended March 31, 2026 compared with $5 thousand in net loan recoveries during the three months ended March 31, 2025.
Current report
The Company recorded lower gains from the sale of Small Business Administration 7(a) loans, which decreased by $343 thousand to $269 thousand for the three months ended March 31, 2026 from $612 thousand for the three months ended March 31, 2025. Contributing to the lower gains were fewer loans sold as well as lower premiums on the sales of loans. The Company sold $2.8 million in loans during the three months ended March 31, 2026 compared with sales totaling $6.5 million for the three months ended March 31, 2025.
Current report
Also contributing to the decline in other income was a $93 thousand decline in service charges, which included commercial loan prepayment charges and late fees. The Company recorded $196 thousand in prepayment and late fees during the three months ended March 31, 2026 compared with $260 thousand for the three months ended March 31, 2025. Commercial loan prepayment penalties are highly unpredictable in both amount and timing, as they are dependent upon our borrower’s ability and intent to repay their loan before its scheduled rate reset date or maturity date, whichever occurs sooner. Late fees on commercial loans are also highly unpredictable in amount and timing, as they accumulate until paid, which may occur when a loan is repaid in full.
Current report
*Other Expenses.*Other expenses increased by $167 thousand, or 3.1%, to $5.6 million for the three months ended March 31, 2026 compared to $5.4 million for the three months ended March 31, 2025 from higher compensation, employee benefit and data processing expenses.
Current report
The increase in total other expenses was primarily attributable to higher compensation and benefit expense, which increased by $137 thousand, or 4.2%, to $3.4 million, due to higher medical benefits and incentive accruals as well as annual merit increases. Data processing expenses increased by $40 thousand, or 32.8%, to $162 thousand for the three months ended March 31, 2026 from $122 thousand for the three months ended March 31, 2025. The increase was attributable to the use of expiring flex credits from the Company’s core service provider during the three months ended March 31, 2025.
Current report
*Net Income.*Net income increased by $1.4 million, or 29.4%, to $6.2 million during the six months period ended March 31, 2026 compared with $4.8 million for the six months period ended March 31, 2025. The increase was due to higher net interest income, partially offset by higher provisions for credit loss, lower other income, and higher other expenses.
Current report
Net Interest and Dividend Income. Net interest and dividend income increased by $2.8 million, or 18.1%, to $18.1 million for the six months ended March 31, 2026 from $15.3 million for the six months ended March 31, 2025. The increase was attributable to a $59.5 million, or 6.3%, increase in the average balance of interest earning assets between the periods as well as a 36 basis points increase in the Company’s net interest margin to 3.63% for the six months ended March 31, 2026 from 3.27% for the six months ended March 31, 2025.
Current report
Interest and Dividend Income. Interest and dividend income increased by $3.1 million, or 11.7%, to $29.5 million for the six months ended March 31, 2026 from $26.4 million for the six months ended March 31, 2025. The increase was attributable to a 28 basis points increase in the yield on interest earning assets to 5.92% for the six months ended March 31, 2026 from 5.64% for the six months ended March 31, 2025, as well as an increase in the average balance of net loans receivable.
Current report
The average balance of loans receivable, net of allowance for credit losses, increased by $67.9 million, or 8.5%, to $862.5 million during the six months ended March 31, 2026 from $794.6 million during the six months ended March 31, 2025, while the yield on loans receivable increased 25 basis points to 6.31% for the six months ended March 31, 2026 from 6.06% for the six months ended March 31, 2025. The higher average balance and yield accounted for a $3.1 million, or 13.0%, increase in loan interest income between periods.
Current report
Interest earned on investment securities, including interest-earning deposits and excluding FHLBNY stock, decreased by $60 thousand, or 2.6%, to $2.26 million for the six months ended March 31, 2026 from $2.32 million for the six months ended March 31, 2025. The average balance of investment securities and interest-earning deposits decreased by $9.3 million, or 6.5%, to $134.4 million for the six months ended March 31, 2026 from $143.7 million for the six months ended March 31, 2025. Partially offsetting this decrease was a 14 basis point increase in the yield of such assets to 3.39% for the six months ended March 31, 2026 from 3.25% for the six months ended March 31, 2025.
Current report
Interest Expense. Interest expense increased by $313 thousand, or 2.8%, to $11.4 million for the six months ended March 31, 2026 compared with $11.1 million for the six months ended March 31, 2025. The average balance of interest-bearing liabilities increased by $44.8 million, or 6.1%, to $779.1 million from $734.3 million, while the cost of interest-bearing liabilities decreased nine basis points to 2.94% for the six months ended March 31, 2026 compared with 3.03% for the six months ended March 31, 2025.
Current report
The average balance of interest-bearing deposits increased by $26.6 million, or 3.8%, to $730.0 million for the six months ended March 31, 2026 from $703.4 million for the six months ended March 31, 2025, while the average cost of such deposits decreased 12 basis points to 2.92% from 3.04%. As a result, interest paid on interest-bearing deposits decreased by $59 thousand, or 0.6%, to $10.6 million for the six months ended March 31, 2026 from $10.7 million for the six months ended March 31, 2025.
Current report
Provision for Credit Losses. The provision for credit losses increased by $209 thousand, or 294.4%, to $280 thousand for the six months ended March 31, 2026 compared with $71 thousand for the six months ended March 31, 2025. The higher provision for credit losses resulted from higher specific reserves on construction loans, partially offset by lower expected loss rates driven by improving economic conditions impacting residential and commercial real estate loans.
Current report
The Company recorded $6 thousand in net loan recoveries during the six months ended March 31, 2026 compared with $108 thousand in net loan recoveries during the six months ended March 31, 2025.
Current report
*Other Income.*Other income decreased by $606 thousand, or 27.2%, to $1.6 million during the six months ended March 31, 2026 compared to $2.2 million for the six months ended March 31, 2025 from lower gains on the sale of Small Business Administration and other real estate owned loans.
Current report
The Company recorded lower gains from the sale of Small Business Administration 7(a) and other real estate owned loans, which decreased $321 thousand and $237 thousand, respectively. Contributing to the lower gains were fewer loans sold as well as lower premiums on the sales of loans. The Company sold $6.2 million Small Business Administration loans during the six months ended March 31, 2026 compared with sales totaling $9.8 million for the six months ended March 31, 2025. The Company recorded a loss of $13 thousand on the sale of other real estate owned for the six months ended March 31, 2026 compared with a $224 thousand gain for the six months ended March 31, 2025.
Current report
Also contributing to the decline in other income was an $84 thousand decline in service charges, The Company recorded $93 thousand in late fees during the six months ended March 31, 2026 compared with $164 thousand for the six months ended March 31, 2025.
Current report
*Other Expenses.*Other expenses increased by $76 thousand, or 0.7%, to $10.9 million during the six months ended March 31, 2026 from $10.8 million during the six months ended March 31, 2025 from higher compensation, employee benefit and data processing expenses.
Current report
The increase in total other expenses was primarily attributable to higher compensation and benefit expense, which increased by $225 thousand, or 3.6%, to $3.4 million, due to higher medical benefits and incentive accruals as well as annual merit increases. Data processing expenses increased by $106 thousand, or 49.8%, to $319 thousand for the six months ended March 31, 2026 from $213 thousand for the six months ended March 31, 2025 from the use of expiring flex credits for the Bank’s core service provider during the six months ended March 31, 2025.
Current report
Partially offsetting these increases was a $178 thousand, or 9.7%, decrease in occupancy expenses to $1.7 million for the six months ended March 31, 2026 from $1.8 million for the six months ended March 31, 2025. Rent and the depreciation of leasehold improvements decreased by $226 thousand between periods from the closure of the Bank’s Bridgewater retail office and subsequent opening of its Martinsville retail office. Partially offsetting these savings were higher ice and snow removal expenses, which increased by $38 thousand between periods.
Current report
Income Tax Expense. The Company recorded tax expense of $2.4 million on pre-tax income of $8.5 million for the six months ended March 31, 2026, compared to $1.9 million on pre-tax income of $6.7 million for the six months ended March 31, 2025. The increase in income tax expense was driven by higher pre-tax income during the six months ended March 31, 2026. The Company’s effective tax rate for the six months ended March 31, 2026 was 27.8% compared with 28.5% for the six months ended March 31, 2025.
Removed paragraphs (8)
Previous report
Allowance for Credit Losses. The allowance for credit losses increased $73 thousand to $8.4 million, or 0.96% of total loans receivable, during the three months ended December 31, 2025. Growth in loans receivable during the quarter as well as an increase in specific reserves for individually evaluated loans resulted in additional provisions for credit losses that were largely offset by reductions resulting from lower adjustments to pooled loans for economic and business conditions.
Previous report
Investment Securities. The investment securities increased $4.7 million, or 5.3%, to $93.1 million at December 31, 2025 from $88.4 million at September 30, 2025. The Company purchased two floating-rate mortgage-backed securities issued by U.S government agencies totaling $6.3 million during the quarter. Investment securities at December 31, 2025 consisted of $70.3 million in mortgage-backed securities issued by U.S. government agencies and U.S. government-sponsored enterprises, $9.5 million in U.S. government-sponsored enterprise debt securities, $9.8 million in corporate notes, $3.4 million in municipal bonds and $170 thousand in “private-label” mortgage-backed securities. There were no other-than-temporary-impairment charges for the Company’s investment securities during the three months ended December 31, 2025.
Previous report
*Other Real Estate Owned.*Other real estate owned (“OREO”) decreased to $0 at December 31, 2025 from $2.2 million at September 30, 2025. The Company sold its only OREO property in November for a loss of $35 thousand.
Previous report
*Interest and Dividend Income.*Interest and dividend income increased $1.7 million, or 12.8%, to $14.6 million for the three months ended December 31, 2025 compared with $12.9 million for the three months ended December 31, 2024. The increase was attributable to a 31-basis point increase in the yield on interest-earning assets to 5.90% for the three months ended December 31, 2025 from 5.59% for the three months ended December 31, 2024 as well as a $70.3 million, or 8.9%, increase in the average balance of loans receivable, net. The increase in yield on the Company’s assets was attributable to higher market interest rates on loans and investments between periods.
Previous report
Provision for Credit Losses. The provision for credit losses decreased $79 thousand, or 78.2%, to $23 thousand for the three months ended December 31, 2025 compared to $101 thousand for the three months ended December 31, 2024. Provisions for on-balance sheet credit losses were $71 thousand from growth in total loans receivable during the quarter, while $49 thousand was recovered from its reserves for off-balance sheet credit losses from contraction in unfunded loan commitments during the quarter. The Company recorded $2 thousand in net recoveries during the three months ended December 31, 2025 compared with $103 thousand in net recoveries during the three months ended December 31, 2024.
Previous report
The decrease in other income was primarily due to the absence of gains from the sales of other real estate owned during the three months ended December 31, 2025 compared with $224 thousand in gains for the three months ended December 31, 2024. Partially offsetting this decrease were higher interest rate swap fees, which increased by $31 thousand, and higher gains from the sale of SBA loans, which increased by $23 thousand.
Previous report
*Other Expenses.*Other expenses decreased by $54 thousand, or 1.0%, to $5.4 million for the three months ended December 31, 2025.
Previous report
The decrease in other expenses was primarily attributable to lower occupancy expenses, which declined by $172 thousand, or 17.4%, to $819 thousand for the three months ended December 31, 2025 compared with $991 thousand for the three months ended December 31, 2024, due to lease termination expenses and ongoing savings related to the closure of the Bank’s Bridgewater office in October 2024. Offsetting this decrease were higher compensation and benefit expenses, which increased by $88 thousand, or 2.9%, to $3.2 million, due to annual merit increases, and higher data processing expenses, which increased by $66 thousand, or 72.5%, to $157 thousand, due to one-time credits applied during the prior year period.
Reworded paragraphs (21)
Previous wording
Total Assets. Total assets increased $47.8 million, or 4.8%, to $1.045 billion at December 31, 2025 from $997.7 million at September 30, 2025. The increase was attributable to larger interest-earning deposits with banks, investment securities and loans receivable.
Current wording
Total Assets. Total assets increased by $70.7 million, or 7.1%, to $1.068 billion at March 31, 2026 from $997.7 million at September 30, 2025. The increase was attributable to higher balances of cash and cash equivalents and loans receivable.
Previous wording
Interest Earning Deposits. Total cash and cash equivalents increased $27.0 million, or 381.4%, to $34.1 million at December 31, 2025 from $7.1 million at September 30, 2025 resulting from higher deposits, partially offset by higher loans receivable and investments.
Current wording
Interest Earning Deposits. Total cash and cash equivalents increased by $40.6 million, or 572.4% to $47.6 million at March 31, 2026 from $7.1 million at September 30, 2025 resulting from higher deposits, partially offset by higher loans receivable and investments.
Previous wording
Loans Receivable. Total loans receivable increased $18.9 million, or 2.2%, to $877.8 million during the three months ended December 31, 2025 from $858.9 million at September 30, 2025. The increase in total loans receivable during the three months ended December 31, 2025 occurred primarily in commercial real estate loans, which increased by $15.7 million, or 2.9%, to $548.9 million, or 62.5% of loans. The Company also grew its construction and land loans, which increased by $5.4 million, or 18.6%, to $34.7 million. Partially offsetting these increases were one-to four-family residential real estate loans (including home equity lines of credit), which decreased by $983 thousand, commercial business loans, which decreased by $971 thousand, and other loans, which decreased by $280 thousand.
Current wording
Loans Receivable. Total loans receivable increased by $21.0 million, or 2.4%, to $879.9 million during the six months ended March 31, 2026 from $858.9 million at September 30, 2025. The increase in total loans receivable occurred in commercial real estate loans, which increased by $24.6 million, and in construction and land loans, which increased by $6.4 million. Partially offsetting these increases were one-to four-family residential real estate loans (including home equity lines of credit), which decreased by $9.5 million, commercial business loans, which decreased by $170 thousand and other loans, which decreased by $277 thousand.
Previous wording
As of December 31, 2025 and September 30, 2025, non-owner occupied commercial real estate loans (as defined by regulatory guidance) to total risk-based capital were estimated at approximately 276% and 267%, respectively. Management believes that Magyar Bank has implemented appropriate risk management practices, including risk assessments, board-approved underwriting policies and related procedures, which include monitoring loan portfolio performance and stressing of the commercial real estate portfolio under adverse economic conditions.
Current wording
As of March 31, 2026 and September 30, 2025, non-owner occupied commercial real estate loans (as defined by regulatory guidance) to total risk-based capital were estimated at approximately 275% and 267%, respectively. Management believes that Magyar Bank has implemented appropriate risk management practices, including risk assessments, board-approved underwriting policies and related procedures, which include monitoring loan portfolio performance and stressing of the commercial real estate portfolio under adverse economic conditions.
Previous wording
Total non-performing loans decreased $90 thousand, or 20.0%, to $361 thousand at December 31, 2025 from $451 thousand at September 30, 2025. Non-performing loans consisted of three loans secured by one-to four family properties. The ratio of non-performing loans to total loans decreased to 0.04% at December 31, 2025 from to 0.05% at September 30, 2025.
Current wording
Total non-performing loans decreased by $157 thousand, or 34.8%, to $294 thousand at March 31, 2026 from $451 thousand at September 30, 2025. Non-performing loans consisted of one loan secured by one-to four family property and one home equity line of credit. The ratio of non-performing loans to total loans decreased to 0.03% at March 31, 2026 from to 0.05% at September 30, 2025.
Previous wording
Deposits. Total deposits increased $44.8 million, or 5.5%, to $859.1 million at December 31, 2025. The inflow in deposits occurred in certificates of deposit (including individual retirement accounts), which increased $26.3 million, or 12.5%, to $236.3, in non-interest bearing checking accounts, which increased by $25.7 million, or 22.0%, to $143.0 million, in money market accounts, which increased $12.3 million, or 4.6%, to $281.2 million, and in savings accounts, which increased $754 thousand, or 1.4%, to $55.2 million. Partially offsetting these increases was a $20.3 million, or 12.4%, decrease in interest-bearing checking accounts to $143.4 million.
Current wording
Deposits. Total deposits increased by $64.1 million, or 7.9%, to $878.4 million at March 31, 2026 compared with $814.3 million at September 30, 2025. The inflow in deposits occurred in certificates of deposit (including individual retirement accounts), which increased by $28.1 million, or 13.4%, to $238.0 million, in non-interest bearing checking accounts, which increased by $16.5 million, or 14.1%, to $133.7 million, in money market accounts, which increased by $8.9 million, or 3.3%, to $277.8 million, in interest-bearing checking accounts, which increased by $7.8 million, or 4.8%, to $171.6 million, and in savings accounts, which increased by $2.8 million, or 5.2%, to $57.3 million.
Previous wording
*Stockholders’ Equity.*Stockholders’ equity increased $2.9 million, or 2.4%, to $121.7 million at December 31, 2025 from $118.8 million at September 30, 2025. The increase was due to the Company’s results from operations, partially offset by $0.08 per share in dividends paid and 2,037 shares repurchased during the quarter at an average share price of $16.85. The Company’s book value per share increased to $18.79 at December 31, 2025 from $18.34 at September 30, 2025.
Current wording
*Stockholders’ Equity.*Stockholders’ equity increased by $5.3 million, or 4.5%, to $124.1 million at March 31, 2026 from $118.8 million at September 30, 2025. The increase was due to the Company’s results from operations, partially offset by $0.18 in dividends paid and 10,925 shares repurchased during the six months ended March 31, 2026 at an average share price of $17.47. The Company’s book value per share increased to $19.19 at March 31, 2026 from $18.34 at September 30, 2025.
Previous wording
Average Balance Sheets for the Three Months Ended December 31, 2025 and 2024
Current wording
Average Balance Sheets for the Three and Six Months Ended March 31, 2026 and 2025
Previous wording
The following table presents certain information regarding the Company’s financial condition and net interest income for the three months ended December 31, 2025 and 2024. The table presents the annualized average yield on interest-earning assets and the annualized average cost of interest-bearing liabilities. We derived the yields and costs by dividing annualized income or expense by the average balance of interest-earning assets and interest-bearing liabilities, respectively, for the periods shown. We derived average balances from daily balances over the periods indicated. Interest income includes fees that we consider adjustments to yields.
Current wording
The following tables present certain information regarding the Company’s financial condition and net interest income for the three and six months ended March 31, 2026 and 2025. The tables present the annualized average yield on interest-earning assets and the annualized average cost of interest-bearing liabilities. We derived the yields and costs by dividing annualized income or expense by the average balance of interest-earning assets and interest-bearing liabilities, respectively, for the periods shown. We derived average balances from daily balances over the periods indicated. Interest income includes fees that we consider adjustments to yields.
Previous wording
Net Income. Net income increased $1.1 million, or 50.4%, to $3.1 million for the three months ended December 31, 2025 compared with net income of $2.1 million for the three months ended December 31, 2024. The increase was due to higher net interest and dividend income, lower provisions for credit losses and lower other expenses, partially offset by lower other income.
Current wording
Net Income. Net income increased by $349 thousand, or 13.0%, to $3.0 million for the three months ended March 31, 2026 compared with net income of $2.7 million for the three months ended March 31, 2025. The increase was due to higher net interest income, partially offset by higher provisions for credit loss, lower non-interest income and higher other expenses.
Previous wording
Net Interest and Dividend Income. Net interest and dividend income increased $1.5 million, or 19.0%, to $8.9 million for the three months ended December 31, 2025 from $7.4 million for the three months ended December 31, 2024. The increase was attributable to a $62.3 million increase in the average balance of interest-earning assets between periods, as well as a 37-basis point increase in the Company’s net interest margin to 3.59% for the three months ended December 31, 2025 from 3.22% for the three months ended December 31, 2024.
Current wording
Net Interest and Dividend Income. Net interest and dividend income increased by $1.4 million, or 17.2%, to $9.2 million for the three months ended March 31, 2026 from $7.9 million for the three months ended March 31, 2025. The increase was attributable to a 35-basis point increase in the Company’s net interest margin to 3.66% for the three months ended March 31, 2026 from 3.31% for the three months ended March 31, 2025, as well as a $56.6 million increase in the average balance of interest-earning assets between the periods.
Previous wording
The average balance of loans receivable, net of allowance for credit losses, increased $70.3 million, or 8.9%, to $856.3 million during the three months ended December 31, 2025 from $786.0 million for the three months ended December 31, 2024, while the yield on loans receivable increased 28 basis points to 6.27% for the three months ended December 31, 2025 from 5.99% for the three months ended December 31, 2024. Contributing to the increase in yield on loans receivable are commercial term loan rates adjusting on their five-year anniversary to market rates that are significantly higher than they were five years ago.
Current wording
The average balance of loans receivable, net of allowance for credit losses, increased by $65.3 million, or 8.1%, to $868.7 million during the three months ended March 31, 2026 from $803.4 million for the three months ended March 31, 2025, while the yield on loans receivable increased 23 basis points to 6.35% for the three months ended March 31, 2026 from 6.12% for the three months ended March 31, 2025. Contributing to the increase in yield on loans receivable are commercial term loan rates adjusting on their five-year anniversary to market rates that are significantly higher than they were five years ago.
Previous wording
Interest earned on investment securities, including interest-earning deposits and excluding FHLB stock, decreased $17 thousand, or 1.7%, to $970 thousand for the three months ended December 31, 2025 from $987 thousand for the three months ended December 31, 2024. The average balance of investment securities and interest-earning deposits decreased by $9.0 million, or 7.0%, to $119.2 million for the three months ended December 31, 2025 from $128.2 million for the three months ended December 31, 2024, while the average yield on such assets increased 18 basis points to 3.24% for the three months ended December 31, 2025 from 3.06% for the three months ended December 31, 2024.
Current wording
Interest earned on investment securities, including interest-earning deposits and excluding FHLB stock, decreased by $45 thousand, or 3.4%, to $1.3 million for the three months ended March 31, 2026. The average balance of investment securities and interest-earning deposits decreased by $9.6 million, or 6.0%, to $150.0 million for the three months ended March 31, 2026 from $159.6 million for the three months ended March 31, 2025, while the average yield on such assets increased 11 basis points to 3.51% for the three months ended March 31, 2026 from 3.40% for the three months ended March 31, 2025.
Previous wording
Interest Expense. Interest expense increased $238 thousand, or 4.4%, to $5.7 million for the three months ended December 31, 2025 from $5.5 million for the three months ended December 31, 2024. The average balance of interest-bearing liabilities increased $53.2 million, or 7.5%, to $763.4 million for the three months ended December 31, 2025 from $710.2 million for the three months ended December 31, 2024, while the average cost on such interest-bearing liabilities decreased 9 basis points to 2.96% for the three months ended December 31, 2025 compared with 3.05% for the three months ended December 31, 2024. Lower short-term market interest rates were primarily responsible for the lower cost of the Company’s interest-bearing liabilities for the three months ended December 31, 2025.
Current wording
Interest Expense. Interest expense increased by $73 thousand, or 1.3%, to $5.7 million for the three months ended March 31, 2026 from $5.6 million for the three months ended March 31, 2025. The average balance of interest-bearing liabilities increased by $36.3 million, or 4.8%, to $795.1 million for the three months ended March 31, 2026 from $758.9 million for the three months ended March 31, 2025, while the average cost on such interest-bearing liabilities decreased 10 basis points to 2.92% for the three months ended March 31, 2026 compared with 3.02% for the three months ended March 31, 2025. Lower short-term market interest rates were primarily responsible for the lower cost of the Company’s interest-bearing liabilities for the three months ended March 31, 2026.
Previous wording
The average balance of interest-bearing deposits increased $33.6 million, or 4.9%, to $714.3 million for the three months ended December 31, 2025 from $680.7 million for the three months ended December 31, 2024. The average cost of such deposits decreased 12 basis points to 2.94% from 3.06%, while the interest paid on interest-bearing deposits increased $40 thousand to $5.29 million for the three months ended December 31, 2025 compared with $5.25 million for the three months ended December 31, 2024.
Current wording
The average balance of interest-bearing deposits increased $19.3 million, or 2.7%, to $746.0 million for the three months ended March 31, 2026 from $726.7 million for the three months ended March 31, 2025. The average cost of such deposits decreased 14 basis points to 2.89% from 3.03%, while the interest paid on interest-bearing deposits decreased $101 thousand to $5.3 million for the three months ended March 31, 2026 compared with $5.4 million for the three months ended March 31, 2025.
Previous wording
*Other Income.*Other income decreased $159 thousand, or 16.6%, to $797 thousand during the three months ended December 31, 2025 compared to $956 thousand for the three months ended December 31, 2024.
Current wording
*Other Income.*Other income decreased by $411 thousand, or 32.4%, to $857 thousand during the three months ended March 31, 2026 compared to $1.3 million for the three months ended March 31, 2025 from lower gains on the sale of loans and lower service charge income.
Previous wording
Income Tax Expense. The Company recorded tax expense of $1.1 million on pre-tax income of $4.3 million for the three months ended December 31, 2025, compared to tax expense of $805 thousand on pre-tax income of $2.9 million for the three months ended December 31, 2024. The Company’s effective tax rate for the three months ended December 31, 2025 was 26.7% compared with 27.9% for the three months ended December 31, 2024.
Current wording
Income Tax Expense. The Company recorded income tax expense of $1.2 million on pre-tax income of $4.3 million for the three months ended March 31, 2026, compared with $1.1 million on pre-tax income of $3.8 million for the three months ended March 31, 2025. The increase was driven by higher pre-tax income during the three months ended March 31, 2026. The Company’s effective tax rate for the three months ended March 31, 2026 and 2025 was 29.0%.
Previous wording
Interest expense on borrowings increased $198 thousand, or 95.2%, to $406 thousand for the three months ended December 31, 2025 from $208 thousand for the three months ended December 31, 2024, The average balance of borrowings increased by $19.6 million, or 66.2%, to $49.1 million with an annualized cost of 3.28% for the three months ended December 31, 2025 from $29.6 million with an annualized cost of 2.80% for the three months ended December 31, 2024. Higher borrowings reflect the Company’s usage of long-term advances to fund five-year commercial term loans between periods.
Current wording
Interest expense on borrowings increased by $372 thousand, or 86.3%, to $803 thousand for the six months ended March 31, 2026 from $431 thousand for the six months ended March 31, 2025. The cost of borrowings increased 48 basis points to 3.28% for the six months ended March 31, 2026 compared with 2.80% for the six months ended March 31, 2025, while the average balance of borrowings increased by $18.3 million, or 59.2%, to $49.1 million for the six months ended March 31, 2026 from $30.8 million for the six months ended March 31, 2025.
Previous wording
The Company’s liquidity is a measure of its ability to fund loans, pay withdrawals of deposits, and other cash outflows in an efficient, cost-effective manner. The Company’s short-term sources of liquidity include maturity, repayment and sales of assets, excess cash and cash equivalents, new deposits, other borrowings, and new advances from the FHLBNY. Based on eligible loan collateral pledged to the FHLBNY at December 31, 2025, we had an aggregate net borrowing capacity of $143.7 million. We also had the ability to borrow $106.8 million from the FRBNY at December 31, 2025 compared with $109.6 million at September 30, 2025. The Company did not have any borrowings outstanding with the FRBNY at December 31, 2025 and September 30, 2025. There has been no material adverse change during the three months ended December 31, 2025 in the ability of the Company and its subsidiaries to fund their operations.
Current wording
The Company’s liquidity is a measure of its ability to fund loans, pay withdrawals of deposits, and other cash outflows in an efficient, cost-effective manner. The Company’s short-term sources of liquidity include maturity, repayment and sales of assets, excess cash and cash equivalents, new deposits, other borrowings, and new advances from the FHLBNY. Based on eligible loan collateral pledged to the FHLBNY at March 31, 2026, we had an aggregate net borrowing capacity of $168.1 million. We also had the ability to borrow $110.5 million from the FRBNY at March 31, 2026 compared with $109.6 million at September 30, 2025. The Company did not have any borrowings outstanding with the FRBNY at March 31, 2026 and September 30, 2025. There has been no material adverse change during the six months ended March 31, 2026 in the ability of the Company and its subsidiaries to fund their operations.
Previous wording
At December 31, 2025, the Company had commitments outstanding under letters of credit totaling $820 thousand, commitments to originate loans totaling $19.3 million, and commitments to fund undisbursed balances of closed loans and unused lines of credit totaling $80.1 million. There has been no material change during the three months ended December 31, 2025 in any of the Company’s other contractual obligations or commitments to make future payments.
Current wording
At March 31, 2026, the Company had commitments outstanding under letters of credit totaling $870 thousand, commitments to originate loans totaling $28.9 million, and commitments to fund undisbursed balances of closed loans and unused lines of credit totaling $85.3 million. There has been no material change during the six months ended March 31, 2026 in any of the Company’s other contractual obligations or commitments to make future payments.
Previous wording
At December 31, 2025, the Bank’s Tier 1 capital as a percentage of the Bank’s total assets was 11.42%, and total qualifying capital as a percentage of risk-weighted assets was 15.77%.
Current wording
At March 31, 2026, the Bank’s Tier 1 capital as a percentage of the Bank’s total assets was 11.15%, and total qualifying capital as a percentage of risk-weighted assets was 15.86%.
Rearranged current paragraphs (7)
Current report — wording carried from elsewhere
(1) The average balance of loans receivable, net includes non-accrual loans.
Current report — wording carried from elsewhere
(2) Interest income and yield are calculated using the Company's 21% federal tax rate.
Current report — wording carried from elsewhere
(3) Includes passbook savings, money market passbook and club accounts.
Current report — wording carried from elsewhere
(4) Includes interest-bearing checking and money market accounts.
Current report — wording carried from elsewhere
(5) Includes certificates of deposits and individual retirement accounts.
Current report — wording carried from elsewhere
(6) Calculated as net interest income divided by average total interest-earning assets.
Current report — wording carried from elsewhere
Comparison of Operating Results for the Six Months Ended March 31, 2026 and 2025