Magyar Bancorp, Inc.
For the period ended Sep 30, 2025. Filed Dec 19, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Dec 19, 2025
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-K
Period ended 2024-09-30; filed 2024-12-19.
0001174947-24-001365
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-09-30; filed 2025-12-19.
0002077096-25-000193
Item 7. 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 80 previous paragraphs and 73 current paragraphs.
20 unchanged; 34 reworded; 19 added; 22 removed; 4 previous and 0 current paragraphs rearranged.
Tables are not compared: 6 previous and 17 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 (19)
Current report
During the year ended September 30, 2025, the Company’s total assets grew $45.8 million, or 4.8%, to $997.7 million from $951.9 million at September 30, 2024. The increase was attributable to a $77.2 million increase in loans receivable, offset by an $18.5 million decrease in total cash and cash equivalents, a $7.0 million decrease in investment securities, a $4.3 million decrease in bank owned life insurance and a $1.6 million decrease in other real estate owned.
Current report
***Total Assets.***Total assets increased $45.8 million, or 4.8%, to $997.7 million compared with $951.9 million at September 30, 2024. The increase was attributable to a $77.2 million increase in loans receivable, net of deferred loan costs, offset by an $18.5 million decrease in total cash and cash equivalents, a $7.0 million decrease in investment securities, a $4.3 million decrease in bank owned life insurance and a $1.6 million decrease in other real estate owned.
Current report
Total non-performing loans increased $219 thousand, or 94.4%, to $451 thousand at September 30, 2025 from $232 thousand at September 30, 2024. Non-performing loans consisted of four loans secured by one-to four family properties totaling $451 thousand. The ratio of non-performing loans to total loans was 0.05% at September 30, 2025 compared to 0.03% at September 30, 2024.
Current report
Allowance for Credit Losses. The allowance for credit losses on loans increased $802 thousand to $8.4 million at September 30, 2025 compared to $7.5 million at September 30, 2024. The increase was attributable to provisions for credit loss totaling $653 thousand and net loan recoveries totaling $149 thousand during the year. For comparison, the Company recorded provisions for credit loss totaling $182 thousand and net loan recoveries totaling $69 thousand during the year ended September 30, 2024.
Current report
Investment Securities. At September 30, 2025, investment securities totaled $88.4 million, reflecting a $7.0 million, or 7.3%, decrease from September 30, 2024. Investment securities at September 30, 2025 consisted of $65.6 million in mortgage-backed securities issued by U.S. government agencies and U.S. government-sponsored enterprises, $9.4 million in U.S. government-sponsored enterprise debt securities, $9.8 million in corporate notes, $3.4 million in municipal bonds and $174 thousand in “private-label” mortgage-backed securities.
Current report
Bank-Owned Life Insurance. Bank owned life insurance (“BOLI”) decreased $4.3 million, or 18.4%, to $19.0 million at September 30, 2025 from the surrender of policies totaling $5.0 million, partially offset by increases in the cash surrender value of the retained policies totaling $673 thousand.
Current report
***Other Real Estate Owned.***Other real estate owned decreased $1.6 million, or 41.8%, to $2.2 million at September 30, 2025. The Company sold two properties totaling $1.8 million for a net gain of $229 thousand and reduced the carrying value on its remaining property through a $57 thousand write down during the year ended September 30, 2025.
Current report
Included in the Company’s total deposits was an estimated $127.9 million that was not collateralized and exceeded the FDIC’s insurance coverage limit of $250,000 at September 30, 2025 compared to $114.7 million at September 30, 2024.
Current report
***Borrowed Funds.***Borrowings increased $20.5 million, or 71.7%, to $49.1 million at September 30, 2025 from $28.6 million at September 30, 2024. Long-term advances from the Federal Home Loan Bank of New York were utilized to match fund commercial real estate loan originations.
Current report
The Company’s net interest margin increased 20 basis points to 3.34% for the year ended September 30, 2025 from 3.14% for the year ended September 30, 2024. The increase was attributable to a $63.9 million, or 7.2%, increase in the average balance of interest-earning assets to $954.6 million for the year ended September 30, 2025 from $890.7 million for the year ended September 30, 2024,
Current report
Provision for Credit Losses. The provision for credit losses increased $312 thousand, or 346.7%, to $402 thousand for the year ended September 30, 2025 compared with $90 thousand for the year ended September 30, 2024. In addition to the provisions, the Company recorded $149 thousand and $69 thousand in net loan recoveries for the year ended September 30, 2025 and 2024, respectively.
Current report
The increase in provisions for credit loss for the year ended September 30, 2025 resulted from growth in the Company’s loan portfolio, specifically in higher expected loss rate segments such as commercial real estate and commercial construction loans. While total loan growth was lower for the current fiscal year period compared to our 2024 fiscal year, the provisions increased comparatively, due to higher balances of lower risk loans and lower balances of higher risk loans in addition to lower adjustments to the historical loss for all loan categories for improving economic conditions during the prior year period.
Current report
Offsetting the increase in provision for credit loss for loans was a $251 thousand reduction in the Company’s allowance for credit loss for unfunded construction loan commitments, which declined by $9.3 million to $5.9 million at September 30, 2025 from $15.2 million at September 30, 2024.
Current report
***Other Income.***Other income increased $100 thousand, or 2.8%, to $3.7 million during the year ended September 30, 2025 compared with $3.6 million for the year ended September 30, 2024.
Current report
The Company’s service charges increased $304 thousand, or 26.8%, to $1.4 million during the year ended September 30, 2025 compared with $1.1 million for the year ended September 30, 2024 from higher commercial loan prepayment fees, loans fees earned and late charges. Income on bank owned life insurance increased $240 thousand, or 55.4% to $673 thousand during the year ended September 30, 2025 compared with $433 thousand for the year ended September 30, 2024 from the restructure of $7.9 million in policies beginning in the 2024 fiscal year. In addition, the Company recorded $179 thousand in interest rate swap fees compared with none for the prior year.
Current report
Offsetting these increases were lower net gains from the sale of assets. The Company’s gains on other real estate and SBA loans were $229 thousand and $1.1 million, respectively, during the year ended September 30, 2025 compared with $1.3 million and $599 thousand, respectively, during the year ended September 30, 2024.
Current report
***Other Expenses.***Other expenses increased $1.0 million, or 4.9%, to $21.4 million from $20.4 million for the year ended September 30, 2024 due primarily to higher compensation and occupancy expenses.
Current report
Compensation and employee benefit expenses increased $893 thousand, or 7.6%, due to annual merit increases, higher medical insurance costs and higher incentive plan accruals. In addition, occupancy expenses increased $188 thousand, or 5.7%, to $3.5 million, due to lease termination expenses related to the closure of the Bank’s Bridgewater office during the year.
Current report
Partially offsetting these increases were lower professional and data processing expenses, which declined $89 thousand and $71 thousand, respectively, due to lower collection costs for non-performing loans and one-time credits used to offset core processing fees.
Removed paragraphs (22)
Previous report
During the year ended September 30, 2024, the Company’s total assets grew $44.6 million, or 4.9%, to $951.9 million compared with $907.3 million at September 30, 2023. The increase was attributable to an $82.8 million increase in net loans receivable, a $5.3 million increase in bank-owned life insurance, and a $3.4 million increase in other real estate owned. Offsetting these increases was a $46.9 million decrease in interest-earning deposits with banks.
Previous report
***Total Assets.***Total assets increased $44.6 million, or 4.9%, to $951.9 million during the year ended September 30, 2024 compared with $907.3 million at September 30, 2023. The increase was attributable to higher loans receivable, bank-owned life insurance and other real estate owned. Partially offsetting these increases were lower interest-earning deposits with banks, as we used cash and cash equivalents to fund loan growth.
Previous report
In 2024, the Company adopted ASU 2016-13,Financial Instruments - Credit Losses, and subsequent related updates, using the modified retrospective approach for all financial assets measured at amortized cost, including loans, held-to-maturity debt securities, and unfunded commitments. On October 1, 2023, the Company recorded a cumulative effect increase to retained earnings of $354 thousand, net of tax, which consisted of a $743 thousand reduction related to loans, and a $389 thousand increase related to unfunded commitments. There were no such charges for investment securities held by the Company at the date of adoption.
Previous report
Investment Securities. Investment securities decreased $528 thousand, or 0.6%, to $95.4 million at September 30, 2024 from $96.0 million at September 30, 2023.
Previous report
Securities available-for-sale increased $5.5 million, or 54.2%, to $15.6 million at September 30, 2024 from $10.1 million at September 30, 2023. The increase was attributable to purchases totaling $6.0 million, unrealized gain of $834 thousand partially offset by principal repayments totaling $1.3 million.
Previous report
Securities held-to-maturity decreased $6.0 million, or 7.0%, to $79.8 million at September 30, 2024 from $85.8 million at September 30, 2023. The decrease was the attributable to principal repayments totaling $12.5 million and partially offset by purchases totaling $6.5 million.
Previous report
Bank-Owned Life Insurance. The cash surrender value of life insurance held for directors and executive officers of Magyar Bank increased $5.3 million, or 29.5%, to $23.3 million at September 30, 2024 from $18.0 million at September 30, 2023.
Previous report
***Other Real Estate Owned.***Other real estate owned increased $3.4 million to $3.7 million for the year ended September 30, 2024. The Company acquired four properties totaling $4.4 million and sold two properties totaling $1.0 million during the year ended September 30, 2024. Of the three remaining properties owned at September 30, 2024, two totaling $3.3 million were under contract of sale.
Previous report
Included in the Company’s deposits were $249.9 million in municipal deposits at September 30, 2024, which represented 29.1% of total deposits. Under current State of New Jersey legislation, municipal deposits exceeding 70% of the Bank’s capital must be collateralized. Magyar Bank was in compliance with the State’s requirements at September 30, 2024.
Previous report
***Borrowed Funds.***Borrowings decreased $947 thousand, or 3.2%, to $28.6 million at September 30, 2024 compared with $29.5 million at September 30, 2023.
Previous report
The Company’s net interest margin decreased 36 basis points to 3.14% for the year ended September 30, 2024 from 3.50% for the year ended September 30, 2023. Growth in the Company’s average interest-earning assets more than offset margin compression between periods due to market interest rate levels and the prolonged inversion to the yield curve.
Previous report
(1) The average balance of loans receivable, net includes non-accrual loans.
Previous report
(2) Interest income and yield are calculated using the Company's 21% federal tax rate.
Previous report
(3) Includes passbook savings, money market passbook and club accounts.
Previous report
(4) Includes interest-bearing checking and money market accounts.
Previous report
(5) Includes certificates of deposits and individual retirement accounts.
Previous report
(6) Calculated as annualized net interest income divided by average total interest-earning assets.
Previous report
Provision for Credit Losses. The provision for credit losses decreased $291 thousand, or 76.4%, to $90 thousand for the year ended September 30, 2024 compared to $381 thousand for the year ended September 30, 2023. During the year ended September 30, 2024, the Company recorded $69 thousand in net loan recoveries compared with $484 thousand in net charge-offs for the year ended September 30, 2023. In addition to lower net charge-offs, the provision for credit losses on loans decreased in amount and as a percentage of gross loans during the year from higher balances of lower risk loans and lower balances of higher risk loans in addition to lower adjustments to the historical loss for all loan categories for improving economic conditions.
Previous report
***Other Income.***Other income increased $931 thousand, or 34.7%, to $3.6 million during the year ended September 30, 2024 compared with $2.7 million the year ended September 30, 2023. The Company’s gains on other real estate, SBA loans and premises were $1.3 million, $599 thousand and $60 thousand, respectively, during the year ended September 30, 2024 compared with $0, $565 thousand and $9 thousand, respectively, during the year ended September 30, 2023. In addition, service charges decreased $457 thousand to $1.1 million during the year ended September 30, 2024 compared with $1.6 million for the year ended September 30, 2023 from lower commercial loan prepayment fees.
Previous report
***Other Expenses.***Other expenses increased $1.1 million, or 5.7%, to $20.4 million during the year ended September 30, 2024 compared to $19.3 million for the year ended September 30, 2023 due primarily to higher compensation benefit expenses, which increased $689 thousand, or 6.2%, to $11.8 million for the year ended September 30, 2024 from $11.1 million for the year ended September 30, 2023. The increase was due to fewer open positions between the two years and the additions of a commercial lender and a commercial credit analyst, as well as annual merit increases.
Previous report
Other expenses increased $202 thousand, or 9.4%, from higher recruitment costs, loan origination and servicing costs and operating expenses. In addition, deposit insurance premiums increased $81 thousand, or 23.8%, to $421 thousand from deposit growth and higher insurance assessment rates implemented by the FDIC for all insured institutions effective January 1, 2023.
Previous report
(1)Assumes an instantaneous uniform change in interest rates at all maturities.
Reworded paragraphs (34)
Previous wording
Total deposits increased $41.2 million, or 5.5%, to $796.7 million and stockholders’ equity increased $5.8 million, or 5.5%, to $110.5 million during the year ended September 30, 2024.
Current wording
Total deposits increased $17.6 million, or 2.2%, to $814.3 million and stockholders’ equity increased $8.3 million, or 7.5%, to $118.8 million during the year ended September 30, 2025 compared with $796.7 million and $110.5 million for the year ended September 30, 2024, respectively.
Previous wording
The Company’s net income increased $74 thousand, or 1.0%, to $7.8 million during the year ended September 30, 2024 compared with net income of $7.7 million for the year ended September 30, 2023 from higher net interest income, lower provision for credit losses and higher other income, partially offset by higher income tax and other expenses.
Current wording
The Company’s net income increased $2.0 million, or 25.4%, to $9.8 million during the year ended September 30, 2025 compared with net income of $7.8 million for the year ended September 30, 2024 from higher net interest income, partially offset by higher provisions for credit loss, other expenses and income tax expense.
Previous wording
Throughout fiscal 2025, we expect to continue increasing our commercial real estate and commercial business loans while managing non-interest expenses in an effort to increase profitability of the Company.
Current wording
Throughout fiscal year 2026, we expect to continue increasing our commercial real estate and commercial business loans while managing non-interest expenses in an effort to increase profitability of the Company.
Previous wording
***Loans Receivable.***Total loans receivable increased $83.0 million, or 11.9%, to $781.2 million at September 30, 2024 from $698.2 million at September 30, 2023. The growth occurred in commercial real estate loans, which increased $72.2 million, or 18.6%, to $461.3 million, in one-to four-family residential mortgage loans (including home equity lines of credit), which increased $16.3 million, or 6.4%, to $270.9 million, and in construction and land loans, which increased $869 thousand, or 4.0%, to $22.7 million. Offsetting these increases were declines in commercial business loans, which decreased $6.2 million, or 20.5%, to $24.0 million and in other consumer loans, which decreased $124 thousand, or 5.3%, to $2.2 million.
Current wording
***Loans Receivable.***Total loans receivable increased $77.7 million, or 9.9%, to $858.9 million during the year ended September 30, 2025 from $781.2 million at September 30, 2024. The growth during the year occurred in commercial real estate loans, which increased $71.9 million, or 15.6%, to $533.2 million, in construction and land loans, which increased $6.6 million, or 28.9%, to $29.3 million, and in one-to four-family residential mortgage loans (including home equity lines of credit), which increased $3.3 million, or 1.2%, to $274.2 million. Offsetting these increases were declines in commercial business loans, which decreased $4.0 million, or 16.5%, to $20.1 million and in other consumer loans, which decreased $116 thousand, or 5.2%, to $2.1 million.
Previous wording
Given the significance of commercial real estate (“CRE”) loans to our total loan portfolio, the following table further disaggregates these loans by occupied status and by collateral type as of September 30, 2024:
Current wording
Given the significance of commercial real estate (“CRE”) loans to our total loan portfolio, the following table further disaggregates these loans by occupied status and by collateral type as of September 30, 2025 and 2024:
Previous wording
The Company obtains an appraisal of the real estate collateral securing a CRE loan prior to originating the loan. The appraised value is used to calculate the ratio of the outstanding loan balance to the value of the real estate collateral, or loan-to-value ratio ("LTV"). The original appraisal is used to monitor the LTVs within the CRE portfolio unless an updated appraisal is received, which may happen for a variety of reasons including, but not limited to, payment delinquency, additional loan requests using the same collateral, and loan modifications. The following table presents the ranges in the LTVs of our CRE loans at September 30, 2024:
Current wording
The Company obtains an appraisal of the real estate collateral securing a CRE loan prior to originating the loan. The appraised value is used to calculate the ratio of the outstanding loan balance to the value of the real estate collateral, or loan-to-value ratio (“LTV”). The original appraisal is used to monitor the LTVs within the CRE portfolio unless an updated appraisal is received, which may happen for a variety of reasons including, but not limited to, payment delinquency, additional loan requests using the same collateral, and loan modifications. The following table presents the ranges in the LTVs of our CRE loans at September 30, 2025 and 2024:
Previous wording
As of September 30, 2024 and 2023, non-owner occupied commercial real estate loans (as defined by regulatory guidance) to total risk-based capital were estimated at approximately 270% and 262%, 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 September 30, 2025 and 2024, non-owner occupied commercial real estate loans (as defined by regulatory guidance) to total risk-based capital were estimated at approximately 267% and 270%, 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
Our asset quality with respect to commercial real estate loans has remained strong despite recent economic and market conditions. As of September 30, 2024 and 2023, we had $116 thousand and $2.2 million of non-performing commercial real estate loans, respectively. Such amounts totaled 0.03% and 0.60% of total commercial real estate loans as of September 30, 2024 and 2023, respectively.
Current wording
Our asset quality with respect to commercial real estate loans has remained strong despite recent economic and market conditions. As of September 30, 2025 and 2024, we had $0 and $116 thousand of non-performing commercial real estate loans, respectively. Such amounts totaled 0.00% and 0.03% of total commercial real estate loans as of September 30, 2025 and 2024, respectively.
Previous wording
In addition to a $433 thousand increase in the cash surrender value of policies, the Company purchased new life insurance policies on directors and executive officers of the Bank totaling $6.6 million and redeemed policies totaling $1.7 million during the twelve months ended September 30, 2024. The Company was in the process of restructuring $7.9 million of its BOLI portfolio at September 30, 2024 that is expected to increase the crediting rate on the restructured BOLI policies from 2.24% (3.20% tax-equivalent yield) to 4.93% (7.04% tax-equivalent yield). The surrender of BOLI policies also impacted income tax expense during the year ended September 30, 2024 as discussed below.
Current wording
The Company began restructuring $7.9 million of its BOLI portfolio in August 2024 to increase the yield on the portfolio to higher market interest rates. The portfolio restructure increased the crediting rate on the restructured BOLI policies from 2.24% (3.20% tax-equivalent yield) to 4.67% (6.67% tax-equivalent yield).
Previous wording
Deposits. Total deposits increased $41.2 million, or 5.5%, during the year ended September 30, 2024. The growth in deposits occurred in certificates of deposit (including individual retirement accounts) which increased $55.0 million, or 52.5%, to $159.7 million, in interest-bearing checking account balances, which increased $31.6 million, or 27.4% to $146.7 million, and in money market account balances, which increased $19.7 million, or 6.9%, to $304.6 million. Offsetting these increases were declines in non-interest checking account balances, which decreased $55.7 million, or 29.6%, to $132.8 million and in savings account balances, which decreased $9.3 million, or 15.0%, to $52.9 million. Customers sought higher-yielding deposit products during a period of increased interest rates.
Current wording
Deposits. Total deposits increased $17.6 million, or 2.2%, to $814.3 million at September 30, 2025. The growth in deposits during the year occurred in certificates of deposit (including individual retirement accounts) which increased $50.3 million, or 31.5%, to $210.0 million, in interest-bearing checking account balances, which increased $17.0 million, or 11.6% to $163.8 million, and in savings account balances, which increased $1.6 million, or 3.0%, to $54.4 million. Offsetting these increases were declines in money market account balances, which decreased $35.6 million, or 11.7%, to $268.9 million and in non-interest checking account balances, which decreased $15.6 million, or 11.7%, to $117.2 million.
Previous wording
The Company’s deposit strategy in 2024 focused on retaining deposits and managing the overall cost of its interest-bearing liabilities during a period with an inverted yield curve. In addition, the Company opened its eighth retail branch office in Martinsville, New Jersey in October 2024.
Current wording
The Company’s deposit strategy in 2025 focused on retaining deposits and managing the overall cost of its interest-bearing liabilities. As part of its strategy to increase deposits and lower its occupancy expense, the Company closed its branch office in Bridgewater, New Jersey and opened a new retail branch office in Martinsville, New Jersey.
Previous wording
***Stockholders’ Equity.***Stockholders’ equity increased $5.7 million, or 5.5%, to $110.5 million at September 30, 2024 from $104.8 million at September 30, 2023. The increase was attributable to the Company’s net income from operations totaling $7.8 million, partially offset by $1.7 million in dividends paid and $2.4 million in share repurchases. In addition, other comprehensive income, stock-based compensation expense and the effect of adopting ASU 2016-13 increased the
Current wording
***Stockholders’ Equity.***Stockholders’ equity increased $8.3 million, or 7.5%, to $118.8 million at September 30, 2025 from $110.5 million at September 30, 2024. The increase was attributable to the Company’s net income from operations totaling $9.8 million, partially offset by $1.8 million in dividends paid and $844 thousand in share repurchases. In addition, other comprehensive income and stock-based compensation expense increased the Company’s equity by $1.2 million. The Company’s book value per share increased to $18.34 at September 30, 2025 from $16.98 at September 30, 2024.
Previous wording
***Net Income.***The Company’s net income increased $74 thousand, or 1.0%, to $7.8 million during the year ended September 30, 2024 compared with $7.7 million for the year ended September 30, 2023 from higher net interest income, lower provision for credit losses and higher other income, partially offset by higher income tax and other expenses. Earnings per share increased to $1.23 for the year ended September 30, 2024 from $1.20 for the year ended September 30, 2023.
Current wording
***Net Income.***The Company’s net income increased $2.0 million, or 25.4%, to $9.8 million during the year ended September 30, 2025 compared with $7.8 million for the year ended September 30, 2024 from higher net interest income, partially offset by higher provisions for credit loss, other expenses and income tax expense. Earnings per share increased to $1.57 for the year ended September 30, 2025 from $1.23 for the year ended September 30, 2024.
Previous wording
Net Interest and Dividend Income. Net interest and dividend income increased $240 thousand, or 0.9%, to $28.0 million during the year ended September 30, 2024 compared to $27.7 million for the year ended September 30, 2023.
Current wording
Net Interest and Dividend Income. Net interest and dividend income increased $3.9 million, or 14.0%, to $31.9 million during the year ended September 30, 2025 compared to $28.0 million for the year ended September 30, 2024.
Previous wording
Interest and Dividend Income. Interest and dividend income increased $10.5 million, or 27.6%, to $48.6 million for the year ended September 30, 2024 from $38.1 million for the year ended September 30, 2023. The average balance of interest-earnings assets between the two periods increased $99.4 million, or 12.6%, to $890.8 million from $791.4 million, while the yield on such assets increased 64 basis point to 5.45% for the year ended September 30, 2024 from 4.81% for the year ended September 30, 2023.
Current wording
Interest and Dividend Income. Interest and dividend income increased $6.1 million, or 12.6%, to $54.7 million for the year ended September 30, 2025 from $48.6 million for the year ended September 30, 2024. The average balance of interest-earnings assets between the two periods increased $63.9 million, or 7.2%, to $954.6 million from $890.8 million, while the yield on such assets increased 28 basis points to 5.73% for the year ended September 30, 2025 from 5.45% for the year ended September 30, 2024.
Previous wording
Interest income on loans increased $7.9 million, or 22.4%, to $43.1 million for the year ended September 30, 2024 from $35.2 million for the year ended September 30, 2023, while the average balance of loans increased $65.5 million, or 9.8%, to $734.4 million from $668.9 million. The average yield on such loans increased 60 basis points to 5.87% at September 30, 2024 from 5.27% for the year ended September 30, 2023 from higher market interest rates.
Current wording
Interest income on loans increased $6.8 million, or 15.8%, to $49.9 million for the year ended September 30, 2025 from $43.1 million for the year ended September 30, 2024, while the average balance of loans increased $79.1 million, or 10.8%, to $813.5 million from $734.4 million. The average yield on such loans increased 27 basis points to 6.14% at September 30, 2025 from 5.87% for the year ended September 30, 2024 from higher interest income on loan originations and on adjustable-rate commercial term loans repricing higher.
Previous wording
The increase was attributable to a 116 basis point increase in the average yield on investment securities and interest earned on deposits to 3.41% from 2.25%, and $33.6 million increase in the average balance of investment securities and interest earning deposits to $154.1 million from $120.5 million during the year ended September 30, 2023.
Current wording
Interest earned on investment securities, including interest earned on deposits but excluding FHLBNY stock, decreased $670 thousand, or 12.8%, to $4.6 million for the year ended September 30, 2025 from $5.2 million for the year ended 2024. The decrease was attributable to a nine-basis point decrease in the average yield on investment securities and interest earned on deposits to 3.32% from 3.41%, and $15.7 million decrease in the average balance of investment securities and interest earning deposits to $138.4 million from $154.1 million during the year ended September 30, 2025.
Previous wording
***Interest Expense.***Interest expense increased $10.3 million, or 99.3%, to $20.6 million for the year ended September 30, 2024 from $10.3 million for the year ended September 30, 2023. The average balance of interest-bearing liabilities increased $130.7 million, or 24.8%, to $657.9 million from $527.3 million between the two periods while the average cost on such interest-bearing liabilities increased 117 basis points to 3.13% for the year ended September 30, 2024 from 1.96% for the year ended September 30, 2023. Higher market interest rates were primarily responsible for the increase in the cost of the Company’s interest-bearing liabilities for the year ended September 30, 2024.
Current wording
***Interest Expense.***Interest expense increased $2.2 million, or 10.7%, to $22.8 million for the year ended September 30, 2025 from $20.6 million for the year ended September 30, 2024. The average balance of interest-bearing liabilities increased $91.0 million, or 13.8%, to $748.9 million for the year ended September 30, 2025 from $657.9 million for the year ended September 30, 2024, while the average cost on such interest-bearing liabilities decreased eight basis points to 3.05% for the year ended September 30, 2025 compared with 3.13% for the year ended September 30, 2024. Lower short-term market interest rates were primarily responsible for the lower cost of the Company’s interest-bearing liabilities for the year ended September 30, 2025.
Previous wording
The average balance of interest-bearing deposits increased $127.4 million, or 25.4%, to $629.1 million for the year ended September 30, 2024 from $501.7 million for the year ended September 30, 2023 while the average cost on such interest-bearing deposits increased 125 basis points to 3.14% from 1.89%. Average expense on interest-bearing deposits increased $10.2 million, or 107.9%, to 19.7 million at September 30, 2024 compared with $9.5 million at September 30, 2023.
Current wording
The average balance of interest-bearing deposits increased $84.6 million, or 13.5%, to $713.7 million for the year ended September 30, 2025 from $629.1 million for the year ended September 30, 2024 while the average cost on such interest-bearing deposits decreased nine basis points to 3.05% from 3.14%. As a result, the cost of interest-bearing deposits increased $2.0 million, or 10.3%, to $21.7 million for the year ended September 30, 2025 compared with $19.7 million for the year ended September 30, 2024.
Previous wording
Interest expense on advances increased $26 thousand, or 3.1%, to $872 thousand for the year ended September 30, 2024 from $846 thousand for the year ended September 30, 2023. The average cost of borrowings decreased 29 basis points to 3.02% for the year ended September 30, 2024 from 3.31% for the year ended September 30, 2023 while the average balance of those borrowings increased $3.3 million to $28.9 million for the year ended September 30, 2024 from $25.6 million the prior year.
Current wording
Interest expense on borrowings increased $182 thousand, or 20.9%, to $1.1 million for the year ended September 30, 2025 from $872 thousand for the year ended September 30, 2024. The average cost of borrowings decreased 2 basis points to 3.00% for the year ended September 30, 2025 from 3.02% for the year ended September 30, 2024 while the average balance of those borrowings increased $6.3 million to $35.2 million for the year ended September 30, 2025 from $28.9 million the prior year.
Previous wording
Income Tax Expense. Income tax expense increased $285 thousand, or 9.4%, to $3.3 million for the year ended September 30, 2024 from $3.0 million for the year ended September 30, 2023. The increase was attributable to higher pre-tax income and a $456 thousand expense for taxable gains on surrendered bank-owned life insurance policies during the year ended September 30, 2024. The Company’s effective income tax rate was 29.9% for the year ended September 30, 2024 and 28.2% for the year ended September 30, 2023.
Current wording
Income Tax Expense. Income tax expense increased $732 thousand, or 22.1%, to $4.0 million for the year ended September 30, 2025 from $3.3 million for the year ended September 30, 2024. The increase was attributable to higher pre-tax income, which increased $2.7 million, or 24.4%, to $13.8 million during the year ended September 30, 2025 compared with $11.1 million for the year ended September 30, 2024.
Previous wording
liabilities, consisting primarily of deposits. As a result, a principal part of our business strategy is to manage interest rate risk and reduce the exposure of our net interest income to changes in market interest rates. Accordingly, our Board of Directors has established an Asset and Liability Management Committee which is responsible for evaluating the interest rate risk inherent in our assets and liabilities, for determining the level of risk that is appropriate, given our business strategy, operating environment, capital, liquidity and performance objectives, and for managing this risk consistent with the guidelines approved by the Board of Directors. Senior management monitors the level of interest rate risk on a regular basis and the Asset and Liability Committee meets at least on a quarterly basis to review our asset/liability policies and interest rate risk position.
Current wording
General. The majority of our assets and liabilities are monetary in nature. Consequently, our most significant form of market risk is interest rate risk. Our assets, which consist primarily of mortgage loans, have longer maturities than our liabilities, consisting primarily of deposits. As a result, a principal part of our business strategy is to manage interest rate risk and reduce the exposure of our net interest income to changes in market interest rates. Accordingly, our Board of Directors has established a Board Asset and Liability Committee which is responsible for evaluating the interest rate risk inherent in our assets and liabilities, for determining the level of risk that is appropriate, given our business strategy, operating environment, capital, liquidity and performance objectives, and for managing this risk consistent with the guidelines approved by the Board of Directors. Senior management monitors the level of interest rate risk on a regular basis, and the Board Asset and Liability Committee meets at least on a quarterly basis to review our asset/liability policies and interest rate risk position.
Previous wording
Net Interest Income Analysis. The table below sets forth, as of September 30, 2024, the estimated changes in our Net Interest Income (“NII”) for each of the next two years that would result from the designated instantaneous changes in interest rates. These estimates require making certain assumptions including loan and mortgage-related investment prepayment speeds, reinvestment rates, and deposit maturities and decay rates. These assumptions are inherently uncertain and, as a result, we cannot precisely predict the impact of changes in interest rates on net interest income. Actual results may differ significantly due to timing, magnitude and frequency of interest rate changes and changes in market conditions. Further, certain shortcomings are inherent in the methodology used in the interest rate risk measurement. Modeling changes in net interest income require making certain assumptions that may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates.
Current wording
Net Interest Income Analysis. The table below sets forth, as of September 30, 2025, the estimated changes in our Net Interest Income (“NII”) for each of the next two years that would result from the designated instantaneous changes in interest rates. These estimates require making certain assumptions including loan and mortgage-related investment prepayment speeds, reinvestment rates, and deposit maturities and decay rates. These assumptions are inherently uncertain and, as a result, we cannot precisely predict the impact of changes in interest rates on net interest income. Actual results may differ significantly due to timing, magnitude and frequency of interest rate changes and changes in market conditions. Further, certain shortcomings are inherent in the methodology used in the interest rate risk measurement. Modeling changes in net interest income requires making certain assumptions that may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates.
Previous wording
Liquidity is the ability to meet current and future financial obligations of a short-term nature. Our primary sources of funds consist of deposit inflows, loan repayments, FHLBNY borrowings and maturities and sales of investment securities. While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and mortgage prepayments are greatly influenced by general interest rates, economic conditions and competition. Our Asset/Liability Management Committee is responsible for establishing and monitoring our liquidity targets and strategies in order to ensure that sufficient liquidity exists for meeting the borrowing needs of our customers as well as unanticipated contingencies. We seek to maintain a liquidity ratio of 5.0% of assets or greater. The liquidity ratio is calculated by determining the sum of the difference between liquid assets (cash and unpledged investment securities) and short-term liabilities (estimated 30-day deposit outflows), plus our borrowing capacity from the FHLBNY and dividing the sum by total assets. At September 30, 2024, our liquidity ratio was 7.6% of assets.
Current wording
Liquidity is the ability to meet current and future financial obligations of a short-term nature. Our primary sources of funds consist of deposit inflows, loan repayments, FHLBNY borrowings and maturities and sales of investment securities. While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and mortgage prepayments are greatly influenced by general interest rates, economic conditions and competition. Our Asset and Liability Committee is responsible for establishing and monitoring our liquidity targets and strategies to ensure that sufficient liquidity exists for meeting the borrowing needs of our customers as well as unanticipated contingencies. We seek to maintain Day 1 available liquidity of at least 25% of non-contractual funding, defined as total deposits, less brokered deposits, collateralized municipal deposits, and any other contractual funding outstanding. At September 30, 2025, our Day 1 availability was 46.6% of non-contractual funding.
Previous wording
We regularly adjust our investments in liquid assets based upon our assessment of expected loan demand, expected deposit flows, yields available on interest-earning deposits and securities, and the objectives of our asset/liability management program. Excess liquid assets are invested generally in interest-earning deposits and short-and intermediate-term securities.
Current wording
We regularly adjust our investments in liquid assets based upon our assessment of expected loan demand, expected deposit flows, yields available on interest-earning deposits and securities, and the objectives of our asset/liability management program. Excess liquid assets are invested generally in interest-earning deposits and short-and intermediate-term securities. Our cash flows are derived from operating activities, investing activities and financing activities as reported in our consolidated Statements of Cash Flows included in our consolidated Financial Statements.
Previous wording
Our most liquid assets are cash and cash equivalents. The levels of these assets are dependent on our operating, financing, lending and investing activities during any given period. At September 30, 2024, cash and cash equivalents totaled
Current wording
Our most liquid assets are cash and cash equivalents. The levels of these assets are dependent on our operating, financing, lending and investing activities during any given period. At September 30, 2025, cash and cash equivalents totaled $7.1 million compared with $25.6 million at September 30, 2024. Securities classified as available-for-sale, which provide additional sources of liquidity from sales, totaled $21.2 million at September 30, 2025 compared with $15.6 million at September 30, 2024.
Previous wording
$25.6 million compared with $72.5 million at September 30, 2023. Securities classified as available-for-sale, which provide additional sources of liquidity from sales, totaled $15.6 million at September 30, 2024 compared with $10.1 million at September 30, 2023. At September 30, 2024, we also had the ability to borrow $272.3 million from the FHLBNY compared with $230.1 million at September 30 2023. At September 30, 2024, we had an aggregate of $28.6 million in advances outstanding and $120.0 million in municipal letters of credit outstanding with the FHLBNY leaving $164.9 million as our remaining borrowing capacity. Our cash flows are derived from operating activities, investing activities and financing activities as reported in our consolidated Statements of Cash Flows included in our consolidated Financial Statements.
Current wording
At September 30, 2025, we had the ability to borrow $319.9 million from the FHLBNY compared with $272.3 million at September 30 2024. At September 30, 2025, we had an aggregate of $49.1 million in advances outstanding and $135.0 million in municipal letters of credit outstanding with the FHLBNY leaving $164.1 million as our remaining borrowing capacity. We also had the ability to borrow $77.5 million from the FRBNY at September 30 2025 compared with $9.1 million at September 30 2024. The Company did not have any borrowings outstanding with the FRBNY at September 30, 2025 or 2024.
Previous wording
At September 30, 2024, we had $28.6 million in loan origination commitments outstanding. In addition to commitments to originate loans, we had $88.3 million in unused lines of credit to borrowers. Certificates of deposit due within one year of September 30, 2024 totaled $99.2 million, or 12.45% of total deposits. If these deposits do not remain with us, we will be required to seek other sources of funds, including other deposits and FHLBNY advances. Depending on market conditions, we may be required to pay higher rates on such deposits or other borrowings than we currently pay on the certificates of deposit (including individual retirement accounts and brokered certificate deposit accounts) due on or before September 30, 2025. We believe, however, that based on past experience a significant portion of our certificates of deposit (including individual retirement accounts and brokered certificate deposit accounts) will remain with us. We have the ability to attract and retain deposits by adjusting the interest rates offered.
Current wording
At September 30, 2025, we had $49.1 million in loan origination commitments outstanding and $80.7 million in unused lines of credit to borrowers. Certificates of deposit due within one year of September 30, 2025 totaled $80.6 million, or 9.90% of total deposits. If these deposits do not remain with us, we will be required to seek other sources of funds, including replacement deposits and FHLBNY advances. Depending on market conditions, we may be required to pay higher rates on such deposits or other borrowings than we currently pay on the certificates of deposit (including individual retirement accounts and brokered certificate deposit accounts) due on or before September 30, 2026. We believe, however, that based on past experience a significant portion of our certificates of deposit (including individual retirement accounts and brokered certificate deposit accounts) will remain with us. We have the ability to attract and retain deposits by adjusting the interest rates offered.
Previous wording
Our primary investing activities are the origination of loans and the purchase of investment securities. We originated $161.1 million in loans and purchased $12.5 million of investment securities during the year ended September 30, 2024. Comparatively, we originated $188.5 million in loans and purchased $6.6 million of investment securities during the year ended September 30, 2023.
Current wording
Our primary investing activities are the origination of loans and the purchase of investment securities. We originated $162.7 million in loans and purchased $11.3 million of investment securities during the year ended September 30, 2025. Comparatively, we originated $161.1 million in loans and purchased $12.5 million of investment securities during the year ended September 30, 2024.
Previous wording
Financing activities consist primarily of activity in deposit accounts and FHLBNY advances. We experienced a net increase in total deposits of $41.2 million, or 5.46%, to $796.7 million for the year ended September 30, 2024 compared with a net increase in total deposits of $87.7 million, or 13.1%, to $755.5 million for the year ended September 30, 2023. Deposit flows are affected by the overall level of interest rates, the interest rates and products offered by us and our local competitors and other factors.
Current wording
Financing activities consist primarily of activity in deposit accounts and FHLBNY advances. We experienced a net increase in total deposits of $17.6 million, or 2.2%, to $814.3 million for the year ended September 30, 2025 compared with a net increase in total deposits of $41.2 million, or 5.46%, to $796.7 million for the year ended September 30, 2024. Deposit flows are affected by the overall level of interest rates, the interest rates and products offered by us and our local competitors and other factors.
Previous wording
Liquidity management is both a daily and long-term function of business management. If we require funds beyond our ability to generate them internally, borrowing agreements exist with the FHLBNY, which provide an additional source of funds. FHLBNY advances totaled $28.6 million and $29.5 million at September 30, 2024 and 2023, respectively. FHLBNY advances have primarily been used to fund loan demand.
Current wording
Liquidity management is both a daily and long-term function of business management. If we require funds beyond our ability to generate them internally, borrowing agreements exist with the FHLBNY and FRBNY, which provide an additional source of funds. In addition to borrowings, the Bank has ability to raise deposits on the brokered market or through deposit listing services. At September 30, 2025, the Bank held $57.3 million in brokered deposits and $24.0 million from national deposit listing services.
Previous wording
Magyar Bank is subject to various regulatory capital requirements, (see “Supervision and Regulation-Federal Banking Regulation-Capital Requirements”). As of September 30, 2024, Magyar Bank’s Tier 1 capital as a percentage of the Bank’s average assets was 11.11% and the total qualifying capital as a percentage of risk-weighted assets was 15.85%.
Current wording
Magyar Bank is subject to various regulatory capital requirements, (see “Supervision and Regulation-Federal Banking Regulation-Capital Requirements”). As of September 30, 2025, Magyar Bank’s Tier 1 capital as a percentage of the Bank’s average assets was 11.41% and the total qualifying capital as a percentage of risk-weighted assets was 15.79%.
Previous wording
Bank-owned life insurance is a tax-advantaged financing transaction that is used to offset employee benefit plan costs. Policies are purchased insuring directors and officers of Magyar Bank using a single premium method of payment. Magyar Bank is the owner and beneficiary of the policies and records tax-free income through cash surrender value accumulation. We have minimized our credit exposure by choosing carriers that are highly rated and limiting the concentration of any one carrier. The investment in bank-owned life insurance has no significant impact on our capital and liquidity.
Current wording
Bank-owned life insurance is a tax-advantaged financing transaction that is used to offset employee benefit plan costs. Policies are purchased to insure the lives of directors and officers of Magyar Bank using a single premium method of payment. Magyar Bank is the owner and beneficiary of the policies and records tax-free income through cash surrender value accumulation. We have minimized our credit exposure by choosing carriers that are highly rated and limiting the concentration of any one carrier. The investment in bank-owned life insurance has no significant impact on our capital and liquidity.
Previous wording
The evaluation has a specific and general component. The specific component relates to loans that are delinquent or otherwise identified as impaired through the application of our loan review process and our loan grading system. All such loans are evaluated individually, with principal consideration given to the value of the collateral securing the loan and discounted cash flows. Specific impairment allowances are established as required by this analysis. However, the Bank’s Federal and State regulators generally require that the specific reserve against impaired collateral-dependent loans be charged-off, reducing the carrying balance of the loan and allowance for loan loss. The general component is determined by segregating the remaining loans into homogenous categories. We analyze the historical loss experience of each category, delinquency trends, general economic conditions and geographic and industry concentrations in establishing the general portion of the reserve. This analysis establishes factors that are applied to the loan groups to determine the amount of the general component of the allowance for credit losses.
Current wording
The evaluation has a specific and general component. The specific component relates to loans that are delinquent or otherwise identified as having increased non-performance risk through the application of our loan review process and our loan grading system. All such loans are evaluated individually, with principal consideration given to the value of the collateral securing the loan and discounted cash flows. Specific impairment allowances are established as required by this analysis. However, the Bank’s Federal and State regulators generally require that the specific reserve against impaired collateral-dependent loans be charged-off, reducing the carrying balance of the loan and allowance for loan loss. The general component is determined by segregating the remaining loans into homogenous categories. We analyze the historical loss experience of each category, delinquency trends, general economic conditions and geographic and industry concentrations in establishing the general portion of the reserve. This analysis establishes factors that are applied to the loan groups to determine the amount of the general component of the allowance for credit losses.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
Company’s equity by $2.1 million. The Company’s book value per share increased to $16.98 at September 30, 2024 from $15.70 at September 30, 2023.
Previous report — wording carried elsewhere
Interest earned on investment securities, including interest earned on deposits but excluding FHLBNY stock, increased $2.5 million, or 94.3%, to $5.2 million for the year ended September 30, 2024 from $2.7 million for the year ended
Previous report — wording carried elsewhere
General. The majority of our assets and liabilities are monetary in nature. Consequently, our most significant form of market risk is interest rate risk. Our assets, consisting primarily of mortgage loans, have longer maturities than our
Previous report — wording carried elsewhere
In addition to borrowings, the Bank has the ability to raise deposits on the brokered market or through deposit listing services. At September 30, 2024, the Bank held $29.6 million in brokered deposits and $20.0 million from deposit listing services.