UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to _____________

Commission File Number 000-51726

Magyar Bancorp, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	20-4154978
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification Number)

400 Somerset Street, New Brunswick, New Jersey	08901
(Address of Principal Executive Office)	(Zip Code)

(732) 342-7600

(Issuer’s Telephone Number including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol	Name of each exchange on which registered
Common Stock, $.01 per share	MGYR	The NASDAQ Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Securities Exchange Act:

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☑	Smaller reporting company	☑
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Securities Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☑

The number of shares outstanding of the issuer's common stock at February 1, 2024 was 6,653,933.

MAGYAR BANCORP, INC.

Form 10-Q Quarterly Report

Table of Contents

PART I. FINANCIAL INFORMATION

		Page Number

Item 1.	Consolidated Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4.	Controls and Procedures	30

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	31
Item 1A.	Risk Factors	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 3.	Defaults Upon Senior Securities	31
Item 4.	Mine Safety Disclosures	31
Item 5.	Other Information	31
Item 6.	Exhibits	32

Signature Pages		33

PART I. FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

MAGYAR BANCORP, INC. AND SUBSIDIARY

Consolidated Balance Sheets

(In Thousands, Except Share and Per Share Data)

	December 31,			September 30,
	2023			2023
	(Unaudited)
Assets
Cash	$	3,128		$	3,179
Interest earning deposits with banks		47,989			69,353
Total cash and cash equivalents		51,117			72,532

Investment securities - available for sale, at fair value		12,273			10,125
Investment securities - at amortized cost (fair value of $75,508 and $73,728 at December 31, 2023 and September 30, 2023, respectively)		84,333			85,835
Federal Home Loan Bank of New York stock, at cost		2,254			2,286
Loans receivable		728,560			697,400
Allowance for credit losses		(7,683	)		(8,330	)
Bank owned life insurance		18,126			18,030
Accrued interest receivable		4,585			4,337
Premises and equipment, net		12,534			13,339
Other real estate owned ("OREO")		328			328
Other assets		10,312			11,410

Total assets	$	916,739		$	907,292

Liabilities and Stockholders' Equity
Liabilities
Deposits	$	763,548		$	755,453
Escrowed funds		3,723			3,494
Borrowings		28,796			29,515
Accrued interest payable		656			443
Accounts payable and other liabilities		13,477			13,597

Total liabilities		810,200			802,502

Stockholders' equity
Preferred stock: $.01 Par Value, 500,000 shares authorized; at December 31, 2023 and September 30, 2023, none issued		—			—
Common stock: $.01 Par Value, 14,000,000 shares authorized; 7,097,825 shares issued; 6,654,952 and 6,674,184 shares outstanding
at December 31, 2023 and September 30, 2023, respectively, at cost		71			71
Additional paid-in capital		62,962			62,801
Treasury stock: 442,873 and 423,641 shares at December 31, 2023 and September 30, 2023, respectively, at cost		(5,554	)		(5,362	)
Unearned Employee Stock Ownership Plan shares		(3,047	)		(3,097	)
Retained earnings		53,456			52,166
Accumulated other comprehensive loss		(1,349	)		(1,789	)

Total stockholders' equity		106,539			104,790

Total liabilities and stockholders' equity	$	916,739		$	907,292

The accompanying notes are an integral part of these consolidated financial statements.

MAGYAR BANCORP, INC. AND SUBSIDIARY

Consolidated Statements of Income

(In Thousands, Except Share and Per Share Data)

	Three Months Ended
	December 31,
	2023		2022
	(Unaudited)
Interest and dividend income
Loans, including fees	$	10,082	$	7,959
Investment securities
Taxable		1,406		504
Tax-exempt		14		14
Federal Home Loan Bank of New York stock		55		24
Total interest and dividend income		11,557		8,501

Interest expense
Deposits		4,077		1,474
Borrowings		236		136
Total interest expense		4,313		1,610

Net interest and dividend income		7,244		6,891

Provision for credit losses- loans		384		317
Provision for credit losses- commitments		97		—

Net interest and dividend income after provision for credit losses		6,763		6,574

Other income
Service charges		303		245
Income on bank owned life insurance		95		95
Interest rate swap fees		—		57
Gains on sales of premises and equipment		60		—
Other operating income		22		20
Gains on sales of loans		129		180
Total other income		609		597

Other expenses
Compensation and employee benefits		2,847		2,621
Occupancy expenses		790		761
Professional fees		226		179
Data processing expenses		140		146
Director fees and benefits		224		201
Marketing and business development		97		126
FDIC deposit insurance premiums		103		54
Other expenses		593		493
Total other expenses		5,020		4,581
Income before income tax expense		2,352		2,590
Income tax expense		700		780
Net income	$	1,652	$	1,810

Earnings per share - basic	$	0.26	$	0.28
Earnings per share - diluted	$	0.26	$	0.28
Weighted average shares outstanding - basic		6,387,010		6,456,525
Weighted average shares outstanding - diluted		6,387,010		6,459,446

The accompanying notes are an integral part of these consolidated financial statements.

MAGYAR BANCORP, INC. AND SUBSIDIARY

Consolidated Statements of Comprehensive Income

(In Thousands)

	Three Months Ended
	December 31
	2023			2022
	(Unaudited)
Net income	$	1,652		$	1,810
Other comprehensive income
Unrealized gains on securities available for sale		584			206
Other comprehensive income, before tax		584			206
Deferred income tax effect		(144	)		(50	)
Total other comprehensive income	$	440		$	156
Total comprehensive income	$	2,092		$	1,966

The accompanying notes are an integral part of these consolidated financial statements.

MAGYAR BANCORP, INC. AND SUBSIDIARY

Consolidated Statements of Changes in Stockholders' Equity

For the Three Months Ended December 31, 2023 and 2022

(In Thousands, Except for Share and Per-Share Amounts)

															Accumulated
	Common Stock				Additional					Unearned					Other
	Shares		Par		Paid-In		Treasury			ESOP			Retained		Comprehensive
	Outstanding		Value		Capital		Stock			Shares			Earnings		Loss		Total
	(Unaudited)
Balance, September 30, 2023		6,674,184	$	71	$	62,801	$	(5,362	)	$	(3,097	)	$	52,166	$	(

SEC Form 10-Q filed by Magyar Bancorp Inc.