MAGYAR BANCORP, INC. ANNOUNCES SECOND QUARTER FINANCIAL RESULTS AND DECLARES DIVIDEND

Rhea-AI Summary

Magyar Bancorp reported strong financial results for Q2 2025, with net income surging 41% to $2.7 million compared to $1.9 million in Q2 2024. The company's six-month net income reached $4.8 million, up from $3.5 million year-over-year.

Key highlights include:

• Earnings per share increased to $0.43 from $0.30
• Net interest margin expanded to 3.31%
• Total assets grew 7.3% to $1.0 billion
• Non-performing loans decreased to just 0.01% of total loans

The bank declared a quarterly cash dividend of $0.06 per share, payable May 28, 2025. President and CEO John Fitzgerald attributed the strong performance to sound lending practices, proactive balance sheet management, and focus on community relationships. The company's book value per share improved to $17.65, reflecting solid operational results despite market volatility.

Positive

• Net income increased 41% to $2.7M in Q2 2025 vs $1.9M in Q2 2024
• Net interest margin expanded to 3.31% from 3.17% year-over-year
• Net loan recoveries of $5K in Q2 2025 and extremely low non-performing assets (0.01% of total loans)
• Total assets grew 7.3% to $1.0B
• SBA loan sale gains increased significantly to $612K from $213K year-over-year
• Book value per share increased to $17.65 from $16.98
• Quarterly cash dividend of $0.06 per share declared

Negative

• Other expenses increased 5.7% to $5.4M due to higher compensation and benefits
• Higher effective tax rate of 29.0% vs 21.7% year-over-year
• Occupancy expenses increased due to seasonal costs and office closure
• Interest expense rose 13.0% to $5.6M year-over-year

Insights

Financial Analyst

Magyar Bancorp delivered impressive Q2 results with 41% net income growth, expanded margins, and exceptionally clean loan portfolio.

Magyar's Q2 2025 results demonstrate remarkable financial strength across multiple key metrics. The $2.7 million quarterly net income represents a 41% year-over-year increase, with EPS jumping from $0.30 to $0.43. This performance stems from both revenue growth and improved operational efficiency.

The bank's net interest margin expanded 14 basis points to 3.31%, bucking the trend many regional banks face with compressed margins. This expansion occurred despite a 18.1% increase in interest-bearing liabilities, showcasing effective cost management as the bank reduced its cost of funds by 13 basis points to 3.02%.

Asset quality deserves special attention - Magyar's non-performing loan ratio stands at just 0.01%, down from 0.03% six months earlier. This extraordinarily clean loan portfolio is virtually unheard of in the banking industry where even well-run institutions typically maintain NPL ratios of 0.5-1.0%. The bank actually recorded net recoveries rather than charge-offs during the quarter.

The balance sheet shows thoughtful positioning with cash/interest-earning deposits up 185% to $72.9 million, providing both safety and dry powder for future opportunities. The loan portfolio grew 3.7% while deposits increased 7.7%, creating a favorable funding environment.

Non-interest income surged 103.9%, primarily driven by gains from SBA loan sales, demonstrating revenue diversification beyond traditional interest income. Book value per share increased from $16.98 to $17.65 in just six months, representing solid shareholder value creation.

NEW BRUNSWICK, N.J., April 30, 2025 /PRNewswire/ -- Magyar Bancorp (NASDAQ: MGYR) ("Company"), parent company of Magyar Bank, reported today the results of its operations for the three and six months ended March 31, 2025.

The Company reported a 41% increase in its net income for the three months ended March 31, 2025, to $2.7 million compared with net income of $1.9 million for the three months ended March 31, 2024. Net income for the six months ended March 31, 2025 was $4.8 million compared with net income of $3.5 million for the six months ended March 31, 2024.

Basic and diluted earnings per share were $0.43 for the three months ended March 31, 2025 compared with $0.30 for the three months ended March 31, 2024. Basic and diluted earnings per share were $0.77 and $0.76, respectively, for the six months ended March 31, 2025 compared with $0.56 for the six months ended March 31, 2024.

The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.06 per share, which will be paid on May 28, 2025 to stockholders of record as of May 14, 2025.

"We are very pleased to report another strong quarter, highlighted by a 41% increase in net income, an expansion in our net interest margin, and an extremely low level of non-performing assets," stated John Fitzgerald, President and Chief Executive Officer of Magyar Bancorp. "These strong outcomes are a direct result of Magyar's commitment to sound lending practices, proactive balance sheet management, and our focus on building lasting relationships within the community. We feel Magyar is well positioned to navigate the current market volatility and continue to produce solid results during the second half of our fiscal year."

Results of Operations for the Three Months Ended March 31, 2025

Net income increased $784 thousand, or 41.3%, to $2.7 million during the three-month period ended March 31, 2025 compared with $1.9 million during the three-month period ended March 31, 2024, due to higher net interest income and other income, partially offset by higher other expenses. 

The Company's net interest and dividend income increased $953 thousand, or 13.8%, to $7.9 million for the quarter ended March 31, 2025 from the quarter ended March 31, 2024. The increase was attributable to a 14-basis point increase in the Company's net interest margin to 3.31% for the three months ended March 31, 2025 from 3.17% for the three months ended March 31, 2024, as well as a $78.8 million increase in the average balance of interest-earning assets between the periods.

Interest and dividend income increased $1.6 million, or 13.5%, to $13.5 million for the three months ended March 31, 2025 compared with $11.9 million for the three months ended March 31, 2024. The increase was attributable to a 23-basis point increase in the yield on interest-earning assets to 5.68% for the three months ended March 31, 2025 from 5.45% for the three months ended March 31, 2024, as well as a $76.6 million, or 10.5%, increase in the average balance of net loans receivable between the periods.

Interest expense increased $651 thousand, or 13.0%, to $5.6 million for the three months ended March 31, 2025 from $5.0 million for the three months ended March 31, 2024. A $116.4 million, or 18.1%, increase in the average balance of interest-bearing liabilities accounted for the increase in interest expense between the periods. Partially offsetting the higher costs was a 13 basis points decrease in the cost of such liabilities to 3.02% for the three months ended March 31, 2025 compared with 3.15% for the three months ended March 31, 2024.

The Company recorded a net recovery for credit losses totaling $30 thousand for the three months ended March 31, 2025 compared with provisions for credit losses totaling $14 thousand for the three months ended March 31, 2024. The lower provision for credit losses resulted from lower construction loan balances, which require higher provisions for credit loss, that more than offset growth in commercial real estate, residential mortgage and commercial business loans. The Company recorded $5 thousand in net loan recoveries during the three months ended March 31, 2025 compared with $65 thousand in net loan recoveries during the three months ended March 31, 2024.

Other income increased $646 thousand, or 103.9%, to $1.3 million during the three months ended March 31, 2025 compared with $622 thousand for the three months ended March 31, 2024. The increase was primarily due to higher gains from the sale of Small Business Administration 7(a) loans, which increased $399 thousand to $612 thousand for the three months ended March 31, 2025 from $213 thousand for the three months ended March 31, 2024. In addition, the Company recorded higher commercial loan prepayment charges, late charges on loans and income from its bank-owned life insurance policies.

Other expenses increased $290 thousand, or 5.7%, to $5.4 million during the three months ended March 31, 2025 compared with $5.1 million for the three months ended March 31, 2024. The increase was primarily attributable to higher compensation and benefit expense, which increased $218 thousand, or 7.2%, to $3.2 million, due to higher medical benefits and incentive accruals as well as annual merit increases. Also contributing to the increase were higher occupancy expenses (related to seasonal snow and ice removal) as well as higher loan servicing and marketing expenses.

The Company recorded tax expense of $1.1 million on pre-tax income of $3.8 million for the three months ended March 31, 2025, compared with $526 thousand on pre-tax income of $2.4 million for the three months ended March 31, 2024. The increase in income tax expense was driven by higher pre-tax income as well as changes in deferred tax items that lowered the Company's tax expense during the three months ended March 31, 2024. The Company's effective tax rate for the three months ended March 31, 2025 was 29.0% compared with 21.7% for the three months ended March 31, 2024.

Results from Operations for the Six Months Ended March 31, 2025

Net income increased $1.2 million, or 34.3%, to $4.8 million during the six-month period ended March 31, 2025 compared with $3.5 million for the six-month period ended March 31, 2024 due to higher net interest income, lower provisions for credit loss, and higher other income, partially offset by higher other expenses and income tax expense.     

The Company's net interest and dividend income increased $1.1 million, or 8.1%, to $15.3 million for the six months ended March 31, 2025 from $14.2 million for the six months ended March 31, 2024. The increase was attributable to a $61.2 million, or 7.0%, increase in the average balance of interest-earning assets between the periods as well as a 4-basis point increase in the Company's net interest margin to 3.27% for the six months ended March 31, 2025 from 3.23% for the six months ended March 31, 2024.

Interest and dividend income increased $2.9 million, or 12.6%, to $26.4 million for the six months ended March 31, 2025 from $23.5 million for the six months ended March 31, 2024. The increase was attributable to a 29-basis point increase in the yield on interest-earning assets to 5.64% for the six months ended March 31, 2025 from 5.35% for the six months ended March 31, 2024, as well as a $79.7 million, or 11.1%, increase in the average balance of net loans receivable.

Interest expense increased $1.8 million, or 19.3%, to $11.1 million for the six months ended March 31, 2025 from $9.3 million for the six months ended March 31, 2024. The cost of interest-bearing liabilities increased 5-basis points to 3.03% for the six months ended March 31, 2025 compared with 2.98% for the six months ended March 31, 2024. In addition, the average balance of interest-bearing liabilities increased $107.5 million, or 17.2%, to $734.3 million from higher money market account and time deposit account balances.

The Company's provision for credit losses was $71 thousand for the six months ended March 31, 2025 compared with $495 thousand for the six months ended March 31, 2024. The lower provision for credit losses resulted from lower construction loan balances, which require higher provisions for credit loss, that more than offset growth in commercial real estate, residential mortgage and commercial business loans. The Company recorded $108 thousand in net loan recoveries during the six months ended March 31, 2025 compared with $66 thousand in net loan recoveries during the six months ended March 31, 2024.

Other income increased $994 thousand, or 80.7%, to $2.2 million during the six months ended March 31, 2025 compared with $1.2 million for the six months ended March 31, 2024. The increase was primarily due to higher gains from the sale of Small Business Administration 7(a) loans, which increased $506 thousand to $848 thousand for the six months ended March 31, 2025 from $342 thousand for the six months ended March 31, 2024. In addition, the Company recorded higher gains from the sale of OREO, commercial loan prepayment charges, late charges on loans and income from its bank-owned life insurance policies.

Other expenses increased $679 thousand, or 6.7%, to $10.8 million during the six months ended March 31, 2025 from $10.1 million during the six months ended March 31, 2024. The increase was primarily attributable to higher compensation and benefit expense, which increased $452 thousand, or 7.7%, to $6.3 million, due to higher medical benefits and incentive accruals as well as annual merit increases. In addition, occupancy expense increased $247 thousand, or 15.5%, to $1.8 million, due to lease termination expenses related to the closure of the Bank's Bridgewater office in the Company's first fiscal quarter.

The Company recorded tax expense of $1.9 million on pre-tax income of $6.7 million for the six months ended March 31, 2025, compared with $1.2 million on pre-tax income of $4.8 million for the six months ended March 31, 2024. The Company's effective tax rate for the six months ended March 31, 2025 was 28.5% compared with 25.7% for the six months ended March 31, 2024.

Balance Sheet Comparison

Total assets increased $69.9 million, or 7.3%, to $1.0 billion at March 31, 2025 from $951.9 million at September 30, 2024. The increase was attributable to higher balances of interest-earning deposits with banks and loans receivable.

Cash and interest-earning deposits with banks increased $47.3 million, or 185.0% to $72.9 million at March 31, 2025 from $25.6 million at September 30, 2024 resulting from net deposit inflows during the six months ended March 31, 2025.

At March 31, 2025, investment securities totaled $94.0 million, reflecting a decrease of $1.4 million, or 1.5%, from September 30, 2024. The decrease resulted from matured bonds totaling $4.5 million and payments from mortgage-backed securities totaling $3.8 million during the six months ended March 31, 2025. Offsetting these decreases were purchases of mortgage-backed securities totaling $6.9 million. There were no credit losses recorded for the Company's investment securities during the six months ended March 31, 2025 and March 31, 2024.

Total loans receivable increased $29.0 million, or 3.7%, to $810.2 million at March 31, 2025 from $781.2 million at September 30, 2024. The increase in total loans receivable during the six months ended March 31, 2025 occurred in commercial real estate loans, which increased $33.9 million, and in one-to four-family residential real estate loans (including home equity lines of credit), which increased $3.8 million. Partially offsetting these increases were construction and land loans, which decreased $5.2 million, commercial business loans, which decreased $3.0 million and other loans, which decreased $483 thousand.

Total non-performing loans decreased $151 thousand, or 65.1%, to $81 thousand at March 31, 2025 from $232 thousand at September 30, 2024. The ratio of non-performing loans to total loans decreased to 0.01% at March 31, 2025 from 0.03% at September 30, 2024.

The allowance for credit losses increased $179 thousand to $8.2 million, or 0.98% of total loans receivable, during the six months ended March 31, 2025. Growth in loans receivable during the six months ended March 31, 2025 resulted in additional provisions for credit losses totaling $71 thousand and the Company recorded $108 thousand in net loan recoveries. The Company's allowance for on-balance sheet credit losses increased to $7.9 million at March 31, 2025 from $7.5 million at September 30, 2024 while its reserve for off-balance sheet commitments decreased to $240 thousand at March 31, 2025 from $449 thousand at September 30, 2024.

Total deposits increased $61.0 million, or 7.7%, to $857.7 million at March 31, 2025. The inflow in deposits occurred in interest-bearing checking accounts, which increased $30.3 million, or 20.6%, to $177.0 million, in money market accounts, which increased $22.5 million, or 7.4%, to $327.1 million, in certificates of deposit (including individual retirement accounts), which increased $6.1 million, or 3.8%, to $165.7 million, in savings accounts, which increased $1.7 million, or 3.2%, to $54.6 million and in non-interest bearing checking accounts, which increased $462 thousand, or 0.4%, to $133.3 million.

The Company's book value per share increased to $17.65 at March 31, 2025 from $16.98 at September 30, 2024. The increase was due to the Company's results from operations, partially offset by $0.15 in dividends paid and 5,749 shares repurchased during the quarter at an average share price of $14.34.

About Magyar Bancorp
Magyar Bancorp is the parent company of Magyar Bank, a community bank headquartered in New Brunswick, New Jersey. Magyar Bank has been serving families and businesses in Central New Jersey since 1922 with a complete line of financial products and services.  Magyar operates seven branch locations in New Brunswick, North Brunswick, South Brunswick, Branchburg, Martinsville, and Edison (2). Please visit us online at www.magbank.com.

Forward Looking Statements
This press release contains statements about future events that constitute forward-looking statements within the meaning of the Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  Such forward-looking statements may be identified by reference to a future period or periods, or by the use of forward- looking terminology, such as "may," "will," "believe," "expect," or similar terms or variations on those terms, or the negative of those terms.  Forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, those risks previously disclosed in the Company's filings with the SEC, general economic conditions, changes in interest rates, regulatory considerations, competition, technological developments, retention and recruitment of qualified personnel, the imposition of tariffs or other domestic or international governmental policies, and market acceptance of the Company's pricing, products and services, and with respect to the loans extended by the Bank and real estate owned, the following: risks related to the economic environment in the market areas in which the Bank operates, particularly with respect to the real estate market in New Jersey; the risk that the value of the real estate securing these loans may decline in value; and the risk that significant expense may be incurred by the Company in connection with the resolution of non-performing loans. The Company wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The Company does not undertake and specifically declines any obligation to publicly release the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

MAGYAR BANCORP, INC. AND SUBSIDIARY
Selected Financial Data
(Dollars In Thousands, Except for Per-Share Amounts)
		Three Months Ended				Six Months Ended
		March 31,				March 31,
		2025		2024		2025		2024
Income Statement Data:
	Interest and dividend income	$         13,524		$         11,920		$         26,428		$         23,478
	Interest expense	5,648		4,997		11,108		9,310
	Net interest and dividend income	7,876		6,923		15,320		14,168
	(Recovery) provision for credit losses	(30)		14		71		495
	Net interest and dividend income after
	(recovery) provision for credit losses	7,906		6,909		15,249		13,673
	Other income	1,268		622		2,225		1,231
	Other expense	5,398		5,108		10,809		10,130
	Income before income tax expense	3,776		2,423		6,665		4,774
	Income tax expense	1,095		526		1,900		1,225
	Net income	$           2,681		$           1,897		$           4,765		$           3,549
Per Share Data:
	Net income per share-basic	$             0.43		$             0.30		$             0.77		$             0.56
	Net income per share-diluted	$             0.43		$             0.30		$             0.76		$             0.56
	Book value per share, at period end	$           17.65		$           16.30		$           17.65		$           16.30
Selected Ratios (annualized):
	Return on average assets	1.05 %		0.81 %		0.96 %		0.76 %
	Return on average equity	9.55 %		7.13 %		8.31 %		6.55 %
	Net interest margin	3.31 %		3.17 %		3.27 %		3.23 %

 

		March 31,		September 30,
		2025		2024
		(Dollars in Thousands)
Balance Sheet Data:
	Assets	$         1,021,863		$            951,918
	Total loans receivable	808,993		780,162
	Allowance for credit losses- loans	(7,936)		(7,548)
	Investment securities - available for sale, at fair value	19,345		15,616
	Investment securities - held to maturity, at cost	74,638		79,816
	Deposits	857,679		796,674
	Borrowings	33,924		28,568
	Shareholders' Equity	114,290		110,548
Asset Quality Data:
	Non-performing loans	$                     81		$                   232
	Other real estate owned	2,537		3,725
	Total non-performing assets	$                2,618		$                3,957
	Allowance for credit losses to non-performing loans	NM*		NM*
	Allowance for credit losses to total loans receivable	0.98 %		0.97 %
	Non-performing loans to total loans receivable	0.01 %		0.03 %
	Non-performing assets to total assets	0.26 %		0.42 %
	Non-performing assets to total equity	2.29 %		3.58 %
	* Not meaningful

 

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SOURCE Magyar Bancorp

FAQ

How much did Magyar Bancorp (MGYR) earnings increase in Q2 2025?

Magyar Bancorp reported a 41% increase in net income, reaching $2.7 million for Q2 2025 compared to $1.9 million in Q2 2024. Earnings per share increased to $0.43 from $0.30 year-over-year.

What dividend will MGYR pay in May 2025?

Magyar Bancorp declared a quarterly cash dividend of $0.06 per share, payable on May 28, 2025, to stockholders of record as of May 14, 2025.

What is Magyar Bancorp's (MGYR) net interest margin for Q2 2025?

Magyar Bancorp's net interest margin increased by 14 basis points to 3.31% for Q2 2025, up from 3.17% in Q2 2024.

How much did MGYR's total assets grow by March 2025?

Magyar Bancorp's total assets increased by $69.9 million (7.3%) to $1.0 billion at March 31, 2025, compared to $951.9 million at September 30, 2024.

What is Magyar Bancorp's (MGYR) book value per share as of March 2025?

Magyar Bancorp's book value per share increased to $17.65 as of March 31, 2025, up from $16.98 at September 30, 2024.

How did MGYR's loan portfolio perform in Q2 2025?

Total loans receivable increased by $29.0 million (3.7%) to $810.2 million, with commercial real estate loans growing by $33.9 million and residential real estate loans increasing by $3.8 million.