Magyar Bancorp Reports 46.1% Increase in Net Income for Q2 2025

Magyar Bancorp, Inc. reported a net income of $2.5 million for the three months ended June 30, 2025, marking a 46.1% increase from $1.7 million in the same period last year. For the nine months ending June 30, 2025, net income rose to $7.2 million, a 38.1% increase compared to $5.2 million for the same period in 2024. The growth in profitability was primarily driven by an increase in net interest income, which rose by 20.5% to $8.2 million for the quarter and by 12.2% to $23.5 million for the nine-month period. This increase was attributed to a higher average balance of interest-earning assets and an improved net interest margin, which increased to 3.35% for the quarter and 3.30% for the nine months.

Total assets for Magyar Bancorp increased by $35.6 million, or 3.7%, to $987.5 million as of June 30, 2025, compared to $951.9 million at the end of the previous fiscal year. This growth was largely due to an increase in loans receivable, which rose by $64.2 million, or 8.2%, to $845.4 million. The increase in loans was primarily driven by a $62.7 million rise in commercial real estate loans and a $3.7 million increase in one-to-four family residential loans. However, there was a decrease in commercial business loans, which fell by $4.9 million.

In terms of operational metrics, the company reported a total of $819.9 million in deposits, reflecting a 2.9% increase from the previous period. The growth in deposits was mainly seen in money market accounts and certificates of deposit, which increased by $26.3 million and $20.9 million, respectively. However, non-interest-bearing checking accounts saw a decrease of $16.5 million. The company also experienced a rise in borrowings, which increased by $7.5 million, or 26.2%, to $36.1 million, primarily to support loan growth.

The allowance for credit losses increased to $8.1 million, or 0.98% of total loans, up from $7.5 million at the end of September 2024. This increase was attributed to the growth in the loan portfolio, particularly in commercial real estate and residential mortgage loans. The company recorded a provision for credit losses of $172,000 for the nine months ended June 30, 2025, compared to $441,000 for the same period in 2024, indicating improved credit quality despite the increase in total non-performing loans, which rose to $920,000 from $232,000.

Looking ahead, Magyar Bancorp anticipates continued growth in its loan portfolio and overall financial performance, although it acknowledges potential risks related to economic conditions and credit quality. The company remains focused on maintaining strong capital ratios, with Tier 1 capital at 10.97% of total assets as of June 30, 2025, and total qualifying capital at 15.71% of risk-weighted assets.