Magyar Bancorp(US:MGYR)2024-12-19 21:07Financial Performance - Net income increased by $74 thousand, or 1.0%, to $7.8 million for the year ended September 30, 2024, attributed to higher net interest income and lower provision for credit losses[160]. - Net income rose by $74 thousand, or 1.0%, to $7.8 million for the year ended September 30, 2024, compared to $7.7 million for the previous year[180]. - Earnings per share increased to $1.23 for the year ended September 30, 2024, up from $1.20 for the year ended September 30, 2023[180]. - Net interest and dividend income increased by $240 thousand, or 0.9%, to $28.0 million for the year ended September 30, 2024, compared to $27.7 million for the previous year[181]. - Interest and dividend income increased by $10.5 million, or 27.6%, to $48.6 million for the year ended September 30, 2024, from $38.1 million for the previous year[187]. - Interest income on loans increased by $7.9 million, or 22.4%, to $43.1 million for the year ended September 30, 2024, from $35.2 million for the previous year[188]. - Other income increased by $931 thousand, or 34.7%, to $3.6 million during the year ended September 30, 2024, driven by gains on other real estate and SBA loans[195]. Asset and Loan Growth - Total assets increased by $44.6 million, or 4.9%, to $951.9 million as of September 30, 2024, compared to $907.3 million in 2023[158]. - Total loans receivable rose by $83.0 million, or 11.9%, to $781.2 million at September 30, 2024, driven by an increase in commercial real estate loans by $72.2 million, or 18.6%[164]. - The total interest-earning assets increased to $890.8 million for the year ended September 30, 2024, compared to $791.4 million for the previous year[187]. - The average balance of interest-earning assets increased by $99.4 million, or 12.6%, to $890.8 million for the year ended September 30, 2024[187]. - The company originated $161.1 million in loans and purchased $12.5 million of investment securities during the year ended September 30, 2024, compared to $188.5 million in loans and $6.6 million in securities in the prior year[209]. Deposit and Equity Changes - Total deposits grew by $41.2 million, or 5.5%, to $796.7 million during the year ended September 30, 2024, with significant increases in certificates of deposit and interest-bearing checking accounts[159][175]. - Stockholders' equity increased by $5.7 million, or 5.5%, to $110.5 million as of September 30, 2024, from $104.8 million a year earlier[178]. - Total deposits increased by $41.2 million, or 5.46%, to $796.7 million for the year ended September 30, 2024, compared to a net increase of $87.7 million, or 13.1%, in the prior year[210]. Interest and Expense Management - Interest expense increased by $10.3 million, or 99.3%, to $20.6 million for the year ended September 30, 2024, primarily due to higher market interest rates[191]. - The average balance of interest-bearing deposits rose by $127.4 million, or 25.4%, to $629.1 million for the year ended September 30, 2024, with the average cost increasing by 125 basis points to 3.14%[192]. - The average cost of borrowings decreased by 29 basis points to 3.02% for the year ended September 30, 2024, despite an increase in the average balance of borrowings to $28.9 million[193]. Credit Quality and Allowance for Losses - Provision for credit losses decreased by $291 thousand, or 76.4%, to $90 thousand for the year ended September 30, 2024, attributed to lower net charge-offs and improved loan quality[194]. - The allowance for credit losses is established through the provision for credit losses charged against income, reflecting management's estimates of expected credit losses in the loan portfolio[219]. - A significant portion of the loan portfolio is collateralized by real estate, making property appraisals and discounted cash flow valuations critical for determining the allowance required for specific loans[220]. - Management conducts a quarterly evaluation of the allowance for credit losses, considering factors such as current economic conditions, delinquency statistics, and the financial strength of borrowers[221]. - The evaluation includes specific and general components; specific allowances are established for impaired loans, while general allowances are based on historical loss experience and economic conditions[222]. - The process of determining the allowance for credit losses requires a high degree of judgment, and actual outcomes differing from estimates may necessitate additional provisions that could reduce future earnings[223]. Strategic Initiatives - The company plans to continue increasing commercial real estate and commercial business loans while managing non-interest expenses to enhance profitability in fiscal 2025[161]. - The company opened its eighth retail branch office in Martinsville, New Jersey, in October 2024 as part of its market expansion strategy[177]. Investment and Securities - Investment securities decreased by $528 thousand, or 0.6%, to $95.4 million at September 30, 2024, with a notable increase in securities available-for-sale by $5.5 million, or 54.2%[170]. Liquidity and Capital Ratios - The liquidity ratio was 7.6% of assets as of September 30, 2024, exceeding the target of 5.0%[204]. - Tier 1 capital as a percentage of average assets was 11.11% as of September 30, 2024, with total qualifying capital at 15.85% of risk-weighted assets[213]. - Cash and cash equivalents totaled $25.6 million at September 30, 2024, down from $72.5 million at September 30, 2023[207]. Non-Performing Loans - Non-performing commercial real estate loans decreased to $116 thousand, or 0.03% of total commercial real estate loans, down from $2.2 million, or 0.60%, in the previous year[167].