Magyar Bancorp(US:MGYR)2025-12-19 15:25Financial Performance - Net income increased by $2.0 million, or 25.4%, to $9.8 million for the year ended September 30, 2025, attributed to higher net interest income [143][161]. - Net income for the year ended September 30, 2025, was $9.76 million, an increase of 25.4% compared to $7.78 million in 2024 [227]. - Earnings per share (EPS) increased to $1.57 for basic shares, up from $1.23 in the previous year, reflecting a growth of 27.6% [227]. - Total comprehensive income for 2025 was $9,760,000, compared to $7,783,000 in 2024, reflecting an increase of 25.4% [235]. - Operating activities generated net cash of $10,389,000 in 2025, compared to $6,318,000 in 2024, reflecting a year-over-year increase of 64.8% [235]. Asset and Liability Management - Total assets increased by $45.8 million, or 4.8%, to $997.7 million as of September 30, 2025, driven by a $77.2 million increase in loans receivable [141]. - Total liabilities increased to $878.82 million in 2025, compared to $841.37 million in 2024, reflecting a growth of approximately 4.4% [224]. - The average balance of interest-earning assets increased by $63.9 million, or 7.2%, to $954.6 million for the year ended September 30, 2025, from $890.8 million for the year ended September 30, 2024 [170]. - Cash and cash equivalents totaled $7.1 million at September 30, 2025, down from $25.6 million at September 30, 2024, while available-for-sale securities increased to $21.2 million from $15.6 million [191]. Loan Portfolio - Total loans receivable increased by $77.7 million, or 9.9%, to $858.9 million, with commercial real estate loans growing by $71.9 million, or 15.6% [147]. - The company originated $162.7 million in loans and purchased $11.3 million of investment securities during the year ended September 30, 2025, compared to $161.1 million in loans and $12.5 million in securities in the previous year [194]. - The total loan portfolio's criticized categories, including Special Mention, Substandard, and Doubtful, were minimal, with only $202,000 in Special Mention for commercial real estate loans in 2025 [323]. - The commercial real estate loans classified as Pass increased to $111,456,000 in 2025 from $88,597,000 in 2024, reflecting a growth of about 25.7% [326]. Credit Quality and Allowance for Credit Losses - The allowance for credit losses increased by $802 thousand to $8.4 million as of September 30, 2025, due to provisions for credit loss totaling $653 thousand [151]. - The provision for credit losses increased by $312 thousand, or 346.7%, to $402 thousand for the year ended September 30, 2025, compared to $90 thousand for the year ended September 30, 2024 [176]. - The allowance for credit losses (ACL) increased to $8.35 million in 2025 from $7.55 million in 2024, representing a rise of approximately 10.6% [332]. - The company employs a ten-point internal risk rating system to monitor credit quality, with loans greater than three months past due classified as Substandard [319]. Deposits and Funding - Total deposits rose by $17.6 million, or 2.2%, to $814.3 million, with significant growth in certificates of deposit increasing by $50.3 million, or 31.5% [142][156]. - As of September 30, 2025, the company had the ability to borrow $319.9 million from the FHLBNY, an increase from $272.3 million at September 30, 2024 [192]. - The Federal Home Loan Bank of New York advances rose to $49.1 million in 2025 from $28.6 million in 2024, reflecting an increase of 71.5% [339]. Interest Income and Expenses - Net interest and dividend income rose by $3.9 million, or 14.0%, to $31.9 million during the year ended September 30, 2025 [162]. - Interest income and yield increased by $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 [170]. - Interest expense increased by $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 [173]. - The Company's net interest margin increased by 20 basis points to 3.34% for the year ended September 30, 2025, compared to 3.14% for the year ended September 30, 2024 [163]. Other Income and Expenses - Other income increased by $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 [178]. - Compensation and employee benefit expenses increased by $893 thousand, or 7.6%, due to annual merit increases and higher medical insurance costs [182]. - The Company's service charges increased by $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 [179]. Stockholder Equity and Dividends - Stockholders' equity increased by $8.3 million, or 7.5%, to $118.8 million, supported by net income and other comprehensive income [160]. - The company paid dividends of $1,823,000 in 2025, an increase from $1,679,000 in 2024, marking an increase of 8.6% [235]. - The Company announced a quarterly dividend of $0.08 per share, payable on November 25, 2025 [294]. Risk Management and Compliance - The Asset Review Committee conducts monthly reviews of all commercial relationships rated 6 ("Watch") or worse to ensure timely risk assessment [320]. - The external loan review company assesses loans greater than $500,000 semi-annually, ensuring compliance with risk rating accuracy [320]. - The company has not engaged in the use of derivative financial instruments, focusing instead on traditional banking services [288].