What changed in this filing

/stocks — the workspaceLOADING

Item 5. Market for Registrant’s Common Equity

2021-12-20 compared with 2020-12-18 · 45 added, 727 removed, 2 unchanged (100% of the section changed)

Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases

of Equity Securities

(a) Our shares of common stock are traded on the NASDAQ Global Market under the symbol “MGYR.”

At September 30, 2020, Magyar Bancorp, MHC owned 3,200,450 shares, or 55.0% of the outstanding shares of our common stock.

approximate number of holders of record of Magyar Bancorp, Inc.’s common stock as of September 30, 2020 was 381.

shares of Magyar Bancorp, Inc.

are held in “nominee”

or “street”

name and accordingly, the number of beneficial

owners of such shares is not known or included in the foregoing number.

Dividend payments

by Magyar Bancorp, Inc.

would be dependent primarily on dividends it receives from Magyar Bank, because Magyar Bancorp, Inc.

no source of income other than dividends from Magyar Bank, earnings from the investment of proceeds from the sale of shares of

common stock retained by Magyar Bancorp, Inc., and interest payments with respect to Magyar Bancorp, Inc.’s loan to the Employee

Stock Ownership Plan.

information on regulatory restrictions regarding the payment of dividends, see “Item 1- Business-

Supervision and Regulation- New Jersey Banking Regulation-Dividends.”

Other than its

Employee Stock Ownership Plan, Magyar Bancorp, Inc.

Market for Registrant’s Common Equity,

Related Stockholder Matters, and Issuer Purchases of Equity Securities

Our shares of common stock are traded on the NASDAQ Global Market under the symbol “MGYR.” The

approximate number of holders of record of Magyar Bancorp, Inc.’s common stock as of September 30, 2021 was 482.

Certain shares

of Magyar Bancorp, Inc.

are held in “nominee” or “street” name and accordingly, the number of beneficial owners

of such shares is not known or included in the foregoing number.

The Company has not historically

paid a dividend to stockholders.

However, on November 16, 2021, the Company declared a one-time special dividend of $0.12 per common share,

payable December 14, 2021, to common shareholders of record at the close of business on November 30, 2021.

In the future, the Company

intends to consider adopting a regular cash dividend policy but no assurance can be given as to the timing of when or if any such regular

dividend payments would commence.

information on regulatory restrictions regarding the payment of dividends, see “Item 1- Business- Supervision and Regulation- New

Jersey Banking Regulation-Dividends.”

Other than its Employee

Stock Ownership Plan, Magyar Bancorp, Inc.

does not have any equity compensation plans that were not approved by stockholders.

There were no stock options or shares of restricted stock available for issuance with respect to Magyar Bancorp’s equity

compensation plans at September 30, 2020

(b) Not applicable.

The Company completed its

first stock repurchase program of 130,927 shares in November 2007 and announced in November 2007 a second repurchase program of

up to 5% of its publicly-held outstanding shares of common stock, or 129,924 shares, under which 91,000 shares had been repurchased

as of September 30, 2020 at an average price of $8.41.

During the year ended September

30, 2020, the Company repurchased 10,000 shares at an average price of $9.03 which has reduced outstanding shares to 5,810,746.

Selected Financial Data

required for smaller reporting companies.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Magyar Bancorp, Inc.

“Company”) is a Delaware-chartered mid-tier stock holding company whose most significant business activity is ownership

of 100% of the common stock of Magyar Bank.

Magyar Bank’s principal business is attracting retail deposits from the general

public and investing those deposits, together with funds generated from operations, principal repayments on loans and securities

and borrowed funds, into one-to four-family residential mortgage loans, multi-family and commercial real estate mortgage loans,

home equity loans and lines of credit, commercial business loans and construction loans.

Our results of operations depend primarily

on our net interest income which is the difference between the interest we earn on our interest-earning assets and the interest

we pay on our interest-bearing liabilities.

Our net interest income is primarily affected by the market interest rate environment,

the shape of the U.S.

Treasury yield curve, the timing of the placement of interest-earning assets and interest-bearing liabilities,

and the prepayment rate on our mortgage-related assets.

Other factors that may affect our results of operations are general and

local economic and competitive conditions, government policies and actions of regulatory authorities.

During the year ended September

30, 2020, the Company’s total assets grew $123.7 million, or 19.6%, to $754.0 million.

The increase was attributable to a

to a $84.9 million, or 16.4%, increase in loans receivable, net of allowance of loss, a $40.3 million, or 187.5%, increase in cash

and cash equivalents, and a $4.1 million increase in other assets from the adoption of ASU 2016-02 (Leases).

Partially offsetting

these increases were decreases in OREO, which declined $4.9 million during the year, and in investment securities, which declined

$1.2 million during the year.

Total deposits increased

$88.3 million, or 16.6%, to $618.3 million during the year ended September 30, 2020.

The growth in deposits during the year ended

September 30, 2020 occurred in non-interest checking account balances, which increased $57.1 million, or 53.7%, to $163.6 million,

in interest-bearing checking account balances, which increased $17.3 million, or 35.9% to $65.4 million, in certificates of deposit

(including individual retirement accounts), which increased $9.6 million, or 8.2%, to $126.4 million, and in savings account balances,

which increased $4.3 million, or 6.1%, to $74.9 million.

Offsetting these increases was a $92,000, or 0.05%, decrease in money

market account balances, to $188.0 million.

The Company’s net

income decreased $806,000, or 26.9%, to $2.2 million for the year ended September 30, 2020 compared with net income of $3.0 million

for the year ended September 30, 2019.

The decrease in net income between the twelve month periods was primarily attributable to

higher provisions for loan loss, which increased $998,000 and lower other non-interest income, which decreased $420,000, both of

which were the result of the Coronavirus/COVID-19 pandemic.

Throughout 2021, we expect

to continue increasing our commercial real estate and commercial business loans while managing non-interest expenses in order to

increase profitability of the Company.

Critical Accounting Policies

Critical accounting

policies are defined as those that are reflective of significant judgments and uncertainties, and could potentially result in materially

different results under different assumptions and conditions.

Critical accounting policies may involve complex subjective decisions

or assessments.

We consider the following to be our critical accounting policies.

for Loan Loss.

The allowance for loan losses is the amount estimated by management as necessary to cover credit losses

in the loan portfolio both probable and reasonably estimable at the balance sheet date.

The allowance is established through the

provision for loan losses which is charged against income.

In determining the allowance for loan losses, management makes significant

estimates and has identified this policy as one of our most critical.

Due to the high degree of judgment involved, the subjectivity

of the assumptions utilized and the potential for changes in the economic environment that could result in changes to the amount

of the recorded allowance for loan losses, the methodology for determining the allowance for loan losses is considered a critical

accounting policy by management.

As a substantial

amount of our loan portfolio is collateralized by real estate, appraisals of the underlying value of property securing loans and

discounted cash flow valuations of properties are critical in determining the amount of the allowance required for specific loans.

Assumptions for appraisals and discounted cash flow valuations are instrumental in determining the value of properties.

optimistic assumptions or negative changes to assumptions could significantly affect the valuation of a property securing a loan

and the related allowance determined.

The assumptions supporting such appraisals and discounted cash flow valuations are carefully

reviewed by management to determine that the resulting values reasonably reflect amounts realizable on the related loans.

Management performs

a quarterly evaluation of the adequacy of the allowance for loan losses.

We consider a variety of factors in establishing this

estimate including, but not limited to, current economic conditions, delinquency statistics, geographic and industry concentrations,

the adequacy of the underlying collateral, the financial strength of the borrower, results of internal loan reviews and other relevant

This evaluation is inherently subjective as it requires material estimates by management that may be susceptible to significant

change based on changes in economic and real estate market conditions.

The evaluation has

a specific and general component.

The specific component relates to loans that are delinquent or otherwise identified as impaired

through the application of our loan review process and our loan grading system.

All such loans are evaluated individually, with

principal consideration given to the value of the collateral securing the loan and discounted cash flows.

Specific impairment allowances

are established as required by this analysis.

However, the Bank’s Federal and State regulators generally require that the

specific reserve against impaired collateral-dependent loans be charged-off, reducing the carrying balance of the loan and allowance

for loan loss.

The general component is determined by segregating the remaining loans by type of loan, risk weighting (if applicable)

and payment history.

We analyze historical loss experience, delinquency trends, general economic conditions and geographic and

industry concentrations in establishing the general portion of the reserve.

This analysis establishes factors that are applied

to the loan groups to determine the amount of the general component of the allowance for loan losses.

Actual loan losses may

be significantly greater than the allowances we have established, which could have a material negative effect on our financial

Deferred Income Taxes.

The Company records income taxes using the asset and liability method.

Accordingly, deferred tax assets and liabilities:

(i) are recognized for the expected future tax consequences of events that have been recognized in the financial statements

or tax returns;

(ii) are attributable to differences between the financial statement carrying amounts of existing assets and

liabilities and their respective tax bases;

and (iii) are measured using enacted tax rates expected to apply in the years

when those temporary differences are expected to be recovered or settled.

Deferred tax assets are

likely to be realized and therefore do not have a valuation allowance.

Impact of the Coronavirus/COVID-19

The extraordinary impact

of the Coronavirus/COVID-19 (“COVID-19”) created an unprecedented environment for consumers and businesses alike.

protect its employees and customers from potential exposure to the virus, all Magyar Bank lobbies were closed from March 20, 2020

through June 8, 2020.

During that period the Bank continued to serve its community through its drive-up lanes, online banking,

mobile services, and ATMs.

Operational staff worked on a rotational

basis and between their primary offices and our disaster recovery

location to limit their potential exposure to COVID-19 and to continue providing banking services to our customers.

To assist its customers,

Magyar Bank offered loan payment deferrals to borrowers unable to pay due to the effects of COVID-19.

The banking regulatory agencies,

through an Interagency Statement dated April 7, 2020, encouraged financial institutions to work with borrowers who request loan

modifications or deferrals as a result of COVID-19.

Under Section 4013 of the CARES Act, loans less than 30 days past due as of

December 31, 2019 were considered current for COVID-19 modifications.

A financial institution may temporarily suspend any determination

of a loan modified as a result of COVID-19 as being a troubled debt restructuring (“TDR”), including the requirement

to determine impairment for accounting purposes.

Similarly, the Financial Accounting Standards Board has confirmed that short-term

modifications made on a good-faith basis in response to COVID-19 to loan customers who were current prior to any relief are not

Loan payment deferral requests

were considered on a case-by-case basis and were initially approved for a three month period for principal and interest payments

or for interest only payments depending on the borrower’s circumstances.

An additional three month period is available for

businesses and consumers that remain unable to operate due to COVID-19 after the initial three month deferral period.

As of September

30, 2020, we had modified 283 loans aggregating $150.7 million, primarily consisting of the deferral of principal and/or interest

payments for a period of 90 days.

Details with respect to actual loan modifications are as follows:

Type of Loan September 30, 2020

Weighted Average

Interest Rate

(In thousands)

One- to four-family residential real estate (1)

Commercial real estate

Home equity lines of credit

Commercial business

(1) Includes home equity loans.

Through November 30, 2020,

270 loans totaling $141.4 million had resumed making their contractually scheduled payments, 11 loans totaling $7.8 million remained

in deferral status, and 2 loans totaling $1.5 million were delinquent.

Of the two delinquent loans, one loan totaling $1.4 million

was delinquent 90 days at September 30, 2020 and one loan totaling $113,000 was delinquent 30 days at September 30, 2020.

The CARES Act authorized

the Small Business Administration (“SBA”) to temporarily guarantee loans under a new 7(a) loan program called the Paycheck

Protection Program (“PPP”).

As a qualified SBA lender, Magyar Bank was automatically authorized to originate PPP loans.

An eligible business could apply for a PPP loan up to the greater of:

(1) 2.5 times its average monthly “payroll costs;”

or (2) $10.0 million.

PPP loans have:

(a) an interest rate of 1.0%, (b) a five year loan term to maturity for loans made on or

after June 5, 2020 (loans made prior to June 5, 2020 have a two-year term, however borrowers and lenders may mutually agree to

extend the maturity for such loans to five years);

and (c) principal and interest payments deferred for six months from the date

of disbursement.

The SBA guarantees 100% of the PPP loans made to eligible borrowers.

The entire principal amount of the borrower’s

PPP loan, including any accrued interest, is eligible to be reduced by the loan forgiveness amount under the PPP.

The Bank funded 350 PPP

loans totaling $56.0 million through September 30, 2020 for which it received $2.0 million in origination fees from the SBA.

Bank receives a processing fee from the SBA based on a percentage of the PPP loan as follows:

5% for loans under $350,000, 3% for

loans of $350,000 up to $1,999,900, and 1% for loans of $2,000,000 or more.

The processing fees are being amortized over the expected

life of the loans.

On April 9, 2020 the Board

of Governors of the Federal Reserve announced the Paycheck Protection Program Lending Facility (“PPPLF”), authorized

under section 13(3) of the Federal Reserve Act, to facilitate lending by eligible financial institutions to small businesses under

the Paycheck Protection Program of the CARES Act.

Under the PPPLF, the Federal Reserve Bank of New York provides advances with

a fixed interest rate of 0.35% to Magyar Bank on a non-recourse basis, taking PPP loans as collateral.

Under section 1102 of the

CARES Act, a PPP Loan is assigned a risk weight of zero percent under the risk-based capital rules of the federal banking agencies.

On April 9, 2020, the Board, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation issued

an interim final rule to allow banking organizations to neutralize the effect of PPP loans financed under the PPPLF on Tier 1 leverage

capital ratios.

At September 30, 2020, the Bank had borrowed $36.9 million in PPPLF advances from the Federal Reserve, pledging

an equal amount of PPP loans as collateral.

The health of the banking

industry is highly correlated with that of the economy.

The closure of non-essential businesses in our local and national economies

increases the likelihood of recession, which typically results in an increased level of credit losses.

Accordingly, our provisions

for loan loss have increased and will be closely monitored throughout the pandemic.

In addition to utilizing quantitative loss

factors, the Company considers qualitative factors, such as changes in underwriting policies, current economic conditions, delinquency

statistics, the adequacy of the underlying collateral, and the financial strength of the borrower.

The impact of the COVID-19 pandemic

on the performance of the Company’s loan portfolio in future quarters is unknown, however all of these factors are likely

to be affected by the COVID-19 pandemic.

Comparison of Financial

Condition at September 30, 2020 and September 30, 2019

Total Assets.

assets increased $123.7 million, or 19.6%, during the year ended September 30, 2020.

The increase was attributable to a $84.9 million,

or 16.4%, increase in loans receivable, net of allowance of loss, a $40.3 million, or 187.5%, increase in cash and cash equivalents,

and a $4.1 million increase in other assets from the adoption of ASU 2016-02 (Leases).

Partially offsetting these increases were

decreases in other real estate owned (“OREO”), which declined $4.9 million during the year, and in investment securities,

which declined $1.2 million during the year.

Loans Receivable.

Total loan receivable increased 84.9 million, or 16.4%, to $603.1 million at September 30, 2020 from $518.2 million at

September 30, 2019.

The total loan receivable at September 30, 2020 were comprised of $248.1 million (40.6%) in commercial real

estate loans, $210.4 million (34.4%) in 1-4 family residential mortgage loans, $101.0 million (16.5%) in commercial business loans

(including $56.0 in PPP loans), $28.2 million (4.6%) in construction loans, and $23.5 million (3.9%) in home equity lines of credit

and other loans.

Total loans receivable at September 30, 2019 were comprised of $232.5 million (44.5%) in commercial real estate

loans, $190.4 million (36.4%) in 1-4 family residential mortgage loans, $48.8 million (9.3%) in commercial business loans, $28.5

million (5.4%) in construction loans, and $22.8 million (4.4%) in home equity lines of credit and other loans.

Total non-performing increased

$2.8 million to $9.7 million during the year ended September 30, 2020 from $6.9 million at September 30, 2019.

At September 30,

2020, non-performing loans consisted of eight commercial real estate loans totaling $2.2 million, three construction loans totaling

$5.1 million, three commercial business loans totaling $1.5 million, and three loans secured by 1-4 family residential mortgage

totaling $905,000.

The ratio of non-performing loans to total loans was 1.6% at September 30, 2020 compared to 1.3% at September

Once a loan is deemed non-performing,

the value of the collateral securing the loan must be assessed, which is typically done by obtaining an updated third-party appraisal.

To the extent that the current appraised value of collateral is insufficient to cover a collateral-dependent loan, the Company

reduces the balance of the loan via a charge to the allowance for loan loss.

Non-performing loans secured

by one-to four-family residential properties, including home equity lines of credit and other consumer loans, increased $791,000

to $905,000 at September 30, 2020 from $114,000 at September 30, 2019.

Magyar Bank had begun foreclosure proceedings on the properties

securing these loans at September 30, 2020.

During the year ended September 30, 2020, there were no charge-offs against the allowance

for loan loss for residential real estate loans while $9,000 was recovered from prior year charge-offs.

Non-performing commercial

real estate loans decreased $433,000 to $2.2 million at September 30, 2020 from $2.7 million at September 30, 2019.

had begun foreclosure proceedings on the properties securing these loans at September 30, 2020.

During the year ended September

30, 2020, there were no charge-offs against the allowance for loan loss while $5,000 was recovered from prior year charge-offs.

Non-performing commercial

business loans increased $239,000 to $1.5 million at September 30, 2020 from $1.2 million at September 30, 2019.

Magyar Bank had

begun foreclosure proceedings on the collateral securing these loans at September 30, 2020.

During the year ended September 30,

2020, Magyar Bank charged off $204,000 through a reduction of its allowance for loan loss for one impaired commercial business

loan while $100,000 was recovered from a prior year charge-off.

Non-performing construction

loans increased $2.2 million to $5.1 million at September 30, 2020 from $2.9 million at September 30, 2019.

Magyar Bank had begun

foreclosure proceedings on the properties securing these loans at September 30, 2020.

During the year ended September 30, 2020,

Magyar Bank charged off $65,000 through a reduction of its allowance for loan loss for one impaired construction loan and there

were no recoveries.

The ratio of non-performing

loans and troubled debt restructurings to total loans receivable increased to 1.63% at September 30, 2020 from 1.39% at September

The allowance for loan losses increased $1.5 million to $6.4 million, or 65.8% of non-performing loans, at September

30, 2020 compared with $4.9 million, or 70.9% of non-performing loans, at September 30, 2019.

Provisions for loan loss during

the year ended September 30, 2020 were $1.7 million while net charge-off were $154,000, compared with a provision of $668,000 and

net recoveries of $20,000 for the prior year period.

The allowance for loan losses was 1.05% and 0.93% of gross loans outstanding

at September 30, 2020 and 2019, respectively.

Investment Securities.

Investment securities decreased $1.2 million, or 2.6%, to $45.0 million at September 30, 2020 from $46.2 million at September 30,

Investment securities at September 30, 2020 consisted of $32.2 million in mortgage-backed securities issued by U.S.

agencies and U.S.

government-sponsored enterprises, $9.5 million in U.S.

government-sponsored enterprise debt securities, $3.0

million in corporate notes and $259,000 in “private-label”

mortgage-backed securities.

There were no other-than-temporary-impairment

charges for the Company’s investment securities for the year ended September 30, 2020.

Securities available-for-sale

decreased $2.1 million, or 12.8%, to $14.6 million at September 30, 2020 from $16.7 million at September 30, 2019.

was attributable to $6.1 million in sales and $5.7 million in principal and premium amortization, partially offset by $9.5 million

in purchases during the twelve months ended September 30, 2020.

Securities held-to-maturity

increased $962,000, or 3.3%, to $30.4 million at September 30, 2020 from $29.5 million at September 30, 2019.

The increase was

the result of $10.2 million in security purchases, partially offset by $9.2 million in principal and premium amortization during

the twelve months ended September 30, 2020.

Bank-Owned Life Insurance.

The cash surrender value of life insurance held for directors and executive officers of Magyar Bank increased $324,000, or 2.4%,

to $14.0 million at September 30, 2020 from $13.6 million at September 30, 2019.

During the twelve months ended September 30, 2020,

the Company did not purchase any new bank-owned life insurance policies.

Other Real Estate

OREO decreased $4.9 million, or 65.5%, to $2.6 million at September 30, 2020 from $7.5 million at September 30,

The Company was able to

dispose of seven properties with an aggregate carrying value of $4.6 million for a net gain of $42,000.

The Company recorded $371,000

in valuation allowances against its OREO during the year ended September 30, 2020 based on updated appraisals or executed contracts

There were no new properties recorded as OREO during the year ended September 30, 2020.

OREO at September 30, 2020

consisted of one residential property totaling $215,000, one compilation of real estate lots/land totaling $490,000, and three

commercial real estate buildings totaling $1.9 million.

The Bank is determining the proper course of action for its OREO, which

may include holding the properties until the real estate market improves, marketing the properties for individual sale, or selling

properties to an investor and/or developer.

Deposits, which include noninterest-bearing demand deposits, interest-bearing demand deposits, money market deposits, savings deposits

and time deposits, are the primary source of the Company’s funds.

The Company offers a variety of products designed

to attract and retain customers, with primary focus on building and expanding relationships.

The Company continues to

focus on establishing relationships with business borrowers, seeking deposits as well as lending relationships.

Total deposits increased

$88.3 million, or 16.6%, to $618.3 million at September 30, 2020 from $530.0 million at September 30, 2019.

The increase in deposits

during the twelve month ended September 30, 2020 occurred in non-interest checking account balances, which increased $57.1 million,

or 53.7%, to $163.6 million, in interest-bearing checking account balances, which increased $17.3 million, or 35.9% to $65.4 million,

in certificates of deposit (including individual retirement accounts), which increased $9.6 million, or 8.2%, to $126.4 million,

and in savings account balances, which increased $4.3 million, or 6.1%, to $74.9 million.

Money market account balances decreased

$92,000, or 0.05%, to $188.0 million.

Deposits accounted for 82.0% of assets and 102.5% of net loans receivable at September 30,

2020 compared with 84.1% of assets and 102.3% of net loans receivable at September 30, 2019, respectively.

The Bank experienced extraordinary

increases in its deposits since the COVID-19 pandemic began in March 2020.

During the six months ended September 30, 2020, deposits

increased $57.4 million, of which $31.4 million was in non-interest checking accounts and $22.9 million was in interest-bearing

checking accounts.

Commercial and consumer deposit inflows were extraordinarily higher during this period due to PPP loan disbursements,

government stimulus programs, lower spending and customers’

preferences for liquidity during the ongoing COVID-19 pandemic.

At September 30, 2020,

the Company held $9.4 million in brokered certificates of deposit, compared with $6.9 million at September 30, 2019.

brokered deposits were used to fund PPP loans before the PPPLF was announced.

The Company’s deposit

strategy in 2020 focused on growing its non-interest checking account balances and managing the cost of its money market accounts

to offset declines in market interest rates.

Borrowed Funds.

increased $31.2 million, or 86.3%, to $67.4 million at September 30, 2020 from $36.2 million at September 30, 2019.

The Bank borrowed

$36.9 million in PPPLF advances from the Federal Reserve Bank during the year ended September 30, 2020 to offset the liquidity

and capital impacts of the PPP loans.

Federal Home Loan Bank of New York advances decreased $5.7 million to $30.5 million at September

30, 2020 from $36.2 million at September 30, 2019 as deposit inflows were used to repay maturing long-term advances.

Stockholders’

equity increased $2.2 million, or 4.0%, to $56.9 million at September 30, 2020 from $54.7 million

at September 30, 2019.

The increase in stockholders’

equity was attributable to the Company’s results of operations

for the year ended September 30, 2020.

The Company repurchased

10,000 shares of its common stock at an average price of $9.03 during the twelve months ended September 30, 2020.

The Company has

repurchased 91,000 shares at an average price of $8.41 pursuant to the second stock repurchase plan, which reduced outstanding

shares to 5,810,746.

The Company’s book

value per share increased to $9.78 at September 30, 2020 from $9.39 at September 30, 2019.

The increase was attributable to the

Company’s results from operations and stock repurchases for the year ended September 30, 2020.

Comparison of Operating

Results for the Years Ended September 30, 2020 and 2019

Company’s net income decreased $806,000, or 26.9%, to $2.2 million during the year ended September 30, 2020 compared with

$3.0 million for the year ended September 30, 2019 due to higher provisions for loan loss, lower non-interest income, and higher

non-interest expenses, partially offset by higher net interest and dividend income.

For the year ended September

30, 2020, the net interest margin decreased by 10 basis points to 3.31% from 3.41% for the prior year period.

The Company experienced

contraction in its margin due to the lower market interest rate environment and the origination of $56.0 million in PPP loans earning

1.0% during the year ended September 30, 2020.

Net Interest and

Dividend Income.

The primary source of the Company’s operating income is net interest and dividend income, which

is the difference between interest and dividends earned on earning assets and fees earned on loans, and interest paid on interest-bearing

The Company’s net interest and dividend income is affected by regulatory, economic and competitive

factors that influence interest rates, loan demand, deposit flows and levels of nonperforming assets.

During the year ended September

30, 2020, net interest and dividend income increased $1.0 million, or 5.0%, to $21.4 million compared to $20.4 million for the

year ended September 30, 2019.

The average balance of interest-earning assets increased $47.3 million, or 7.9%, while the yield

on such assets decreased 37 basis points to 4.16% for the year ended September 30, 2020 compared with the prior year period.

of PPP loans, higher balances of interest earning deposits, and lower market interest rates were responsible for the 37 basis point

drop in yield on earning assets.

The average balance of interest-bearing liabilities increased $20.7 million, or 4.4%, while the

cost on such liabilities decreased 31 basis points to 1.13% for the year ended September 30, 2020 compared with the prior year

Lower market interest rates were responsible for the 31 basis point drop in the cost of the Company’s liabilities.

Average Balance Sheet.

The following table presents certain information regarding our financial condition and net interest income for the years

ended September 30, 2020, 2019 and 2018.

The table presents the annualized average yield on interest-earning assets and the annualized

average cost of interest-bearing liabilities.

We derived the yields and costs by dividing annualized income or expense by the average

balance of interest-earning assets and interest-bearing liabilities, respectively, for the periods shown.

We derived average balances

from daily balances over the periods indicated.

Interest income includes fees that we consider adjustments to yields.

For the Year Ended September 30,

(Dollars In Thousands)

Interest-earning assets:

Interest-earning deposits

Loans receivable, net

FHLB of NY stock

Total interest-earning assets

Noninterest-earning assets

Interest-bearing liabilities:

Savings accounts (1)

NOW accounts (2)

Time deposits (3)

Total interest-bearing deposits

Total interest-bearing liabilities

Noninterest-bearing liabilities

Total liabilities

Retained earnings

Total liabilities and retained earnings

Net interest and dividend income

Interest rate spread

Net interest-earning assets

Net interest margin (4)

Average interest-earning assets to

average interest-bearing liabilities

(1) Includes passbook savings, money market passbook and club accounts.

(2) Includes interest-bearing checking and money market accounts.

(3) Includes certificates of deposits and individual retirement accounts.

(4) Calculated as annualized net interest income divided by average total interest-earning assets.

Rate/Volume Analysis.

The following table presents the effects of changing rates and volumes on our net interest income for the periods indicated.

rate column shows the effects attributable to changes in rate (changes in rate multiplied by average volume).

The volume column

shows the effects attributable to changes in volume (changes in average volume multiplied by prior rate).

The net column represents

the sum of the prior columns.

For purposes of this table, changes attributable to both rate and volume, which cannot be segregated,

have been allocated proportionately, based on the changes due to rate and the changes due to volume.

September 30,

Increase (decrease)

(In thousands)

Interest-earning assets:

Interest-earning deposits

FHLB of NY stock

Total interest-earning assets

Interest-bearing liabilities:

Savings accounts (1)

NOW accounts (2)

Time deposits (3)

Total interest-bearing deposits

Total interest-bearing liabilities

Increase in net interest income

(1) Includes passbook

savings, money market passbook and club accounts.

(2) Includes interest-bearing

checking and money market accounts.

(3) Includes certificates

of deposits and individual retirement accounts.

Interest and Dividend

Interest and dividend income decreased $176,000, or 0.6%, to $26.9 million for the year ended September 30, 2020

from $27.1 million for the year ended September 30, 2019.

The average balance of interest-earnings assets between the two periods

increased $47.3 million, or 7.9%, to $645.1 million from $597.9 million, while the yield on such assets decreased 37 basis points

to 4.16% for the year ended September 30, 2020 from 4.53% for the year ended September 30, 2019.

Interest income on loans

increased $472,000, or 1.9%, to $25.6 million for the year ended September 30, 2020 from $25.2 million for the year ended September

30, 2019, while the average balance of loans increased $46.1 million, or 8.9%, to $562.2 million from $516.1 million.

yield on such loans was 4.55% at September 30, 2020 compared with 4.87% at September 30, 2019.

The decrease in yield on loans reflected

the lower market interest rate environment and the origination of $56.0 million in PPP loans earning 1.0% during the year ended

September 30, 2020.

Interest earned on investment

securities, including interest earned on deposits but excluding Federal Home Loan Bank of New York stock, decreased $627,000, or

34.8%, to $1.2 million for the year ended September 30, 2020 from $1.8 million for the same period prior year.

The decrease was

primarily due to an 81 basis point decrease in the average yield on investment securities and interest earned on deposits to 1.45%

from 2.26%, partially offset by a $1.2 million, or 1.6%, increase in the average balance of investment securities and interest

earning deposits to $80.9 million from $79.7 million from the prior year.

Interest Expense.

Interest expense decreased $1.2 million, or 17.8%, to $5.5 million for the year ended September 30, 2020 from $6.7 million

for the year ended September 30, 2019.

The average balance of interest-bearing liabilities increased $20.7 million, or 4.4%, to

$487.0 million from $466.3 million between the two periods while the cost of such

liabilities decreased 31 basis points to 1.13%

for the year ended September 30, 2020 from 1.44% for the same period prior year due to the lower market interest rate environment.

The average balance of

interest-bearing deposits increased $10.2 million, or 2.4%, to $441.4 million for the year ended September 30, 2020 from $431.2

million for the prior year while the average cost of such deposits decreased 29 basis points to 1.08% from 1.37%.

Interest expense

on average deposits decreased $1.1 million, or 19.4%, to $4.8 million for the year ended September 30, 2020 from $5.9 million for

the year ended September 30, 2019.

Interest expense on advances

decreased $46,000, or 5.8%, to $743,000 for the year ended September 30, 2020 from $789,000 for the year ended September 30, 2019.

The average cost of borrowings decreased 62 basis points to 1.62% for the year ended September 30, 2020 from 2.24% for the year

ended September 30, 2019.

The average balance of advances and securities sold under agreements to repurchase increased $10.5 million

to $45.6 million for the year ended September 30, 2020 from $35.2 million the prior year.

Provision for Loan

We establish provisions for loan losses, which are charged to earnings, at a level necessary to absorb known and

inherent losses that are both probable and reasonably estimable at the date of the financial statements.

In evaluating the level

of the allowance for loan losses, management considers historical loss experience, the types of loans and the amount of loans in

the loan portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying

collateral, peer group information and prevailing economic conditions.

This evaluation is inherently subjective as it requires

estimates that are susceptible to significant revision as more information becomes available or as future events occur.

After an evaluation of

these factors, management made a provision of $1.7 million for the year ended September 30, 2020 compared with a $668,000 provision

for the prior year.

There were net charge-offs of $154,000 for the year ended September 30, 2020 compared with $20,000 in net recoveries

for the year ended September 30, 2019.

The COVID-19 pandemic and subsequent recession resulted in elevated risk factors used in

determining the appropriate level of the allowance for loan loss.

Total non-performing loans

increased by $2.8 million to $9.7 million during the year ended September 30, 2020 from $6.9 million at September 30, 2019.

allowance for loan losses increased by $1.5 million during the twelve months ended September 30, 2020 to $6.4 million.

Other Income.

income decreased $420,000, or 19.7%, to $1.7 million during the year ended September 30, 2020 compared with $2.1 million the prior

year due to lower loan and deposit service charges, which decreased $473,000.

In addition to the lower loan fees, the closure of

the bank’s branch lobbies during the peak of the COVID-19 pandemic and the shift in consumer behavior to debit cards from

physical checks resulted in a decline in retail fee income year-over-year.

Other Expenses.

expenses increased $753,000, or 4.3%, to $18.4 million for the year ended September 30, 2020 compared to $17.6 million for the

year ended September 30, 2019.

Legal fees associated with

the foreclosure and collection of non-performing loans drove professional fees $457,000, or 41.5%, higher during the year ended

September 30, 2020.

In addition, OREO expenses increased $165,000, or 49.4%, to $499,000 from valuation allowances recorded during

the year ended September 30, 2020 based on updated appraisals or executed contracts of sale.

Compensation and benefit

expenses increased $150,000, or 1.5%, to $10.3 million due to new compliance positions and annual merit increases for employees.

Income Tax Expense.

The Company recorded tax expense of $921,000 on income of $3.1 million for the year ended September 30, 2020 compared with tax

expense of $1.3 million on income of $4.3 million for the year ended September 30, 2019.

The lower income tax expense resulted

from a $1.2 million decrease in the Company’s results from operations.

The Company’s effective

tax rate for the year ended September 30, 2020 was 29.6% compared with 29.7% for the year ended September 30, 2019.

Management of Market Risk

The majority of our assets and liabilities are monetary in nature.

Consequently, our most significant form of market risk is interest

Our assets, consisting primarily of mortgage loans, have longer maturities than our liabilities, consisting primarily

As a result, a principal part of our business strategy is to manage interest rate risk

and reduce the exposure of

our net interest income to changes in market interest rates.

Accordingly, our Board of Directors has established an Asset and Liability

Management Committee which is responsible for evaluating the interest rate risk inherent in our assets and liabilities, for determining

the level of risk that is appropriate, given our business strategy, operating environment, capital, liquidity and performance objectives,

and for managing this risk consistent with the guidelines approved by the Board of Directors.

Senior management monitors the level

of interest rate risk on a regular basis and the Asset and Liability Committee meets at least on a quarterly basis to review our

asset/liability policies and interest rate risk position.

We have sought to

manage our interest rate risk in order to minimize the exposure of our earnings and capital to changes in interest rates.

of our ongoing asset-liability management, we seek to manage our exposure to interest rate risk by retaining in our loan portfolio

fewer fixed rate residential loans, by originating and retaining adjustable-rate loans in the residential, construction and commercial

real estate loan portfolios, by using alternative funding sources, such as advances from the Federal Home Loan Bank of New York

(“FHLBNY”), to “match fund”

longer-term residential and commercial mortgage loans, and by originating and

retaining variable rate home equity and short-term and medium-term fixed-rate commercial business loans.

We have also increased

money market account deposits as a percentage of our total deposits.

Money market accounts offer a variable rate based on market

By following these strategies, we believe that we are well-positioned to react to changes in market interest rates.

Net Interest Income

The table below sets forth, as of September 30, 2020, the estimated changes in our Net Interest Income (“NII”)

for each of the next two years that would result from the designated instantaneous changes in interest rates.

These estimates require

making certain assumptions including loan and mortgage-related investment prepayment speeds, reinvestment rates, and deposit maturities

and decay rates.

These assumptions are inherently uncertain and, as a result, we cannot precisely predict the impact of changes

in interest rates on net interest income.

Actual results may differ significantly due to timing, magnitude and frequency of interest

rate changes and changes in market conditions.

Further, certain shortcomings are inherent in the methodology used in the interest

rate risk measurement.

Modeling changes in net interest income require making certain assumptions that may or may not reflect the

manner in which actual yields and costs respond to changes in market interest rates.

Estimated Decrease

Estimated Increase

Interest rates

in NII Year 1

(Decrease) in NII Year 2

(Basis Points) (1)

(Dollars in thousands)

(1) Assumes an instantaneous uniform change in interest rates at all maturities.

Liquidity and Capital Resources

Liquidity is the

ability to meet current and future financial obligations of a short-term nature.

Our primary sources of funds consist of deposit

inflows, loan repayments, FHLBNY borrowings and maturities and sales of investment securities.

While maturities and scheduled amortization

of loans and securities are predictable sources of funds, deposit flows and mortgage prepayments are greatly influenced by general

interest rates, economic conditions and competition.

Our Asset/Liability Management Committee is responsible for establishing and

monitoring our liquidity targets and strategies in order to ensure that sufficient liquidity exists for meeting the borrowing needs

of our customers as well as unanticipated contingencies.

We seek to maintain a liquidity ratio of 5.0% of assets or greater.

liquidity ratio is calculated by determining the sum of the difference between liquid assets (cash and unpledged investment securities)

and short-term liabilities (estimated 30-day deposit outflows), plus our borrowing capacity from the FHLBNY and dividing the sum

by total assets.

At September 30, 2020, our liquidity ratio was 15.5% of assets.

We regularly adjust

our investments in liquid assets based upon our assessment of expected loan demand, expected deposit flows, yields available on

interest-earning deposits and securities, and the objectives of our asset/liability management program.

Excess liquid assets are

invested generally in interest-earning deposits and short-and intermediate-term securities.

Our most liquid

assets are cash and cash equivalents.

The levels of these assets are dependent on our operating, financing, lending and investing

activities during any given period.

At September 30, 2020, cash and cash equivalents totaled $61.7 million compared with $21.5

million at September 30, 2019.

Securities classified as available-for-sale, which provide additional sources of liquidity from

sales, totaled $14.6 million at September 30, 2020 compared with $16.7 at September 30,

At September 30, 2020, we also had

the ability to borrow $141.8 million from the FHLBNY.

On that date, we had an aggregate of $30.5 million in advances

outstanding and $50.0 million in municipal letters of credit outstanding with the FHLBNY.

Our cash flows are

derived from operating activities, investing activities and financing activities as reported in our consolidated Statements of

Cash Flows included in our consolidated Financial Statements.

no stock options or shares of restricted stock available for issuance with respect to Magyar Bancorp’s equity compensation plans

at September 30, 2021

2020, we had $21.1 million in loan origination commitments outstanding.

In addition to commitments to originate loans, we had $78.6

million in unused lines of credit to borrowers.

Certificates of deposit due within one year of September 30, 2020 totaled $79.1

million, or 12.8% of total deposits.

If these deposits do not remain with us, we will be required to seek other sources of funds,

including other deposits and FHLBNY advances.

Depending on market conditions, we may be required to pay higher rates on such deposits

or other borrowings than we currently pay on the certificates of deposit (including individual retirement accounts and brokered

certificate deposit accounts) due on or before September 30, 2021.

We believe, however, that based on past experience a significant

portion of our certificates of deposit (including individual retirement accounts and brokered certificate deposit accounts) will

remain with us.

We have the ability to attract and retain deposits by adjusting the interest rates offered.

Our primary investing

activities are the origination of loans and the purchase of investment securities.

We originated $145.9 million in loans (including

$56.0 million in PPP loans) and we purchased $19.8 million of investment securities for the year ended September 30, 2020.

Comparatively,

we originated $74.7 million in loans and purchased $4.7 million of investment securities for the year ended September 30, 2019.

Financing activities

consist primarily of activity in deposit accounts and FHLBNY advances.

We experienced a net increase in total deposits of $88.3

million, or 16.6%, to $618.3 million for the year ended September 30, 2020 compared with a net decrease in total deposits of $62,000

for the year ended September 30, 2019.

Deposit flows are affected by the overall level of interest rates, the interest rates and

products offered by us and our local competitors and other factors.

Liquidity management

is both a daily and long-term function of business management.

If we require funds beyond our ability to generate them internally,

borrowing agreements exist with the FHLBNY, which provide an additional source of funds.

FHLBNY advances totaled $30.5 million

and $36.2 million at September 30, 2020 and September 30, 2019, respectively.

FHLBNY advances have primarily been used to fund

In addition to borrowings,

the Bank has the ability to raise deposits on the brokered market or through deposit listing services.

At September 30, 2020, the

Bank held $9.4 million in brokered deposits and $11.9 million from deposit listing services.

Magyar Bank is subject

to various regulatory capital requirements, (see “Supervision and Regulation-Federal Banking Regulation-Capital Requirements”).

As of September 30, 2020, Magyar Bank’s Tier 1 capital as a percentage of the Bank's average assets was 8.30% and the total

qualifying capital as a percentage of risk-weighted assets was 13.18%.

Bank-owned life insurance

is a tax-advantaged financing transaction that is used to offset employee benefit plan costs.

Policies are purchased insuring directors

and officers of Magyar Bank using a single premium method of payment.

Magyar Bank is the owner and beneficiary of the policies

and records tax-free income through cash surrender value accumulation.

We have minimized our credit exposure by choosing carriers

that are highly rated and limiting the concentration of any one carrier.

The investment in bank-owned life insurance has no significant

impact on our capital and liquidity.

Off-Balance Sheet Arrangements

and Aggregate Contractual Obligations

As a financial services provider, we routinely are a party to various financial instruments with off-balance-sheet risks, such

as commitments to extend credit, standby letters of credit and unused lines of credit.

While these contractual obligations represent

our future cash requirements, a significant portion of commitments to extend credit may expire without being drawn upon.

Such commitments

are subject to the same credit policies and approval process accorded to loans made by us.

For additional information, see Note

P, “Commitments,”

and Note Q “Financial Instruments with Off-Balance-Sheet Risk”

to our consolidated financial

Contractual Obligations.

In the ordinary course of our operations, we enter into certain contractual obligations.

Such obligations include operating leases

for premises and equipment.

The following table summarizes

our significant fixed and determinable contractual obligations and other funding needs by payment date at September 30, 2020.

payment amounts represent those amounts due to the recipient and do not include any unamortized premiums or discounts or other

similar carrying amount adjustments.

Payments Due by Period

September 30, 2020

(In thousands)

Federal Home Loan Bank advances

Federal Reserve Bank advances

Operating leases

Quantitative and Qualitative Disclosures About Market Risk

required for smaller reporting companies.

The Company completed its second step conversion and related public stock offering on July 14, 2021.

stock offering, the Company sold 3,910,000 shares of common stock at $10.00 per share in a subscription offering pursuant to a Registration

Statement on Form S-1 (SEC File No.

333-254282), which was declared effective by the Securities and Exchange Commission on May 14, 2021.

In addition, the Company issued 3,187,825 new shares of Company common stock in exchange for the 2,610,296 shares of common stock which

were owned by shareholders other than Magyar Bancorp, MHC.

As a result, the Company registered 7,098,070 shares pursuant to the Registration

The subscription offering resulted in gross offering proceeds of approximately $39.1 million.

The net offering proceeds (after

payment of offering expenses) were approximately $37.4 million.

From the net offering proceeds, the Company used $3.4 million to fund

a loan to Magyar Bank’s employee stock ownership (which in turn used those funds to purchase 312,800 shares of common stock in the

subscription offering), invested $18.7 million in Magyar Bank as additional capital, and retained $18.7 million for general corporate

Keefe, Bruyette & Woods, Inc.

served as marketing agent to the Company in connection with the subscription offering.

Share repurchases.

The Company completed

its first stock repurchase program of 130,927 shares in November 2007 and announced in November 2007 a second repurchase program of up

to 5% of its publicly-held outstanding shares of common stock, or 129,924 shares, under which 91,000 shares had been repurchased as of

July 13, 2021 at an average price of $8.41.

Under current federal

regulations, subject to limited exceptions, the Company may not repurchase shares of our common stock during the first year following

the completion of its second-step conversion offering, which was completed on July 14, 2021.

The Company did not repurchase any shares

of its common stock during the fiscal year ended September 30, 2021.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity