What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2022-12-22 compared with 2021-12-20 · 235 added, 245 removed, 1364 unchanged (26% of the section changed)

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As a result of the second-step conversion, all share and per

share information has been subsequently revised to reflect the 1.2213 exchange ratio, unless otherwise noted.

share information prior to the reorganization was subsequently revised to reflect the 1.2213 exchange ratio, unless otherwise noted.

Magyar Bancorp, Inc.

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savings bank headquartered in New Brunswick, New Jersey that was originally founded in 1922 as a New Jersey building and loan association.

In 1954, Magyar Bank converted to a New Jersey savings and loan association, before converting to a New Jersey savings bank charter in

We conduct business from our main office located at 400 Somerset Street, New Brunswick, New Jersey, and our seven branch offices

located in New Brunswick, North Brunswick, South Brunswick, Branchburg, Bridgewater, and Edison, New Jersey.

The telephone number at our

main office is (732) 342-7600 and our website is located at www.magbank.com.

In 1954, Magyar Bank converted to a New Jersey

savings and loan association, before converting to

a New Jersey savings bank charter in 1993.

We conduct business from our main office located at 400 Somerset Street, New Brunswick, New

Jersey, and our seven branch offices located in New Brunswick, North Brunswick, South Brunswick, Branchburg, Bridgewater, and Edison,

The telephone number at our main office is (732) 342-7600 and our website is located at www.magbank.com.

Our principal business consists

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is not sufficient to get a conventional mortgage) or option ARM mortgage loans.

At September 30, 2021, non-performing residential mortgage

loans totaled $1.2 million, or 0.57% of the total residential loan portfolio.

Interest income of $55,000 would have been recorded on non-performing

residential mortgage loans for the year ended September 30, 2021 if they had been current in accordance with their original terms.

the year ended September 30, 2021, there were no charge-offs against the allowance for loan loss for impaired residential real estate

loans while $1,000 was recovered from prior year charge-offs.

At September 30, 2022, there were no non-performing residential

mortgage loans, and there were no charge-offs against the allowance for loan loss for impaired residential real estate loans while $1,000

was recovered from prior year charge-offs.

We also originate home

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with the loan amount not to exceed $500,000 and with terms of up to 30 years.

There were no non-performing home equity loans and there

were no charge-offs against the allowance for loan loss for impaired home equity loans while $1,000 was recovered from prior year charge-offs

for the year ended September 30, 2021.

There were no non-performing home equity loans at September

30 2022 and there were no charge-offs or recoveries for impaired home equity loans during the year ended September 30, 2022.

We offer fixed-rate mortgage

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residential mortgage loans, except for loans to low-income borrowers to enhance our Community Reinvestment Act performance.

no residential mortgage loans purchased during the year ended

September 30, 2021.

We underwrite

purchased residential mortgage loans using the same criteria as if we were originating the loans.

no residential mortgage loans purchased during the year ended September 30, 2022.

We underwrite purchased residential mortgage loans using

the same criteria as if we were originating the loans.

At September 30, 2022,

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The loan was performing in accordance with its

repayment terms at September 30, 2021.

contractual repayment terms at September 30, 2022.

We also offer adjustable-rate

residential mortgage loans with interest rates based on the weekly average yield on U.S.

Treasuries or the London Interbank Offering Rate

(“LIBOR”) adjusted to a constant maturity of one year, which adjusts either annually from the outset of the loan or which

adjusts annually after a one-, three-, five-, seven-, and ten-year initial fixed-rate period.

Our adjustable-rate mortgage loans generally

provide for maximum rate adjustments of 2% per adjustment, with a lifetime maximum adjustment up to 5%, regardless of the initial rate.

We also offer adjustable-rate mortgage loans with an interest rate based on the prime rate as published in The Wall Street Journal

or the Federal Home Loan Bank of New York advance rates.

Treasuries or the Secured Overnight Financing

Rate (“SOFR”), which adjust either semi-annually or annually from the outset of the loan or which adjusts annually after a

one-, three-, five-, seven-, and ten-year initial fixed-rate period.

Our adjustable-rate mortgage loans generally provide for maximum

rate adjustments of 2% per adjustment, with a lifetime maximum adjustment up to 5%, regardless of the initial rate.

We also offer adjustable-rate

mortgage loans with an interest rate based on the prime rate as published in The Wall Street Journal or the Federal Home Loan Bank

of New York advance rates.

Due to historically low

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loans are generally secured by five-or-more-unit apartment buildings, industrial properties and properties used for business purposes

such as small office buildings and retail facilities.

We generally originate adjustable-rate commercial real estate loans with a maximum

term of 25 years with adjustable-rate periods every five years.

The maximum loan-to-value ratio for our commercial real estate loans is

75%, based on the appraised value of the property.

such as small office buildings, warehouses and retail facilities.

We generally originate adjustable-rate commercial real estate loans

with a maximum term of 25 years with adjustable-rate periods every five years.

The maximum loan-to-value ratio for our commercial real

estate loans is 75%, based on the appraised value of the property.

We consider a number of

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of operations and management of the properties securing the loans or the businesses conducted on such property, and may be affected to

a greater extent by adverse conditions in the real estate market or the economy in general.

Accordingly, the nature of these loans makes

them more difficult for management to monitor and evaluate.

a greater extent by adverse conditions in the

real estate market or the economy in general.

Accordingly, the nature of these loans makes them more difficult for management to monitor and evaluate.

The maximum amount of a commercial

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or $14.4 million.

At September 30, 2021, our largest commercial real estate loan was $12.0 million to finance the purchase of a nursing

and rehabilitation home in Edison, New Jersey.

The loan amount was 65% of the lower of the purchase price, which was lower than the appraised

At September 30, 2022, our largest commercial real estate loan was $13.7 million to finance the purchase and operation

of a nursing and rehabilitation home in Edison, New Jersey.

The original loan amount was 65% of the purchase price, which was lower than

the appraised value.

The loan was performing in accordance with its terms at September 30, 2022.

Non-performing commercial

real estate loans decreased $1.1 million, or 51.4%, to $1.1 million at September 30, 2021 from $2.2 million at September 30, 2020.

the year ended September 30, 2021, there was one charge-off totaling $51,000 against the allowance for loan loss and there were no recoveries

of prior year charge-offs.

Interest income of $97,000 would have been recorded on non-performing commercial real estate loans for the

year ended September 30, 2021 if they had been current in accordance with their original terms.

All other loans secured by commercial

real estate were performing in accordance with their terms.

There were no non-performing

commercial real estate loans at September 30, 2022 compared with $1.1 million at September 30, 2021.

During the year ended September 30,

2022, there were no charge-offs from commercial real estate loans, however there were $53,000 in recoveries received from prior year charge-offs.

Construction Loans.

We also originate construction loans for the development of one-to four-family homes, apartment buildings and commercial properties.

Construction loans are generally offered to experienced local developers operating in our primary market area and to individuals for the

construction of their personal residences.

At September 30, 2021, our construction loans totaled $20.4 million, or 3.4% of total loans.

We also originate construction and land acquisition loans for the development of one-to four-family homes, apartment buildings

and commercial properties.

Construction loans are generally offered to experienced local developers operating in our primary market area

and to individuals for the construction of their personal residences.

At September 30, 2022, our construction loans totaled $15.2 million,

or 2.4% of total loans.

At September 30, 2022,

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At September 30, 2022,

construction loans for the development of town homes, condominiums and apartment buildings totaled $358,000.

construction loans for the development of town homes, condominiums and apartment buildings totaled $1.7 million.

The maximum loan-to-value

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the personal guarantors of the loan.

At September 30, 2021, there were a total of two non-performing construction loan totaling $4.6 million.

Interest income of $327,000 would have been recorded on these non-performing construction loans for the year ended September 30, 2021,

if they had been current in accordance with their original term.

During the year ended September 30, 2021, there were no charge-offs against

the allowance for loan loss and there were no recoveries from prior year charge-offs.

At September 30, 2022, the $2.8 million loan was the only non-performing construction loan in the

Bank’s portfolio.

Interest income of $220,000 would have been recorded on this non-performing construction loan for the year ended

September 30, 2022, if it had been current in accordance with their original term.

During the year ended September 30, 2022, there were

no charge-offs against the allowance for loan loss and there were no recoveries from prior year charge-offs.

Before making a commitment

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Included in commercial business

loans are SBA 7(a) loans, on which the SBA provides guarantees of up to 75% (90% during the COVID-19 pandemic) of the principal balance

(85% for loans under $150,000).

These loans are made for the purposes of providing working capital and financing the purchase of equipment,

inventory or commercial real estate, and may be made inside or outside the Company’s market place.

Generally, an SBA 7(a) loan has

a deficiency in its credit profile that would not allow the borrower to qualify for a traditional commercial loan, which is why the government

provides the guarantee.

The deficiency may be a higher loan to value ratio, lower debt service coverage ratio or weak personal financial

In addition, many SBA 7(a) loans are for start-up businesses where there is no history of financial information.

many SBA borrowers do not have an ongoing and continuous banking relationship with the Bank, but merely work with the Bank on a single

The guaranteed portions of the Company’s SBA loans are generally sold in the secondary market.

loans are SBA 7(a) loans, on which the SBA provides guarantees of up to 75% of the principal balance (85% for loans under $150,000).

loans are made for the purposes of providing working capital and financing the purchase of equipment, inventory or commercial real estate,

and may be made inside or outside the State of New Jersey.

Generally, an SBA 7(a) loan has a deficiency in its credit profile that would

not allow the borrower to qualify for a traditional commercial loan, which is why the government provides the guarantee.

The deficiency

may be a higher loan to value ratio, lower debt service coverage ratio or weak personal financial guarantees.

In addition, many SBA 7(a)

loans are for start-up businesses where there is no history of financial information.

Finally, many SBA borrowers do not have an ongoing

and continuous banking relationship with the Bank, but merely work with the Bank on a single transaction.

We generally sell the guaranteed

portions of these SBA loans in the secondary market.

When making commercial

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to maintain their staff and operations through the COVID-19 pandemic.

This liquidity is in the form of a loan, 100% guaranteed by the

SBA, that is forgivable provided the funds are used on qualifying payroll costs, and to a lesser extent, rent, utilities and interest

This liquidity was in the form of a loan, 100% guaranteed by the

SBA, that was forgivable provided the funds were used on qualifying payroll costs, and to a lesser extent, rent, utilities and interest

on qualifying mortgage payments.

The loans bear a fixed rate of 1.0% and loan payments are deferred through the date that the SBA remits

the borrower’s loan forgiveness amount to the lender (or, if the borrower does not apply for loan forgiveness, 10 months after the

The loans bear a fixed rate of 1.0% and loan payments were deferred through the date that the SBA remits

the borrower’s loan forgiveness amount to the lender (or, if the borrower did not apply for loan forgiveness, 10 months after the

end of the borrower’s loan forgiveness covered period).

The Company originated 350 loans totaling $56.0 million under the CARES

Act, all of which were repaid during the year ended September 30, 2021.

The Company expects the majority of these loans to be approved

for full forgiveness by the SBA.

All 350 PPP loans totaling $56.0 million originated by the Company under

the CARES Act were fully forgiven and paid off.

The Economic Aid to Hard-Hit Small

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PPP loan, an applicant must have experienced a revenue reduction of at least 25% in 2020 relative to 2019.

We originated 212 Second Draw

PPP loans totaling $35.3 million.

The contractual term of the loans is five years, although the Company expects the majority of these

loans to be approved for full forgiveness by the SBA.

At September 30, 2021, the Company held 111 Second Draw PPP loans totaling $25.1

Of the 212 Second Draw PPP

loans totaling $35.3 million originated by the Company, only one loan totaling $3,000 did not apply for forgiveness and was the only PPP

loan outstanding at September 30, 2022.

The loan is expected to be repaid over the contractual term of the loan, or five years.

The maximum amount of a

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This loan was performing according to its repayment terms at September 30, 2022.

At September 30, 2021, one commercial business loan totaling $1.3 million was non-performing.

Interest income of $75,000 would have been

recorded on non-performing commercial business loans for the year ended September 30, 2021 if the loan had been current in accordance

with its original term.

During the year ended September 30, 2021, there were no charge-offs against the allowance for loan loss for impaired

commercial business loans and there were $96,000 in recoveries from prior year charge-offs.

At September 30, 2022, there were no charge-offs against the allowance for loan loss for impaired commercial business loans and there

were no recoveries from prior year charge-offs.

Home Equity Lines

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30, 2022, these loans totaled $18.7 million, or 3.0% of our total loan portfolio.

The underwriting standards we use for home equity lines

of credit include a determination of the applicant’s credit history, an assessment of the applicant’s ability to meet existing

obligations, the ongoing payments on the proposed loan and the value of the collateral securing the loan.

The maximum combined (first

and second mortgage liens) loan-to-value ratio for home equity lines of credit is 80%.

Home equity lines of credit have adjustable rates

of interest, indexed to the prime rate, as reported in The Wall Street Journal , with terms of up to 25 years.

underwriting standards we use for home equity

lines of credit include a determination of the applicant’s credit history, an assessment of the applicant’s ability to meet

existing obligations, the ongoing payments on the proposed loan and the value of the collateral securing the loan.

The maximum combined

(first and second mortgage liens) loan-to-value ratio for home equity lines of credit is 80%.

Home equity lines of credit have adjustable

rates of interest, indexed to the prime rate, as reported in The Wall Street Journal , with terms of up to 25 years.

The maximum amount of a

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September 30, 2022.

At September 30, 2021, there were no charge-offs to home equity lines of credit, while there was $1,000 recovered

from a prior year charge-off.

At September 30, 2022, there were no charge-offs to home equity lines of credit and there were no recoveries of any

prior year charge-offs.

We also originate loans

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At September 30, 2022,

stock-secured loans totaled $3.8 million, or 0.6% of our total net loan portfolio.

Generally, we limit the aggregate amount of loans secured

by the common stock of any one corporation to 15% of Magyar Bank’s capital.

At September 30, 2021, loans totaling $3.5 million,

or 0.6% of our loan portfolio, were secured by the common stock of Johnson & Johnson a New York Stock Exchange company that operates

a number of facilities in our market area and employs a substantial number of residents.

Although these loans are underwritten based on

the ability of the individual borrower to repay the loan, the concentration of our portfolio secured by this stock subjects us to the

risk of a decline in the market price of the stock and, therefore, a reduction in the value of the collateral securing these loans.

of September 30, 2021, the aggregate loan-to-value ratio of the stock-secured portfolio was 13.6%.

stock-secured and other loans totaled $3.1 million, or 0.5% of our total net loan portfolio.

Generally, we limit the aggregate amount

of loans secured by the common stock of any one corporation to 15% of Magyar Bank’s capital, or $14.4 million.

At September 30,

2022, loans totaling $3.0 million, or 0.5% of our loan portfolio, were secured by the common stock of Johnson & Johnson a New York

Stock Exchange company that operates a number of facilities in our market area and employs a substantial number of residents.

these loans are underwritten based on the ability of the individual borrower to repay the loan, the concentration of our portfolio secured

by this stock subjects us to the risk of a decline in the market price of the stock and, therefore, a reduction in the value of the collateral

securing these loans.

As of September 30, 2022, the aggregate loan-to-value ratio of the stock-secured portfolio was 15.8%.

Loan Originations,

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During the fiscal year

ended September 30, 2021, we originated $31.3 million of fixed-rate and adjustable-rate one-to four-family residential mortgage loans

and $60.5 million of fixed-rate and adjustable-rate commercial real estate loans.

The fixed-rate loans are primarily loans with terms

of 30 years or less.

We also originated $47.9 million of commercial business loans (which includes $25.1 million of PPP loans), $9.5 million

of construction loans, and $9.8 million of home equity lines of credit and other loans.

ended September 30, 2022, we originated $87.0 million of fixed-rate and adjustable-rate commercial real estate loans and $38.6 million

of fixed-rate and adjustable-rate one-to four-family residential mortgage loans.

The fixed-rate loans are primarily loans with terms of

30 years or less.

We also originated $16.2 million of home equity lines of credit and other loans, $9.0 million of construction loans

and $8.5 million of commercial business loans.

We generally do not purchase

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materially less than current market rates) for each date presented.

September 30,

(Dollars in thousands)

Non-accrual loans:

four-family residential

Commercial real

lines of credit

non-accrual loans

Accruing loans three months or more

One-to four-family

Commercial real

lines of credit

loans three months or more past due

Total non-performing

troubled debt restructurings

Performing troubled

debt restructurings

One-to four-family residential

Commercial real estate

Home equity lines of credit

Commercial business

Total non-accrual loans

Accruing loans three months or more past due:

One-to four-family residential

Commercial real estate

Home equity lines of credit

Commercial business

Total loans three months or more past due

Total non-performing loans

Other real estate owned

Total non-performing assets

Total non-performing

loans to total loans

Total non-performing

loans and performing

troubled debt

restructurings to total loans

Total non-performing

assets to total assets

Total non-performing

assets and performing

troubled debt

restructurings to total assets

Performing troubled debt restructurings

and total non-performing assets

Total non-performing loans to total loans

Total non-performing loans and performing

troubled debt restructurings to total loans

Total non-performing assets to total assets

Total non-performing assets and performing

troubled debt restructurings to total assets

Commercial business, commercial

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compared to $369.9 million, or 62.2% of our total loans, at September 30, 2021.

The Company’s non-accrual

loans decreased $5.3 million, or 65.3%, to $2.8 million at September 30, 2022 from $8.2 million at September 30, 2021.

During the year

ended September 30, 2022, $1.3 million in non-accrual commercial business loans, $1.1 million in non-accrual commercial real estate loans

and $685,000 in non-accrual one-to four-family residential mortgage loans were paid off by the borrowers.

In addition, $1.7 million in

non-accrual construction loans and $467,000 in non-accrual one-to four-family residential mortgage loans were paid current by the borrowers.

Additional interest income of

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that it would not otherwise consider, such as a below market interest rate, extending the maturity of a loan, or a combination of both.

were two new TDR loans totaling $340,000 during the

fiscal year ended September 30, 2021 that were performing

in accordance with their restructured terms at September 30, 2021.

For comparison purposes, there was one TDR loan totaling $220,000 during

the fiscal year ended September 30, 2020.

were no new TDR loans during the fiscal year ended September 30, 2022.

For comparison purposes, there were two TDR loans totaling $340,000

during the fiscal year ended September 30, 2021.

Delinquent Loans .

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Commercial real estate

Commercial business

At September 30, 2021

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Commercial real estate

Home equity lines of credit

Commercial business

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Holding costs and declines in fair value result in charges to expense after acquisition.

The Company held $636,000 of OREO

properties at September 30, 2021, a decrease of $2.0 million from $2.6 million at September 30, 2020.

The Company held one OREO property

totaling $281,000 at September 30, 2022, a decrease of $355,000, or 55.8% from $636,000 on at September 30, 2021.

Classified Assets.

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The provision for loan losses

decreased $37,000 to $1.6 million for the year ended September 30, 2021 compared to $1.7 million for the year ended September 30, 2020.

The decrease was attributable to contraction in net total loans receivable, offset by adjustments to historical loss factors for economic

conditions relating to the COVID-19 pandemic.

decreased $1.3 million, or 81.3%, to $304,000 for the year ended September 30, 2022 compared to $1.6 million for the year ended September

The decrease was attributable to lower adjustments for the COVID-19 pandemic, lower balances of higher-risk loan segments within

the allowance for loan loss calculation and lower non-performing loan balance at September 30, 2022.

Allowance for Loan Losses.

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Commercial real estate

Home equity lines of credit

Commercial business

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Total recoveries

Net charge-offs (recoveries)

Net (recoveries) charge-offs

Provision for loan losses

Balance at end of period

Net charge-offs (recoveries) to average loans outstanding

Net (recoveries) charge-offs to average loans outstanding

Allowance for loan losses to total non-performing loans

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Mae and Freddie Mac, mortgage-backed securities, certain certificates of deposit of insured financial institutions, overnight and short-term

loans to other banks, investment-grade corporate debt instruments, and municipal securities.

In addition, we may invest in equity securities

subject to certain limitations and not in excess of Magyar Bank’s Tier 1 capital.

loans to other banks, investment-grade corporate debt instruments, and municipal debt securities.

In addition, we may invest in equity

securities subject to certain limitations and not in excess of Magyar Bank’s Tier 1 capital.

The Investment Policy requires

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The estimated fair value of our mortgage-backed securities portfolio

at September 30, 2021 was $53.0 million, which was $166,000 less than the amortized cost.

at September 30, 2022 was $56.3 million, which was $10.2 million less than the amortized cost.

Mortgage-backed securities in Magyar Bank’s

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Corporate and Other

At September 30, 2021, the Bank held one corporate note issued by Wells Fargo Bank at its amortized value totaling

$3.0 million.

Our Investment Policy allows for the purchase of such instruments and requires that corporate debt obligations be rated

in one of the four highest categories by a nationally recognized rating service.

We may invest up to 25% of Magyar Bank’s investment

portfolio in corporate debt obligations and up to 15% of Magyar Bank’s capital in any one issuer.

At September 30, 2022, the Bank held two corporate notes issued by Goldman Sachs Corporate and Wells Fargo Bank totaling

$5.0 million and $3.0 million, respectively.

Our Investment Policy allows for the purchase of such instruments and requires that corporate

debt obligations be rated in one of the four highest categories by a nationally recognized rating service.

We may invest up to 25% of

Magyar Bank’s investment portfolio in corporate debt obligations and up to 15% of Magyar Bank’s capital in any one issuer.

Equity Securities.

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Securities Portfolios.

following tables set forth the composition of our securities portfolio (excluding FHLBNY common stock) at the dates indicated.

following table sets forth the composition of our securities portfolio (excluding FHLBNY common stock) at the dates indicated.

At September 30,

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At September 30, 2022, a total

of 36 securities with an aggregate fair value of $53.7 million had gross unrealized losses of $1.0 million, or approximately 1.9% of fair

None of these unrealized losses were considered other-than-temporary.

of 80 securities with an aggregate fair value of $88.9 million had gross unrealized losses of $13.7 million, or approximately 15.4% of

The lower market values of our securities reflects higher market interest rates.

None of these unrealized losses were considered

other-than-temporary.

Portfolio Maturities and

The composition, maturities and weighted average yields of the investment debt securities portfolio and the mortgage-backed

securities portfolio at September 30, 2021 are summarized in the following tables.

securities portfolio at September 30, 2022 are summarized in the following table.

Maturities are based on the final contractual payment

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We also accept brokered deposits when attractive rates and terms are available.

At September 30, 2021, we had $6.0

million in brokered deposits, compared to $9.4 million at September 30, 2020.

We had $6.0 million in brokered deposits

at September 30, 2022 and September 30, 2021.

Interest rates, maturity

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paid on these deposits, has been and will continue to be significantly affected by market conditions.

At September 30, 2021, $116.9 million,

or 18.3% of our deposit accounts, were certificates of deposit (including individual retirement accounts).

At September 30, 2022, $82 .

million, or 12.4% of our deposit accounts, were certificates of deposit (including individual retirement accounts).

The following table sets forth

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Total deposits

At September 30, 2021 and

2020, the aggregate amount of uninsured deposits (which are deposits in amounts greater than $250,000, which is the maximum amount for

federal deposit insurance) was $41.7 million and $52.7 million, respectively.

At September 30, 2021 and September 30, 2020, we had no

deposits that were uninsured for any reason other than being in excess of the maximum amount for federal deposit insurance.

At September 30, 2022,

2021 and 2020, the aggregate amount of un-insured deposits (which are deposits in amounts greater than $250,000, which is the maximum

amount for federal deposit insurance) was $396.7 million, $374.7 million and $363.4 million, respectively.

At September 30, 2022 and September

30, 2021, we had no deposits that were uninsured for any reason other than being in excess of the maximum amount for federal deposit insurance.

The following table sets forth

the maturity of our uninsured certificates of deposit at September 30, 2021.

the maturity of our un-insured certificates of deposit at September 30, 2022.

At September 30,

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Ending balance

decreased $44.0 million, or 65.4%, to $23.4 million at September 30, 2021 from $67.4 million at September 30, 2020.

The Bank repaid all

$36.9 million in Paycheck Protection Program Liquidity Facility (“PPPLF”) advances to the Federal Reserve Bank during the

year ended September 30, 2021 that were used to fund Round 1 PPP loans.

The Bank did not utilize the PPPLF to fund its Round 2 PPP loans.

FHLBNY advances decreased $7.1 million to $23.4 million at September 30, 2021 from $30.5 million at September 30, 2020 as deposit inflows

were used to repay maturing long-term advances.

from the Federal Home Loan Bank of New York (“FHLBNY”) decreased $7.7 million, or 33.1%, to $15.6 million at September 30,

2022 from $23.4 million at September 30, 2021 as deposit inflows were used to repay maturing long-term advances.

The borrowings represent

2.2% of total liabilities and had a weighted average interest rate of 2.48% at September 30, 2022.

Based on eligible collateral pledged to

the FHLBNY at September 30, 2021, we had an aggregate borrowing capacity of $151.2 million with the FHLBNY.

Based on eligible collateral pledged

to the FHLBNY at September 30, 2022, we had an aggregate borrowing capacity of $138.9 million with the FHLBNY.

Long-term FHLBNY advances as of

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Year Ending September

The Bank is also able to borrow

funds from an overnight line of credit with the FHLBNY.

The Bank did not access the line of credit at any time during the years ended

September 30, 2021 and 2020.

The Bank is also able to borrow funds from an overnight

line of credit with the FHLBNY.

Information concerning overnight line of credit advances with the Federal Home Loan Bank of New York is

summarized as follows:

September 30,

(Dollars in thousands)

Balance at end of year

Weighted average balance during the year

Maximum month-end balance during the year

Average interest rate during the year

Subsidiary Activities

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signs or symptoms of a possible COVID-19 illness and have been provided paid time off to cover compensation during such absences.

ongoing basis, we further promote the health and wellness of our employees by strongly encouraging work-life balance, offering flexible

work schedules, and keeping the employee portion of health care premiums to a minimum.

basis, we further promote the health and wellness

of our employees by strongly encouraging work-life balance, offering flexible work schedules, and keeping the employee portion of health

care premiums to a minimum.

Employee retention helps us operate

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out our core values, actively prioritizing concern for our employees’ well-being, supporting our employees’ career goals,

offering competitive wages and providing valuable fringe

benefits aids in retention of our top-performing employees.

In addition, nearly all of our employees are stockholders of the Company through participation in our Employee Stock Ownership Plan, which

aligns associate and stockholder interests by providing stock ownership on a tax-deferred basis at no investment cost to our associates.

At September 30, 2021, 27% of our current staff had been with us for fifteen years or more.

offering competitive wages and providing valuable fringe benefits aids in retention of our top-performing employees.

In addition, nearly

all of our employees are stockholders of the Company through participation in our Employee Stock Ownership Plan, which aligns associate

and stockholder interests by providing stock ownership on a tax-deferred basis at no investment cost to our associates.

At September 30,

2022, 32% of our current staff had been with us for fifteen years or more.

FEDERAL AND STATE TAXATION

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“Leeway” investments must comply with a number of limitations on the individual and aggregate amounts of “leeway”

A savings bank may also exercise trust powers upon approval of the Commissioner.

New Jersey savings banks may exercise those

powers, rights, benefits or privileges authorized for national banks or out-of-state banks or for federal or out-of-state savings banks

or savings associations, provided that before exercising any such power, right, benefit or privilege, prior approval by the Commissioner

by regulation or by specific

authorization is required.

The exercise of

these lending, investment and activity powers are limited by federal law and regulations.

See “Federal Banking Regulation-Activity

Restrictions on State-Chartered Banks” below.

A savings bank may also exercise trust powers upon approval

of the Commissioner.

New Jersey savings banks

may exercise those powers, rights, benefits or privileges authorized for national banks or out-of-state banks or for federal or out-of-state

savings banks or savings associations, provided that before exercising any such power, right, benefit or privilege, prior approval by

the Commissioner by regulation or by specific authorization is required.

The exercise of these lending, investment and activity powers

are limited by federal law and regulations.

See “Federal Banking Regulation-Activity Restrictions on State-Chartered Banks”

Loans-to-One-Borrower

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capital to total assets leverage ratio.

The existing capital requirements were effective January 1, 2015 and are the result of a final

rule implementing regulatory amendments based on recommendations of the Basel Committee on Banking Supervision and certain requirements

of the Dodd-Frank Act.

The capital standards require

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and adjustments specified in the regulations.

On April 9, 2020, the Federal

Reserve Board, the OCC, and the FDIC issued an interim final rule to allow banking organizations to exclude from regulatory capital measures

any exposures pledged as collateral for a non-recourse loan from the Federal Reserve.

Since PPPLF extensions of credit are non-recourse,

PPP loans pledged to the PPPLF qualify for exclusion under the interim final rule.

In determining the amount

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greater risk.

For example, a risk weight of 0% is assigned to cash

government securities, a risk weight

of 50% is generally assigned to prudently underwritten first lien one-to four-family residential mortgages, a risk weight of 100% is assigned

to commercial and consumer loans, a risk weight of 150% is assigned to certain past due loans and a risk weight of between 0% to 600%

is assigned to permissible equity interests, depending on certain specified factors.

For example, a risk weight of 0% is assigned to cash and U.S.

government securities, a risk weight of 50% is generally assigned

to prudently underwritten first lien one-to four-family residential mortgages, a risk weight of 100% is assigned to commercial and consumer

loans, a risk weight of 150% is assigned to certain past due loans and a risk weight of between 0% to 600% is assigned to permissible

equity interests, depending on certain specified factors.

In addition to establishing

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including the risk-based capital requirements.

Section 4012 of the CARES Act

required that the community bank leverage ratio be temporarily lowered to 8%.

The federal regulators issued a rule implementing the lower

ratio effective April 23, 2020.

The rule also established a two-quarter grace period for a qualifying institution whose leverage ratio

falls below the 8% community bank leverage ratio requirement so long as the bank maintains a leverage ratio of 7% or greater.

rule was issued to transition back to the 9% community bank leverage ratio by increasing the ratio to 8.5% for calendar year 2021 and

9% thereafter.

Prompt Corrective

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Federal law and FDIC regulations generally limit the activities and investments of state-chartered Federal

Deposit Insurance Corporation-insured banks and their subsidiaries to those permissible for national banks and their subsidiaries, unless

such activities and investments are specifically exempted by law or consented to by the Federal Deposit Insurance Corporation.

Deposit Insurance Corporation-insured banks and their subsidiaries to those

permissible for national banks and their subsidiaries,

unless such activities and investments are specifically exempted by law or consented to by the Federal Deposit Insurance Corporation.

Before making a new investment

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Deposit Insurance.

The Dodd-Frank Act permanently increased the maximum amount of deposit insurance for banks, savings institutions and credit unions to

$250,000 per depositor.

assessment system is based on each institution’s total assets less tangible capital, and ranges from 1.5 to 40 basis points.

for institutions of less than $10 billion of assets are based on financial measures and supervisory ratings derived from statistical modeling

estimating the institution’s probability of failure over a three-year period.

The Deposit Insurance Fund of the Federal Deposit Insurance Corporation insures deposits at Federal Deposit Insurance Corporation insured

financial institutions such as Magyar Bank generally up to a maximum of $250,000 per separately insured depositor.

the Federal Deposit Insurance Corporation’s risk-based assessment system, insured institutions are assigned to one of four risk

categories based on supervisory evaluations, regulatory capital levels and certain other risk factors.

Rates are based on each institution’s

risk category and certain specified risk adjustments.

Institutions deemed to be less risky pay lower rates while institutions deemed riskier

pay higher rates.

Assessment rates (inclusive of possible adjustments) currently range from 2 1/2 to 45 basis points of each institution’s

total assets less tangible capital.

The Federal Deposit Insurance Corporation may increase or decrease the scale uniformly, except that

no adjustment can deviate more than two basis points from the base scale without notice and comment rulemaking.

The Federal Deposit Insurance

Corporation’s current system represents a change, required by the Dodd-Frank Act, from its prior practice of basing the assessment

on an institution’s deposits.

2020, the FDIC issued a final rule that mitigates the deposit insurance assessment effects of participating in certain COVID-19 liquidity

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In addition, the Dodd-Frank Act prohibits mortgage originators from receiving compensation based on the terms of residential mortgage

loans and generally limits the ability of a mortgage originator to be compensated by others if compensation is received from a consumer.

The Dodd-Frank Act requires mortgage lenders to make additional disclosures prior to the extension of credit, and in each billing statement,

for negative amortization loans and hybrid adjustable-rate mortgages.

The Economic Growth Act included provisions that ease certain requirements

related to mortgage transactions for certain institutions with less than $10 billion in total consolidated assets.

generally limits the ability of a mortgage

originator to be compensated by others if compensation is received from a consumer.

The Dodd-Frank Act requires mortgage lenders to make

additional disclosures prior to the extension of credit, and in each billing statement, for negative amortization loans and hybrid adjustable-rate

The Economic Growth Act included provisions that ease certain requirements related to mortgage transactions for certain institutions

with less than $10 billion in total consolidated assets.

Privacy Regulations .

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Savings banks, such as Magyar Bank, are authorized to borrow from the Federal Reserve Bank “discount window.” Magyar Bank

is deemed by the Federal Reserve Board to be

generally sound and thus is eligible to obtain secondary

credit from its Federal Reserve Bank.

Generally, secondary credit is extended on a very short-term basis to meet the liquidity needs of

the institution.

Loans must be secured by acceptable collateral and carry a rate of interest above the Federal Open Market Committee’s

federal funds target rate.

is deemed by the Federal Reserve Board to be generally sound and thus is eligible to obtain secondary credit from its Federal Reserve

Generally, secondary credit is extended on a very short-term basis to meet the liquidity needs of the institution.

Loans must be

secured by acceptable collateral and carry a rate of interest above the Federal Open Market Committee’s federal funds target rate.

The USA PATRIOT Act

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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 1. Business