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Item 1. Business

2025-12-19 compared with 2024-12-19 · 745 added, 825 removed, 143 unchanged (92% of the section changed)

Forward Looking Statements

We have included or incorporated

by reference in this Annual Report on Form 10-K, and from time to time our management may make, statements that may constitute “forward-looking

statements” within the meaning of the safe harbour provisions of the U.S.

Private Securities Litigation Reform Act of 1995.

Forward-looking

statements are not historical facts but instead represent only our beliefs regarding future events, many of which, by their nature, are

inherently uncertain and outside our control.

These statements include statements other than historical information or statements of current

condition and may relate to our future plans and objectives and results, as well as statements about the objective and effectiveness of

our risk management and liquidity policies, statements about trends in or growth opportunities for our business, statements about our

future status, and activities or reporting under U.S.

Looking Statements

have included or incorporated by reference in this Annual Report on Form 10-K, and from time to time our management may make, statements

that may constitute “forward-looking statements” within the meaning of the safe harbour provisions of the U.S.

Private Securities

Litigation Reform Act of 1995.

Forward-looking statements are not historical facts but instead represent only our beliefs regarding future

events, many of which, by their nature, are inherently uncertain and outside our control.

These statements include statements other than

historical information or statements of current condition and may relate to our future plans and objectives and results, as well as statements

about the objective and effectiveness of our risk management and liquidity policies, statements about trends in or growth opportunities

for our business, statements about our future status, and activities or reporting under U.S.

banking and financial regulation.

Forward-looking statements generally are identified

by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,”

“strategy,” “future,” “opportunity,” “plan,” “may,” “should,”

“will,” “would,” “will be,” “will continue,” “will likely result,” and similar

By identifying these statements for you in this manner, we are alerting you to the possibility that our actual results and

financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking

Important factors that could cause our actual results and financial condition to differ from those indicated in the forward-looking

statements include, among others, those discussed below and under “Risk Factors” in Part I, Item 1A of this Annual Report

on Form 10-K.

Magyar Bancorp, Inc.

“Company”) is a Delaware-chartered corporation which owns 100% of the outstanding shares of common stock of Magyar Bank.

September 30, 2024, Magyar Bancorp, Inc.

had consolidated assets of $951.9 million, total deposits of $796.7 million and stockholders’

equity of $110.5 million.

Forward-looking

statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,”

“estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,”

“may,” “should,” “will,” “would,” “will be,” “will continue,”

“will likely result,” and similar expressions.

By identifying these statements for you in this manner, we are alerting you

to the possibility that our actual results and financial condition may differ, possibly materially, from the anticipated results and

financial condition indicated in these forward-looking statements.

Important factors that could cause our actual results and financial

condition to differ from those indicated in the forward-looking statements include, among others, those discussed below and under “Risk

Factors” in Part I, Item 1A of this Annual Report on Form 10-K.

Bancorp, Inc.

(the “Company”) is a Delaware-chartered corporation which owns 100% of the outstanding shares of common stock

of Magyar Bank (the “Bank”).

At September 30, 2025, Magyar Bancorp, Inc.

had consolidated assets of $997.7 million, total

deposits of $814.3 million and stockholders’ equity of $118.8 million.

Magyar Bancorp, Inc.

has not engaged in any significant business activity other than owning all of the shares

of common stock of Magyar Bank.

has not engaged in any significant

business activity other than owning all of the shares of common stock of Magyar Bank.

The executive office of Magyar Bancorp, Inc.

is located at 400 Somerset Street, New Brunswick, New Jersey

08901, and its telephone number is (732) 342-7600.

Magyar Bank is a New Jersey-chartered

savings bank headquartered in New Brunswick, New Jersey that was originally founded in 1922.

We conduct business from our main office

located at 400 Somerset Street, New Brunswick, New Jersey, and our eight branch offices located in New Brunswick, North Brunswick, South

Brunswick, Branchburg, Bridgewater, Edison and Martinsville, New Jersey.

The telephone number at our main office is (732) 342-7600 and

our website is located at www.magbank.com.

Information on our website is not and should not be considered

a part of this Annual Report.

Our principal business consists

of attracting retail deposits from the general public in the areas surrounding our main office in New Brunswick, New Jersey and our branch

offices located in Middlesex and Somerset Counties, New Jersey, and investing those deposits, together with funds generated from operations

and wholesale funding, in commercial real estate loans, residential mortgage loans, commercial business loans, Small Business Administration

(“SBA”) loans, home equity loans, home equity lines of credit, construction and land loans and investment securities.

revenues are derived principally from interest on loans and securities;

our investment securities consist primarily of mortgage-backed

securities and U.S.

located at 400 Somerset Street, New Brunswick, New Jersey 08901, and its telephone number is (732) 342-7600.

Bank is a New Jersey-chartered savings bank headquartered in New Brunswick, New Jersey that was originally founded in 1922.

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, Edison and Martinsville, New Jersey.

The telephone number at our main office

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

Information on our website is not and should not be considered a part

of this Annual Report.

principal business consists of attracting retail deposits from the general public in the areas surrounding our main office in New Brunswick,

New Jersey and our branch offices located in Middlesex and Somerset Counties, New Jersey, and investing those deposits, together with

funds generated from operations and wholesale funding, in commercial real estate loans, residential mortgage loans, commercial business

loans, Small Business Administration (“SBA”) loans, home equity loans, home equity lines of credit, construction and land

loans and investment securities.

Our revenues are derived principally from interest on loans and securities;

our investment securities

consist primarily of mortgage-backed securities and U.S.

Government and government-sponsored enterprise obligations.

We also generate revenues from fees and service charges.

Our primary sources of funds are deposits, borrowings and principal and interest payments on loans and securities.

We are subject to comprehensive

regulation and examination by the New Jersey Department of Banking and Insurance (“NJDBI”) and the Federal Deposit Insurance

Corporation (“FDIC”).

We are headquartered in New

Brunswick, New Jersey, and our primary deposit market area is concentrated in the communities surrounding our headquarters branch and

our branch offices located in Middlesex and Somerset Counties, New Jersey.

Our primary lending market area is broader than our deposit

market area and includes all of New Jersey.

The economy of our primary

market area is largely urban and suburban with a broad economic base that is typical for counties surrounding the New York metropolitan

We also generate

revenues from fees and service charges.

Our primary sources of funds are deposits, borrowings and principal and interest payments on

loans and securities.

We are subject to comprehensive regulation and examination by the New Jersey Department of Banking and Insurance

(“NJDBI”) and the Federal Deposit Insurance Corporation (“FDIC”).

are headquartered in New Brunswick, New Jersey, and our primary deposit market area is concentrated in the communities surrounding our

headquarters branch and our branch offices located in Middlesex and Somerset Counties, New Jersey.

Our primary lending market area is

broader than our deposit market area and includes all of New Jersey.

economy of our primary market area is largely urban and suburban with a broad economic base that is typical for counties surrounding

the New York metropolitan area.

The median household income in Middlesex and Somerset Counties ranks among the highest in the nation.

Most of the Bank’s customers

are individuals and small to medium-sized businesses which are dependent upon the regional economy.

Adverse changes in economic and business

conditions in the Bank’s markets could adversely affect the Bank’s borrowers, their ability to repay their loans and to borrow

additional funds, and consequently the Bank’s financial condition and performance.

The majority of the Bank’s loans are secured

by real estate located in New Jersey.

A decline in local economic conditions could adversely affect the values of such real estate.

Consequently,

a decline in local economic conditions may have a greater effect on the Bank’s earnings and capital than on the earnings and capital

of larger financial institutions whose real estate loan portfolios are more geographically diverse.

We face intense competition

within our market area both in making loans and attracting deposits.

Our market area has a high concentration of financial institutions

including large money center and regional banks, community banks and credit unions.

Some of our competitors offer products and services

that we currently do not offer, such as trust services and private banking.

According to the Federal Deposit Insurance Corporation’s

annual Summary of Deposit report, at June 30, 2024, our market share of deposits was 1.52% and 0.38% in Middlesex and Somerset

Counties, respectively.

of our customers are individuals and small to medium-sized businesses which are dependent upon the regional economy.

Adverse changes

in economic and business conditions in the Bank’s markets could adversely affect the Bank’s borrowers, their ability to repay

their loans and to borrow additional funds, and consequently the Bank’s financial condition and performance.

Most of the Bank’s

loans are secured by real estate located in New Jersey.

A decline in local economic conditions could adversely affect the values of such

Consequently, a decline in local economic conditions may have a greater effect on the Bank’s earnings and capital

than on the earnings and capital of larger financial institutions whose real estate loan portfolios are more geographically diverse.

face intense competition within our market area both in making loans and attracting deposits.

Our market area has a high concentration

of financial institutions including large money center and regional banks, community banks and credit unions.

Some of our competitors

offer products and services that we currently do not offer, such as trust services and private banking.

According to the Federal Deposit

Insurance Corporation’s annual Summary of Deposit report, on June 30, 2025, our market share of deposits was 1.39% and 0.69%

in Middlesex and Somerset Counties, respectively.

Our market share of deposits was 1.52% and 0.38%, respectively, at June 30, 2024.

Our competition for loans

and deposits comes principally from commercial banks, savings institutions, mortgage banking firms and credit unions.

We face additional

competition for deposits from short-term money market funds, brokerage firms, mutual funds and insurance companies.

Our primary focus

is to build and develop profitable customer relationships across all lines of business while maintaining our role as a community bank.

Lending Activities

Our lending relationships

are primarily with small to mid-sized businesses and individual consumers residing primarily in and around central and northern New Jersey.

We primarily originate commercial real estate loans and residential mortgage loans, and to a lesser extent home equity lines of credit,

commercial business and construction and land loans.

Loan Portfolio Composition.

The following table sets forth the composition of our loan portfolio by type of loan, at the dates indicated.

September 30,

competition for loans and deposits comes principally from commercial banks, savings institutions, mortgage banking firms and credit unions.

We face additional competition for deposits from short-term money market funds, brokerage firms, mutual funds and insurance companies.

Our primary focus is to build and develop profitable customer relationships across all lines of business while maintaining our role as

a community bank.

lending relationships are primarily with small to mid-sized businesses and individual consumers residing primarily in and around central

and northern New Jersey.

We primarily originate commercial and residential real estate loans, and to a lesser extent home equity lines

of credit, commercial business and construction and land loans.

Portfolio Composition.

The following table sets forth the composition of our loan portfolio by type of loan, for the years ended

September 30, 2025 and 2024.

Years Ended September 30,

(Dollars in thousands)

7 unchanged sentences

Total loans receivable, net

Loan Portfolio Maturities

Portfolio Maturities.

The following table summarizes the scheduled repayments of our loan portfolio at September 30, 2025.

Demand loans,

loans having no stated repayment schedule or maturity, and overdraft loans are reported as being due in one year or less.

loans, loans having no stated repayment schedule or maturity, and overdraft loans are reported as being due in one year or less.

Loans and Lines

5 unchanged sentences

After fifteen years

The following table sets forth

the scheduled repayments of fixed- and adjustable-rate loans at September 30, 2024 that are contractually due after September 30, 2025.

following table sets forth the scheduled repayments of fixed-rate and adjustable-rate loans at September 30, 2025 that are contractually

due after September 30, 2026.

Due After September 30, 2026

(In thousands)

4 unchanged sentences

Commercial business

One-to Four-Family Residential

We originate residential mortgage loans, most of which are secured by properties located in our primary market area and

most of which we hold in portfolio.

At September 30, 2024, $246.2 million, or 31.5% of our total loan portfolio, consisted of residential

mortgage loans.

Generally, residential mortgage loans are originated in amounts up to 80% of the lesser

of the appraised value or purchase price of the property, with private mortgage insurance required on loans with a loan-to-value ratio

in excess of 80%.

Generally, all residential

mortgage loans are underwritten according to Federal Home Loan Mortgage Corporation (“Freddie Mac”) guidelines, policies and

Historically, we have not originated a significant number of loans for the purpose of reselling them in the secondary market.

We also originate home equity

loans secured by residences located in our market area.

The underwriting standards we use for home equity loans 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.

At September 30, 2024, we

had $144.0 million of fixed-rate residential mortgage loans, which represented 58.5% of our total residential mortgage loan portfolio.

Four-Family Residential Loans.

We originate residential mortgage loans, most of which are secured by properties located in our

primary market area and most of which we hold in portfolio.

At September 30, 2025, $242.5 million, or 28.2% of our total loan portfolio,

consisted of residential mortgage loans.

Generally, residential mortgage loans are originated in amounts up to 80% of the lesser of the

appraised value or purchase price of the property, with private mortgage insurance required on loans with a loan-to-value ratio more

all residential mortgage loans are underwritten according to Federal Home Loan Mortgage Corporation (“Freddie Mac”) guidelines,

policies and procedures.

Historically, we have not originated a significant number of loans for the purpose of reselling them in the

secondary market.

also originate home equity loans secured by residences located in our market area.

The underwriting standards we use for home equity

loans 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.

September 30, 2025, we had $145.0 million of fixed-rate residential mortgage loans, which represented 59.8% of our total residential

mortgage loan portfolio.

At September 30, 2025, our largest fixed-rate residential mortgage loan was $9.8 million.

The loan was performing

in accordance with its contractual repayment terms at September 30, 2025.

September 30, 2025, adjustable-rate residential mortgage loans totaled $97.4 million, or 40.2% of our total residential mortgage loan

The largest adjustable-rate residential mortgage loan was for $2.6 million.

The loan was performing in accordance with its

contractual repayment terms at September 30, 2025.

At September 30, 2024, adjustable-rate

residential mortgage loans totaled $102.2 million, or 41.5% of our total residential mortgage loan portfolio.

The largest adjustable-rate

residential mortgage loan was for $2.2 million.

The loan was performing in accordance with its contractual repayment terms at September

Commercial Real Estate

We also originate commercial real estate loans, most of which are secured by properties located in our primary market area.

Real Estate Loans.

We also originate commercial real estate loans, most of which are secured by properties located in our primary

At September 30, 2025, $533.2 million, or 62.1%, of our total loan portfolio consisted of these types of loans.

Commercial real estate

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

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 factors

when we originate commercial real estate loans.

During the underwriting process we evaluate the business qualifications and financial

condition of the borrower, including credit history, profitability of the property being financed, as well as the value and condition

of the mortgaged property securing the loan.

When evaluating the business qualifications of the borrower, we consider the financial resources

of the borrower, the borrower’s experience in owning or managing similar property and the borrower’s payment history with

us and other financial institutions.

In evaluating the property securing the loan, we consider the net operating income of the mortgaged

property before debt service and depreciation, the ratio of the loan amount to the appraised value of the mortgaged property and the debt

service coverage ratio (the ratio of net operating income to debt service) to ensure it is at least 120% of the monthly debt service.

Loans secured by commercial

real estate generally are larger than residential mortgage loans and involve greater credit risk.

Commercial real estate loans often involve

large loan balances to single borrowers or groups of related borrowers.

Repayment of these loans depends to a large degree on the results

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.

Construction and Land

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

and commercial properties.

Construction and land 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, 2024, our construction and land loans

totaled $22.7 million, or 2.9% of total loans.

Construction and land loans

generally have a maximum term of 24 months.

We provide financing for land acquisition, site improvement and hard construction costs.

acquisition loans are limited to 50% of the sale price or appraised value of the land, whichever is lower.

Site improvement loans are

limited to 100% of the bonded site improvement costs.

Construction loans are limited to 75% of the lesser of the contract sale price or

appraised value of the property.

Construction and land lending

is generally considered to involve a higher degree of credit risk than long-term financing on improved, owner-occupied real estate.

of loss on a construction and land loan depends largely upon the accuracy of the initial estimate of the value of the property at completion

of construction compared to the estimated cost (including interest) of construction and other assumptions.

If the estimate of construction

cost is inaccurate, we may be required to advance funds beyond the amount originally committed in order to protect the value of the property.

Additionally, if our estimate of the value of the completed property is inaccurate, our construction and land loan may exceed the value

of the collateral.

The advantages of construction lending are that the market is typically less competitive than standard mortgage products,

the interest rate typically charged is a variable rate, which permits the Bank to protect against sudden changes in its costs of funds,

the interest rate is typically higher to reflect the higher degree of credit risk, and the origination fees charged by the Bank to its

customers can be amortized over the shorter term of a construction loan, typically, one to two years, which permits the Bank to recognize

fees as income over a shorter period of time.

Home Equity Loans and

Lines of Credit and Other Loans.

We originate home equity lines of credit secured by residences located in our market area.

September 30, 2024, these loans totaled $24.7 million, or 3.2% 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.

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.

We also originate loans secured

by the common stock of publicly traded companies, provided their shares are listed on the New York Stock Exchange or the NASDAQ Stock

Stock-secured loans are interest-only and are offered for terms up to twelve months and for adjustable rates of interest indexed

to the prime rate, as reported in The Wall Street Journal.

The loan amount is not to exceed 70% of the value of the stock securing

the loan at any time.

At September 30, 2024, stock-secured and other loans totaled $2.1 million, or 0.3% of our total net loan portfolio.

Commercial Business

We make commercial business loans primarily in our market area to a variety of professionals, sole proprietorships and

small and mid-sized businesses.

Our commercial business loans include term loans

and revolving lines of credit.

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

purposes 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.

consider a number of factors when we originate commercial real estate loans.

During the underwriting process we evaluate the business

qualifications and financial condition of the borrower, including credit history, profitability of the property being financed, as well

as the value and condition of the mortgaged property securing the loan.

When evaluating the business qualifications of the borrower,

we consider the financial resources of the borrower, the borrower’s experience in owning or managing similar property and the borrower’s

payment history with us and other financial institutions.

In evaluating the property securing the loan, we consider the net operating

income of the mortgaged property before debt service and depreciation, the ratio of the loan amount to the appraised value of the mortgaged

property and the debt service coverage ratio (the ratio of net operating income to debt service) to ensure it is at least 120% of the

monthly debt service.

secured by commercial real estate generally are larger than residential mortgage loans and involve greater credit risk.

Commercial real

estate loans often involve large loan balances to single borrowers or groups of related borrowers.

Repayment of these loans depends to

a large degree on the results 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.

and Land Loans.

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

buildings and commercial properties.

Construction and land 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, 2025, our construction and

land loans totaled $29.3 million, or 3.4% of total loans.

and land loans generally have a maximum term of 24 months.

We provide financing for land acquisition, site improvement and hard construction

Land acquisition loans are limited to 50% of the sale price or appraised value of the land, whichever is lower.

Site improvement

loans are limited to 100% of the bonded site improvement costs.

Construction loans are limited to 75% of the lesser of the contract sale

price or appraised value of the property.

and land lending is generally considered to involve a higher degree of credit risk than long-term financing on improved, owner-occupied

Risk of loss on a construction and land loan depends largely upon the accuracy of the initial estimate of the value of the

property at completion of construction compared to the estimated cost (including interest) of construction and other assumptions.

the estimate of construction cost is inaccurate, we may be required to advance funds beyond the amount originally committed to protect

the value of the property.

Additionally, if our estimate of the value of the completed property is inaccurate, our construction and land

loan may exceed the value of the collateral.

The advantages of construction lending are that the market is typically less competitive

than standard mortgage products, the interest rate typically charged is a variable rate, which permits the Bank to protect against sudden

changes in its costs of funds, the interest rate is typically higher to reflect the higher degree of credit risk, and the origination

fees charged by the Bank to its customers can be amortized over the shorter term of a construction loan, typically, one to two years,

which permits the Bank to recognize fees as income over a shorter period of time.

Equity Loans and Lines of Credit and Other Loans.

We originate home equity lines of credit secured by residences located in our

At September 30, 2025, these loans totaled $31.8 million, or 3.7% 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.

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.

also originate loans secured by the common stock of publicly traded companies, provided their shares are listed on the New York Stock

Exchange or the NASDAQ Stock Market.

Stock-secured loans are interest-only and are offered for terms up to twelve months and for adjustable

rates of interest indexed to the prime rate, as reported in The Wall Street Journal.

The loan amount is not to exceed 70% of the

value of the stock securing the loan at any time.

At September 30, 2025, stock-secured and other loans totaled $1.6 million, or 0.2%

of our total net loan portfolio.

Business Loans.

We make commercial business loans primarily in our market area to a variety of professionals, sole proprietorships

and small and mid-sized businesses.

Our commercial business loans include term loans and revolving lines of credit.

At September 30,

2025, our commercial business loans totaled $20.0 million, or 2.3% of total loans.

The maximum term of a commercial

business loan is 25 years.

Such loans are generally used for longer-term working capital purposes such as purchasing equipment or furniture.

maximum term of a commercial business loan is 25 years.

Such loans are generally used for longer-term working capital purposes such as

purchasing equipment or furniture.

Commercial business loans are made with either adjustable or fixed rates of interest.

Included in commercial business

loans are Small Business Administration (“SBA”) 7(a) loans, on which the SBA provides guarantees of up to 75% 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 State of New Jersey.

At September 30, 2024, $14.9

million, or 95.2% of the Company’s SBA loan balances, were to businesses located in 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 weaker

personal financial guarantees.

in commercial business 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).

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 State of New Jersey.

At September 30, 2025, $17.6 million, or 96.0%

of the Company’s SBA loan balances, were to businesses located in 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 weaker 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.

Commercial business loans

generally have greater credit risk than residential mortgage loans.

Unlike residential mortgage loans, which generally are made on the

basis of the borrower’s ability to repay the loan from his or her employment income, and which are secured by real property with

ascertainable value, commercial business loans generally are made on the basis of the borrower’s ability to repay the loan from

the cash flow of the borrower’s business.

As a result, the repayment of commercial business loans may depend substantially on the

success of the borrower’s business.

As such the performance of these types of loans may be particularly sensitive to local and/or

national economic conditions.

Further, any collateral securing commercial business loans may depreciate over time, may be difficult to

appraise and may fluctuate in value.

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.

sell the guaranteed portions of these SBA loans in the secondary market.

business loans generally have greater credit risk than residential mortgage loans.

Unlike residential mortgage loans, which generally

are made on the basis of the borrower’s ability to repay the loan from his or her employment income, and which are secured by real

property with ascertainable value, commercial business loans generally are made on the basis of the borrower’s ability to repay

the loan from the cash flow of the borrower’s business.

As a result, the repayment of commercial business loans may depend substantially

on the success of the borrower’s business.

As such the performance of these types of loans may be particularly sensitive to local

and/or national economic conditions.

Further, any collateral securing commercial business loans may depreciate over time, may be difficult

to appraise and may fluctuate in value.

We try to minimize these risks through our underwriting standards.

Loans to One Borrower

and Concentration of Loans.

to One Borrower and Concentration of Loans.

The maximum amount of loans to one borrower is limited by our Board-established loans-to-one-borrower

limit, which is currently 15% of Magyar Bank’s capital, or $18.6 million.

At September 30, 2024, our largest loan was $13.2 million

At September 30, 2025, our largest loan was a $12.8 million

commercial real estate loan to finance the purchase and operation of a nursing and rehabilitation home in Edison, New Jersey.

was performing in accordance with its terms at September 30, 2025.

The size of loans which the

Bank can offer to potential borrowers is less than the size of loans which many of the Bank’s competitors with larger capitalization

are able to offer.

The Bank may engage in loan participations with other banks for loans in excess of the Bank’s legal lending limits.

However, no assurance can be given that such participations will be available at all or on terms which are favorable to the Bank and its

The Bank has established policies

to determine and monitor concentrations of credit risk and to maintain discipline in lending practices with a focus on portfolio diversification.

Asset Quality

We commence collection efforts

when a loan becomes 15 days past due with system-generated reminder notices.

Subsequent late charge and delinquent notices are issued

and the account is monitored on a regular basis thereafter.

Personal, direct contact with the borrower is attempted early in the collection

process as a courtesy reminder and later to determine the reason for the delinquency and to safeguard our collateral.

When a loan is more

than 60 days past due, the credit file is reviewed and, if deemed necessary, information is updated or confirmed and collateral re-evaluated.

size of loans which the Bank can offer to potential borrowers is less than the size of loans which many of the Bank’s competitors

with larger capitalization are able to offer.

The Bank may engage in loan participations with other banks for loans in excess of the

Bank’s legal lending limits.

However, no assurance can be given that such participations will be available at all or on terms which

are favorable to the Bank and its customers.

Bank has established policies to determine and monitor concentrations of credit risk and to maintain discipline in lending practices

with a focus on portfolio diversification.

commence collection efforts when a loan becomes 15 days past due with system-generated reminder notices.

Subsequent late charge and delinquent

notices are issued, and the account is monitored on a regular basis thereafter.

Personal, direct contact with the borrower is attempted

early in the collection process as a courtesy reminder and later to determine the reason for the delinquency and to safeguard our collateral.

When a loan is more than 60 days past due, the credit file is reviewed and, if deemed necessary, information is updated or confirmed

and collateral re-evaluated.

We make every effort to contact the borrower and develop a plan of repayment to cure the delinquency.

Loans are placed on non-accrual

status when they are delinquent for more than 90 days.

When loans are placed on non-accrual status, unpaid accrued interest is fully reversed,

and further income is recognized only to the extent received.

A summary report of all loans

30 days or more past due is provided to the Board of Directors on a monthly basis.

If no repayment plan is in process, the file is referred

to counsel for the commencement of foreclosure and/or other collection efforts.

Non-Performing Assets.

are placed on non-accrual status when they are delinquent for more than 90 days.

When loans are placed on non-accrual status, unpaid

accrued interest is fully reversed, and further income is recognized only to the extent received.

summary report of all loans 30 days or more past due is provided to the Board of Directors on a monthly basis.

If no repayment plan is

in process, the file is referred to counsel for the commencement of foreclosure and/or other collection efforts.

Non-Performing

Non-accrual loans are loans on which the accrual of interest has ceased.

Loans are generally placed on non-accrual status if,

in the opinion of management, collection is doubtful, or when principal or interest is past due 90 days or more.

Interest accrued, but

not collected at the date a loan is placed on non-accrual status, is reversed and charged against interest income.

Subsequent cash receipts

are applied either to the outstanding principal or recorded as interest income, depending on management’s assessment of ultimate

collectability of principal and interest.

Loans are returned to an accrual status when the borrower’s ability to make periodic principal

and interest payments has returned to normal (i.e., brought current with respect to principal or interest or restructured) and the paying

capacity of the borrower and/or the underlying collateral is deemed sufficient to cover principal and interest.

The following table sets forth

the amounts and categories of our non-accrual assets at the dates indicated.

September 30,

Loans are generally placed on non-accrual status

if, in the opinion of management, collection is doubtful, or when principal or interest is past due 90 days or more.

Interest accrued

but not collected at the date a loan is placed on non-accrual status, is reversed and charged against interest income.

Subsequent cash

receipts are applied either to the outstanding principal or recorded as interest income, depending on management’s assessment of

ultimate collectability of principal and interest.

Loans are returned to an accrual status when the borrower’s ability to make

periodic principal and interest payments has returned to normal (i.e., brought current with respect to principal or interest or restructured)

and the paying capacity of the borrower and/or the underlying collateral is deemed sufficient to cover principal and interest.

following table sets forth the amounts and categories of our non-accrual assets at September 30, 2025 and 2024.

Years Ended September 30,

(Dollars in thousands)

2 unchanged sentences

Commercial real estate

Construction and land

Home equity lines of credit

Total non-accrual loans

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Total non-accrual loans to total loans

Allowance for credit loss to total non-accrual loans

Allowance for credit loss to total loan receivable

A loan is considered individually

evaluated when it has been modified for a borrower in financial distress or when, based on current information and events, it is probable

that the Bank will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of

the loan agreement.

Individually evaluated loans that have been modified are measured based on the present value of expected future discounted

cash flows, the market price of the loan or the fair value of the underlying collateral if the loan is collateral dependent.

We record cash receipts on

individually evaluated loans that are non-performing as a reduction to principal before applying amounts to interest or late charges unless

specifically directed by the Bankruptcy Court to apply payments otherwise.

Delinquent Loans .

The following table sets forth certain information with respect to our loan portfolio delinquencies at the dates indicated.

Loans delinquent

more than three months are generally classified as non-accrual loans.

Allowance for credit losses to total non-accrual loans*

Allowance for credit losses to total loan receivable

* Not meaningful

loan is considered individually evaluated when it has been modified for a borrower in financial distress or when, based on current information

and events, it is probable that the Bank will be unable to collect the scheduled payments of principal or interest when due according

to the contractual terms of the loan agreement.

Individually evaluated loans that have been modified are measured based on the present

value of expected future discounted cash flows, the market price of the loan or the fair value of the underlying collateral if the loan

is collateral dependent.

record cash receipts on individually evaluated loans that are non-performing as a reduction to principal before applying amounts to interest

or late charges unless specifically directed by the Bankruptcy Court to apply payments otherwise.

The following table sets forth certain information with respect to our loan portfolio delinquencies for the years ended

September 30, 2025 and 2024.

Loans delinquent more than three months, or 90 days are generally classified as non-accrual loans.

Loans Delinquent For

1 unchanged sentence

(Dollars in thousands)

At September 30, 2024

September 30, 2025

One-to four-family residential

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Home equity loans and lines of credit

At September 30, 2023

September 30, 2024

One-to four-family residential

Commercial real estate

Construction and land

Real Estate Owned .

Real estate we acquire as a result of foreclosure or by deed in lieu of foreclosure is classified as other real estate owned (“OREO”)

When property is acquired it is recorded at fair value less estimated cost to sell at the date of foreclosure, establishing

a new cost basis.

Home equity loans and lines of credit

Estate Owned .

Real estate we acquire as a result of foreclosure or by deed in lieu of foreclosure is classified as other real

estate owned (“OREO”) until sold.

When property is acquired, it is recorded at fair value less estimated cost to sell at

the date of foreclosure, establishing a new cost basis.

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

We held three properties consisting

of two residential single-family homes and one commercial real estate property totaling $3.7 million at September 30, 2024, an increase

of $3.4 million, or 1035.7% from $328 thousand at September 30, 2023.

Allowance for Credit Losses

September 30, 2025, we held one commercial real estate property totaling $2.2 million, a decrease of $1.5 million, or 41.8%, compared

to two residential single-family and one commercial real estate properties totaling $3.7 million at September 30, 2024.

for Credit Losses

assets measured at amortized cost should be presented at the net amount expected to be collected, through an allowance for credit losses

5 unchanged sentences

losses that have taken place during the period.

ACL on Loans.

Company maintains its ACL on loans at a level that management believes to be appropriate to absorb estimated credit losses as of the date

of the Consolidated Balance Sheet.

The ACL is a valuation reserve established and maintained by charges against income.

Loans, or portions

thereof, are charged-off against the ACL when they are deemed uncollectible.

The ACL is an estimate of expected credit losses that considers

our historical loss experience, the weighted average expected lives of loans, current economic conditions and forecasts of future economic

The determination of an appropriate ACL is inherently subjective and may have significant changes from period to period.

methodology for determining the ACL has two main components:

evaluation of expected credit losses for certain groups of homogeneous loans

that share similar risk characteristics and evaluation of loans that do not share risk characteristics with other loans.

The ACL is measured

on a collective (pool) basis when similar characteristics exist.

The Company’s loan portfolio is segmented by loan types that have

similar risk characteristics and behave similarly during economic cycles.

The ACL for individual loans

begins with the use of normal credit review procedures to identify whether a loan no longer shares similar risk characteristics with other

pooled loans and, therefore, should be individually assessed.

We individually evaluate loans that meet the following criteria:

it is determined that foreclosure is probable, (2) substandard, doubtful and nonperforming loans when repayment is expected to be provided

substantially through the operation or sale of the collateral, or (3) when it is determined by management that a loan does not share similar

risk characteristics with other loans.

Credit loss estimates are calculated based on the following three acceptable methods for measuring

(1) the present value of expected future cash flows discounted at the loan’s original effective interest rate;

loan’s observable market price;

or (3) the fair value of the collateral when the loan is collateral dependent.

Our individual loan

evaluations consist primarily of the fair value of collateral method because most of our loans are collateral dependent.

Collateral values

are reduced to consider expected disposition costs when appropriate.

A charge-off is recorded when the estimated fair value of the loan

is less than the loan balance.

ACL on Unfunded Loan

The Company estimates expected credit losses over the contractual period in which the Bank is exposed to credit risk

via a contractual obligation to extend credit unless that obligation is unconditionally cancellable by the Bank.

The ACL on unfunded loan

commitments is included in accounts payable and other liabilities in the Company’s Consolidated Balance Sheets and is adjusted through

credit loss expense.

The estimate includes consideration of the likelihood that funding will occur, the amount of funding that will occur

and an estimate of expected credit losses on commitments expected to be funded over its estimated life.

The following table sets forth

activity in our allowance for credit losses on loans for the years indicated.

September 30,

The Company maintains its ACL on loans at a level that management believes to be appropriate to absorb estimated credit

losses as of the date of the Consolidated Balance Sheet.

The ACL is a valuation reserve established and maintained by charges against

Loans, or portions thereof, are charged off against the ACL when they are deemed uncollectible.

The ACL is an estimate of expected

credit losses that considers our historical loss experience, the weighted average expected lives of loans, current economic conditions

and forecasts of future economic conditions.

The determination of an appropriate ACL is inherently subjective and may have significant

changes from period to period.

The methodology for determining the ACL has two main components:

evaluation of expected credit losses

for certain groups of homogeneous loans that share similar risk characteristics and evaluation of loans that do not share risk characteristics

with other loans.

The ACL is measured on a collective (pool) basis when similar characteristics exist.

The Company’s loan portfolio

is segmented by loan types that have similar risk characteristics and behave similarly during economic cycles.

ACL for individual loans begins with the use of normal credit review procedures to identify whether a loan no longer shares similar risk

characteristics with other pooled loans and, therefore, should be individually assessed.

We individually evaluate loans that meet the

following criteria:

(1) when it is determined that foreclosure is probable, (2) substandard, doubtful and nonperforming loans when repayment

is expected to be provided substantially through the operation or sale of the collateral, or (3) when it is determined by management

that a loan does not share similar risk characteristics with other loans.

Credit loss estimates are calculated based on the following

three acceptable methods for measuring the ACL:

(1) the present value of expected future cash flows discounted at the loan’s original

effective interest rate;

(2) the loan’s observable market price;

or (3) the fair value of the collateral when the loan is collateral

Our individual loan evaluations consist primarily of the fair value of collateral method because most of our loans are collateral

Collateral values are reduced to consider expected disposition costs when appropriate.

A charge-off is recorded when the estimated

fair value of the loan is less than the loan balance.

on Unfunded Loan Commitments.

The Company estimates expected credit losses over the contractual period in which the Bank is exposed

to credit risk via a contractual obligation to extend credit unless that obligation is unconditionally cancellable by the Bank.

on unfunded loan commitments is included in accounts payable and other liabilities in the Company’s Consolidated Balance Sheets

and is adjusted through credit loss expense.

The estimate includes consideration of the likelihood that funding will occur, the amount

of funding that will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life.

following table sets forth activity in our ACL on loans for the years ended September 30, 2025 and 2024.

Years Ended September 30,

(Dollars in thousands)

1 unchanged sentence

Effect of adopting ASU 2016-13

Net charge-offs (recoveries):

Net recoveries:

One-to four-family residential

Construction and land

Commercial business

Total net charge-offs (recoveries)

Total net recoveries

Provision for credit losses

Balance at end of year

Net charge-offs (recoveries) to average loans outstanding

Net recoveries to average loans outstanding

Allowance for credit loss to total loans receivable

Allocation of ACL on

The following table sets forth the ACL on loans allocated by loan category and the percent of the allowance to the total

allowance at the dates indicated, as well as additional information with respect to net loan charge-offs by category.

The ACL on loans

allocated to each category is not necessarily indicative of future losses in any particular category and does not restrict the use of

the allowance to absorb losses in other categories.

At of For the Year Ended September 30, 2024

At of For the Year Ended September 30, 2023

off to Average

of ACL on Loans.

The following table sets forth the ACL on loans allocated by loan category and the percent of the allowance

to the total allowance at September 30, 2025 and 2024, as well as additional information with respect to net loan charge-offs by category.

The ACL on loans allocated to each category is not necessarily indicative of future losses in any particular category and does not restrict

the use of the allowance to absorb losses in other categories.

September 30, 2025

September 30, 2024

Net Charge-off

(Dollars in thousands)

5 unchanged sentences

Total allowance for credit losses

Our Board of Directors has

adopted our Investment Policy.

This policy determines the types of securities in which we may invest.

The Investment Policy is reviewed

annually by the Board of Directors and changes to the policy are subject to approval by our Board of Directors.

While general investment

strategies are developed by the Asset and Liability Committee, the execution of specific actions rests primarily with our President and

our Chief Financial Officer.

They are responsible for ensuring the guidelines and requirements included in the Investment Policy are followed.

They are authorized to execute transactions that fall within the scope of the established Investment Policy up to $5.0 million per transaction

individually or $10.0 million per transaction jointly.

Investment transactions in excess of $10.0 million must be approved by the Asset

and Liability Committee.

Investment transactions are reviewed and ratified by the Board of Directors at their regularly scheduled meetings.

Our investments portfolio

may include U.S.

Treasury obligations, debt and equity securities issued by various government-sponsored enterprises, including Fannie

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 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

that securities transactions be conducted in a safe and sound manner, and purchase and sale decisions be based upon a thorough analysis

of each security to determine its quality and inherent risks and fit within our overall asset/liability management objectives.

must consider the effect of an investment or sale on our risk-based capital and prospects for yield and appreciation.

Portfolio Maturities

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

portfolio at September 30, 2024 are summarized in the following table.

Maturities are based on the final contractual payment dates, and

do not reflect the impact of prepayments or early redemptions that may occur.

The weighted average yield is determined using a yield calculated

from the contractual interest rate adjusted for the amortization/accretion of premium/discount paid to purchase the security, if any,

expected to be recognized during its average life.

Yields on tax-exempt obligations have been computed on a tax-equivalent basis.

More Than One

More Than Five

Years Through

Board of Directors has adopted our Investment Policy, which determines the types of securities in which we may invest.

While general

investment strategies are developed by the Board Asset and Liability Committee, the execution of specific actions rests primarily with

our President and our Chief Financial Officer.

They are responsible for ensuring the guidelines and requirements included in the Investment

Policy are followed.

They are authorized to execute transactions that fall within the scope of the established Investment Policy up to

$5.0 million per transaction individually or $10.0 million per transaction jointly.

Investment transactions more than $10.0 million must

be approved by the Board Asset and Liability Committee.

Investment transactions are reviewed and ratified by the Board of Directors at

their regularly scheduled meetings.

investments portfolio may include U.S.

Treasury obligations, debt and equity securities issued by various government-sponsored enterprises,

including Fannie 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 debt securities.

we may invest in equity securities subject to certain limitations and not more than Magyar Bank’s Tier 1 capital.

Investment Policy requires that securities transactions be conducted in a safe and sound manner, and purchase and sale decisions be based

upon a thorough analysis of each security to determine its quality and inherent risks and fit within our overall asset/liability management

The analysis must consider the effect of an investment or sale on our risk-based capital and prospects for yield and appreciation.

Maturities and Yields.

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

securities portfolio at September 30, 2025 and 2024 are summarized in the following tables.

Maturities are based on the final contractual

payment dates, and do not reflect the impact of prepayments or early redemptions that may occur.

The weighted average yield is determined

using a yield calculated from the contractual interest rate adjusted for the amortization/accretion of premium/discount paid to purchase

the security, if any, expected to be recognized during its average life.

Yields on tax-exempt obligations have been computed on a tax-equivalent

September 30, 2025

11 unchanged sentences

Corporate securities

Sources of Funds

including certificates of deposit, demand, savings, NOW and money market accounts, have traditionally been the primary source of funds

used for our lending and investment activities.

We obtain certificates of deposit primarily through our branch network and to a lesser

extent via the brokered CD market.

We also use borrowings, primarily Federal Home Loan Bank advances, to supplement cash flow needs, to

lengthen the maturities of liabilities for interest rate risk management and to manage our cost of funds.

Additional sources of funds

include principal and interest payments from loans and securities, loan and security prepayments and maturities, income on other earning

assets and stockholders’ equity.

While cash flows from loans and securities payments can be relatively stable sources of funds,

deposit inflows and outflows can vary widely and are influenced by prevailing interest rates, market conditions and levels of competition.

deposits are generated primarily from customers within our primary market area.

We offer a selection of deposit accounts, including demand

accounts, NOW accounts, money market accounts, savings accounts, retirement accounts and certificates of deposit.

Deposit account terms

vary, with the principal differences being the minimum balance required, the amount of time the funds must remain on deposit and the interest

Deposits have traditionally been the primary source of funds used for our lending and investment activities.

We obtain certificates

of deposit primarily through our branch network and to a lesser extent via the brokered CD market.

We also use borrowings, primarily

Federal Home Loan Bank advances, to supplement cash flow needs, to lengthen the maturities of liabilities for interest rate risk management

and to manage our cost of funds.

Additional sources of funds include principal and interest payments from loans and securities, loan

and security prepayments and maturities, income on other earning assets and stockholders’ equity.

While cash flows from loans and

securities payments can be relatively stable sources of funds, deposit inflows and outflows can vary widely and are influenced by prevailing

interest rates, market conditions and levels of competition.

Our deposits are generated primarily from customers within our primary market area.

We offer a selection of deposit accounts, including

demand accounts, NOW accounts, money market accounts, savings accounts, retirement accounts and certificates of deposit.

Deposit account

terms vary, with the principal differences being the minimum balance required, the amount of time the funds must remain on deposit and

the interest rate.

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

At September 30, 2024, we had $29.6 million in brokered

The flow of deposits is influenced

significantly by general economic conditions, changes in money market and other prevailing interest rates and competition.

of deposit accounts offered allows us to be competitive in obtaining funds and responding to changes in consumer demand.

Based on experience,

we believe that our deposits are relatively stable.

However, the ability to attract and maintain deposits, and the rates paid on these

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

The following table sets forth

the distribution of total deposit accounts, by account type, at the dates indicated.

September 30,

At September 30, 2025, we had $57.3

million in brokered certificate of deposits.

flow of deposits is influenced significantly by general economic conditions, changes in money market and other prevailing interest rates

and competition.

The variety of deposit accounts offered allows us to be competitive in obtaining funds and responding to changes in

consumer demand.

Based on experience, we believe that our deposits are relatively stable.

However, the ability to attract and maintain

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

following table sets forth the distribution of total deposit accounts, by account type, at September 30, 2025 and 2024.

Years Ended September 30,

(Dollars in thousands)

5 unchanged sentences

Total deposits

At September 30, 2024 and

2023, the aggregate deposits in amounts greater than $250 thousand, which is the maximum amount for federal deposit insurance, were $380.0

million and $429.9 million, respectively.

The estimated amounts of deposits that were neither insured nor collateralized were $114.7 million

and $109.3 million at September 30, 2024 and 2023, respectively.

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 certificates of deposits with individual account balances exceeding $250 thousand at September 30, 2024.

September 30,

September 30, 2025 and 2024, the aggregate deposits in amounts greater than $250 thousand, which is the maximum amount for federal deposit

insurance, were $351.0 million and $380.0 million, respectively.

The estimated amounts of deposits that were neither insured nor collateralized

were $127.9 million and $114.7 million at September 30, 2025 and 2024, respectively.

We had no deposits that were uninsured for any reason

other than being more than the maximum amount for federal deposit insurance.

following table sets forth the maturity of certificates of deposits with individual account balances exceeding $250 thousand for the

years ended September 30, 2025 and 2024.

Years Ended September 30,

(In thousands)

Maturity Period:

Maturity Periods:

Three months or less

2 unchanged sentences

Over twelve months

At September 30, 2024, $99.2

million of our certificates of deposit had maturities of one year or less.

We monitor activity on these accounts and, based on historical

experience and our current pricing strategy, we believe we will retain a large portion of these accounts upon maturity.

Subsidiary Activities

September 30, 2025, $80.6 million of our certificates of deposit had maturities of one year or less.

We monitor activity on these accounts

and, based on historical experience and our current pricing strategy, we believe we will retain a large portion of these accounts upon

Company’s only subsidiary is the Bank.

The Bank holds three subsidiaries as described below.

Magyar Investment Company

is a New Jersey investment corporation subsidiary for the purpose of buying, selling and holding investment securities.

The income earned

on Magyar Investment Company’s investment securities are subject to a lower state tax than that assessed on income earned on investment

securities maintained at Magyar Bank.

Hungaria Urban Renewal, LLC

is a Delaware limited-liability corporation established in 2002 as a qualified intermediary operating for the purpose of acquiring and

developing Magyar Bank’s main office.

In 2006, Magyar Bank acquired a 100% interest in Hungaria Urban Renewal, LLC, which has no

other business other than owning Magyar Bank’s main office site.

As part of a tax abatement agreement with the City of New Brunswick,

Magyar Bank’s main office will remain in Hungaria Urban Renewal, LLC’s name.

Magyar Service Corporation,

a New Jersey corporation, is a wholly owned subsidiary of Magyar Bank.

Magyar Service Corporation offers Magyar Bank customers and others

a complete range of non-deposit investment products and

financial planning services, including insurance products, fixed and variable

annuities, and retirement planning for individual and commercial customers.

Employees and Human Capital

At September 30, 2024 we employed

91 full-time employees and 10 part-time employees.

Our employees are not represented by any collective bargaining group.

Management believes

that we have good relations with our employees.

Employee retention helps us

operate efficiently and achieve one of our business objectives, which is being a high-level service provider.

We believe our commitment

to living 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.

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,

2024, 35% of our current staff had been with us for ten years or more.

SUPERVISION AND REGULATION

Magyar Bank is a New Jersey-chartered

savings bank, and its deposit accounts are insured up to applicable limits by the Federal Deposit Insurance Corporation (“FDIC”)

under the Deposit Insurance Fund (“DIF”).

Magyar Bank is subject to extensive regulation, examination and supervision by the

Commissioner of the New Jersey Department of Banking and Insurance (the “Commissioner”) as the issuer of its charter, and

by the FDIC as deposit insurer and its primary federal regulator.

Magyar Bank must file reports with the Commissioner and the FDIC concerning

its activities and financial condition, and it must obtain regulatory approval prior to entering into certain transactions, such as mergers

with, or acquisitions of, other depository institutions and opening or acquiring branch offices.

The Commissioner and the FDIC conduct

periodic examinations to assess Magyar Bank’s compliance with various regulatory requirements.

This regulation and supervision establishes

a comprehensive framework of activities in which a savings bank can engage and is intended primarily for the protection of the DIF and

The regulatory structure also gives the regulatory authorities extensive discretion in connection with their supervisory and

enforcement activities and examination policies, including policies with respect to the classification of assets and the establishment

of adequate loan loss reserves for regulatory purposes.

Magyar Bancorp, Inc., as

a bank holding company controlling Magyar Bank, is subject to the Bank Holding Company Act of 1956, as amended (“BHCA”), the

rules and regulations of the Federal Reserve Bank (the “FRB”) under the BHCA the provisions of the New Jersey Banking Act

of 1948 (the “New Jersey Banking Act”), and to the regulations of the Commissioner under the New Jersey Banking Act applicable

Investment Company is a New Jersey investment corporation subsidiary for the purpose of buying, selling and holding investment securities.

The income earned on Magyar Investment Company’s investment securities are subject to a lower state tax than that assessed on income

earned on investment securities maintained at Magyar Bank.

Urban Renewal, LLC is a Delaware limited-liability corporation established in 2002 as a qualified intermediary operating for the purpose

of acquiring and developing Magyar Bank’s main office.

In 2006, Magyar Bank acquired a 100% interest in Hungaria Urban Renewal,

LLC, which has no other business other than owning Magyar Bank’s main office site.

As part of a tax abatement agreement with the

City of New Brunswick, Magyar Bank’s main office will remain in Hungaria Urban Renewal, LLC’s name.

Service Corporation, a New Jersey corporation, is a wholly owned subsidiary of Magyar Bank.

Magyar Service Corporation offers Magyar

Bank customers and others a complete range of non-deposit investment products and financial planning services, including insurance products,

fixed and variable annuities, and retirement planning for individual and commercial customers.

and Human Capital Resources

September 30, 2025 we employed 91 full-time employees and seven part-time employees.

Our employees are not represented by any collective

bargaining group.

Management believes that we have good relations with our employees.

retention helps us operate efficiently and achieve one of our business objectives, which is being a high-level service provider.

our commitment to living 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.

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, 2025, 36% of our current staff had been with us for ten years or more.

AND REGULATION

Bank is a New Jersey-chartered savings bank, and its deposit accounts are insured up to applicable limits by the Federal Deposit Insurance

Corporation (“FDIC”) under the Deposit Insurance Fund (“DIF”).

Magyar Bank is subject to extensive regulation,

examination and supervision by the Commissioner of the New Jersey Department of Banking and Insurance (the “Commissioner”)

as the issuer of its charter, and by the FDIC as deposit insurer and its primary federal regulator.

Magyar Bank must file reports with

the Commissioner and the FDIC concerning its activities and financial condition, and it must obtain regulatory approval prior to entering

into certain transactions, such as mergers with, or acquisitions of, other depository institutions and opening or acquiring branch offices.

The Commissioner and the FDIC conduct periodic examinations to assess Magyar Bank’s compliance with various regulatory requirements.

This regulation and supervision establishes a comprehensive framework of activities in which a savings bank can engage and is intended

primarily for the protection of the DIF and depositors.

The regulatory structure also gives the regulatory authorities extensive discretion

in connection with their supervisory and enforcement activities and examination policies, including policies with respect to the classification

of assets and the establishment of adequate loan loss reserves for regulatory purposes.

Bancorp, Inc., as a bank holding company controlling Magyar Bank, is subject to the Bank Holding Company Act of 1956, as amended (“BHCA”),

the rules and regulations of the Federal Reserve Bank (the “FRB”) under the BHCA the provisions of the New Jersey Banking

Act of 1948 (the “New Jersey Banking Act”), and the regulations of the Commissioner under the New Jersey Banking Act applicable

to bank holding companies.

3 unchanged sentences

Magyar Bancorp, Inc.

is required to file certain reports with, and otherwise comply with,

the rules and regulations of the Securities and Exchange Commission under the federal securities laws.

Any change in such laws and

regulations, whether by the Commissioner, the FDIC, the Federal Reserve Board or through legislation, could have a material adverse impact

on Magyar Bank and Magyar Bancorp, Inc.

is required to file certain reports with, and otherwise comply

with, the rules and regulations of the Securities and Exchange Commission under the federal securities laws.

change in such laws and regulations, whether by the Commissioner, the FDIC, the Federal Reserve Board or through legislation, could have

a material adverse impact on Magyar Bank and Magyar Bancorp, Inc.

and their operations and stockholders.

Certain of the laws and regulations

applicable to Magyar Bank and Magyar Bancorp, Inc.

of the laws and regulations applicable to Magyar Bank and Magyar Bancorp, Inc.

are summarized below.

These summaries do not purport to be complete and are qualified

in their entirety by reference to such laws and regulations.

New Jersey Banking Regulation

Activity Powers.

Magyar Bank derives its lending, investment and other activity powers primarily from the applicable provisions of the New Jersey Banking

Act and its related regulations.

These summaries do not purport to

be complete and are qualified in their entirety by reference to such laws and regulations.

Jersey Banking Regulation

Magyar Bank derives its lending, investment and other activity powers primarily from the applicable provisions of the

New Jersey Banking Act and its implementing regulations.

Loans-to-One-Borrower

With certain specified exceptions, a New Jersey-chartered savings bank may not make loans or extend credit to a single

borrower or to entities related to the borrower in an aggregate amount that would exceed 15% of the bank’s capital funds.

bank may lend an additional 10% of the bank’s capital funds if secured

by collateral meeting the requirements of the New Jersey

With certain specified exceptions, a New Jersey-chartered savings bank may not make loans or extend credit to a

single borrower or to entities related to the borrower in an aggregate amount that would exceed 15% of the bank’s capital funds.

A savings bank may lend an additional 10% of the bank’s capital funds if secured by collateral meeting the requirements of the

New Jersey Banking Act.

Magyar Bank currently complies with applicable loans-to-one-borrower limitations.

the New Jersey Banking Act, a stock savings bank may declare and pay a dividend on its capital stock only to the extent that the payment

of the dividend would not impair the capital stock of the savings bank.

In addition, a stock savings bank may not pay a dividend unless

the savings bank would, after the payment of the dividend, have a surplus of not less than 50% of its capital stock, or alternatively,

Under the New Jersey Banking Act, a stock savings bank may declare and pay a dividend on its capital stock only to the extent that the

payment of the dividend would not impair the capital stock of the savings bank.

In addition, a stock savings bank may not pay a dividend

unless the savings bank would, after the payment of the dividend, have a surplus of not less than 50% of its capital stock, or alternatively,

the payment of the dividend would not reduce the surplus.

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See “Federal Banking Regulation-Prompt Corrective Action” below.

Minimum Capital Requirements.

Regulations of the Commissioner impose on New Jersey-chartered depository institutions, including Magyar Bank, minimum capital requirements

similar to those imposed by the FDIC on insured state banks.

See “Federal Banking Regulation-Capital Requirements.”

Examination and Enforcement.

The NJDBI may examine Magyar Bank whenever it deems an examination advisable.

The NJDBI examines Magyar Bank at least every three years.

The Commissioner may order any savings bank to discontinue any violation of law or unsafe or unsound business practice and may direct

any director, officer, attorney or employee of a savings bank engaged in an objectionable activity, after the Commissioner has ordered

the activity to be terminated, to show cause at a hearing before the Commissioner why such person should not be removed.

The Commissioner

also has authority to appoint a conservator or receiver for a savings bank under certain circumstances such as insolvency or unsafe or

unsound condition to transact business.

Federal Banking Regulation

Capital Requirements.

Regulations of the Commissioner impose on New Jersey-chartered depository institutions, including Magyar

Bank, minimum capital requirements similar to those imposed by the FDIC on insured state banks.

See “Federal Banking Regulation-Capital

Requirements.”

and Enforcement.

The NJDBI may examine Magyar Bank whenever it deems an examination advisable.

The NJDBI examines Magyar Bank

at least every three years.

The Commissioner may order any savings bank to discontinue any violation of law or unsafe or unsound business

practice and may direct any director, officer, attorney or employee of a savings bank engaged in an objectionable activity, after the

Commissioner has ordered the activity to be terminated, to show cause at a hearing before the Commissioner why such person should not

The Commissioner also has authority to appoint a conservator or receiver for a savings bank under certain circumstances such

as insolvency or unsafe or unsound condition to transact business.

Banking Regulation

Requirements.

Federal regulations require FDIC-insured depository institutions to meet several minimum capital standards:

a common equity Tier

1 capital to risk-based assets ratio, a Tier 1 capital to risk-based assets ratio, a total capital to risk-based assets ratio, and a Tier

1 capital to total assets leverage ratio.

The capital standards require

the maintenance of common equity Tier 1 capital, Tier 1 capital and total capital to risk-weighted assets of at least 4.5%,

6% and 8%, respectively, and a leverage ratio of at least 4% Tier 1 capital.

Common equity Tier 1 capital is generally defined as

common stockholders’ equity and retained earnings.

Tier 1 capital is generally defined as common equity Tier 1 and additional Tier

Additional Tier 1 capital includes certain noncumulative perpetual preferred stock and related surplus and minority interests

in equity accounts of consolidated subsidiaries.

Total capital includes Tier 1 capital (common equity Tier 1 capital plus additional Tier

1 capital) and Tier 2 capital.

Tier 2 capital is comprised of capital instruments and related surplus, meeting specified requirements,

and may include cumulative preferred stock and long-term perpetual preferred stock, mandatory convertible securities, intermediate preferred

stock and subordinated debt.

Also included in Tier 2 capital is the allowance for loan and lease losses limited to a maximum of 1.25%

of risk-weighted assets and, for institutions that have exercised an opt-out election regarding the treatment of Accumulated Other Comprehensive

Income (“AOCI”), up to 45% of net unrealized gains on available-for-sale equity securities with readily determinable fair

market values.

Institutions that have not exercised the AOCI opt-out have AOCI incorporated into common equity Tier 1 capital (including

unrealized gains and losses on available-for-sale-securities).

Calculation of all types of regulatory capital is subject to deductions

and adjustments specified in the regulations.

In determining the amount

of risk-weighted assets for purposes of calculating risk-based capital ratios, all assets, including certain off-balance sheet assets

(e.g., recourse obligations, direct credit substitutes, residual interests) are multiplied by a risk weight factor assigned by the regulations

based on the risks believed inherent in the type of asset.

Higher levels of capital are required for asset categories believed to present

greater risk.

equity Tier 1 capital to risk-based assets ratio, a Tier 1 capital to risk-based assets ratio, a total capital to risk-based assets ratio,

and a Tier 1 capital to total assets leverage ratio.

capital standards require the maintenance of common equity Tier 1 capital, Tier 1 capital and total capital to risk-weighted

assets of at least 4.5%, 6% and 8%, respectively, and a leverage ratio of at least 4% Tier 1 capital.

Common equity Tier 1 capital

is generally defined as common stockholders’ equity and retained earnings.

Tier 1 capital is generally defined as common equity

Tier 1 and additional Tier 1 capital.

Additional Tier 1 capital includes certain noncumulative perpetual preferred stock and related

surplus and minority interests in equity accounts of consolidated subsidiaries.

Total capital includes Tier 1 capital (common equity

Tier 1 capital plus additional Tier 1 capital) and Tier 2 capital.

Tier 2 capital is comprised of capital instruments and related surplus,

meeting specified requirements, and may include cumulative preferred stock and long-term perpetual preferred stock, mandatory convertible

securities, intermediate preferred stock and subordinated debt.

Also included in Tier 2 capital is the allowance for loan and lease losses

limited to a maximum of 1.25% of risk-weighted assets and, for institutions that have exercised an opt-out election regarding the treatment

of Accumulated Other Comprehensive Income (“AOCI”), up to 45% of net unrealized gains on available-for-sale equity securities

with readily determinable fair market values.

Institutions that have not exercised the AOCI opt-out have AOCI incorporated into common

equity Tier 1 capital (including unrealized gains and losses on available-for-sale-securities).

Calculation of all types of regulatory

capital is subject to deductions and adjustments specified in the regulations.

determining the amount of risk-weighted assets for purposes of calculating risk-based capital ratios, all assets, including certain off-balance

sheet assets (e.g., recourse obligations, direct credit substitutes, residual interests) are multiplied by a risk weight factor assigned

by the regulations based on the risks believed inherent in the type of asset.

Higher levels of capital are required for asset categories

believed to present greater risk.

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

the minimum regulatory capital requirements, the regulations limit capital distributions and certain discretionary bonus payments to management

if the institution does not hold a “capital conservation buffer” consisting of 2.5% of common equity Tier 1 capital to risk-weighted

asset above the amount necessary to meet its minimum risk-based capital requirements.

At September 30, 2024, Magyar

Bank’s common equity Tier 1 capital to risk-based assets ratio was 14.75%, total capital to risk-based assets ratio was 15.85%,

and Tier 1 capital to total assets leverage ratio was 11.11%.

At September 30, 2023, Magyar Bank’s common equity Tier 1 capital

to risk-based assets ratio was 14.97%, total capital to risk-based assets ratio was 16.22%, and Tier 1 capital to total assets leverage

ratio was 11.11%.

Prompt Corrective Action.

Federal bank regulatory authorities are required to take “prompt corrective action” with respect to institutions that do not

meet minimum capital requirements.

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.

addition to establishing the minimum regulatory capital requirements, the regulations limit capital distributions and certain discretionary

bonus payments to management if the institution does not hold a “capital conservation buffer” consisting of 2.5% of common

equity Tier 1 capital to risk-weighted assets above the amount necessary to meet its minimum risk-based capital requirements.

September 30, 2025, Magyar Bank’s common equity Tier 1 capital to risk-based assets ratio was 14.70%, total capital to risk-based

assets ratio was 15.79%, and Tier 1 capital to total assets leverage ratio was 11.41%.

At September 30, 2024, Magyar Bank’s common

equity Tier 1 capital to risk-based assets ratio was 14.75%, total capital to risk-based assets ratio was 15.85%, and Tier 1 capital

to total assets leverage ratio was 11.11%.

Corrective Action.

Federal bank regulatory authorities are required to take “prompt corrective action” with respect

to institutions that do not meet minimum capital requirements.

For these purposes, the applicable statute establishes five capital categories.

An institution is deemed

to be “well capitalized” if it has a total risk-based capital ratio of 10.0% or greater, a Tier 1 risk-based capital ratio

of 8.0% or greater, a leverage ratio of 5.0% or greater and a common equity Tier 1 ratio of 6.5% or greater.

An institution is “adequately

capitalized” if it has a total risk-based capital ratio of 8.0% or greater, a Tier 1 risk-based capital ratio of 6.0% or greater,

a leverage ratio of 4.0% or greater and a common equity Tier 1 ratio of 4.5% or greater.

An institution is “undercapitalized”

if it has a total risk-based capital ratio of less than 8.0%, a Tier 1 risk-based capital ratio of less than 6.0%, a leverage ratio of

less than 4.0% or a common equity Tier 1 ratio of less than 4.5%.

An institution is deemed to be “significantly undercapitalized”

if it has a total risk-based capital ratio of less than 6.0%, a Tier 1 risk-based capital ratio of less than 4.0%, a leverage ratio of

less than 3.0% or a common equity Tier 1 ratio of less than 3.0%.

An institution is considered to be “critically undercapitalized”

if it has a ratio of tangible equity (as defined in the regulations) to total assets that is equal to or less than 2.0%.

Effective March

31, 2020, qualifying community banking organizations that elect to use the Community Bank Leverage Ratio framework and that maintain a

leverage ratio of greater than 9.0% will be considered to have satisfied the risk-based and leverage capital requirements to be deemed

well-capitalized.

Undercapitalized institutions

are subject to a variety of mandatory supervisory measures including the requirement to file a capital plan for the FDIC’s approval

and dividend restrictions as well as other discretionary actions by the regulator.

Federal Home Loan Bank

Magyar Bank is a member of the Federal Home Loan Bank system, which consists of eleven regional federal home loan banks,

each subject to supervision and regulation by the Federal Housing Finance Agency.

The federal home loan banks provide a central credit

facility primarily for member thrift institutions as well as other entities involved in home mortgage lending.

Magyar Bank, as a member

of the FHLBNY, is required to purchase and hold shares of capital stock in the FHLBNY in specified amounts.

As of September 30, 2024,

Magyar Bank was in compliance with these requirements.

An institution is deemed to be “well capitalized” if it has a total risk-based capital ratio of 10.0% or greater, a Tier

1 risk-based capital ratio of 8.0% or greater, a leverage ratio of 5.0% or greater and a common equity Tier 1 ratio of 6.5% or greater.

An institution is deemed to be “adequately capitalized” if it has a total risk-based capital ratio of 8.0% or greater, a

Tier 1 risk-based capital ratio of 6.0% or greater, a leverage ratio of 4.0% or greater and a common equity Tier 1 capital ratio of 4.5%

An institution is deemed to be “undercapitalized” if it has a total risk-based capital ratio of less than 8.0%,

a Tier 1 risk-based capital ratio of less than 6.0%, a leverage ratio of less than 4.0% or a common equity Tier 1 capital ratio of less

An institution is deemed to be “significantly undercapitalized” if it has a total risk-based capital ratio of

less than 6.0%, a Tier 1 risk-based capital ratio of less than 4.0%, a leverage ratio of less than 3.0% or a common equity Tier 1 capital

ratio of less than 3.0%.

An institution is deemed to be “critically undercapitalized” if it has a ratio of tangible equity

(as defined in the regulations) to total assets that is equal to or less than 2.0%.

Effective March 31, 2020, qualifying community banking

organizations that elect to use the Community Bank Leverage Ratio framework and that maintain a leverage ratio of greater than 9.0% will

be considered to have satisfied the risk-based and leverage capital requirements to be deemed well-capitalized.

At September 30, 2025,

Magyar Bank met all of the requirements to be considered well capitalized for regulatory capital purposes.

Undercapitalized

institutions are subject to a variety of mandatory supervisory measures including the requirement to file a capital plan for the FDIC’s

approval and dividend restrictions as well as other discretionary actions by the regulator.

Home Loan Bank System.

Magyar Bank is a member of the Federal Home Loan Bank system, which consists of eleven regional federal

home loan banks, each subject to supervision and regulation by the Federal Housing Finance Agency.

The federal home loan banks provide

a central credit facility primarily for member thrift institutions as well as other entities involved in home mortgage lending.

Bank, as a member of the FHLBNY, is required to purchase and hold shares of capital stock in the FHLBNY in specified amounts.

of September 30, 2025, Magyar Bank was in compliance with these requirements.

The FDIC has extensive enforcement authority over insured savings banks, including Magyar Bank.

This enforcement authority includes, among

other things, the ability to assess civil money penalties, issue cease and desist orders and remove directors and officers.

these enforcement actions may be initiated in response to violations of laws and regulations, unsafe or unsound practices or non-compliance

with agency conditions or agreements.

Deposit Insurance.

The DIF of the FDIC insures deposits at Federal Deposit Insurance Corporation insured financial institutions such as Magyar Bank generally

up to a maximum of $250 thousand per separately insured depositor.

the FDIC’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.

rates (inclusive of possible adjustments) currently range from 2.5 to 32 basis points of each institution’s total assets less tangible

This enforcement authority includes,

among other things, the ability to assess civil money penalties, issue cease and desist orders and remove directors and officers.

general, these enforcement actions may be initiated in response to violations of laws and regulations, unsafe or unsound practices or

non-compliance with agency conditions or agreements.

The DIF insures deposits at FDIC-insured financial institutions such as Magyar Bank generally up to a maximum of $250

thousand per separately insured depositor for each account ownership category.

the FDIC’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

Assessment rates (inclusive of possible adjustments) currently range from 2.5 to 32 basis points of each institution’s total

assets less tangible capital.

of deposits may be terminated by the FDIC upon a finding that an institution has engaged in unsafe or unsound practices, is in an unsafe

or unsound condition to continue operations or has violated any applicable law, regulation, rule, order or condition imposed by the FDIC.

The Bank does not believe that it is taking or is subject to any action, condition or violation that could lead to termination of its

deposit insurance.

Applicable law and FDIC regulations generally limit the ability of an insured depository institution to accept,

renew or roll over any brokered deposit unless the institution’s capital category is “well capitalized” or, upon application

to and a waiver from the FDIC, “adequately capitalized.” Less-than-well-capitalized banks also are subject to restrictions

on the interest rates that they may pay on deposits.

The characterization of deposits as “brokered” may result in the imposition

of higher deposit assessments on such deposits.

The FDIC’s brokered deposit regulations provide a limited exception for reciprocal

deposits for banks that are well managed and well capitalized (or adequately capitalized and have obtained a waiver from the FDIC as mentioned

Under the limited exception, qualified banks are able to exempt from treatment as “brokered” deposits up to $5 billion

or 20% of the institution’s total liabilities in reciprocal deposits.

Transactions with Affiliates

of Magyar Bank.

Magyar Bank’s authority to engage in transactions with its affiliates is limited by Sections 23A and 23B

of the Federal Reserve Act and its implementing Regulation W promulgated by the FRB.

An affiliate includes, among other things, a company

that controls, is controlled by, or is under common control with an insured depository institution, such as Magyar Bancorp, Inc.

“covered transactions,” as defined by these authorities, between an insured depository institution and its affiliates are

subject to certain quantitative and collateral requirements.

In this regard, covered transactions between an insured depository institution

and its affiliates are limited to 10% of the institution’s capital stock and surplus for transactions with any one affiliate, and

20% of the institution’s capital stock and surplus for transactions in the aggregate with all affiliates.

Collateral of specific

types and in specified amounts ranging from 100% to 130% of the amount of the transaction must usually be provided by affiliates for a

savings bank to engage in a credit transaction with them.

In addition, “covered transactions” with affiliates must be on terms

and conditions consistent with safe and sound banking practices, and generally may not involve low-quality assets.

Transactions with affiliates

must generally be on terms and under circumstances that are substantially the same, or at least as favorable to the institution, as comparable

transactions involving non-affiliates.

or unsound condition to continue operations or has violated any applicable law, regulation, order or condition imposed by the FDIC.

Bank does not believe that it is taking or is subject to any action, condition or violation that could lead to termination of its deposit

Applicable law and FDIC regulations generally limit the ability of an insured depository institution to

accept, renew or roll over any brokered deposit unless the institution’s capital category is “well capitalized” or,

upon application to and a waiver from the FDIC, “adequately capitalized.” Less-than-well-capitalized banks also are subject

to restrictions on the interest rates that they may pay on deposits.

The characterization of deposits as “brokered” may result

in the imposition of higher deposit assessments on such deposits.

The FDIC’s brokered deposit regulations provide a limited exception

for reciprocal deposits for banks that are well managed and well capitalized (or adequately capitalized and have obtained a waiver from

the FDIC as mentioned above).

Under the limited exception, qualified banks can exempt from treatment as “brokered” deposits

up to $5 billion or 20% of the institution’s total liabilities in reciprocal deposits.

with Affiliates of Magyar Bank.

Magyar Bank’s authority to engage in transactions with its affiliates is limited by Sections

23A and 23B of the Federal Reserve Act and its implementing Regulation W promulgated by the FRB.

An affiliate includes, among other things,

a company that controls, is controlled by, or is under common control with an insured depository institution, such as Magyar Bancorp,

In general, “covered transactions,” as defined by these authorities, between an insured depository institution and its

affiliates are subject to certain quantitative and collateral requirements.

In this regard, covered transactions between an insured depository

institution and its affiliates are limited to 10% of the institution’s capital stock and surplus for transactions with any one

affiliate, and 20% of the institution’s capital stock and surplus for transactions in the aggregate with all affiliates.

of specific types and in specified amounts ranging from 100% to 130% of the amount of the transaction must usually be provided by affiliates

for a savings bank to engage in a credit transaction with them.

In addition, “covered transactions” with affiliates must

be on terms and conditions consistent with safe and sound banking practices and generally may not involve low-quality assets.

with affiliates must generally be on terms and under circumstances that are substantially the same, or at least as favorable to the institution,

as comparable transactions involving non-affiliates.

Magyar Bank is currently in compliance with these requirements.

Prohibitions Against

Tying Arrangements.

Against Tying Arrangements.

Banks are subject to the prohibitions of 12 U.S.C.

Section 1972 on certain tying arrangements.

§ 1972 on certain tying arrangements.

institution is prohibited, subject to some exceptions, from extending credit to or offering any other service, or fixing or varying the

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or its affiliates or not obtain services of a competitor of the institution.

Community Reinvestment

All FDIC-insured institutions have a responsibility under the Community Reinvestment Act (“CRA”) and related

regulations to help meet the credit needs of their communities, including low-and moderate-income neighborhoods.

In connection with its

examination of a state chartered savings bank, the FDIC is required to assess the institution’s record of compliance with the CRA.

In 2023, the FDIC, the

FRB, and the Office of the Comptroller of the Currency issued a final rule to strengthen and modernize the CRA regulations.

final rule, banks with assets of at least $600 million as of December 31 in both of the prior two calendar years and less than $2 billion

as of December 31 in either of the prior two calendar years will be an “intermediate bank.” The agencies will evaluate intermediate

banks under the Retail Lending Test and either the current community development test, referred to in the final rule as the Intermediate

Bank Community Development Test, or, at the bank’s option, the Community Development Financing Test.

The applicability date for

the majority of the provisions in the CRA regulations is January 1, 2026, and additional requirements will be applicable on January 1,

An institution’s failure

to comply with the provisions of the CRA could, at a minimum, result in regulatory restrictions on its activities.

We received an “Outstanding”

CRA rating in our most recently completed federal examination, which was conducted by the FDIC in 2022.

The Bank Secrecy Act

and USA PATRIOT Act .

The Bank Secrecy Act (“BSA”) and the Uniting and Strengthening America by Providing Appropriate

Tools Required to Intercept and Obstruct Terrorism Act of 2001 (“USA PATRIOT Act”) require Magyar Bank to implement a compliance

program to detect and prevent money laundering, terrorist financing, and illicit crime.

Together, the BSA and USA PATRIOT Act require

Magyar Bank to implement internal controls, conduct customer due diligence, maintain records, and file reports.

The USA PATRIOT Act also

required the federal banking agencies to take into consideration the effectiveness of controls designed to combat money laundering activities

in determining whether to approve a merger or other acquisition application.

Accordingly, if we engage in a merger or other acquisition,

our controls designed to combat money laundering would be considered as part of the application process.

We have established policies,

procedures and systems designed to comply with the BSA, USA PATRIOT Act, and regulations implemented thereunder.

Cyber Security .

The federal banking agencies have adopted rules providing for new notification requirements for banking organizations and their service

Reinvestment Act.

All FDIC-insured institutions have a responsibility under the Community Reinvestment Act (“CRA”)

and related regulations to help meet the credit needs of their communities, including low-and moderate-income neighborhoods.

In connection

with its examination of a state-chartered savings bank, the FDIC is required to assess the institution’s record of compliance with

institution’s failure to comply with the provisions of the CRA could, at a minimum, result in regulatory restrictions on its activities.

We received an “Satisfactory” CRA rating in our most recently completed federal examination, which was conducted by the FDIC

Bank Secrecy Act and USA PATRIOT Act .

The Bank Secrecy Act (“BSA”) and the Uniting and Strengthening America

by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (“USA PATRIOT Act”) require Magyar

Bank to implement a compliance program to detect and prevent money laundering, terrorist financing, and illicit crime.

Together, the

BSA and USA PATRIOT Act require Magyar Bank to implement internal controls, conduct customer due diligence, maintain records, and file

reports, among other things.

The USA PATRIOT Act also required the federal banking agencies to take into consideration the effectiveness

of controls designed to combat money laundering activities in determining whether to approve a merger or other acquisition application.

Accordingly, if we engage in a merger or other acquisition, our controls designed to combat money laundering would be considered as part

of the application process.

We have established policies, procedures and systems designed to comply with the BSA, USA PATRIOT Act, and

regulations implemented thereunder.

Cybersecurity .

The federal banking agencies have adopted rules providing for notification requirements for banking organizations and their service

providers for significant cybersecurity incidents.

Specifically, the new rules require a banking organization to notify its primary federal

regulator as soon as possible, and no later than 36 hours after, the banking organization determines that a “computer-security incident”

rising to the level of a “notification incident” has occurred.

Notification is required for incidents that have materially

affected or are reasonably likely to materially affect the viability of a banking organization’s operations, its ability to deliver

banking products and services, or the stability of the financial sector.

Service providers are required under the rule to notify affected

banking organization customers as soon as possible when the

provider determines that it has experienced a computer-security incident that

has materially affected or is reasonably likely to materially affect the banking organization’s customers for four or more hours.

Consumer Protection .

Magyar Bank and Magyar Bancorp are subject to federal and state fair lending laws.

The Equal Credit Opportunity Act and the Fair Housing

Act prohibit lenders from discriminating in their lending practices on the basis of characteristics specified in those statutes.

Magyar Bank and Magyar Bancorp are subject to other federal and state laws designed to protect consumers and prohibit unfair, deceptive

or abusive business practices, including the Home Ownership Protection Act, Fair Credit Reporting Act, as amended by the Fair and Accurate

Credit Transactions Act of 2003, the Gramm-Leach Bliley Act, the Truth in Lending Act, the Home Mortgage Disclosure Act, the Real Estate

Settlement Procedures Act, the National Flood Insurance Act and various state law counterparts.

These laws and regulations mandate certain

disclosure requirements and regulate the manner in which financial institutions must interact with clients when taking deposits, making

loans, collecting and servicing loans and providing other services.

Further, the Consumer Financial Protection Bureau has broad authority

to prohibit unfair or deceptive acts and practices and is specifically empowered to require certain disclosures to consumers and draft

model disclosure forms.

Failure to comply with consumer protection laws and regulations can subject financial institutions to enforcement

actions, fines and other penalties.

The failure to comply with these laws could result in enforcement actions by the federal banking agencies,

as well as other federal regulatory agencies and the Department of Justice.

Privacy Regulations .

Federal regulations generally require that Magyar Bank disclose its privacy policy, including identifying with whom it shares a customer’s

“non-public personal information,” to customers at the time of establishing the customer relationship and annually thereafter.

In addition, Magyar Bank is required to provide its customers with the ability to “opt-out” of having their personal information

shared with unaffiliated third parties and not to disclose account numbers or access codes to non-affiliated third parties for marketing

Except as otherwise required or permitted by law, Magyar Bank is prohibited from disclosing such information.

Magyar Bank currently

has a privacy protection policy in place and believes that such policy is in compliance with the regulations.

Loans to a Bank’s

Specifically, the rules require a banking organization to notify its primary federal

regulator as soon as possible, and no later than 36 hours after, the banking organization determines that a “computer-security

incident” rising to the level of a “notification incident” has occurred.

Notification is required for incidents that

have materially affected or are reasonably likely to materially affect the viability of a banking organization’s operations, its

ability to deliver banking products and services, or the stability of the financial sector.

Service providers are required under the

rule to notify affected banking organization customers as soon as possible when the provider determines that it has experienced a computer-security

incident that has materially affected or is reasonably likely to materially affect the banking organization’s customers for four

or more hours.

Magyar Bank is subject to federal and state fair lending laws.

The federal Equal Credit Opportunity Act and the Fair

Housing Act prohibit lenders from discriminating in their lending practices on the basis of characteristics specified in those statutes.

In addition, Magyar Bank is subject to other federal and state laws designed to protect consumers and prohibit unfair, deceptive or abusive

business practices, including the Home Ownership Protection Act, Fair Credit Reporting Act, as amended by the Fair and Accurate Credit

Transactions Act of 2003, the Gramm-Leach Bliley Act, the Truth in Lending Act, the Home Mortgage Disclosure Act, the Real Estate Settlement

Procedures Act, the National Flood Insurance Act and various state law counterparts.

These laws and regulations mandate certain disclosure

requirements and regulate the way financial institutions must interact with clients when taking deposits, making loans, collecting and

servicing loans and providing other services.

Further, the Consumer Financial Protection Bureau has broad authority to prohibit unfair

or deceptive acts and practices and is specifically empowered to require certain disclosures to consumers and draft model disclosure

Failure to comply with consumer protection laws and regulations can subject financial institutions to enforcement actions, fines

and other penalties.

The failure to comply with these laws could result in enforcement actions by the federal banking agencies, as well

as other federal regulatory agencies and the Department of Justice.

Regulations .

Federal regulations generally require that Magyar Bank disclose its privacy policy, including identifying with whom

it shares a customer’s “non-public personal information,” to customers at the time of establishing the customer relationship

and annually thereafter.

In addition, Magyar Bank is required to provide its customers with the ability to “opt-out” of having

their personal information shared with unaffiliated third parties and not to disclose account numbers or access codes to non-affiliated

third parties for marketing purposes.

Except as otherwise required or permitted by law, Magyar Bank is prohibited from disclosing such

Magyar Bank currently has a privacy protection policy in place and believes that such policy is in compliance with the regulations.

to a Bank’s Insiders

A bank’s loans to its executive officers, directors, any owner of 10% or more of its stock (each, an insider)

and any entities controlled by any such person (an insider’s related interest) are subject to the conditions and limitations imposed

by Section 22(h) of the Federal Reserve Act and its implementing regulations.

Under these restrictions, the aggregate amount of the loans

to any insider and the insider’s related interests may not exceed the loans-to-one-borrower limit applicable to member banks, which

is comparable to the loans-to-one-borrower limit applicable to Magyar Bank’s loans.

See “New Jersey Banking Regulation—Loans-to-One

Borrower Limitations.” All loans by a bank to all insiders and insiders’ related interests in the aggregate may not exceed

the bank’s unimpaired capital and unimpaired surplus.

With certain exceptions, loans to an executive officer, other than loans

for the education of the officer’s children and certain loans secured by the officer’s residence, may not exceed the greater

of $25 thousand or 2.5% of the bank’s unimpaired capital and surplus, and in no event more than $100 thousand.

Federal regulation

A bank’s loans to its executive officers, directors, any owner of 10% or more of its stock (each, an insider) and any entities controlled

by any such person (an insider’s related interest) are subject to the conditions and limitations imposed by Section 22(h) of the

Federal Reserve Act and its implementing regulations.

Under these restrictions, the aggregate amount of the loans to any insider and the

insider’s related interests may not exceed the loans-to-one-borrower limit applicable to member banks, which is comparable to the

loans-to-one-borrower limit applicable to Magyar Bank’s loans.

See “New Jersey Banking Regulation—Loans-to-One Borrower

Limitations.” All loans by a bank to all insiders and insiders’ related interests in the aggregate may not exceed the bank’s

unimpaired capital and unimpaired surplus.

With certain exceptions, loans to an executive officer, other than loans for the education

of the officer’s children and certain loans secured by the officer’s residence, may not exceed the greater of $25 thousand

or 2.5% of the bank’s unimpaired capital and surplus, and in no event more than $100 thousand.

Federal regulation also requires

that any proposed loan to an insider or a related interest of that insider be approved in advance by a majority of the Board of Directors

of the bank, with any interested directors not participating in the voting, if such loan, when aggregated with any existing loans to that

insider and the insider’s related interests, would exceed the greater of $25 thousand or 5% of the bank’s unimpaired capital

Generally, loans to an insider’s related interests must be made on substantially the same terms as, and follow credit

underwriting procedures that are not less stringent than, those that are prevailing at the time for comparable transactions with other

An exception is made for extensions

of credit made pursuant to a benefit or compensation plan of a bank that is widely available to employees of the bank and that does not

give any preference to insiders of the bank over other employees of the bank.

In addition, federal law prohibits

extensions of credit to a bank’s insiders and their related interests by any other institution that has a correspondent banking

relationship with the bank, unless such extension of credit is on substantially the same terms as those prevailing at the time for comparable

transactions with other persons and does not involve more than the normal risk of repayment or present other unfavourable features.

New Jersey Regulation.

Provisions of the New Jersey Banking Act impose conditions and limitations on the liabilities to a savings bank of its directors and executive

officers and of corporations and partnerships controlled by such persons, that are comparable in many respects to the conditions and limitations

imposed on the loans and extensions of credit to insiders and their related interests under federal law, as discussed above.

The New Jersey

Banking Act also provides that

a savings bank that is in compliance with federal law is deemed to be in compliance with such provisions

of the New Jersey Banking Act.

Federal Reserve System

Savings banks, such as Magyar

Bank, are authorized to borrow from the Federal Reserve Bank “discount window.” Magyar Bank is deemed by the FRB to be generally

sound and thus is eligible to obtain secondary credit from its FRB.

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.

Sarbanes-Oxley Act of 2002

also requires that any proposed loan to an insider or a related interest of that insider be approved in advance by a majority of the

Board of Directors of the bank, with any interested directors not participating in the voting, if such loan, when aggregated with any

existing loans to that insider and the insider’s related interests, would exceed the greater of $25 thousand or 5% of the bank’s

unimpaired capital and surplus.

Generally, loans to an insider or insider’s related interests must be made on substantially the

same terms as, and follow credit underwriting procedures that are not less stringent than, those that are prevailing at the time for

comparable transactions with other persons.

exception is made to some of the otherwise-applicable requirements for extensions of credit made pursuant to a benefit or compensation

plan of a bank that is widely available to employees of the bank and that does not give any preference to insiders of the bank over other

employees of the bank.

addition, federal law prohibits extensions of credit to a bank’s insiders and their related interests by any other institution

that has a correspondent banking relationship with the bank, unless such extension of credit is on substantially the same terms as those

prevailing at the time for comparable transactions with other persons and does not involve more than the normal risk of repayment or

present other unfavourable features.

Jersey Regulation.

Provisions of the New Jersey Banking Act impose conditions and limitations on the liabilities to a savings

bank of its directors and executive officers and of corporations and partnerships controlled by such persons, that are comparable in

many respects to the conditions and limitations imposed on the loans and extensions of credit to insiders and their related interests

under federal law, as discussed above.

The New Jersey Banking Act also provides that a savings bank that is in compliance with federal

law is deemed to be in compliance with such provisions of the New Jersey Banking Act.

Reserve System

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

by the FRB to be generally sound and thus is eligible to obtain secondary credit from its FRB.

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.

Sarbanes-Oxley

Sarbanes-Oxley Act is intended to improve corporate responsibility, to provide for enhanced penalties for accounting and auditing improprieties

at publicly traded companies and to protect investors by improving the accuracy and reliability of corporate disclosures pursuant to the

securities laws.

We have policies, procedures and systems designed to comply with this Act and its implementing regulations, and we review

and document such policies, procedures and systems to ensure continued compliance.

Holding Company Regulation

Federal Regulation.

at publicly traded companies and to protect investors by improving the accuracy and reliability of corporate disclosures pursuant to

the securities laws.

We have policies, procedures and systems designed to comply with this Act and its implementing regulations, and

we review and document such policies, procedures and systems to ensure continued compliance.

Company Regulation

Magyar Bancorp, Inc.

is regulated as a bank holding company.

Bank holding companies are subject to examination, regulation and periodic

reporting under the BHCA, as administered by the FRB.

Bank holding companies are generally subject to consolidated capital requirements

established by the FRB.

Bank holding companies under $3.0 billion in consolidated assets remain exempt from consolidated regulatory capital

Bank holding companies are subject to examination, regulation

and periodic reporting under the BHCA, as administered by the FRB.

Bank holding companies are generally subject to consolidated capital

requirements established by the FRB, but those under $3.0 billion in consolidated assets remain exempt from consolidated regulatory capital

requirements, unless the FRB determines otherwise in particular cases.

Regulations of the FRB provide

that a bank holding company must serve as a source of strength to any of its subsidiary banks and must not conduct its activities in an

unsafe or unsound manner.

The Dodd-Frank Act codified the source of strength policy and required the promulgation of implementing regulations.

Under the prompt corrective action provisions of the Dodd-Frank Act, a bank holding company parent of an undercapitalized subsidiary bank

would be directed to guarantee, within limitations, the capital restoration plan that is required of such an undercapitalized bank.

“Federal Banking Regulation—Prompt Corrective Action.” If the undercapitalized bank fails to file an acceptable capital

restoration plan or fails to implement an accepted plan, the FRB may prohibit the bank holding company parent of the undercapitalized

bank from paying any dividend or making any other form of capital distribution without the prior approval of the FRB.

As a bank holding company,

Magyar Bancorp, Inc.

is required to obtain the prior approval of the FRB to acquire all, or substantially all, of the assets of any bank

or bank holding company.

of the FRB provide that a bank holding company must serve as a source of strength to any of its subsidiary banks and must not conduct

its activities in an unsafe or unsound manner.

The Dodd-Frank Act codified the source of strength policy and required the promulgation

of implementing regulations.

Under the prompt corrective action provisions of the Dodd-Frank Act, a bank holding company parent of an

undercapitalized subsidiary bank would be directed to guarantee, within limitations, the capital restoration plan that is required of

an undercapitalized bank.

See “Federal Banking Regulation—Prompt Corrective Action.” If an undercapitalized bank fails

to file an acceptable capital restoration plan or fails to implement an accepted plan, the FRB may prohibit the bank holding company

parent of the undercapitalized bank from paying any dividend or making any other form of capital distribution without the prior approval

a bank holding company, Magyar Bancorp, Inc.

is required to obtain the prior approval of the FRB to acquire all, or substantially all,

of the assets of any bank or bank holding company.

Prior FRB approval is required for Magyar Bancorp, Inc.

to acquire direct or indirect ownership or control of

any voting securities of any bank or bank holding company if, after giving effect to such acquisition, it would, directly or indirectly,

own or control more than 5% of any class of voting shares of such bank or bank holding company.

Under federal law, depository

institutions are liable to the FDIC for losses suffered or anticipated by the FDIC in connection with the default of a commonly controlled

depository institution or any assistance provided by the FDIC to such an institution in danger of default.

This law would be applicable

potentially to Magyar Bancorp, Inc.

if it ever acquired as a separate subsidiary a depository institution in addition to Magyar Bank.

In connection with the

mutual-to-stock conversion of Magyar Bancorp, MHC, “eligible account holders” and “supplemental eligible account

holders” received an interest in liquidation accounts maintained by the Company and the Bank in an aggregate amount equal to

(a) Magyar Bancorp, MHC’s ownership interest in the Company’s total stockholders’ equity as of the date of the

latest Statement of Balance Sheet included in the offering prospectus for the conversion, plus (b) the value of the net assets of

Magyar Bancorp, MHC as of the date of the latest Statement of Balance Sheet of Magyar Bancorp, MHC before the consummation of

the conversion (excluding its ownership of the Company).

The Company and the Bank hold the liquidation accounts for the benefit of

eligible account holders and supplemental eligible account holders who continue to maintain deposits in the Bank after the

The liquidation accounts are intended to preserve for eligible account holders and supplemental eligible account holders

who continue to maintain their deposit accounts with the Bank a liquidation interest in the residual net worth, if any, of the Bank

(after the payment of all creditors, including depositors to the full extent of their deposit accounts) in the event of a

liquidation of (a) the Company and the Bank or (b) the Bank .

New Jersey Regulation.

Under the New Jersey Banking Act, a company owning or controlling a savings bank is regulated as a bank holding company.

The New Jersey

Banking Act defines the terms “company” and “bank holding company” as such terms are defined under the BHCA.

bank holding company controlling a New Jersey-chartered bank or savings bank must file certain reports with the Commissioner and is subject

to examination by the Commissioner.

Acquisition of Magyar

Bancorp, Inc.

Under federal law and under the New Jersey Banking Act, no person may acquire control of Magyar Bancorp, Inc.

first obtaining approval of such acquisition of control by the FRB and the Commissioner.

Federal Securities Laws.

to acquire direct or indirect

ownership or control of any voting securities of any bank or bank holding company if, after giving effect to such acquisition, it would,

directly or indirectly, own or control more than 5% of any class of voting shares of such bank or bank holding company.

federal law, depository institutions are liable to the FDIC for losses suffered or anticipated by the FDIC in connection with the default

of a commonly controlled depository institution or any assistance provided by the FDIC to such an institution in danger of default.

law would be applicable potentially to Magyar Bancorp, Inc.

if it ever acquired as a separate subsidiary a depository institution in

addition to Magyar Bank.

connection with the mutual-to-stock conversion of Magyar Bancorp, MHC, “eligible account holders” and “supplemental

eligible account holders” received an interest in liquidation accounts maintained by the Company and Magyar Bank in an aggregate

amount equal to (a) Magyar Bancorp, MHC’s ownership interest in the Company’s total stockholders’ equity as of the

date of the latest Statement of Balance Sheet included in the offering prospectus for the conversion plus;

(b) the value of the net assets

of Magyar Bancorp, MHC as of the date of the latest Statement of Balance Sheet of Magyar Bancorp, MHC before the consummation of the

conversion (excluding its ownership of the Company).

The Company and Magyar Bank hold the liquidation accounts for the benefit of eligible

account holders and supplemental eligible account holders who continue to maintain deposits in Magyar Bank after the conversion.

liquidation accounts are intended to preserve for eligible account holders and supplemental eligible account holders who continue to

maintain their deposit accounts with Magyar Bank a liquidation interest in the residual net worth, if any, of Magyar Bank (after the

payment of all creditors, including depositors to the full extent of their deposit accounts) in the event of a liquidation of (a) the

Company and Magyar Bank or (b) Magyar Bank.

Jersey Regulation.

Under the New Jersey Banking Act, a company owning or controlling a savings bank is regulated as a bank holding

The New Jersey Banking Act defines the terms “company” and “bank holding company” as such terms are

defined under the BHCA.

Each bank holding company controlling a New Jersey-chartered bank or savings bank must file certain reports with

the Commissioner and is subject to examination by the Commissioner.

of Magyar Bancorp, Inc.

Under federal law and under the New Jersey Banking Act, no person may acquire control of Magyar Bancorp,

without first obtaining approval of such acquisition of control by the FRB and the Commissioner.

Securities Laws.

Magyar Bancorp, Inc.

common stock is registered with the Securities and Exchange Commission under the Securities Exchange Act

of 1934, as amended.

common stock is registered with the Securities and Exchange Commission under the Securities

Exchange Act of 1934, as amended.

Magyar Bancorp, Inc.

is subject to the information, proxy solicitation, insider trading restrictions and other requirements

under the Securities Exchange Act of 1934.

Not required for smaller reporting

is subject to the information, proxy solicitation, insider trading restrictions

and other requirements under the Securities Exchange Act of 1934.

required for smaller reporting companies.

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