400 Somerset St., New Brunswick, NJ 08901
732.342.7600
MAGYAR BANCORP ANNOUNCES FIRST QUARTER EARNINGS
New Brunswick, New Jersey, January 26, 2007 - Magyar Bancorp (NASDAQ: MGYR),
parent company of Magyar Bank, announced today its results of operations for the
three months ended December 31, 2006. The Company's net income for the three
months ended December 31, 2006 was $272,000, an increase of $106,000 or 63.8%
from the same period in 2005. For the three months ended December 31, 2006,
basic and diluted earnings per share was $.05.
For the three months ended December 31, 2006, net interest and dividend income
increased $565,000, or 19.8%, over the same period last year. At December 31,
2006, Magyar Bancorp had total assets of $449.1 million, an increase of $14.9
million, or 3.4%, from September 30, 2006. Loans receivable increased $17.4
million, or 5.0%, to $369.3 million.
Non-performing loans decreased to $7.3 million at December 31, 2006 from $7.4
million at September 30, 2006. Total non-performing loans for both periods
include $5.1 million in loans to builder Kara Homes, LLC. These loans are
secured by real estate and were not accrued for during the three months ending
December 31, 2006. $5.0 million of loans made by the Bank to Solomon Dwek are
currently performing.
The provision for loan losses totaled $167,000 for the three months ended
December 31, 2006 compared with $120,000 for the three months ended December 31,
2005. The increase in the provision reflected the higher balances of loans
receivable as well as management's analysis of the inherent risk within the loan
portfolio. The Bank's allowance for loan loss increased to $4.1 million, or
1.10% of loans, at December 31, 2006 from $3.9 million, or 1.11% of loans, at
September 30, 2006.
Total deposits increased $16.7 million, or 5.1%, to $342.3 million at December
31, 2006 from $325.6 million at September 30, 2006.
"Magyar's growth strategy continues to produce strong results, particularly in
our deposit base," stated Elizabeth E. Hance, President and Chief Executive
Officer of Magyar Bancorp. "Our Branchburg office, which opened in September
2006, had over $7.0 million in deposits at the end of our first quarter, and we
look forward to opening our next office inside the Child Health Institute in New
Brunswick."
Magyar Bancorp common stock is traded on the NASDAQ Global Market under the
symbol "MGYR."
Magyar Bancorp is the parent company of Magyar Bank, a community bank
headquartered in New Brunswick, New Jersey. Magyar Bank has been serving
families and businesses in Central New Jersey for over 80 years with a complete
line of financial products and services, and today Magyar operates branch
locations in New Brunswick, North Brunswick, South Brunswick and Branchburg.
Visit Magyar online at www.magbank.com.
Forward Looking Statements
This press release contains statements about future events that constitute
forward-looking statements within the meaning of the Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
Such forward-looking statements may be identified by reference to a future
period or periods, or by the use of forward- looking terminology, such as "may,"
"will," "believe," "expect," or similar terms or variations on those terms, or
the negative of those terms. Forward-looking statements are subject to numerous
risks and uncertainties, including, but not limited to, those risks previously
disclosed in the Company's filings with the SEC, general economic conditions,
changes in interest rates, regulatory considerations, competition, technological
developments, retention and recruitment of qualified personnel, and market
acceptance of the Company's pricing, products and services, and with respect to
the loans extended by the Bank to Kara Homes and Solomon Dwek, the following:
risks related to the economic environment in the market areas in which the Bank
operates, particularly with respect to the real estate market in New Jersey; the
risk that the value of the real estate securing these loans may decline in
value; and the risk that significant expense may be incurred by the Company in
connection with the resolution of these loans. The Company wishes to caution
readers not to place undue reliance on any such forward-looking statements,
which speak only as of the date made. The Company does not undertake and
specifically declines any obligation to publicly release the result of any
revisions that may be made to any forward-looking statements to reflect events
or circumstances after the date of such statements or to reflect the occurrence
of anticipated or unanticipated events.
Contact: John Reissner, 732.214.2083
MAGYAR BANCORP, INC. AND SUBSIDIARY
Selected Financial Data
(Dollars in Thousands, Except Per Share Data)
Three Months Ended
December 31,
2006 2005
------ ------
(Unaudited)
Income Statement Data:
Interest and dividend income $ 7,001 $ 5,118
Interest expense 3,588 2,270
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Net interest and dividend income 3,413 2,848
Provision for loan losses 167 120
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Net interest and dividend income after
provision for loan losses 3,246 2,728
Non-interest income 333 235
Non-interest expense 3,205 2,715
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Income before income tax 374 248
Income tax expense 102 82
------- -------
Net income $ 272 $ 166
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Per Share Data:
Basic earnings per share (1) $ 0.05 N/A
Book value per share (1) $ 8.20 N/A
Selected Ratios:
Return on average assets 0.24% 0.18%
Return on average equity 2.24% 2.67%
Net interest margin 3.32% 3.41%
-------------------------
(1) Per share data for the three months ended December 31, 2005 are not
presented since the Company did not have publicly held shares
outstanding during this period.
At or For the Period Ended
December 31, 2006 September 30, 2006
----------------- ------------------
(Unaudited)
Balance Sheet Data:
Assets $ 449,109 $ 434,204
Loans receivable 369,305 351,861
Allowance for loan losses 4,059 3,892
Investment securities - available for sale, at fair value 17,336 18,169
Investment securities - held to maturity, at cost 22,790 23,895
Deposits 342,318 325,602
Borrowings 51,124 52,996
Shareholders' Equity 48,562 48,212
Asset Quality Data:
Non-performing loans $ 7,306 $ 7,400
REO property - -
Allowance for loan losses to total loans receivable 1.10% 1.11%
Non-performing loans to total loans receivable 1.98% 2.10%
Allowance for loan losses to non-performing loans 55.56% 52.59%