Magyar Bancorp, Inc. Announces Fourth Quarter and Year End Financial Results

NEW BRUNSWICK, N.J., Dec. 9, 2011 /PRNewswire/ -- Magyar Bancorp (NASDAQ: MGYR) ("Company"), parent company of Magyar Bank, reported today the results of its operations for the three months and year ended September 30, 2011.

The Company reported a net loss of $36,000 for the three months ended September 30, 2011, compared to net income of $107,000 for the three months ended September 30, 2010.  The Company reported a net loss for the year ended September 30, 2011 of $249,000, compared to net income of $3.9 million for the year ended September 30, 2010. The loss per share was $0.01 and $0.04 for the three and twelve months ended September 30, 2011, compared with basic and diluted earnings per share for the three months and twelve months ended September 30, 2010 of $0.02 and $0.68, respectively.

John Fitzgerald, President and Chief Executive Officer commented that "During the fiscal year, we continued to reposition our balance sheet and reduce our risk within the portfolio.  Our level of non-performing assets increased during the quarter, and while we expect this level to remain higher than normal in fiscal year 2012, we continue to see strong interest in properties being foreclosed upon or currently held by the Bank and have several properties under contract which we anticipate will close in the coming quarters. In fact, during the first quarter of fiscal year 2012, the Bank completed the sale of two properties previously held as other real estate owned.  The carrying value of these properties was $3.2 million at September 30, 2011, and we expect positive trends to continue during fiscal year 2012."

Mr. Fitzgerald continued "Despite the historically low interest rate environment, our net interest margin remained over 3.0%, ending the year at 3.11%, down only nine basis points from 3.20% a year earlier. In addition, we continued the reduction in our construction loan portfolio, which decreased 40% to $34.1 million from $57.1 million at 2010, and was down 68% from its peak of $105.7 million in 2008. Finally, Magyar Bank continued to strengthen its capital ratios during the year, despite strong economic headwinds. The Bank's leverage ratio as of September 30, 2011 increased to 8.07%, while the total risk based capital ratio increased to 13.21%. While the economic environment remains challenging, we continue to focus on strengthening our balance sheet, managing expenses and returning the Company to profitability."

About Magyar Bancorp

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 since 1922 with a complete line of financial products and services.  Today, Magyar operates six branch locations in New Brunswick, North Brunswick, South Brunswick, Branchburg, Bridgewater and Edison. Please visit us 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 and real estate owned, 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.

SOURCE Magyar Bancorp

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