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Magyar Bancorp, Inc. (MGYR)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 FY2025 delivered clean growth: diluted EPS of $0.33 on net income of $2.1M, up 26% YoY, driven by higher net interest income, lower provisioning, and a 57% jump in other income; net interest margin (NIM) expanded 14 bps sequentially to 3.22% as initial Fed cuts flowed through funding costs .
  • Balance sheet scaled above $1.0B as deposits rose 6.5% QoQ to $848.8M; liquidity increased (cash and interest-earning deposits +129% QoQ) to support a strong loan pipeline; total loans grew 3.2% QoQ to $805.5M .
  • Credit quality remained exceptionally clean: NPLs were $0.34M (0.04% of loans); OREO declined $1.2M QoQ on property sales, reducing NPAs/Assets to 0.29% from 0.42% .
  • Capital return improving: Board raised the quarterly dividend to $0.06 (from $0.05 previously), payable Feb 20, 2025 (record Feb 6, 2025) .
  • No S&P Global consensus estimates were available for this micro-cap; we therefore do not present estimate comparisons this quarter (see Estimates Context) [Values from S&P Global were unavailable due to access limits].

What Went Well and What Went Wrong

  • What Went Well

    • Sequential NIM inflection: management highlighted a 14 bps NIM increase vs Q4 as rate cuts started to benefit funding costs; CEO: “our net interest margin increased 14 basis points from the prior quarter as the Bank begins to see the benefits of the Federal Reserve’s rate cuts” .
    • Strong deposit-led balance sheet growth: deposits +6.5% QoQ lifted total assets above $1.0B; liquidity strengthened to fund loan growth .
    • Other income tailwinds: gains on OREO sales ($224k), stronger SBA gain-on-sale ($236k), and higher BOLI income (+$72k from policy restructuring) boosted noninterest income +57% YoY .

  • What Went Wrong

    • Funding costs remained elevated YoY: interest expense rose 26.6% YoY with cost of interest-bearing liabilities up 25 bps to 3.05% (still reflecting lagged repricing in the deposit base) .
    • Operating expense uptick: opex +7.7% YoY on higher compensation and occupancy, including lease termination charges from the Bridgewater office closure .
    • Provisioning modestly positive: provision for credit losses of $101k (on-balance sheet provision $209k offset by $108k off-balance release), reflecting ongoing loan growth and commitment dynamics .

Financial Results

MetricQ1 2024 (Dec 31, 2023)Q3 2024 (Jun 30, 2024)Q4 2024 (Sep 30, 2024)Q1 2025 (Dec 31, 2024)
Net Interest & Dividend Income ($000)$7,244 $6,784 $7,021 $7,444
Other Income ($000)$609 $409 $1,973 $956
Other Expense ($000)$5,020 $5,055 $5,212 $5,409
Provision for Credit Losses ($000)$481 ($54) ($351) $101
Pre-Tax Income ($000)$2,352 $2,192 $4,133 $2,890
Net Income ($000)$1,652 $1,691 $2,542 $2,085
Diluted EPS ($)$0.26 $0.27 $0.41 $0.33
Net Interest Margin (%)3.29% 3.02% 3.08% 3.22%

KPIs and Balance Sheet

KPIQ1 2024Q3 2024Q4 2024Q1 2025
Total Assets ($000)N/A$944,354 $951,918 $1,008,408
Total Loans Receivable ($000)N/A$759,409 $780,162 $805,489
Total Deposits ($000)N/A$789,193 $796,674 $848,832
Book Value/Share ($)$16.03 $16.55 $16.98 $17.23
ROAA (annualized, %)0.72% 0.71% 1.06% 0.86%
ROAE (annualized, %)6.19% 6.41% 9.63% 7.42%
NPLs ($000)N/A$4,552 $232 $339
NPLs/Loans (%)N/A0.60% 0.03% 0.04%
NPAs/Assets (%)N/A0.57% 0.42% 0.29%

Notes: Q1 2024 balance sheet line-items were not provided in the Q1 2025 table; therefore “N/A” is shown where unavailable .

Segment breakdown: Not applicable; no segment disclosures in company materials for the period .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Dividend per share (quarterly)Q1 FY2025$0.05 (declared 10/31/24) $0.06 (payable 2/20/25; record 2/6/25) Raised
Quantitative financial guidanceFY2025None disclosed None disclosed; qualitative comments on NIM and liquidity Maintained (no formal guidance)

Earnings Call Themes & Trends

Note: No public Q1 FY2025 earnings call transcript was found; themes below synthesize management commentary across recent press releases.

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q1 FY2025)Trend
Net interest marginQ3: “cost of funds increased… anticipate margin will begin to stabilize during the second half of the calendar year” (NIM 3.02%) . Q4: NIM improved to 3.08% .NIM 3.22%, +14 bps QoQ as Fed cuts begin to benefit funding costs .Improving
Deposits/liquidityQ3: deposits +$33.7M; uninsured deposits ~$122.3M . Q4: deposits +$7.5M; uninsured ~$114.7M .Deposits +6.5% QoQ (+$52.2M), assets surpassed $1.0B; cash balances +129% QoQ .Improving
Credit quality/OREOQ3: NPLs 0.60% of loans; OREO up on additions . Q4: NPLs dropped to 0.03% on resolutions; OREO $3.7M .NPLs 0.04%; OREO fell to $2.5M after sales; NPAs/Assets down to 0.29% .Improving
Loan growthQ3: loans +$62.2M YTD . Q4: +$20.9M QoQ .+$25.3M QoQ; CRE +$20.1M (59.7% of loans) .Strong/steady
BOLI restructureQ4: restructuring $7.9M to raise crediting rate; BOLI +$5.1M QoQ .BOLI income +$72k YoY from restructure completed in prior quarter .Positive tailwind
Branch footprintQ3: lease for new Martinsville branch . Q4: Martinsville opened Oct 11, 2024 .Bridgewater office closed; incurred lease termination costs .Optimizing footprint

Management Commentary

  • “Total assets eclipsed the $1 billion mark during the quarter thanks to a 6.5% increase in total deposits… our net interest margin increased 14 basis points from the prior quarter as the Bank begins to see the benefits of the Federal Reserve’s rate cuts” — John Fitzgerald, President & CEO .
  • Liquidity and pipeline: “Our liquidity position will continue to fund the Bank’s strong loan pipeline in our 2025 fiscal year” .
  • Operating drivers: YoY earnings growth reflected higher net interest income, lower credit provisions, and higher other income; offsets included higher compensation and occupancy costs tied to staffing additions and the Bridgewater office lease termination .

Q&A Highlights

  • No public earnings call transcript or Q&A was available for Q1 FY2025; no “earnings-call-transcript” document was found in the company’s filings or materials [ListDocuments returned none for this period].

Estimates Context

  • S&P Global consensus estimates were not available for MGYR’s Q1 FY2025 at the time of analysis; therefore, no formal “vs. consensus” comparisons are presented this quarter. Actual diluted EPS was $0.33 from company materials .
  • Given limited sell-side coverage, estimate models may need to reflect: (i) sequential NIM improvement, (ii) stronger other income contributions (OREO/SBA/BOLI), (iii) higher opex run-rate from staffing and footprint optimization, and (iv) solid loan/deposit growth momentum .

Key Takeaways for Investors

  • Margin inflection is underway: sequential NIM expanded 14 bps to 3.22% with early benefits from Fed cuts; watch for further relief as deposit costs reprice in coming quarters .
  • Balance sheet momentum: deposits +6.5% QoQ propelled assets >$1.0B and lifted liquidity (cash balances +129% QoQ), positioning the bank to fund a “strong loan pipeline” .
  • Credit remains pristine: NPLs of 0.04% and falling NPAs/Assets reflect disciplined underwriting; OREO disposition is progressing, providing noninterest income upside when sold .
  • Noninterest income levers: continued SBA loan sale activity and BOLI yield uplift from the prior-quarter restructuring offer incremental earnings support beyond core spread income .
  • Expense trajectory bears monitoring: higher comp and occupancy (including office exit costs) nudged opex higher; underlying run-rate vs. one-time effects should be tracked in subsequent quarters .
  • Shareholder returns improving: dividend increased to $0.06 from $0.05, signaling confidence in earnings durability while maintaining capital flexibility .
  • Near-term catalysts: continued NIM expansion, sustained deposit inflows, OREO sales progress, and loan growth execution could drive estimate revisions and multiple expansion in a benign credit backdrop .

Appendix: Source Documents Read

  • Q1 FY2025 Form 8-K 2.02 with press release and selected financial data (published Jan 23, 2025) .
  • PR Newswire press release duplicating Q1 FY2025 results (Jan 23, 2025) .
  • Q4 FY2024 Form 8-K 2.02 press release and selected financial data (Oct 31, 2024) .
  • Q3 FY2024 Form 8-K 2.02 press release and selected financial data (Jul 25, 2024) .