The Company reported a 13% increase in its net income for the three months ended March 31, 2026, to $3.0 million compared with net income of $2.7 million for the three months ended March 31, 2025. Net income for the six months ended March 31, 2026 increased 29% to $6.2 million compared with net income of $4.8 million for the six months ended March 31, 2025.
Basic and diluted earnings per share were $0.49 and $0.48, respectively, for the three months ended March 31, 2026 compared with $0.43 in basic and diluted earnings per share for the three months ended March 31, 2025. Basic and diluted earnings per share were $0.99 and $0.98, respectively, for the six months ended March 31, 2026 compared with $0.77 and $0.76, respectively, for the six months ended March 31, 2025.
The Company also announced that its Board of Directors declared a quarterly cash dividend of $0.10 per share, which will be paid on May 21, 2026 to stockholders of record as of May 7, 2026.
"We are very pleased to continue to produce double digit growth in earnings, reporting a 13% increase in net income for the quarter ended March 31, 2026", stated John Fitzgerald, President and Chief Executive Officer of Magyar Bancorp. "Our net interest margin expanded 35 basis points compared to the same period last year on the strength of strong loan growth with continued emphasis on strong credit underwriting. We expect this trend to continue, positioning Magyar to navigate the current market volatility and produce solid results during the second half of our fiscal year."
Results of Operations for the Three Months Ended March 31, 2026
Net income increased $349 thousand, or 13.0%, to $3.0 million during the three months ended March 31, 2026 compared with $2.7 million during the three months ended March 31, 2025, due to higher net interest income, partially offset by higher provisions for credit loss, lower non-interest income and higher other expenses.
The Company's net interest and dividend income increased $1.4 million, or 17.2%, to $9.2 million for the three months ended March 31, 2026 from the three months ended March 31, 2025. The increase was attributable to a 35-basis point increase in the Company's net interest margin to 3.66% for the three months ended March 31, 2026 from 3.31% for the three months ended March 31, 2025, as well as a $56.6 million increase in the average balance of interest-earning assets between the periods.
Interest and dividend income increased $1.4 million, or 10.6%, to $14.9 million for the three months ended March 31, 2026 compared with $13.5 million for the three months ended March 31, 2025. The increase was attributable to a 25-basis point increase in the yield on interest earning assets to 5.93% for the three months ended March 31, 2026 from 5.68% for the three months ended March 31, 2025, as well as a $65.3 million, or 8.1%, increase in the average balance of net loans receivable between the periods.
Interest expense increased $73 thousand, or 1.3%, to $5.7 million for the three months ended March 31, 2026 from $5.6 million for the three months ended March 31, 2025. A $36.3 million, or 4.8%, increase in the average balance of interest-bearing liabilities was almost entirely offset by a 10-basis point reduction in the cost of such liabilities to 2.92% for the three months ended March 31, 2026 compared with 3.02% for the three months ended March 31, 2025.
The Company recorded provisions for credit losses totaling $256 thousand for the three months ended March 31, 2026 compared with a net recovery for credit losses totaling $30 thousand for the three months ended March 31, 2025. The higher provision for credit losses resulted from higher commercial real estate and construction loan balances, which generally require higher provisions for credit loss, that more than offset contraction in the Company's residential mortgage loan portfolio. The Company recorded $3 thousand in net loan recoveries during the three months ended March 31, 2026 compared with $5 thousand in net loan recoveries during the three months ended March 31, 2025.
Other income decreased $411 thousand, or 32.4%, to $857 thousand during the three months ended March 31, 2026 compared with $1.3 million for the three months ended March 31, 2025. The decrease was primarily due to lower gains from the sale of Small Business Administration 7(a) loans, which decreased $343 thousand to $269 thousand for the three months ended March 31, 2026 from $612 thousand for the three months ended March 31, 2025. In addition, the Company's service charge income declined by $93 thousand between periods from lower commercial loan prepayment charges and late charges on loans.
Other expenses increased $165 thousand, or 3.1%, to $5.6 million during the three months ended March 31, 2026 compared with $5.4 million for the three months ended March 31, 2025. The increase was primarily attributable to higher compensation and benefit expense, which increased $137 thousand, or 4.2%, to $3.4 million, due to higher medical benefits and incentive accruals as well as annual merit increases.
The Company recorded tax expense of $1.2 million on pre-tax income of $4.3 million for the three months ended March 31, 2026, compared with $1.1 million on pre-tax income of $3.8 million for the three months ended March 31, 2025. The Company's effective tax rate for the three months ended March 31, 2026 and 2025 was 29.0%.
Results from Operations for the Six Months Ended March 31, 2026
Net income increased $1.4 million, or 29.4%, to $6.2 million during the six months ended March 31, 2026 compared with $4.8 million for the six-month period ended March 31, 2025 due to higher net interest income, partially offset by higher provisions for credit losses, lower other income, and higher other expenses.
The Company's net interest and dividend income increased $2.8 million, or 18.1%, to $18.1 million for the six months ended March 31, 2026 from $15.3 million for the six months ended March 31, 2025. The increase was attributable to a $59.5 million, or 6.3%, increase in the average balance of interest earning assets between the periods as well as a 36-basis point increase in the Company's net interest margin to 3.63% for the six months ended March 31, 2026 from 3.27% for the six months ended March 31, 2025.
Interest and dividend income increased $3.1 million, or 11.7%, to $29.5 million for the six months ended March 31, 2026 from $26.4 million for the six months ended March 31, 2025. The increase was attributable to a 28-basis point increase in the yield on interest earning assets to 5.92% for the six months ended March 31, 2026 from 5.64% for the six months ended March 31, 2025, as well as a $67.9 million, or 8.5%, increase in the average balance of net loans receivable.
Interest expense increased $313 thousand, or 2.8%, to $11.4 million for the six months ended March 31, 2026 from $11.1 million for the six months ended March 31, 2025. A $44.8 million, or 6.1%, increase in the average balance of interest-bearing liabilities was partially offset by a 9 basis point reduction in the cost of such liabilities to 2.94% for the six months ended March 31, 2026 compared with 3.03% for the six months ended March 31, 2025.
The Company recorded provisions for credit losses totaling $280 thousand for the six months ended March 31, 2026 compared with provisions for credit losses totaling $71 thousand for the six months ended March 31, 2025. The higher provision for credit losses resulted from higher specific reserves on construction loans, partially offset by lower expected loss rates driven by improving economic conditions impacting residential and commercial real estate loans. The Company recorded $6 thousand in net loan recoveries during the six months ended March 31, 2026 compared with $108 thousand in net loan recoveries during the six months ended March 31, 2025.
Other income decreased $606 thousand, or 27.2%, to $1.6 million during the six months ended March 31, 2026 compared with $2.2 million for the six months ended March 31, 2025. The decrease was due to lower gains from the sale of Small Business Administration 7(a) loans and other real estate owned, which decreased $321 thousand and $237 thousand, respectively. In addition, the Company's service charge income declined by $84 thousand between periods from lower commercial loan prepayment charges and late charges on loans.
Other expenses increased $76 thousand, or 0.7%, to $10.9 million during the six months ended March 31, 2026 compared with $10.8 million for the six months ended March 31, 2025. The increase was primarily attributable to higher compensation and benefit expense, which increased $225 thousand, or 3.6%, to $6.5 million, due to higher medical benefits and incentive accruals as well as annual merit increases.
The Company recorded tax expense of $2.4 million on pre-tax income of $8.5 million for the six months ended March 31, 2026, compared with $1.9 million on pre-tax income of $6.7 million for the six months ended March 31, 2025. The Company's effective tax rate for the six months ended March 31, 2026 was 27.8% compared with 28.5% for the six months ended March 31, 2025.
Balance Sheet Comparison
Total assets increased $70.7 million, or 7.1%, to $1.068 billion at March 31, 2026 from $997.7 million at September 30, 2025. The increase was attributable to higher balances of interest-earning deposits with ...
