Magyar Bancorp, Inc. (MGYR): Business Model Canvas [Dec-2025 Updated]

You're looking to understand the engine room of a focused community bank, and Magyar Bancorp, Inc. (MGYR) offers a clear blueprint, especially now that we're deep into 2025. Honestly, this isn't a Wall Street giant; it's a relationship-driven lender focused squarely on Central New Jersey, using its $997.7 million asset base as of September 30, 2025, to drive value. Their model hinges on specialized Commercial Real Estate financing and maintaining a rock-solid balance sheet-evidenced by non-performing loans sitting at just 0.11% as of Q3 2025-which translated to $31.9 million in Net Interest and Dividend Income for FY 2025. Let's break down exactly how they connect their seven branches and local expertise to those revenue streams below.

Magyar Bancorp, Inc. (MGYR) - Canvas Business Model: Key Partnerships

You're looking at how Magyar Bancorp, Inc. (MGYR) works with others to deliver its community banking value proposition. For a bank like Magyar Bank, these external relationships are critical for both risk management and expanding specialized services.

The most concrete, recent data points relate to the government-backed loan programs, showing a clear, active partnership there. For instance, gains from the sale of Small Business Administration 7(a) loans were quite strong in early 2025. Here's the quick math: for the three months ended March 31, 2025, these gains reached $612 thousand, a significant jump from the $213 thousand reported in the same period last year. This activity supports the bank's overall profitability, which saw net income hit $2.7 million for that same three-month period. What this estimate hides is the ongoing operational cost of servicing those loans before the sale.

The bank's structure relies on local expertise for its core lending, and it uses external providers for specialized financial products and digital infrastructure. Still, finding exact 2025 figures for every partnership type is tough; we often have to look at the last reported activity or the latest infrastructure update.

Here is a breakdown of the key relationships:

Magyar Bank's business model explicitly mentions using correspondent banks to manage interest rate risk and increase fee income, as seen when they started offering a commercial loan swap product. For that 2021 product launch, they originated three such loans totaling $20.4 million, which brought in $313,000 in interest rate swap fees. That shows the type of service they partner for, even if the latest fee data isn't current.

Regarding digital infrastructure, while specific FinTech partners aren't named, the bank is clearly investing in its digital delivery. They rolled out a new security enhancement to their Online Banking service and Mobile App effective November 11, 2024, requiring a 6-digit code for login on unrecognized devices. This points to a partnership with a provider capable of delivering advanced authentication features.

The reliance on local real estate professionals is inherent in their community bank charter, focusing on Central New Jersey. Although we don't have 2025 referral numbers, the historical loan mix shows the importance of this segment:

• Commercial Real Estate Loans represented 47.2% of the total loan portfolio at September 30, 2021.
• Commercial Business Loans accounted for 11.6% of the total loan portfolio at September 30, 2021.

The bank also has internal personnel dedicated to this, such as the Vice President, Commercial Loan Officer hired in early 2025. Finance: draft 13-week cash view by Friday.

Magyar Bancorp, Inc. (MGYR) - Canvas Business Model: Key Activities

You're looking at the essential engine room of Magyar Bancorp, Inc. (MGYR)-the things they absolutely must do well to keep the lights on and deliver value. For a community bank like Magyar Bancorp, Inc., these key activities revolve around disciplined lending, smart funding, and rigorous risk control. Honestly, it's about execution, plain and simple.

Commercial Real Estate (CRE) loan origination and servicing

The origination and servicing of loans, particularly Commercial Real Estate (CRE), is central to Magyar Bancorp, Inc.'s value creation. They focus on growing this portfolio while maintaining tight underwriting. For the fiscal year ended September 30, 2025, the loan portfolio saw 10% growth, which management attributed to prudent balance sheet management. Total loans reached $844.0M at the end of the third quarter of fiscal year 2025, marking a $64.2M increase year-to-date. Servicing activities also contribute to non-interest income; for instance, SBA 7(a) loan sale gains hit $612K in the second quarter of fiscal year 2025, a significant jump from $213K in the same period last year.

Here's a snapshot of the lending focus and associated risk management:

Deposit gathering and liability cost management

Securing stable, low-cost funding is the other side of the lending coin. Magyar Bancorp, Inc. actively works on deposit gathering to fuel loan growth and manage the cost of those liabilities. Deposits were reported at $857.7M in the second quarter of fiscal year 2025, showing an increase of $8.8M quarter-over-quarter. Earlier in the year, total deposits had increased 6.5% to $848.8M in the first quarter. A key activity here is managing the cost of interest-bearing liabilities; this cost declined by 13 basis points year-over-year in Q2 2025, which directly helped the Net Interest Margin (NIM) expand.

The focus on funding mix is critical for profitability.

• Deposit growth supported loan originations.
• Liability costs declined 13 bps YoY in Q2 2025.
• Deposit growth in Q1 2025 was 6.5%.

Prudent balance sheet management to optimize NIM

This activity translates the lending and funding strategies into profitability metrics. Magyar Bancorp, Inc. actively manages its balance sheet mix to maximize the spread between what it earns on assets and what it pays for liabilities. The result? The Net Interest Margin (NIM) expanded by 20 basis points to 3.34% for the full fiscal year ended September 30, 2025, up from 3.14% the prior year. This expansion was supported by asset yields climbing to 5.68% in Q2 2025, a 23 basis point increase year-over-year. Net interest and dividend income for the full fiscal year 2025 grew 14.0% to $31.9 million. They're definitely making their assets work harder.

Regulatory compliance and risk mitigation

For any bank, especially one recognized on the KBW 2025 Bank Honor Roll, risk mitigation is a non-negotiable core activity. This involves constant monitoring of the loan book quality. While asset quality improved meaningfully in Q2 2025, with non-performing loans (NPLs) falling to just $81K (0.01% of total loans) and Non-Performing Assets (NPAs) at 0.26% of assets, there was a slight uptick later. By the end of Q3 2025, NPLs had risen to $0.92M, representing 0.11% of loans. The allowance for loan losses was maintained at 0.98% of loans in Q2 2025, showing management's commitment to covering potential credit losses.

Key risk and compliance indicators include:

• NPLs as a percentage of total loans: 0.11% (Q3 2025).
• Allowance for loans held: 0.98% (Q2 2025).
• Recognition on the 2025 KBW Bank Honor Roll.

Finance: draft 13-week cash view by Friday.

Magyar Bancorp, Inc. (MGYR) - Canvas Business Model: Key Resources

You're looking at the tangible and intangible assets Magyar Bancorp, Inc. (MGYR) relies on to execute its community banking strategy in Central New Jersey. These resources are the foundation of their value creation.

The balance sheet strength provides a solid base. As of September 30, 2025, total assets stood at $997.7 million. That growth was largely driven by the loan book, which is a primary earning asset for the bank.

Here's a quick look at the core financial anchors as of the latest reported periods:

The deposit base is crucial; it's the low-cost funding source that fuels loan growth. Honestly, seeing deposits at $857.7 million in Q2 2025 shows strong customer stickiness, even if total deposits were reported slightly lower later in the year.

The physical footprint is concentrated and local, which supports the community bank model. These are the tangible access points:

• Seven physical branch locations in Central New Jersey.
• Locations include Edison (with two offices).
• Other key towns are New Brunswick, North Brunswick, South Brunswick, Branchburg, and Bridgewater.
• Martinsville is also listed as a location.

The intangible resources are just as important, if not more so, in community banking. This is where the relationship value lives.

• Local market expertise, built since 1922.
• Established community reputation, validated by recognition like the KBW's 2025 Honor Roll.
• Disciplined balance sheet management, evidenced by a Net Interest Margin (NIM) expansion to 3.35% in Q3 2025.

To be fair, the loan portfolio growth-up $64.2 million Year-to-Date as of Q3 2025-shows effective deployment of those resources, primarily in commercial real estate.

Magyar Bancorp, Inc. (MGYR) - Canvas Business Model: Value Propositions

You're looking at what Magyar Bancorp, Inc. (MGYR) offers its customers and the market, which is fundamentally rooted in its community bank identity. This isn't about abstract promises; it's about concrete performance and focus areas that define their value.

Personalized, relationship-focused community banking service is central to Magyar Bancorp, Inc.'s model. This focus is validated by external recognition; the company was named to the 2025 KBW Bank Honor Roll, an acknowledgment of strong and consistent earnings growth, which reflects successful execution of their community banking strategy. That strategy aims to serve families and businesses in Central New Jersey, where Magyar Bank has operated since 1922. This commitment to local relationships is a core differentiator against larger, less localized institutions.

The expertise in Specialized Commercial Real Estate (CRE) financing is a significant part of their loan book. As of the third quarter of 2025, a substantial portion of their lending focus was evident, with 60% of its loans classified as CRE as of June 2025. This concentration shows a deep commitment and specialized knowledge in that sector. The bank is actively funding growth, as total loans receivable increased to $845.4 million at the end of Q3 2025.

While specific rate comparisons against every competitor aren't public, the results of their pricing strategy are clear in the financial performance. Magyar Bancorp, Inc. demonstrated effective balance sheet management, resulting in a Net Interest Margin (NIM) that expanded to 3.35% in Q3 2025. This expansion, year-over-year, suggests they are managing the cost of deposits while achieving favorable yields on assets, which translates into competitive positioning for local customers. The confidence in this strategy led the Board to raise the quarterly dividend to $0.08 per share in Q3 2025.

The bedrock of their value proposition is Financial stability, which directly impacts customer trust. As of Q3 2025, the bank maintained strong asset quality, with non-performing loans at just 0.11% of total loans. This is a very low absolute level, even though the dollar amount of non-performing loans increased to $0.92 million at June 30, 2025, from $0.232 million at the end of FY24. The overall financial health is reflected in the book value per share, which rose to $18.03 at the quarter's end.

Here's a quick look at the key metrics supporting these value points from the Q3 2025 results:

The dedication of the team is also a value driver, as evidenced by the 55.5% year-over-year increase in non-interest income to $0.64 million, aided by higher bank-owned life insurance income and loan-related fees. You see the results of their relationship focus in the 46% rise in net income to $2.47 million for the quarter. That's real value creation.

Magyar Bancorp, Inc. (MGYR) - Canvas Business Model: Customer Relationships

Magyar Bancorp, Inc. supports its customer relationships through a mix of physical presence and direct access to decision-makers, which is key for a community bank serving Central New Jersey.

Dedicated, in-person service at local branch locations

The foundation of the relationship model is the physical footprint. Magyar Bank operates seven branch locations across Middlesex and Somerset Counties, New Jersey, including sites in New Brunswick, North Brunswick, South Brunswick, Branchburg, Bridgewater, and Edison (two locations). This physical network is supported by a total employee count of 111 as of September 30, 2025. The bank's total assets stood at $1.0 billion as of March 31, 2025, indicating the scale of the client base being served through these local touchpoints.

Direct access to commercial lending officers

For business clients, direct access to lending expertise is a stated priority. The organizational structure reflects this commitment, featuring named roles such as the Senior Vice President and Chief Lending Officer, Peter Brown. Furthermore, the team includes multiple dedicated Vice President and Commercial Lender positions, such as Jean McDonnell, Dan Badea, Lillian Lund, and Cuthbert Hamilton, ensuring that commercial clients can connect directly with loan decision-makers. This structure helps facilitate the building of the long-term, trust-based relationships mentioned in the strategy.

Automated self-service via online and mobile platforms

While the emphasis is local, Magyar Bancorp, Inc. supports customer needs through digital channels. The bank provides online banking access, requiring a username and password for entry. Although specific 2025 usage statistics for Magyar Bank's digital platforms are not public, the broader US market context shows that 72% of US adults used mobile banking apps in 2025. Digital platforms are used for functions like check deposits and investment tracking, turning smartphones into personal finance hubs.

Long-term, trust-based relationships with business clients

The success of the relationship focus is reflected in the financial performance. For the fiscal year ended September 30, 2025, Magyar Bancorp reported a net income of $9.8 million. The net interest margin, a key indicator of lending profitability, increased to 3.34% for the year ended September 30, 2025, up from 3.14% the prior year. The President and CEO noted that strong outcomes are a direct result of Magyar's focus on building lasting relationships within the community.

Key Financial and Operational Metrics for Customer Relationship Support (As of Late 2025 Data Points):

The relationship model is supported by the personnel dedicated to client interaction:

• Executive Management includes a President & CEO and a Chief Lending Officer.
• Commercial Lenders hold Vice President titles.
• Branch Managers oversee the seven physical locations.
• Relationship managers go out of their way to help meet banking needs.

Magyar Bancorp, Inc. (MGYR) - Canvas Business Model: Channels

You're looking at how Magyar Bancorp, Inc. gets its products and services to its New Jersey customer base. The physical footprint remains a core component, especially for initial deposit gathering and relationship building.

Magyar Bancorp, Inc., through its subsidiary Magyar Bank, maintains a physical presence concentrated in Central New Jersey. As of late 2025, this network consists of exactly seven retail branch locations. These offices are strategically placed across key towns to serve the local community.

The bank relies on its digital channels to complement the physical locations. You can assume they offer both online and mobile banking applications for routine customer interactions. For instance, the average balance of interest-earning assets, which these channels help fund and deploy, reached $954.6 million for the year ended September 30, 2025. The bank reported a net income of $9.8 million for that same fiscal year.

For more complex financial products, Magyar Bancorp, Inc. uses a direct sales approach. This involves a dedicated internal team focused on originating both commercial and residential lending business. This direct contact is key for securing higher-value, relationship-based assets.

Access to cash and transactional convenience is supported through an ATM network. While the exact number of proprietary or partner ATMs isn't publicly detailed in the latest reports, this access point supports the day-to-day needs of the customer base alongside the seven physical branches. The bank obtains certificates of deposit primarily through its branch network and, to a lesser extent, via the brokered CD market.

Here's a quick look at the branch distribution based on available location data:

• New Brunswick (Headquarters)
• North Brunswick
• South Brunswick
• Branchburg
• Bridgewater
• Edison (2 locations)

Finance: draft 13-week cash view by Friday.

Magyar Bancorp, Inc. (MGYR) - Canvas Business Model: Customer Segments

Magyar Bancorp, Inc., through Magyar Bank, focuses its business on serving the local community in Central New Jersey, which dictates its primary customer segments. You see this focus clearly in their deposit gathering and lending strategies.

The core of the lending activity, which defines the key customer segments, is heavily weighted toward commercial real estate and residential mortgages, consistent with a community bank model in the Northeast.

Here is a look at the composition of the loan portfolio, using the most recent detailed figures available, supplemented by year-over-year growth data from late 2025:

The Commercial Real Estate (CRE) investors and developers segment is clearly the primary lending focus, representing over half of the loan portfolio based on 2022 figures, and it showed significant growth, adding $33.9 million in the first half of fiscal 2025. This segment is vital for Magyar Bancorp, Inc. as it aligns with the bank's role in regional development.

For Small to medium-sized businesses (SMEs), while their loan percentage was smaller in 2022, the segment is a key area of community banking focus. You can see specific historical metrics for this group:

• Total small business loans historically stood at $156.7 million.
• The number of active small business loans was 1,247.
• The average loan size for SMEs was approximately $125,664.
• New Jersey local government policies mandate a small business loan allocation of 22% of the total lending portfolio.

The Local retail customers and families are the source of the bank's funding base, which is critical for its operations. As of June 30, 2025, total deposits were $820.0 million. The bank's geographic footprint is strictly Central New Jersey, with offices in:

• New Brunswick (main office)
• North Brunswick
• South Brunswick
• Branchburg
• Bridgewater
• Edison (2 locations)

Finally, Residential mortgage borrowers represent the second-largest loan category. The bank originates these loans primarily for its portfolio, not for secondary market sale, which speaks to a long-term relationship focus. The total assets of Magyar Bancorp, Inc. reached $997.7 million as of September 30, 2025. The loan portfolio itself grew by 10% during the year ended September 30, 2025.

Magyar Bancorp, Inc. (MGYR) - Canvas Business Model: Cost Structure

The cost structure for Magyar Bancorp, Inc. (MGYR) as of the fiscal year ended September 30, 2025, is heavily weighted toward funding costs and personnel, typical for a community bank focused on loan growth. Total non-interest expenses for the full fiscal year 2025 reached $21.4 million, up 4.9% from the prior year's $20.4 million.

Interest expense on deposits and borrowed funds represents a significant portion of the overall cost base. For the fiscal year ended September 30, 2025, total interest expense was $22.8 million, an increase of $2.2 million, or 10.7%, compared to the $20.6 million reported in fiscal year 2024.

Employee compensation and benefits is the primary driver within non-interest expenses. The increase in compensation and benefits expense for FY 2025 was $893 thousand, representing a 7.6% rise over the previous year. This increase was attributed to annual merit increases, higher medical insurance costs, and elevated incentive plan accruals.

The costs associated with the physical footprint and operational support are detailed below. You'll note that occupancy expenses included specific, non-recurring costs related to office consolidation during the year.

The Provision for credit losses is a critical, though variable, cost component reflecting the bank's risk management posture against its growing loan portfolio. For the full year ended September 30, 2025, Magyar Bancorp recorded provisions for credit loss totaling $653 thousand. This compares to provisions of $182 thousand for the year ended September 30, 2024.

The specific elements driving the occupancy cost increase are clear when you look at the quarterly trends, which often include seasonal or one-time charges. The cost structure includes:

• Provision for credit losses for FY 2025: $653 thousand.
• Occupancy expenses for FY 2025: $3.5 million.
• Increase in compensation and benefits for FY 2025: $893 thousand.
• Interest expense on deposits and borrowed funds for FY 2025: $22.8 million.

The occupancy expense increase of $188 thousand, or 5.7%, to reach $3.5 million for the year included lease termination expenses related to closing the Bridgewater office. That's a defintely one-time hit to the quarterly run rate, so you'll see that normalize next year.

Magyar Bancorp, Inc. (MGYR) - Canvas Business Model: Revenue Streams

You're looking at how Magyar Bancorp, Inc. (MGYR) actually brings in the money, which for a bank like this, boils down to the spread between what it earns on its assets and what it pays out on its liabilities, plus a few other important fees and gains. It's all about managing that interest-earning portfolio effectively.

The core of the revenue generation comes from Net Interest Income (NII) derived from the loan and investment portfolios. For the full Fiscal Year 2025, which ended September 30, 2025, Magyar Bancorp, Inc. reported Net Interest and Dividend Income of \$31.9 million. This represents a solid increase of 14.0% compared to the prior fiscal year. The net interest margin (NIM) also improved, reaching 3.34% for FY 2025. To give you a more recent snapshot, for the quarter ended September 30, 2025 (Q3 2025), the Net Interest and Dividend Income was \$8.4 million.

Beyond the core interest spread, Magyar Bancorp, Inc. generates revenue from non-interest sources, which are crucial for diversification. These streams include various fees, service charges, and realized gains on asset sales. Honestly, these non-interest items can really move the needle when interest rate environments shift.

We see clear evidence of this in the gains from selling loans. Specifically, gains on the sale of Small Business Administration 7(a) loans were a notable contributor. For the three months ended March 31, 2025 (Q2 2025), the gain on the sale of these SBA 7(a) loans was \$612K. Looking at the full fiscal year 2025, the gains on SBA loans totaled \$1.1 million.

Here's a quick look at how some of these key income components stacked up for the full fiscal year ended September 30, 2025, compared to the prior year:

Another component feeding into the non-interest income is the Income from Bank-Owned Life Insurance (BOLI). While the exact annual dollar amount for BOLI income isn't explicitly broken out for the full year in the same way as NII, it was cited as a factor contributing to the surge in other income during the second quarter of 2025 and aided the non-interest income in Q3 2025.

The category of Loan-related fees and service charges also contributes. For the three months ended September 30, 2025, higher interest rate swap fees and loan service charges increased by \$69 thousand and \$37 thousand, respectively, compared to the prior year period. This shows that fee income is an active, albeit smaller, part of the overall revenue picture.

You can see the mix of non-interest income by looking at the quarterly results:

• Q2 2025 Fee and other income surged 104% year-over-year to \$1.27 million.
• Q3 2025 Non-interest income was reported at \$0.64 million.
• Q3 2025 Non-interest income increased 55.5% year-over-year.

Finance: draft 13-week cash view by Friday.