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400
      Somerset St., New Brunswick, NJ 08901


732.342.7600





MAGYAR
      BANCORP ANNOUNCES FIRST QUARTER EARNINGS





New
      Brunswick, New Jersey,January
      23,
      2008–Magyar
      Bancorp(NASDAQ: MGYR),
      parent company of Magyar Bank,
      reported today net income of $142,000
      for the three months endedDecember 31,
      2007, compared to net income of
      $272,000
      for the three months endedDecember
      31, 2006.





The
      Company reported basic and diluted
      earnings per share of $0.02for
      the three months endedDecember 31,
      2007and $0.05 for the three
      months endedDecember 31,
      2006.The Company’s book value
      per share increased to $8.51 at December 31, 2007 from $8.20 at December 31,
      2006.





Net
      income decreased $130,000 during the
      three months ended December 31, 2007 compared with the prior year period due
      to
      higher operating costs
      associated withthe opening
      of a new branch location in
      February 2007,the
      cumulative effect ofaflattenedinterestrateyield
      curve, which decreased the
      Bank’s
      interest rate spread and margin,and anincrease
      in non-performing loan expenses
      during the current period.





Total
      assetsincreased
      $14.6million,or3.1%,
      during the three months endedDecember 31,
      2007.Loans,
      net of allowance for loan
      losses,increased
      $9.2million
      to $390.8million.
      Loan growth occurred primarily in
      construction loans, which increased $7.0 million, or 7.2%, and in commercial
      business loans, which
      increased $4.8 million, or 17.9%. Investment securities
      increased
      $5.8million
      to $51.3 million during the
      quarter.  The Company does not hold any preferred stock of either
      Fannie Mae or Freddie Mac in its investment securities
      portfolio.





Total
      depositsdecreased$4.6million
      to $364.2millionwhileborrowingsincreased$17.4million
      to $67.4millionduring
      the three months endedDecember 31,
      2007.  Time deposits decreased
      $6.9 million to $193.6 million while money market, interest-bearing checking and non-interest
      bearing
      checking balances increased $2.2 million, $834,000, and $761,000, respectively,
      reflecting the Company’s
      efforts to increase its lower-cost
      core deposits.





Net
      interest and dividend income for the
      three months endedDecember
      31, 2007increased
      $153,000 to $3.6 million from
      $3.4 million for the three months endedDecember
      31, 2006.The
      Bank’s
      interest rate spread and margin
      decreased to 2.94% and 3.24%, respectively, for the three-month period ended
      December 31, 2007 from3.04%
      and 3.37% for the three months ended December 31, 2006. The decrease in spread
      and margin was attributable to the flattened interest rate yield curve during
      the past twelve months. While the yield on interest-earning assets increased
      2
      basis pointsto
      6.94% for the three months ended
      December 31, 2007 from 6.92% for the prior year period, the cost of
      interest-bearing liabilities increased 12 basis points to 4.00% from 3.88%
      during the same periods.





Non-performing
      loanstotaled $7.6 million
      at
      December 31, 2007, compared
      with$8.0million
      atDecember 31, 2006.The
      largest balance of non-performing
      loans during both periods was represented by a$4.2 million loan made by
      the Bank to Solomon Dwek, whose real estate holdings were forced into bankruptcy
      in





February
      2007. This loan remained in non-performing status at December 31, 2007 pending
      action from the bankruptcy court, which is expected to approve the completion
      of
      the transfer of the property to the Bank during the quarter ended March 31,
      2008. On December 31, 2007, the Bank received full repayment of a $745,000
      loan
      made to Solomon Dwek. The repayment included interest in the amount of $57,000
      and fees totaling $23,000.





The
      non-performing loans during both three month periods also included a $1.9
      million loan secured by a catering facility. The Bank is in the process of
      foreclosure on the property securing the loan; the foreclosure is expected
      to
      occur during the quarter ended March 31, 2008.





Other
      real estate owned decreased $958,000 during the quarter to $1.3 million at
      December 31, 2007. The third of the original four Kara Homes, LLC properties
      was
      sold on November 29, 2007, resulting in a $50,000 loss on the sale. At December
      31, 2007, the Bank held one lot from the third property located in Stafford
      Township, NJ and all nine substantially vacant lots from the fourth property
      located in Little Egg Harbor, NJ.





At
      December 31, 2007, no 1-4 family residential mortgage loans were considered
      non-performing. The Bank has not and does not intend to originate or purchase
      sub-prime loans or option-ARM loans.





The
      Company completed its first stock repurchase of 130,927 shares during the
      quarter ended December 31, 2007. On November 16, 2007, the Company’s Board of
      Directors approved a second stock repurchase plan that allows for the repurchase
      of an additional 5% of its outstanding shares (excluding shares held by Magyar
      Bancorp, MHC, the Company’s mutual holding company), or up to 129,924 shares.
      The Company repurchased 1,500 shares pursuant to the second stock repurchase
      plan at December 31, 2007, reducing outstanding shares to
      5,791,315.





About
      Magyar Bancorp


Magyar
      Bancorp is the parent company of
      Magyar Bank,acommunity
      bank headquartered inNew Brunswick,New
      Jersey. Magyar Bank hasbeen
      serving families and businesses inCentral New
      Jerseyfor over
      85years
      with a completeline
      of financial products and
      services.  Today,Magyar
      operatesfivebranch
      locationsthroughout Middlesex
      andSomersetCountiesincludingNewBrunswick(2),
      North Brunswick,South Brunswickand
      Branchburg.Please visitusonline
      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 Solomon Dwek 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.





Contact:
      John Reissner, 732.214.2083













MAGYAR
                  BANCORP, INC. AND
                  SUBSIDIARYSelected
                  Financial
                  Data(Dollars
                  in Thousands, Except Per
                  Share Data)
  Three
                  Months
                  EndedDecember
                  31,2007
              
              
              2006(Unaudited)Income
                  Statement Data:Interest
                  and dividend
                  income
              
              $
              7,615
              
              
              $
              7,001Interest
                  expense
              
              
              4,049
              
              
              
              3,588Net
                  interest and dividend
                  income
              
              
              3,566
              
              
              
              3,413Provision
                  for loan
                  losses
              
              
              223
              
              
              
              167Net
                  interest and dividend income
                  afterprovision
                  for loan losses
              
              
              3,343
              
              
              
              3,246Non-interest
                  income
              
              
              340
              
              
              
              333Non-interest
                  expense
              
              
              3,521
              
              
              
              3,205Income
                  before income
                  tax
              
              
              162
              
              
              
              374Income
                  tax
                  expense
              
              
              20
              
              
              
              102Net
                  income
              
              $
              142
              
              
              $
              272Per
                  Share Data:Basic
                  earnings per
                  share
              
              $
              0.02
              
              
              $
              0.05Diluted
                  earnings per
                  share
              
              $
              0.02
              
              
              
              n/aBook
                  value per
                  share
              
              $
              8.51
              
              
              $
              8.20Selected
                  Ratios:Return
                  on average
                  assets
              
              
              0.12
              %
              
              
              0.24
              %Return
                  on average
                  equity
              
              
              1.16
              %
              
              
              2.24
              %Net
                  interest
                  margin
              
              
              3.24
              %
              
              
              3.37
              %








At
                  or For the Period
                  EndedDecember
                  31,
                  2007
              
              
              September
                  30,
                  2007(Unaudited)Balance
                  Sheet Data:Assets
              
              $
              487,744
              
              
              $
              473,177Loans
                  receivable
              
              
              394,820
              
              
              
              385,368Allowance
                  for loan
                  losses
              
              
              3,990
              
              
              
              3,754Investment
                  securities - available
                  for sale, at fair value
              
              
              34,267
              
              
              
              27,373Investment
                  securities - held to
                  maturity, at cost
              
              
              17,030
              
              
              
              18,116Deposits
              
              
              364,188
              
              
              
              368,777Borrowings
              
              
              67,411
              
              
              
              49,985Shareholders'
                  Equity
              
              
              49,308
              
              
              
              48,193Asset
                  Quality Data:Non-performing
                  loans
              
              $
              7,558
              
              
              $
              8,033REO
                  property
              
              
              1,280
              
              
              
              2,238Allowance
                  for loan losses to total
                  loans receivable
              
              
              1.01
              %
              
              
              0.97
              %Non-performing
                  loans to total
                  loans receivable
              
              
              1.91
              %
              
              
              2.08
              %Allowance
                  for loan losses to
                  non-performing loans
              
              
              52.79
              %
              
              
              46.73
              %