UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      D.C. 20549





FORM
      10-QSB/A





ý QUARTERLY REPORT UNDER SECTION 13 OR 15(d)


OF
      THE
      SECURITIES EXCHANGE ACT OF 1934


For
      the
      quarterly period ended December 31, 2006





Commission
      File Number  **000-51726**





MAGYAR
      BANCORP, INC.


(Exact
      name of small business issuer as specified in its charter)





Delaware
            
            20-4154978(State
                or other jurisdiction of
            
            (I.R.S.
                Employerincorporation
                or organization)
            
            Identification
                Number)400
                Somerset StreetNew
                Brunswick, New Jersey
            
            08901(Address
                of principal executive offices)
            
            (Zip
                Code)





Issuer's
      telephone number, including area code (732) 342-7600





Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 12 months (or for such shorter period
      that the registrant was required to file such reports), and (2) has been subject
      to such filing requirements for the past 90 days.


YESý
            NOo





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).


YES
                  o
              NOý


State
      the
      number of shares outstanding of each of the issuer's classes of common stock,
      as
      of the latest practicable date.





Class
            Outstanding
                at February 8, 2007Common
                Stock, $0.01 Par Value
            5,923,742





Transitional
      Small Business Disclosure Format   YES o NO ý















**EXPLANATORY
      NOTE**




The
      purpose of this Amendment No. 1 to the Company’s Quarterly Report on Form 10-QSB
      for the period ended December 31, 2006, is to re-file Item 2, Part I -
      Management’s Discussion and Analysis of Financial Condition and Results of
      Operations. The average balance sheet and related information previously filed
      reflected actual, not average, balances. The average balance sheet information
      and related information is included in this Amendment No. 1.




These
      changes had no effect on the Company’s consolidated statements of income,
      consolidated balance sheets, consolidated statement of changes in stockholders’
equity, consolidated statements of cash flows, or the notes thereto.








2






Item
      2.
      Management's Discussion and Analysis or Plan of Operation





**Forward-Looking
      Statements**




When
      used
      in this filing and in future filings by Magyar Bancorp, Inc. with the Securities
      and Exchange Commission, in the Company’s press releases or other public or
      shareholder communications, or in oral statements made with the approval of
      an
      authorized executive officer, the words or phrases, “anticipate,” “would be,”
“will allow,” “intends to,” “will likely result,” “are expected to,” “will
      continue,” “is anticipated,” “estimated,” “projected,” or similar expressions
      are intended to identify “forward looking statements.” Such statements are
      subject to risks and uncertainties, including but not limited to changes in
      economic conditions in Magyar Bancorp, Inc.’s market area, changes in policies
      by regulatory agencies, fluctuations in interest rates, demand for loans in
      Magyar Bancorp, Inc.’s market area, changes in the position of banking
      regulators on the adequacy of our allowance for loan losses, and competition,
      all or some of which could cause actual results to differ materially from
      historical earnings and those presently anticipated or projected.




Magyar
      Bancorp, Inc. wishes to caution readers not to place undue reliance on any
      such
      forward-looking statements, which speak only as of the date made, and advises
      readers that various factors, including regional and national economic
      conditions, substantial changes in levels of market interest rates, credit
      and
      other risks of lending and investing activities, and competitive and regulatory
      factors, could affect Magyar Bancorp, Inc.’s financial performance and could
      cause Magyar Bancorp, Inc.’s actual results for future periods to differ
      materially from those anticipated or projected.




Magyar
      Bancorp, Inc. does not undertake, and specifically disclaims any obligation,
      to
      update any forward-looking statements to reflect occurrences or unanticipated
      events or circumstances after the date of such statements.




**Critical
      Accounting Policies**





Critical
      accounting policies are defined as those that are reflective of significant
      judgments and uncertainties, and could potentially result in materially
      different results under different assumptions and conditions. We believe that
      the most critical accounting policy upon which our financial condition and
      results of operations depend, and which involves the most complex subjective
      decisions or assessments, is the allowance for loan losses.




The
      allowance for loan losses is the amount estimated by management as necessary
      to
      cover credit losses in the loan portfolio both probable and reasonably estimable
      at the balance sheet date. The allowance is established through the provision
      for loan losses which is charged against income. In determining the allowance
      for loan losses, management makes significant estimates and has identified
      this
      policy as one of our most critical. The methodology for determining the
      allowance for loan losses is considered a critical accounting policy by
      management due to the high degree of judgment involved, the subjectivity of
      the
      assumptions utilized and the potential for changes in the economic environment
      that could result in changes to the amount of the recorded allowance for loan
      losses.




As
      a
      substantial amount of our loan portfolio is collateralized by real estate,
      appraisals of the underlying value of property securing loans and discounted
      cash flow valuations of properties are critical in determining the amount of
      the
      allowance required for specific loans. Assumptions for appraisals and discounted
      cash flow valuations are instrumental in determining the value of properties.
      Overly optimistic assumptions or negative changes to assumptions could
      significantly affect the valuation of a


3


property
      securing a loan and the related allowance. The assumptions supporting such
      appraisals and discounted cash flow valuations are carefully reviewed by
      management to determine that the resulting values reasonably reflect amounts
      realizable on the related loans.




Management
      performs a quarterly evaluation of the adequacy of the allowance for loan
      losses. We consider a variety of factors in establishing this estimate
      including, but not limited to, current economic conditions, delinquency
      statistics, geographic and industry concentrations, the adequacy of the
      underlying collateral, the financial strength of the borrower, results of
      internal loan reviews and other relevant factors. This evaluation is inherently
      subjective as it requires material estimates by management that may be
      susceptible to significant change based on changes in economic and real estate
      market conditions.




The
      evaluation has a specific and general component. The specific component relates
      to loans that are delinquent or otherwise identified as a problem loan through
      the application of our loan review process and our loan grading system. All
      such
      loans are evaluated individually, with principal consideration given to the
      value of the collateral securing the loan and discounted cash flows. Specific
      allowances are established as required by this analysis. The general component
      is determined by segregating the remaining loans by type of loan, risk weighting
      (if applicable) and payment history. We also analyze historical loss experience,
      delinquency trends, general economic conditions and geographic and industry
      concentrations. This analysis establishes factors that are applied to the loan
      groups to determine the amount of the general component of the allowance for
      loan losses.




Actual
      loan losses may be significantly more than the allowances we have established
      which could have a material negative effect on our financial
      results.





**Comparison
      of Financial Condition at December 31, 2006 and September 30,
      2006**





Total
      assets increased $14.9 million, or 3.4%, to $449.1 million at December 31,
      2006
      from $434.2 million at September 30, 2006, represented by significant growth
      in
      net loans receivable, partially offset by a decrease in securities
      available-for-sale and securities held-to-maturity.





Net
      loans
      receivable increased $17.3 million, or 5.0%, to $365.2 million at December
      31,
      2006 from $348.0 million at September 30, 2006. The increase in loans receivable
      for the three-month period was slightly offset by $200,000 in sales of
      one-to-four family residential mortgage loans and provisions for loan loss
      of
      $167,000. During the three months ended December 31, 2006, commercial business
      loans led the increase in net loans receivable with growth of $6.7 million,
      or
      27.2%, to $31.2 million from $24.5 million at September 30, 2006. Construction
      loans increased $5.3 million, or 5.8%, and home equity lines of credit increased
      $3.5 million, or 32.1%, during the period to $95.6 million and $14.3
      million, respectively.





At
      December 31, 2006, the significant loan categories in terms of the percent
      of
      total loans were 38.7% in one-to-four family residential mortgage loans, 25.9%
      in construction loans and 18.7% in commercial real estate loans. At December
      31,
      2005 these categories in terms of the percent of total loans were 43.3% in
      one-to-four family residential mortgage loans, 22.8% in construction loans
      and
      19.6% in commercial real estate loans. Throughout 2007 we expect to continue
      with our strategy of diversifying the Company’s balance sheet with higher
      concentrations in commercial and construction loans.





Total
      non-performing loans decreased by $94,000 to $7.3 million at December 31, 2006
      from $7.4 million at September 30, 2006. The ratio of non-performing loans
      to
      total loans receivable was


4


1.98%
      at
      December 31, 2006 compared with 2.10% at September 30, 2006. The allowance
      for
      loan losses was increased $167,000 to $4.1 million or 55.6% of
      non-performing loans at December 31, 2006 compared with $3.9 million or
      52.6% of non-performing loans at September 30, 2006. The allowance for loan
      losses was 1.1% of gross loans outstanding at both December 31, 2006 and
      September 30, 2006.





The
      Bank’s interest in loans on the Dwek Properties and Sugar Maple Estates
      (reported in the Company’s Current Report on Form 8-K dated June 27, 2006) was
      $745,000 and $4.2 million, respectively, at December 31, 2006. Payments on
      both
      loans were current at December 31, 2006. An “as-is condition” contract of sale
      in the amount of $1.46 million was approved by the superior court for the sale
      of property securing the Dwek Properties loan. The sale and closing are
      currently scheduled to occur in February 2007. The Sugar Maple Estates property
      is currently listed for sale through the court appointed sale
      agent.





In
      October 2006, Kara Homes, Inc. (“Kara Homes”), one of our largest construction
      loan borrowers, filed for Chapter 11 bankruptcy (reported in our Current Report
      on Form 8-K dated October 10, 2006). Kara Homes' lending relationship with
      us
      consists of four construction loans with a total outstanding balance of $7.6
      million. Two of the four loans were participated with other banks, limiting
      our
      total lending relationship with Kara Homes to $5.1 million. The loans were
      designated non-accrual at September 30, 2006 and remained on that status at
      December 31, 2006. On January 8, 2007 the Bankruptcy Court approved a motion
      to
      begin a bidding process through the Bankruptcy Court for all four Kara Homes
      properties. An auction is expected to be held in the Bankruptcy Court during
      the
      Company’s second quarter to sell the four projects. The Bank has made an initial
      offer on each of the four projects to proceed with a Bankruptcy Code Section
      363
      sale of the property to the Bank (free and clear of all liens, claims and
      encumbrances with the exception of real estate taxes.)




Although
      management believes that the Bank’s position in the Dwek Properties, Sugar Maple
      Estates, and Kara Homes, Inc. loans are well collateralized, there can be no
      assurance that losses will not occur or that significant additional expenses
      will not be incurred in the process of the resolution of the loans.





Securities
      available-for-sale decreased $0.9 million, or 4.6%, to $17.3 million at December
      31, 2006 from $18.2 million at September 30, 2006. The decrease was the result
      of $142,000 in sales of a money market mutual fund and $730,000 in principal
      amortization. In addition, securities held-to-maturity decreased $1.1 million,
      or 4.6%, to $22.8 million at December 31, 2006 from $23.9 million at September
      30, 2006, resulting from principal amortization. The decrease in the
      available-for-sale and held-to-maturity securities reflected the deployment
      of
      investment proceeds into new higher-yielding construction and commercial
      loans.





Total
      deposits increased $16.7 million, or 5.1%, to $342.3 million at December 31,
      2006. The increase was primarily the result of money market accounts, which
      increased $9.2 million, or 16.5%, to $65.3 million at December 31, 2006 from
      $56.1 million at September 30, 2006, and certificate of deposit accounts, which
      increased $6.6 million, or 4.4%, to $156.4 million at December 31, 2006 from
      $149.8 million at September 30, 2006. Other significant changes in total
      deposits over the three-month period included an increase in NOW accounts of
      $2.1 million, or 6.8%, to $32.6 million and a decrease in savings accounts
      of
      $3.4 million, or 7.9%, to $39.7 million.




Borrowings
      from the Federal Home Loan Bank of New York decreased $1.9 million, or 3.9%
      to
      $51.1 million at December 31, 2006 from $53.0 million at September 30, 2006.
      Proceeds from the growth in deposits described above were used to pay down
      short-term advances over the three-month period.


5







Stockholders’
      equity increased $350,000, or 0.7%, to $48.6 million at December 31, 2006 from
      $48.2 million at September 30, 2006. The increase was attributable to net income
      during the period of $272,000, the release of shares from the ESOP totaling
      $73,000 and a decrease in accumulated other comprehensive loss of $5,000. The
      other comprehensive losses due to unrealized losses on investment securities
      available-for-sale related to increases in interest rates since the investment
      securities were purchased. Management has concluded that none of the securities
      have impairments that are considered other than temporary.








**Average
      Balance Sheets for the Three Months Ended December 31, 2006 and
      2005**





The
      table
      on the following page presents certain information regarding Magyar Bancorp,
      Inc.’s financial condition and net interest income for the three months ended
      December 31, 2006 and 2005. The table presents the annualized average yield
      on
      interest-earning assets and the annualized average cost of interest-bearing
      liabilities. We derived the yields and costs by dividing annualized income
      or
      expense by the average balance of interest-earning assets and interest-bearing
      liabilities, respectively, for the periods shown. We derived average balances
      from daily balances over the periods indicated. Interest income includes fees
      that we consider adjustments to yields.


6


Three
                  Months Ended December 31,2006
              
              2005Average
                Balance
              
              Interest
                Income/
                Expense
              
              Yield/
                Cost
              
              Average
                Balance
              
              Interest
                Income/
                Expense
              
              Yield/
                Cost(Dollars
                  in thousands)Interest-earning
                  assets:Interest-earning
                  deposits
              
              $
              233
              
              $
              3
              
              
              5.11
              %
              $
              1,190
              
              $
              8
              
              
              2.67
              %Loans
                  receivable, net
              
              
              357,138
              
              
              6,517
              
              
              7.24
              %
              
              277,681
              
              
              4,575
              
              
              6.54
              %SecuritiesTaxable
              
              
              39,301
              
              
              416
              
              
              4.20
              %
              
              50,269
              
              
              500
              
              
              3.95
              %Tax-exempt
              
              
              2,194
              
              
              30
              
              
              5.42
              %
              
              147
              
              
              2
              
              
              5.40
              %FHLB
                  of NY stock
              
              
              2,756
              
              
              44
              
              
              6.33
              %
              
              2,389
              
              
              33
              
              
              5.48
              %Total
                  interest-earning assets
              
              
              401,622
              
              
              7,010
              
              
              6.92
              %
              
              331,676
              
              
              5,118
              
              
              6.12
              %Noninterest-earning
                  assets
              
              
              40,748
              
              
              
              
              
              
              
              
              37,934Total
                  assets
              
              $
              442,370
              
              
              
              
              
              
              
              $
              369,610Interest-bearing
                  liabilities:Savings
                  accounts(1)
              
              $
              40,828
              
              
              113
              
              
              1.10
              %
              $
              58,061
              
              
              153
              
              
              1.05
              %NOW
                  accounts(2)
              
              
              93,592
              
              
              824
              
              
              3.49
              %
              
              59,821
              
              
              241
              
              
              1.60
              %Time
                  deposits(3)
              
              
              181,674
              
              
              2,007
              
              
              4.38
              %
              
              155,682
              
              
              1,312
              
              
              3.34
              %Total
                  interest-bearing deposits
              
              
              316,094
              
              
              2,944
              
              
              3.70
              %
              
              273,564
              
              
              1,706
              
              
              2.47
              %Federal
                  Home Loan Bank borrowings
              
              
              50,490
              
              
              644
              
              
              5.06
              %
              
              46,322
              
              
              514
              
              
              4.40
              %Loan
                  payable
              
              
              -
              
              
              -
              
              
              
              
              
              2,497
              
              
              50
              
              
              7.94
              %Total
                  interest-bearing liabilities
              
              
              366,584
              
              
              3,588
              
              
              3.88
              %
              
              322,383
              
              
              2,270
              
              
              2.79
              %Noninterest-bearing
                  liabilities
              
              
              27,252
              
              
              
              
              
              
              
              
              22,380Total
                  liabilities
              
              
              393,836
              
              
              
              
              
              
              
              
              344,763Retained
                  earnings
              
              
              48,534
              
              
              
              
              
              
              
              
              24,847Total
                  liabilities and retained earnings
              
              $
              442,370
              
              
              
              
              
              
              
              $
              369,610Tax-equivalent
                  basis adjustment
              
              
              
              
              
              (9
              )Net
                  interest income
              
              
              
              
              $
              3,413
              
              
              
              
              
              
              
              $
              2,848Interest
                  rate spread
              
              
              
              
              
              
              
              
              3.04
              %
              
              
              
              
              
              
              
              3.33
              %Net
                  interest-earning assets
              
              $
              35,038
              
              
              
              
              
              
              
              $
              9,293Net
                  interest margin(4)
              
              
              
              
              
              
              
              
              3.37
              %
              
              
              
              
              
              
              
              3.41
              %Average
                  interest-earning assets to average interest-bearing liabilities
              
              
              109.56
              %
              
              
              
              
              
              
              
              102.88
              %


(1)   
                  Includes passbook savings, money market passbook and club
                  accounts.(2)   
                  Includes regular and money market NOW accounts.(3)   
                  Includes certificates of deposits and individual retirement
                  accounts(4)   
                  Calculated as annualized net interest income divided by average
                  total
                  interest-earning assets


7


**Comparison
      of Operating Results for the Three Months Ended December 31, 2006 and
      2005**





***Net
      Income*** .
      The
      Company recorded net income of $272,000 for the three months ended December
      31,
      2006. Net income increased $106,000, or 63.9%, compared to $166,000 for the
      three months ended December 31, 2005.





***Net
      Interest and Dividend Income.*** Net
      interest and dividend income increased $565,000, or 19.8%, to $3.4 million
      for the three months ended December 31, 2006 from $2.8 million for the
      three months ended December 31, 2005. Total interest and dividend income
      increased $1.9 million to $7.0 million for the three month period ended December
      31, 2006 while total interest expense increased $1.3 million to $3.6 million
      from the same three month period one year earlier.





***Interest
      Income.*** The
      increase in ** interest
      income of $1.9 million, or 36.8%, to $7.0 million for the three months ended
      December 31, 2006 was primarily due to an increase in the average balance of
      interest-earning assets of $69.9 million to $401.6 million from $331.7 million,
      as well as an improvement in the average yield on such assets to 6.92% from
      6.12%. Interest earned on loans increased to $6.5 million for the three months
      ended December 31, 2006 from $4.6 million for the prior year period, reflecting
      an $79.5 million, or 28.6%, increase in the average balance of loans as well
      as
      a 70 basis point increase in the average yield on such loans to 7.24% from
      6.54%. The improved yield on loans reflected the higher balance of
      higher-yielding commercial business, commercial real estate and construction
      loans. The yield on loans would have been 25 basis points greater at 7.49%
      if
      not for $7.1 million in loans that did not accrue interest during the three
      months ended December 31, 2006.





Interest
      earned on our investment securities decreased $56,000, or 11.2%, due to a $8.9
      million, or 17.7%, decrease in the average balance of such securities. The
      average yield on such securities increased 31 basis points from 3.95% for the
      three months ended December 31, 2005 to 4.26% for the three months ended
      December 31, 2006. The decreased average balance of our investment securities
      reflected the deployment of proceeds from prepayments or repayments into
      higher-yielding loans.





***Interest
      Expense.*** Interest
      expense increased $1.3 million, or 58.1%, to $3.6 million for the three months
      ended December 31, 2006 from $2.3 million for the three months ended December
      31, 2005. The increase in interest expense was primarily due to a $44.2 million,
      or 13.7%, increase in the average balance of interest-bearing liabilities to
      $366.6 million from $322.4 million. In addition, the average cost of such
      liabilities increased to 3.88% from 2.79% in the higher market interest rate
      environment.





The
      average balance of interest bearing deposits increased to $316.1 million from
      $273.6 million while the average cost of such deposits increased to 3.70% from
      2.47% in the higher market interest rate environment. This resulted in an
      increase in interest paid on deposits from $1.7 million to $2.9 million for
      the
      three months ended December 31, 2006 compared to the same period last year.
      Interest paid on Federal Home Loan Bank advances increased to $644,000 for
      the
      three months ended December 31, 2006 from $514,000 for the prior year period.
      In
      addition to an increase in the average balance of such advances from $46.3
      million to $50.5 million, there was a 66 basis point increase in the average
      cost of Federal Home Loan Bank advances to 5.06% for the three months ended
      December 31, 2006 from 4.40% for the prior year period.





***Provision
      for Loan Losses.*** We
      establish provisions for loan losses, which are charged to earnings, at a level
      necessary to absorb known and inherent losses that are both probable and
      reasonably estimable at the date of the financial statements. In evaluating
      the
      level of the allowance for loan losses, management considers historical loss
      experience, the types of loans and the amount of loans in the loan portfolio,
      adverse situations that may affect the borrower’s ability to repay, the
      estimated value of any


8


underlying
      collateral, peer group information and prevailing economic conditions. This
      evaluation is inherently subjective as it requires estimates that are
      susceptible to significant revision as more information becomes available or
      as
      future events occur. After an evaluation of these factors, management recorded
      a
      provision of $167,000 for the three months ended December 31, 2006 compared
      to a
      $120,000 provision for the prior year period. The increase in the provision
      in
      2006 as compared to 2005 was due primarily to the overall growth of the loan
      portfolio and the inherent risks within that growth, specifically the increase
      in the proportion of construction and commercial real estate loans in our
      portfolio.





Determining
      the amount of the allowance for loan losses necessarily involves a high degree
      of judgment. Management reviews the level of the allowance on a quarterly
      basis, ** and
      establishes the provision for loan losses based on the factors set forth in
      the
      preceding paragraph. Historically, our loan portfolio has consisted primarily
      of
      one-to four-family residential mortgage loans. However, our current business
      plan calls for increases in construction, commercial real estate and commercial
      business loans. As management evaluates the allowance for loan losses, the
      increased risk associated with larger non-homogenous construction, commercial
      real estate and commercial business loans may result in larger additions to
      the
      allowance for loan losses in future periods.


Although
      we believe that we use the best information available to establish the allowance
      for loan losses, future additions to the allowance may be necessary, based
      on
      estimates that are susceptible to change as a result of changes in economic
      conditions and other factors. In addition, the Federal Deposit Insurance
      Corporation, as an integral part of its examination process, will periodically
      review our allowance for loan losses. This agency may require us to recognize
      adjustments to the allowance, based on its judgments about information available
      to it at the time of its examination.





***Other
      Income.*** Non-interest
      income increased $98,000, or 41.7%, to $333,000 for the three months ended
      December 31, 2006 from $235,000 for the three months ended December 31, 2005.
      The increase reflected an increase in service charges and a larger increase
      in
      the cash surrender value of Magyar Bank’s bank-owned life insurance for the
      three months ended December 31, 2006 compared to the earlier three-month period.
      In addition, the Bank recorded $19,000 in rental income from a lease of office
      space at its headquarters that commenced in April 2006.





***Other
      Expenses.*** Non-interest
      expense increased to $3.2 million for the three months ended December 31, 2006
      from $2.7 million for the three months ended December 31, 2005.





Compensation
      and employee benefits increased $285,000, or 18.3% to $1.8 million for the
      three
      months ended December 31, 2006 from $1.6 million for the three months ended
      December 31, 2005. This increase included $73,000 in ESOP expenses recorded
      during the current period. In addition, the increase also reflected staff
      additions in our commercial real estate and retail banking areas, as well as
      normal merit increases and increases in employee benefit costs.





The
      higher non-interest expense also was due to higher occupancy expenses, which
      increased to $592,000 for the three months ended December 31, 2006 from $468,000
      for the prior year period. The increase primarily reflected the addition of
      the
      Bank’s fourth branch office in Branchburg, New Jersey, which was completed in
      September 2006. In addition, other expenses increased $85,000, or 24.7%, to
      $429,000 for the three months ended December 31, 2006 from $344,000 for the
      same
      period last year primarily due to expenses associated with the non-performing
      loans described above.





***Income
      Tax Expense.***  Income
      tax expense was $102,000 for the three months ended December 31, 2006, as
      compared to $82,000 for the three months ended December 31, 2005. The
      effective tax rate


9


was
      27.3%
      and 33.1% for the three month periods ended December 31, 2006 and 2005,
      respectively. The decrease in the effective tax rate between periods was due
      to
      the creation of the Magbank Investment Company in August 2006. The MagBank
      Investment Company meets the requirements to elect New Jersey Investment Company
      status and therefore is subject to a New Jersey state tax rate of 3.6% compared
      with a 9.0% corporate business tax rate for New Jersey corporations.





The
      benefit from the MagBank investment Company was partially offset by an added
      New
      Jersey state tax assessment for privilege periods ending on or after July 1,
      2006, which affects the Company’s year ending September 30, 2007. New Jersey
      taxpayers shall be assessed and must pay a surtax equal to 4% of the amount
      of
      tax liability remaining after applying credits against liability, other than
      credits for installment payments, estimated payments made with a request for
      extension to file a return, or overpayments from a prior privilege period.
      Payments of the surtax are to be made annually as required under N.J.S.A.
      54:10A-15. No credits shall be allowed against the surtax liability except
      for
      credits for installment payments, estimated payments made with a request for
      an
      extension of time for filing a return, or overpayments from prior privilege
      periods.




**New
      Accounting Pronouncements**




In
      July
      2006, FASB issued FASB Interpretation (FIN) 48, “Accounting for Uncertainty in
      Income Taxes: an interpretation of FASB Statement No. 109, “Accounting for
      Income Taxes.”  FIN 48 clarifies FASB 109, to indicate a criterion that an
      individual tax position would have to meet for some or all of the benefit of
      that position to be recognized in an entity’s financial statements.  In
      applying FIN 48, an entity is required to evaluate a tax position using a
      two-step process.  First, the entity should evaluate the position for
      recognition. An entity should recognize the financial statement benefit of
      a tax position if it determines that it is more likely than not that the
      position will be sustained on examination. The term “more likely than not” means
“a likelihood of more than 50 percent.” In assessing whether the
      more-likely-than-not criterion is met, the entity should assume that the tax
      position will be reviewed by the applicable taxing authority. Additionally,
      if past administrative practices and precedents of the taxing authority are
      widely understood, those practices and precedents should be considered in an
      entity’s assessment of the more-likely-than-not criterion. The second step
      is measurement: a tax position that meets the more-likely-than-not recognition
      threshold is measured to determine the amount of benefit to recognize in the
      financial statements. The tax position is measured at the largest amount of
      benefit that is greater than 50 percent likely of being realized upon ultimate
      settlement.  FIN 48 is effective for fiscal years beginning after December
      15, 2006 (as of October 1, 2007 for the Company) and is currently under
      evaluation by the Company to determine the impact on the Company’s consolidated
      financial statements.




In
      September 2006, the FASB issued SFAS No. 157, “Fair Value
      Measurements.” This Statement defines fair value, establishes a framework
      for measuring fair value in accordance with generally accepted accounting
      principles, and expands disclosures about fair value measurements.  This
      Statement applies to other accounting pronouncements that require or permit
      fair
      value measurements, but does not require any new fair value
      measurements. The Statement is effective for fiscal years beginning after
      November 15, 2007 and interim periods within those fiscal years (as of
      September 30, 2008 for the Company). The Company does not expect the
      adoption of SFAS No. 157 to have a material impact on its financial
      statements.




In
      September 2006, FASB issued SFAS No. 158, “Employers’ Accounting for
      Defined Benefit Pension and Other Postretirement Plans,” which requires
      employers to recognize on their balance sheets the funded status of pension
      and
      other postretirement benefit plans.  This requirement is effective as
      of


10




the
      end
      of the first fiscal year ending after December 31, 2006 (as of
      September 30, 2007 for the Company). Statement 158 will also require
      fiscal-year-end measurements of plan assets and benefit obligations, eliminating
      the use of earlier measurement dates currently permissible. The new
      measurement-date requirement will not be effective until fiscal years ending
      after December 15, 2008 (as of September 30, 2009). The Statement
      amends Statements 87, 88, 106 and 132R, but retains most of their measurement
      and disclosure guidance and will not change the amounts recognized in the income
      statement as net periodic benefit cost.  The Company is evaluating the
      effect of SFAS No. 158 on its financial statements.




In
      September 2006, the SEC issued Staff Accounting Bulletin No. 108, “Considering
      the Effects of Prior Year Misstatements when Quantifying Misstatements in
      Current Year Financial Statements” (SAB 108), to address diversity in
      practice in quantifying financial statement misstatements. SAB 108 requires
      that
      registrants use a dual approach in quantifying misstatements based on their
      impact on the financial statements and related disclosures. SAB 108 is effective
      as of September 30, 2007, allowing a one-time transitional cumulative effect
      adjustment to retained earnings for errors (if any) that were not previously
      deemed material, but are material under the guidance in SAB 108.  The
      Company is currently evaluating the impact of adopting SAB 108 on its financial
      statements.








**LIQUIDITY
      AND CAPITAL RESOURCES**




**Liquidity**




The
      Company’s liquidity is a measure of its ability to fund loans, pay withdrawals
      of deposits, and other cash outflows in an efficient, cost-effective
      manner. The Company’s short-term sources of liquidity include maturity,
      repayment and sales of assets, excess cash and cash equivalents, new deposits,
      brokered deposits, other borrowings, and new advances from the Federal Home
      Loan
      Bank. There has been no material adverse change during the three month period
      ended December 31, 2006 in the ability of the Company and its subsidiaries
      to
      fund their operations.




At
      December 31, 2006, the Company had commitments outstanding under letters of
      credit of $450,000,  commitments
      to originate loans of $39.0 million, and commitments to fund undisbursed
      balances of closed loans and unused lines of credit of $35.0 million. There
      has been no material change during the three months ended December 31, 2006
      in
      any of the Company’s other contractual obligations or commitments to make future
      payments.




**Capital
      Requirements**




The
      Bank
      was in compliance with all of its regulatory capital requirements as of December
      31, 2006.




**QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**




**Asset
      and Liability Management**




The
      Company’s market risk exposure is predominately caused by interest rate risk,
      which is defined as the sensitivity of the Company’s current and future
      earnings, the values of its assets and liabilities, and the value of its capital
      to changes in the level of market interest rates. The Company’s balance
      sheet at September 30, 2006 reflected sensitivity to decreases in market
      interest rate movements.


11


In
      an
      effort to reduce the anticipated negative affect on earnings from decreases
      in
      market interest rates, interest rate floors with notional amounts of $15 million
      were held by the Bank at December 31, 2006.





Management
      of the Company believes that there has not been a material adverse change in
      market risk during the three months ended December 31, 2006.










12





Signatures





Pursuant
      to the requirements of the Securities Exchange Act of 1934, the registrant
      has
      duly caused this amended report to be signed on its behalf by the undersigned
      thereunto duly authorized.











MAGYAR
                BANCORP, INC.(Registrant)Date:
                February 8, 2007
            /s/
                Elizabeth E. HanceElizabeth
                E. HancePresident
                and Chief Executive OfficerDate:
                February 8, 2007
            /s/
                Jon R. AnsariJon
                R. AnsariSenior
                Vice President and Chief Financial
                Officer











13