Magyar Bancorp
              News





**400
      Somerset St., New Brunswick, NJ 08901**


**732.342.7600**





**MAGYAR
      BANCORP ANNOUNCES THIRD QUARTER EARNINGS**





**New
      Brunswick, New Jersey,****July
      2****5****, 2007** – Magyar Bancorp
      (NASDAQ: MGYR), parent company of Magyar Bank, reported today net income of
      $194,000 for the three months ended June 30, 2007, compared to a net income
      of
      $276,000 for the three months ended June 30, 2006.  The Company’s net
      income for the nine months ended June 30, 2007 was $625,000, compared to a
      net
      loss of ($231,000) for the nine months ended June 30, 2006.  Included
      in the Company’s results of operations for the nine months ended June 30, 2006
      was a pre-tax charge of $1.5 million recorded as a result of the creation and
      funding of a charitable foundation.





The
      Company reported basic and diluted earnings per share of $0.03 and $0.11 for
      the
      three and nine months ended June 30, 2007. Basic and diluted earnings per share
      for the three months ended June 30, 2006 were $.05. Since the Company completed
      its initial public offering on January 23, 2006, earnings per share were not
      applicable for the nine months ended June 30, 2006.





Operating
      costs associated with two new branch locations, a less favorable interest yield
      curve and an increase in non-performing loans contributed to the $82,000
      decrease in earnings during the three month period ended June 30, 2007 compared
      with the three month period ended June 30, 2006.





Total
      assets increased $6.3 million, or 1.3%, during the three months ended June
      30,
      2007 to $474.4 million. Loans, net of allowance for loan losses increased $1.7
      million to $380.1 million while investment securities increased $4.1 million
      to
      $47.4 million. Total deposits grew $10.7 million to $359.3 million which enabled
      the Bank to reduce borrowings by $4.6 million to $60.5 million during the three
      months ended June 30, 2007.





Net
      interest and dividend income for the three months ended June 30, 2007 and June
      30, 2006 was unchanged at $3.4 million. The Bank’s interest rate spread and
      margin decreased to 2.88% and 3.20%, respectively, for the three-month period
      ended June 30, 2007 from 3.46% and 3.76% for the three months ended June 30,
      2006. The decrease in spread and margin was attributable to non-performing
      loans, which accounted for 25 basis points of the decrease, and the less
      favorable interest yield curve.





Non-performing
      loans decreased $3.9 million during the quarter to $9.0 million at June 30,
      2007. As a result of the March 27, 2007 auction of the Kara Homes, LLC
      properties, three of the four loans held by the bank totaling $3.9 million
      were
      repaid during the month of June. The Bank now owns real estate in the amount
      of
      $1.3 million related to the Bank’s purchase of one of the three loans. As a
      result of the three loan repayments, loan loss reserves were reduced $297,000.
      One loan to Kara Homes, LLC in the amount of $1.2 million remained in loans
      receivable at June 30, 2007.





The
      $5.0
      million in loans made by the Bank to Solomon Dwek, whose real estate holdings
      were forced into bankruptcy in February 2007, remained in non-performing status
      at June 30, 2007.







“Our
      third quarter produced another strong gain in our deposit base, increasing
      3.1%
      for the quarter,” stated Elizabeth E. Hance, President and Chief Executive
      Officer.  “During the quarter, we made significant progress on our
      outstanding credit issues with the sale of three of the four Kara Homes
      properties, enabling us to reduce our non-performing loans.”





**About
      Magyar Bancorp**


Magyar
      Bancorp is the parent company of Magyar Bank, a community bank headquartered
      in
      New Brunswick, New Jersey. Magyar Bank has been serving families and businesses
      in Central New Jersey for over 84 years with a complete line of financial
      products and services.  Today, Magyar operates five branch locations
      in New Brunswick (2), North Brunswick, South Brunswick and Branchburg. Please
      visit us online 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 Kara Homes and Solomon Dwek, 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 SUBSIDIARY****Selected
                Financial Data****(Dollars
                in Thousands, Except Per Share Data)**Three
                Months EndedJune
                30,2007
            
            
            2006(Unaudited)**Income
                Statement Data:**Interest
                and dividend income
            
            $
            7,459
            
            
            $
            6,119Interest
                expense
            
            
            4,050
            
            
            
            2,700Net
                interest and dividend income
            
            
            3,409
            
            
            
            3,419Provision
                for loan losses
            
            
            75
            
            
            
            240Net
                interest and dividend income afterprovision
                for loan losses
            
            
            3,334
            
            
            
            3,179Non-interest
                income
            
            
            466
            
            
            
            210Non-interest
                expense
            
            
            3,524
            
            
            
            2,991Income
                before income tax
            
            
            276
            
            
            
            398Income
                tax expense
            
            
            82
            
            
            
            122Net
                income
            
            $
            194
            
            
            $
            276**Per
                Share Data:**Basic
                earnings per share
            
            $
            0.03
            
            
            $
            0.05Diluted
                earnings per share
            
            $
            0.03
            
            
            $
            0.05Book
                value per share
            
            $
            8.04
            
            
            $
            8.14**Selected
                Ratios:**Return
                on average assets
            
            
            0.17
            %
            
            
            0.27
            %Return
                on average equity
            
            
            1.60
            %
            
            
            2.31
            %Net
                interest margin
            
            
            3.20
            %
            
            
            3.76
            %










At
                  or For the Period EndedJune
                  30, 2007
              
              
              September
                  30, 2006(Unaudited)**Balance
                  Sheet Data:**Assets
              
              $
              474,423
              
              
              $
              434,204Loans
                  receivable
              
              
              384,183
              
              
              
              351,861Allowance
                  for loan losses
              
              
              4,067
              
              
              
              3,892Investment
                  securities - available for sale, at fair value
              
              
              28,157
              
              
              
              18,169Investment
                  securities - held to maturity, at cost
              
              
              19,201
              
              
              
              23,895Deposits
              
              
              359,254
              
              
              
              325,602Borrowings
              
              
              60,484
              
              
              
              52,996Shareholders'
                  Equity
              
              
              47,633
              
              
              
              48,212**Asset
                  Quality Data:**Non-performing
                  loans
              
              $
              8,998
              
              
              $
              7,400REO
                  property
              
              
              1,283
              
              
              
              -Allowance
                  for loan losses to total loans receivable
              
              
              1.06
              %
              
              
              1.11
              %Non-performing
                  loans to total loans receivable
              
              
              2.34
              %
              
              
              2.10
              %Allowance
                  for loan losses to non-performing loans
              
              
              45.20
              %
              
              
              52.59
              %