**000-51726**

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

| Class                                        | Outstanding                at August 10, 2007 |
|----------------------------------------------|----------------------------------------------------|
| Common                Stock, $0.01 Par Value | 5,831,642                                          |

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f

PART      I. FINANCIAL INFORMATION

|                                      |                                                                                          | Page                Number |
|-------------------------------------------|-----------------------------------------------------------------------------------------------|----------------------------|
|                                      |                                                                                          |                       |
| Item                1.                    | Financial                Statements                                                           | 1                          |
| Item                2.                    | Management’s                Discussion and Analysis or Plan of                Operation | 12                         |
| Item                3.                    | Controls                and Procedures                                                        | 24                         |
|                                      |                                                                                          |                       |
| PART                II. OTHER INFORMATION |
|                                      |                                                                                          |                       |
| Item                1.                    | Legal                Proceedings                                                              | 25                         |
| Item                2.                    | Unregistered                Sales of Equity Securities and Use of                Proceeds     | 25                         |
| Item                3.                    | Defaults                Upon Senior Securities                                                | 25                         |
| Item                4.                    | Submission                of Matters to a Vote of Security                Holders             | 26                         |
| Item                5.                    | Other                Information                                                              | 26                         |
| Item                6.                    | Exhibits                                                                                      | 26                         |
|                                      |                                                                                          |                       |
| Signature                Pages            |                                                                                          | 27                         |

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*Table          of Contents*

FINANCIAL INFORMATION

e

| **MAGYAR                BANCORP, INC. AND SUBSIDIARY**                                            |
|---------------------------------------------------------------------------------------------------------------------------------|
| Consolidated                Balance Sheets                                                        |
| (In                Thousands, Except Share Data)                                                  |
|                                                                                                                            |   | **June                30,** |   |   | **September                30,** |   |
|                                                                                                                            |   | **2007** |   |   | **2006** |   |
|                                                                                                                            |   | (Unaudited) |   |   |   |   |
| **Assets**                                                                                                                      |   |   |   |   |   |   |
| Cash                                                                                                                            |   | $ | 5,661 |   |   | $ | 5,912 |   |
| Interest                earning deposits with banks                                                                             |   |   | 191 |   |   |   | 105 |   |
| Total                cash and cash equivalents                                                                                  |   |   | 5,852 |   |   |   | 6,017 |   |
|                                                                                                                            |   |   |   |   |   |   |   |   |
| Investment                securities - available for sale, at fair value                                                        |   |   | 28,157 |   |   |   | 18,169 |   |
| Investment                securities - held to maturity, at amortized cost (fair value of $18,808                and            |   |   |   |   |   |   |   |   |
| $23,358                at June 30, 2007 and September 30, 2006, respectively)                                                   |   |   | 19,201 |   |   |   | 23,895 |   |
|                                                                                                                            |   |   |   |   |   |   |   |   |
| Federal                Home Loan Bank of New York stock, at cost                                                                |   |   | 3,247 |   |   |   | 2,870 |   |
| Loans                receivable, net of allowance for loan losses of $4,067 and                $3,892                           |   |   |   |   |   |   |   |   |
| at                June 30, 2007 and September 30, 2006, respectively                                                            |   |   | 380,116 |   |   |   | 347,969 |   |
| Bank                owned life insurance                                                                                        |   |   | 9,879 |   |   |   | 9,606 |   |
| Accrued                interest receivable                                                                                      |   |   | 2,477 |   |   |   | 2,218 |   |
| Premises                and equipment, net                                                                                      |   |   | 22,635 |   |   |   | 21,690 |   |
| Other                real estate                                                                                                |   |   | 1,283 |   |   |   | - |   |
| Other                assets                                                                                                     |   |   | 1,576 |   |   |   | 1,770 |   |
|                                                                                                                            |   |   |   |   |   |   |   |   |
| Total                assets                                                                                                     |   | $ | 474,423 |   |   | $ | 434,204 |   |
| **Liabilities                and Stockholders' Equity**                                                                         |   |   |   |   |   |   |   |   |
| Liabilities                                                                                                                     |   |   |   |   |   |   |   |   |
| Deposits                                                                                                                        |   | $ | 359,254 |   |   | $ | 325,602 |   |
| Escrowed                funds                                                                                                   |   |   | 1,289 |   |   |   | 1,158 |   |
| Federal                Home Loan Bank of New York advances                                                                      |   |   | 54,484 |   |   |   | 47,996 |   |
| Securities                sold under agreements to repurchase                                                                   |   |   | 6,000 |   |   |   | 5,000 |   |
| Accrued                interest payable                                                                                         |   |   | 1,027 |   |   |   | 1,141 |   |
| Accounts                payable and other liabilities                                                                           |   |   | 4,736 |   |   |   | 5,095 |   |
|                                                                                                                            |   |   |   |   |   |   |   |   |
| Total                liabilities                                                                                                |   |   | 426,790 |   |   |   | 385,992 |   |
|                                                                                                                            |   |   |   |   |   |   |   |   |
| Stockholders'                equity                                                                                             |   |   |   |   |   |   |   |   |
| Preferred                stock: $.01 Par Value, 1,000,000 shares authorized; no shares                issued                    |   |   | - |   |   |   | - |   |
| Common                stock: $.01 Par Value, 8,000,000 shares authorized; 5,923,742                issued                       |   |   |   |   |   |   |   |   |
| at                June 30, 2007 and September 30, 2006.                                                                         |   |   | 59 |   |   |   | 59 |   |
| Additional                paid-in capital                                                                                       |   |   | 25,980 |   |   |   | 25,786 |   |
| Treasury                stock; 92,100 shares at June 30, 2007                                                                   |   |   | (1,360 | ) |   |   | - |   |
| Unearned                shares held by Employee Stock Ownership Plan                                                            |   |   | (1,918 | ) |   |   | (2,133 | ) |
| Retained                earnings                                                                                                |   |   | 25,626 |   |   |   | 25,001 |   |
| Accumulated                other comprehensive loss, net                                                                        |   |   | (754 | ) |   |   | (501 | ) |
|                                                                                                                            |   |   |   |   |   |   |   |   |
| Total                stockholders' equity                                                                                       |   |   | 47,633 |   |   |   | 48,212 |   |
| Total                liabilities and stockholders' equity                                                                       |   | $ | 474,423 |   |   | $ | 434,204 |   |
|                                                                                                                            |   |   |   |   |   |   |   |   |
| The                accompanying notes are an integral part of these statements.         |
|                                                                                                                            |   |   |   |   |   |   |   |   |

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*Table          of Contents*

| **MAGYAR                  BANCORP, INC. AND SUBSIDIARY**                                                      |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Consolidated                  Statements of Operations                                              |
| (In                  Thousands, Except Per Share Data)                                              |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                            |   | For                  the Three Months |   |   | For                  the Nine Months |   |
|                                                                                                                                                            |   | Ended                  June 30, |   |   | Ended                  June 30, |   |
|                                                                                                                                                            |   | 2007 |   |   | 2006 |   |   | 2007 |   |   | 2006 |   |
|                                                                                                                                                            |   | (Unaudited)          |   |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                  and dividend income                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans,                  including fees                                                                                                                          |   | $ | 6,923 |   |   | $ | 5,624 |   |   | $ | 20,120 |   |   | $ | 15,267 |   |
| Investment                  securities                                                                                                                          |   |   | 468 |   |   |   | 465 |   |   |   | 1,375 |   |   |   | 1,530 |   |
| Federal                  Home Loan Bank of New York stock                                                                                                       |   |   | 68 |   |   |   | 30 |   |   |   | 168 |   |   |   | 84 |   |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  interest and dividend income                                                                                                             |   |   | 7,459 |   |   |   | 6,119 |   |   |   | 21,663 |   |   |   | 16,881 |   |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                  expense                                                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                                                                                                                        |   |   | 3,218 |   |   |   | 2,242 |   |   |   | 9,198 |   |   |   | 5,871 |   |
| Borrowed                  money                                                                                                                                 |   |   | 832 |   |   |   | 458 |   |   |   | 2,200 |   |   |   | 1,391 |   |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  interest expense                                                                                                                         |   |   | 4,050 |   |   |   | 2,700 |   |   |   | 11,398 |   |   |   | 7,262 |   |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  interest and dividend income                                                                                                               |   |   | 3,409 |   |   |   | 3,419 |   |   |   | 10,265 |   |   |   | 9,619 |   |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Provision                  for loan losses                                                                                                                      |   |   | 75 |   |   |   | 240 |   |   |   | 352 |   |   |   | 600 |   |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  interest and dividend income after                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| provision                  for loan losses                                                                                                                      |   |   | 3,334 |   |   |   | 3,179 |   |   |   | 9,913 |   |   |   | 9,019 |   |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                  income                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Service                  charges                                                                                                                                |   |   | 354 |   |   |   | 206 |   |   |   | 763 |   |   |   | 571 |   |
| Other                  operating income                                                                                                                         |   |   | 107 |   |   |   | 99 |   |   |   | 339 |   |   |   | 237 |   |
| Gains                  on sales of loans                                                                                                                        |   |   | 5 |   |   |   | 9 |   |   |   | 17 |   |   |   | 9 |   |
| Losses                  on the sales of investment securities                                                                                                   |   |   | - |   |   |   | (104 | ) |   |   | - |   |   |   | (104 | ) |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  other income                                                                                                                             |   |   | 466 |   |   |   | 210 |   |   |   | 1,119 |   |   |   | 713 |   |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                  expenses                                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Compensation                  and employee benefits                                                                                                             |   |   | 2,072 |   |   |   | 1,825 |   |   |   | 5,881 |   |   |   | 5,183 |   |
| Occupancy                  expenses                                                                                                                             |   |   | 647 |   |   |   | 436 |   |   |   | 1,855 |   |   |   | 1,347 |   |
| Advertising                                                                                                                                                     |   |   | 82 |   |   |   | 58 |   |   |   | 226 |   |   |   | 263 |   |
| Professional                  fees                                                                                                                              |   |   | 169 |   |   |   | 180 |   |   |   | 452 |   |   |   | 518 |   |
| Service                  fees                                                                                                                                   |   |   | 123 |   |   |   | 112 |   |   |   | 372 |   |   |   | 329 |   |
| Contribution                  to charitable foundation                                                                                                          |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,547 |   |
| Other                  expenses                                                                                                                                 |   |   | 431 |   |   |   | 380 |   |   |   | 1,390 |   |   |   | 1,060 |   |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  other expenses                                                                                                                           |   |   | 3,524 |   |   |   | 2,991 |   |   |   | 10,176 |   |   |   | 10,247 |   |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                  (loss) before income tax expense                                                                                                        |   |   | 276 |   |   |   | 398 |   |   |   | 856 |   |   |   | (515 | ) |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                  tax expense (benefit)                                                                                                                   |   |   | 82 |   |   |   | 122 |   |   |   | 231 |   |   |   | (284 | ) |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  income (loss)                                                                                                                              |   | $ | 194 |   |   | $ | 276 |   |   | $ | 625 |   |   | $ | (231 | ) |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings                  (loss) per share- basic and diluted                                                                                                   |   | $ | 0.03 |   |   | $ | 0.05 |   |   | $ | 0.11 |   |   | N/A |   |
|                                                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| The                  accompanying notes are an integral part of these statements.              |

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*Table          of Contents*

| **MAGYAR                BANCORP, INC. AND SUBSIDIARY**                                                                                                                                                                              |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| Consolidated                Statement of Changes in Stockholders' Equity                                                                                                                                                            |   |
| Nine                months ended June 30, 2007                                                                                                                                                                                      |   |
|  (In                Thousands, Except for Share Amounts)                                                                                                                                                                       |   |
| (Unaudited)                                                                                                                                                                                                                         |   |
|                                                                                                                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Accumulated |   |   |   |   |
|                                                                                                                                                                                                                                |   | Common                Stock |   |   | Additional |   |   |   |   |   |   |   |   |   |   |   | Other |   |   |   |   |
|                                                                                                                                                                                                                                |   | Shares |   |   | Par |   |   | Paid-In |   |   | Treasury |   |   | Unearned |   |   | Retained |   |  Comprehensive |   |   |
|                                                                                                                                                                                                                                |   | Issued |   |   | Value |   |   | Capital |   |   | Stock |   |   | ESOP                Shares |   |   | Earnings |   |   | Income/(Loss) |   |   | Total |   |
|                                                                                                                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Balance,                September 30, 2006                                                                                                                                                                                    |   |   | 5,923,742 |   |   | $ | 59 |   |   | $ | 25,786 |   |   | $ | - |   |   | $ | (2,133 | ) |   | $ | 25,001 |   |   | $ | (501 | ) |   | $ | 48,212 |   |
|                                                                                                                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Net                income                                                                                                                                                                                                     |   |   | - |   |   |   | - |   |   |   | - |   |   |   |   |   |   |   | - |   |   |   | 625 |   |   |   | - |   |   |   | 625 |   |
|  Other                comprehensive loss, net of                                                                                                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  reclassification                adjustments and taxes                                                                                                                                                               | -      |   |   |   | - |   |   |   | - |   |   |   |   |   |   |   | - |   |   |   | - |   |   |   | (253 | ) |   |   | (253 | ) |
|                                                                                                                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Total                comprehensive income                                                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 372 |   |
|  Treasury                stock, at cost (92,100 shares)                                                                                                                                                                   |   | - |   |   |   |   |   |   |   |   |   |   |   | (1,360 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (1,360 | ) |
|  Allocation                of ESOP stock                                                                                                                                                                                       |   |   | - |   |   |   | - |   |   |   | 40 |   |   |   |   |   |   |   | 215 |   |   |   | - |   |   |   | - |   |   |   | 255 |   |
|  Compensation                cost for stock options                                                                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  and                restricted stock                                                                                                                                                                                           |   |   | - |   |   |   | - |   |   |   | 154 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 154 |   |
|                                                                                                                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Balance,                June 30, 2007                                                                                                                                                                                         |   |   | 5,923,742 |   |   | $ | 59 |   |   | $ | 25,980 |   |   | $ | (1,360 | ) |   | $ | (1,918 | ) |   | $ | 25,626 |   |   | $ | (754 | ) |   | $ | 47,633 |   |
|                                                                                                                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| The                accompanying notes are an integral part of this statement.                          |

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*Table          of Contents*

| **MAGYAR                  BANCORP, INC. AND SUBSIDIARY**                                            |
|-----------------------------------------------------------------------------------------------------------------------------------|
| Consolidated                  Statements of Cash Flows                                              |
| (In                  Thousands)                                                                     |
|                                                                                                                              |   | For                  the Nine Months Ended |   |
|                                                                                                                              |   | June                  30,    |   |
|                                                                                                                              |   | 2007 |   |   | 2006 |   |
|                                                                                                                              |   | (Unaudited) |   |
| Operating                  activities                                                                                             |   |   |   |   |   |   |
| Net                  income (loss)                                                                                                |   | $ | 625 |   |   | $ | (231 | ) |
| Adjustment                  to reconcile net income (loss) to net cash provided by                                                |   |   |   |   |   |   |   |   |
| operating                  activities                                                                                             |   |   |   |   |   |   |   |   |
| Contribution                  of stock to charitable foundation                                                                   |   |   | - |   |   |   | 1,047 |   |
| Depreciation                  expense                                                                                             |   |   | 858 |   |   |   | 742 |   |
| Premium                  amortization on investment securities, net                                                               |   |   | 115 |   |   |   | 126 |   |
| Proceeds                  from mortgage loan sales                                                                                |   |   | - |   |   |   | 2,817 |   |
| Provision                  for loan losses                                                                                        |   |   | 352 |   |   |   | 600 |   |
| Gains                  on sale of loans                                                                                           |   |   | (17 | ) |   |   | (9 | ) |
| Losses                  on sale of investment securities                                                                          |   |   | - |   |   |   | 104 |   |
| ESOP                  and share-based compensation expense                                                                        |   |   | 409 |   |   |   | 122 |   |
| Increase                  in accrued interest receivable                                                                          |   |   | (259 | ) |   |   | (460 | ) |
| Increase                  in bank owned life insurance                                                                            |   |   | (273 | ) |   |   | (190 | ) |
| (Increase)                  decrease in other assets                                                                              |   |   | (34 | ) |   |   | 3,898 |   |
| (Decrease)                  increase in accrued interest payable                                                                  |   |   | (114 | ) |   |   | 656 |   |
| Decrease                  in accounts payable and other liabilities                                                               |   |   | (359 | ) |   |   | (523 | ) |
|                                                                                                                              |   |   |   |   |   |   |   |   |
| Net                  cash provided by operating activities                                                                        |   |   | 1,303 |   |   |   | 8,699 |   |
|                                                                                                                              |   |   |   |   |   |   |   |   |
| Investing                  activities                                                                                             |   |   |   |   |   |   |   |   |
| Net                  increase in loans receivable                                                                                 |   |   | (33,765 | ) |   |   | (60,392 | ) |
| Purchases                  of investment securities available for sale                                                            |   |   | (13,772 | ) |   |   | (5,488 | ) |
| Sales                  of investment securities available for sale                                                                |   |   | 142 |   |   |   | 3,896 |   |
| Proceeds                  from maturities/calls of investment securities held to                  maturity                        |   |   | - |   |   |   | 2,010 |   |
| Proceeds                  from maturities/calls of investment securities available for                  sale                      |   |   | - |   |   |   | 2,518 |   |
| Principal                  repayments on investment securities held to maturity                                                   |   |   | 4,642 |   |   |   | 4,801 |   |
| Principal                  repayments on investment securities available for sale                                                 |   |   | 3,506 |   |   |   | 2,554 |   |
| Purchases                  of bank owned life insurance                                                                           |   |   | - |   |   |   | (3,570 | ) |
| Purchases                  of premises and equipment                                                                              |   |   | (1,803 | ) |   |   | (2,626 | ) |
| (Purchase)                  redemption of Federal Home Loan Bank of New York stock                                                |   |   | (377 | ) |   |   | 248 |   |
|                                                                                                                              |   |   |   |   |   |   |   |   |
| Net                  cash used in investing activities                                                                            |   |   | (41,427 | ) |   |   | (56,049 | ) |
|                                                                                                                              |   |   |   |   |   |   |   |   |
| Financing                  activities                                                                                             |   |   |   |   |   |   |   |   |
| Net                  increase in deposits                                                                                         |   |   | 33,652 |   |   |   | 40,503 |   |
| Net                  proceeds from issurance of common stock                                                                      |   |   | - |   |   |   | 24,782 |   |
| Net                  purchase of common stock for ESOP                                                                            |   |   | - |   |   |   | (2,306 | ) |
| Stock                  compensation tax benefit                                                                                   |   |   | 48 |   |   |   | - |   |
| Net                  increase in escrowed funds                                                                                   |   |   | 131 |   |   |   | 119 |   |
| Proceeds                  from long-term Federal Home Loan Bank of New York advances                                              |   |   | 6,642 |   |   |   | - |   |
| Repayments                  of long-term Federal Home Loan Bank of New York advances                                              |   |   | (6,329 | ) |   |   | (1,458 | ) |
| Proceeds                  of short-term Federal Home Loan Bank of New York advances                                               |   |   | 6,175 |   |   |   | - |   |
| Repayments                  of short-term Federal Home Loan Bank of New York advances                                             |   |   | - |   |   |   | (4,400 | ) |
| Proceeds                  (repayments) of securities sold under agreements to                  repurchase                         |   |   | 3,000 |   |   |   | (5,000 | ) |
| Repayments                  of loans payable                                                                                      |   |   | (2,000 | ) |   |   | (2,497 | ) |
| Purchase                  of treasury stock                                                                                       |   |   | (1,360 | ) |   |   | - |   |
| Net                  cash provided by financing activities                                                                        |   |   | 39,959 |   |   |   | 49,743 |   |
|                                                                                                                              |   |   |   |   |   |   |   |   |
| Net                  (decrease) increase in cash and cash equivalents                                                             |   |   | (165 | ) |   |   | 2,393 |   |
|                                                                                                                              |   |   |   |   |   |   |   |   |
| Cash                  and cash equivalents, beginning of period                                                                   |   |   | 6,017 |   |   |   | 3,209 |   |
|                                                                                                                              |   |   |   |   |   |   |   |   |
| Cash                  and cash equivalents, end of period                                                                         |   | $ | 5,852 |   |   | $ | 5,602 |   |
|                                                                                                                              |   |   |   |   |   |   |   |   |
| Supplemental                  disclosures of cash flow information                                                                |   |   |   |   |   |   |   |   |
| Cash                  paid for                                                                                                    |   |   |   |   |   |   |   |   |
| Interest                                                                                                                          |   | $ | 11,512 |   |   | $ | 6,606 |   |
| Income                  taxes                                                                                                     |   | $ | 510 |   |   | $ | 23 |   |
|                                                                                                                              |   |   |   |   |   |   |   |   |
| The                  accompanying notes are an integral part of these statements.         |

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*Table          of Contents*

**MAGYAR      BANCORP, INC. AND SUBSIDIARY**

|  |   | Magyar                Bancorp, Inc. (the “Company”) was organized on January 23, 2006 to serve                as the mid-tier stock holding company of Magyar Bank (the “Bank”). The                Bank’s corporate structure was changed from a mutual savings bank to the                mutual holding company form of ownership. Magyar Bank became a New                Jersey-chartered stock savings bank subsidiary of Magyar Bancorp,                Inc., a                Delaware-chartered holding company. Magyar Bancorp, Inc. owns 100%                of the                outstanding shares of common stock of Magyar Bank. Magyar Bancorp,                Inc. is                a majority-owned subsidiary of Magyar Bancorp, MHC, and a New                Jersey-chartered mutual holding                company. |
|--|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  |   | Magyar                Bancorp, MHC owns 3,200,450 shares, or 54.03%, of the issued shares                of                common stock of Magyar Bancorp, Inc. The remaining 2,723,292 shares,                or                45.97%, were sold to public stockholders, including a charitable                foundation organized by the Bank. The gross offering proceeds from                the                sale were $27,233,000 and the net proceeds were $25,829,000 (including                $1,047,000 in stock contributed to the charitable foundation). So                long as                Magyar Bancorp, MHC exists, it will be required to own a majority                of the                voting stock of Magyar Bancorp,                Inc. |
|--|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  |   | Three                wholly owned, non-bank subsidiaries exist under Magyar Bank. Magyar                Service Corporation, a New Jersey corporation, operates under the                name                Magyar Financial Services and receives commissions from annuity and                life                insurance sales referred to a licensed, non-bank financial planner.                Hungaria Urban Renewal, LLC, a Delaware corporation, is a real-estate                holding company whose only holding is Magyar Bank’s corporate headquarters                in New Brunswick. MagBank Investment Company, a New Jersey corporation,                operates as an investment holding company. 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. |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  |   | Magyar                Bank is subject to regulations issued by the New Jersey Department                of                Banking and Insurance and the Federal Deposit Insurance Corporation.                Magyar Bancorp, Inc. is subject to comprehensive regulation and                examination by the Board of Governors of the Federal Reserve System                and                the New Jersey Department of Banking and                Insurance. |
|--|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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*Table          of Contents*

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*Table          of Contents*

| Expected                  life  | 6.5                  years |
|---------------------------------|----------------------------|
| Discount                  rate  | 4.51%                      |
| Volatility                      | 16.67%                     |
| Dividend                  yield | 0.71%                      |

|                                           |   |                           |    |   |                            |   | Weighted                          |   |                             |   |
|------------------------------------------------|--------|--------------------------------|---------|--------|---------------------------------|--------|-----------------------------------|--------|----------------------------------|--------|
|                                           |   |                           |    |   | Weighted                        |   | Average                           |   | Aggregate                        |   |
|                                           |   | Number                  of     |    |   | Average                         |   | Remaining                         |   | Intrinsic                        |   |
|                                           |   | Stock                  Options |    |   | Exercise                  Price |   | Contractual                  Life |   | Value                            |   |
|                                           |   |                           |    |   |                            |   |                              |   |                             |   |
| Balance                  at September 30, 2006 |   |                           | -       |   |                            |   | -                                 |   |                             |   |   |   |
| Granted                                        |   |                           | 217,826 |   |                            | $      | 14.61                             |   |                             |   |   |   |
| Exercised                                      |   |                           | -       |   |                            |   | -                                 |   |                             |   |   |   |
| Forfeited                                      |   |                           | -       |   |                            |   | -                                 |   |                             |   |   |   |
| Balance                  at June 30, 2007      |   |                           | 217,826 |   |                            | $      | 14.61                             |   |  9.7                  years |   | $ | - |   |
|                                           |   |                           |    |   |                            |   |                              |   |                             |   |   |   |   |
| Exercisable                  at June 30, 2007  |   |                           | -       |   |                            |   | -                                 |   |  N/A                        |   | N/A |   |

|                                           |   |                           |    |   |                        |   |
|------------------------------------------------|--------|--------------------------------|---------|--------|-----------------------------|--------|
|                                           |   |                           |    |   | Weighted                    |   |
|                                           |   |                           |    |   | Average                     |   |
|                                           |   | Number                  of     |    |   | Grant                  Date |   |
|                                           |   | Stock                  Options |    |   | Fair                  Value |   |
|                                           |   |                           |    |   |                        |   |
| Balance                  at September 30, 2006 |   |                           | -       |   |                        |   | - |   |
| Granted                                        |   |                           | 217,826 |   |                        | $      | 3.91 |   |
| Exercised                                      |   |                           | -       |   |                        |   | - |   |
| Forfeited                                      |   |                           | -       |   |                        |   | - |   |
| Balance                  at June 30, 2007      |   |                           | 217,826 |   |                        | $      | 3.91 |   |

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*Table          of Contents*

|                                           |   |                          |    |   | Weighted                    |   |
|------------------------------------------------|--------|-------------------------------|---------|--------|-----------------------------|--------|
|                                           |   |                          |    |   | Average                     |   |
|                                           |   | Number                  of    |    |   | Grant                  Date |   |
|                                           |   | Stock                  Awards |    |   | Fair                  Value |   |
|                                           |   |                          |    |   |                        |   |
| Balance                  at September 30, 2006 |   |                          | -       |   |                        |   | - |   |
| Granted                                        |   |                          | 103,479 |   |                        | $      | 14.55 |   |
| Forfeited                                      |   |                          | -       |   |                        |   | - |   |
| Balance                  at June 30, 2007      |   |                          | 103,479 |   |                        | $      | 14.55 |   |

|                                            |   |                      |    |
|-------------------------------------------------|--------|---------------------------|---------|
|                                            |   | June                  30, |    |
|                                            |   | 2007                      |    |
|                                            |   |                      |    |
| Shares                  released for allocation |   |                      | 17,936  |   |
| Unreleased                  shares              |   |                      | 199,927 |   |
|                                            |   |                      |    |   |
| Total                  ESOP shares              |   |                      | 217,863 |   |

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*Table            of Contents*

|                                                    |   | Three                  Months Ended June 30, |   |
|---------------------------------------------------------|--------|----------------------------------------------|--------|
|                                                    |   | 2007           |   |   | 2006       |   |
|                                                    |   |                                         |   |   |   |   |   | Net                  of |   |   |   |   |   |   |   |   | Net                  of |   |
|                                                    |   | Before                  Tax                  |   |   | Tax |   |   | Tax |   |   | Before                  Tax |   |   | Tax |   |   | Tax |   |
|                                                    |   | Amount                                       |   |   | Benefit |   |   | Amount |   |   | Amount |   |   | Benefit |   |   | Amount |   |
|                                                    |   | (Unaudited)                                  |
| Unrealized                  holding gains (losses)      |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| arising                  during period on:              |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                    |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Available-for-sale                  investments         |   | $                                            | (250   | ) |   | $ | 76 |   |   | $ | (174 | ) |   | $ | (3 | ) |   | $ | 1 |   |   | $ | (2 | ) |
|                                                    |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Less                  reclassification adjustment for   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| losses                  realized in net income          |   |                                         | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                    |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Minimum                  pension liability              |   |                                         | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                    |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                  rate derivatives              |   |                                         | (208   | ) |   |   | 83 |   |   |   | (125 | ) |   |   | (20 | ) |   |   | - |   |   |   | (20 | ) |
|                                                    |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                  comprehensive income (loss), net |   | $                                            | (458   | ) |   | $ | 159 |   |   | $ | (299 | ) |   | $ | (23 | ) |   | $ | 1 |   |   | $ | (22 | ) |

|                                                    |   |                                                                                                                                        |   |   |                                                 |   |   |   |   |                    |                        |   |   |    |   |   |   |   |   |   |                    |   |   |   |
|---------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------------------------------------------------|--------|--------|--------|--------|-------------------------|-----------------------------|--------|--------|---------|--------|--------|--------|--------|--------|--------|-------------------------|--------|--------|--------|
|                                                    |   |                                                                                                                                        |   |   |                                                 |   |   |   |   |                    |                        |   |   |    |   |   |   |   |   |   |                    |   |   |   |
|                                                    |   |                                                                                                                                        |   |   |                                                 |   |   |   |   |                    |                        |   |   |    |   |   |   |   |   |   |                    |   |   |   |
|                                                    |   |                                                                                                                                        |   |   |                                                 |   |   |   |   |                    |                        |   |   |    |   |   |   |   |   |   |                    |   |   |   |
|                                                    |   | Nine                  Months Ended June 30,                 |   |
|                                                    |   | 2007                                                                                                |   |   | 2006         |   |
|                                                    |   |                                                                                                                                        |   |   |                                                 |   |   |   |   | Net                  of |                        |   |   |    |   |   |   |   |   |   | Net                  of |   |
|                                                    |   | Before                  Tax                                                                                                                 |   |   | Tax                                                  |   |   | Tax    |   |                    | Before                  Tax |   |   | Tax     |   |   | Tax    |   |
|                                                    |   | Amount                                                                                                                                      |   |   | Benefit                                              |   |   | Amount |   |                    | Amount                      |   |   | Benefit |   |   | Amount |   |
|                                                    |   | (Unaudited)                        |
| Unrealized                  holding gains (losses)      |   |                                                                                                                                        |   |   |                                                 |   |   |   |   |                    |                        |   |   |    |   |   |   |   |   |   |                    |   |   |   |
| arising                  during period on:              |   |                                                                                                                                        |   |   |                                                 |   |   |   |   |                    |                        |   |   |    |   |   |   |   |   |   |                    |   |   |   |
|                                                    |   |                                                                                                                                        |   |   |                                                 |   |   |   |   |                    |                        |   |   |    |   |   |   |   |   |   |                    |   |   |   |
| Available-for-sale                  investments         |   | $                                                                                                                                           | (73    | )      |                                                 | $      | 13     |   |   | $                       | (61                         | )      |   | $       | (44    | )      |   | $      | 330    |   |                    | $      | 286    |   |
|                                                    |   |                                                                                                                                        |   |   |                                                 |   |   |   |   |                    |                        |   |   |    |   |   |   |   |   |   |                    |   |   |   |
| Less                  reclassification adjustment for   |   |                                                                                                                                        |   |   |                                                 |   |   |   |   |                    |                        |   |   |    |   |   |   |   |   |   |                    |   |   |   |
| losses                  realized in net income          |   |                                                                                                                                        | -      |   |                                                 |   | -      |   |   |                    | -                           |   |   |    | -      |   |   |   | -      |   |                    |   | -      |   |
|                                                    |   |                                                                                                                                        |   |   |                                                 |   |   |   |   |                    |                        |   |   |    |   |   |   |   |   |   |                    |   |   |   |
| Minimum                  pension liability              |   |                                                                                                                                        | -      |   |                                                 |   | -      |   |   |                    | -                           |   |   |    | (650   | )      |   |   | -      |   |                    |   | (650   | )      |
|                                                    |   |                                                                                                                                        |   |   |                                                 |   |   |   |   |                    |                        |   |   |    |   |   |   |   |   |   |                    |   |   |   |
| Interest                  rate derivatives              |   |                                                                                                                                        | (223   | )      |                                                 |   | 30     |   |   |                    | (193                        | )      |   |    | (70    | )      |   |   | -      |   |                    |   | (70    | )      |
|                                                    |   |                                                                                                                                        |   |   |                                                 |   |   |   |   |                    |                        |   |   |    |   |   |   |   |   |   |                    |   |   |   |
| Other                  comprehensive income (loss), net |   | $                                                                                                                                           | (296   | )      |                                                 | $      | 43     |   |   | $                       | (254                        | )      |   | $       | (764   | )      |   | $      | 330    |   |                    | $      | (434   | )      |

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*Table          of Contents*

|                                                    |   |                                        |   |   |                                             |   |   |      |   |   |   |   |
|---------------------------------------------------------|--------|---------------------------------------------|--------|--------|--------------------------------------------------|--------|--------|-----------|--------|--------|--------|--------|
|                                                    |   | June                  30,    |   |   | September                  30,    |   |
|                                                    |   | 2007                         |   |   | 2006                              |   |
|                                                    |   | Amortized                                   |   |   | Fair                                             |   |   | Amortized |   |   | Fair   |   |
|                                                    |   | Cost                                        |   |   | Value                                            |   |   | Cost      |   |   | Value  |   |
|                                                    |   |  (Unaudited)            |   |   |                                             |   |   |      |   |
| Securities                  available for sale:         |   |                                        |   |   |                                             |   |   |      |   |   |   |   |
| U.S.                  government and agency obligations |   | $                                           | -      |   |                                             | $      | -      |      |   | $      | -      |   |   | $ | - |   |
| Municipal                  bonds                        |   |                                        | 3,215  |   |                                             |   | 3,163  |      |   |   | 2,049  |   |   |   | 2,066 |   |
| Equity                  securities                      |   |                                        | -      |   |                                             |   | -      |      |   |   | 142    |   |   |   | 142 |   |
| Mortgage-backed                  securities             |   |                                        | 25,295 |   |                                             |   | 24,994 |      |   |   | 16,258 |   |   |   | 15,961 |   |
|                                                    |   |                                        |   |   |                                             |   |   |      |   |   |   |   |   |   |   |   |
| Total                  securities available for sale    |   | $                                           | 28,510 |   |                                             | $      | 28,157 |      |   | $      | 18,449 |   |   | $ | 18,169 |   |
|                                                    |   |                                        |   |   |                                             |   |   |      |   |   |   |   |   |   |   |   |
| Securities                  held to maturity:           |   |                                        |   |   |                                             |   |   |      |   |   |   |   |   |   |   |   |
| U.S.                  government and agency obligations |   | $                                           | 2,139  |   |                                             | $      | 2,094  |      |   | $      | 2,157  |   |   | $ | 2,105 |   |
| Municipal                  bonds                        |   |                                        | 137    |   |                                             |   | 143    |      |   |   | 137    |   |   |   | 145 |   |
| Mortgage-backed                  securities             |   |                                        | 16,925 |   |                                             |   | 16,571 |      |   |   | 21,601 |   |   |   | 21,108 |   |
|                                                    |   |                                        |   |   |                                             |   |   |      |   |   |   |   |   |   |   |   |
| Total                  securities held to maturity      |   | $                                           | 19,201 |   |                                             | $      | 18,808 |      |   | $      | 23,895 |   |   | $ | 23,358 |   |

|   | Loans                receivable, net were comprised of the following (in                thousands): |
|--------|-----------------------------------------------------------------------------------------------------|

|                                             |   | June                  30, |    |   | September                  30, |   |
|--------------------------------------------------|--------|---------------------------|---------|--------|--------------------------------|--------|
|                                             |   | 2007                      |    |   | 2006                           |   |
|                                             |   | (Unaudited)               |    |   |                           |   |
|                                             |   |                      |    |   |                           |   |
| One                  -to-four family residential |   | $                         | 146,479 |   |                           | $      | 143,245 |   |
| Commercial                  real estate          |   |                      | 79,700  |   |                           |   | 68,567 |   |
| Construction                                     |   |                      | 100,495 |   |                           |   | 90,342 |   |
| Home                  equity lines of credit     |   |                      | 12,805  |   |                           |   | 10,843 |   |
| Commercial                  business             |   |                      | 28,942  |   |                           |   | 24,510 |   |
| Other                                            |   |                      | 16,006  |   |                           |   | 14,846 |   |
|                                             |   |                      |    |   |                           |   |   |   |
| Total                  loans receivable          |   |                      | 384,427 |   |                           |   | 352,353 |   |
| Deferred                  loan fees              |   |                      | (244    | )      |                           |   | (492 | ) |
| Allowance                  for loan losses       |   |                      | (4,067  | )      |                           |   | (3,892 | ) |
|                                             |   |                      |    |   |                           |   |   |   |
| Total                  loans receivable, net     |   | $                         | 380,116 |   |                           | $      | 347,969 |   |

|   | At                June 30, 2007 and September 30, 2006, non-performing loans had a                total                principal balance of $8,998,000 and $7,400,000, respectively. Unrecorded                interest on the non-performing loans during the nine-month period                ended                June 30, 2007 totaled $591,000. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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*Table          of Contents*

|   | A                summary of deposits by type of account are summarized as follows                (in                thousands): |
|--------|---------------------------------------------------------------------------------------------------------------------------------|

|                                     |   | June                  30, |    |   | September                  30, |   |
|------------------------------------------|--------|---------------------------|---------|--------|--------------------------------|--------|
|                                     |   | 2007                      |    |   | 2006                           |   |
|                                     |   | (Unaudited)               |    |   |                           |   |
|                                     |   |                      |    |   |                           |   |
| Demand                  accounts         |   | $                         | 21,541  |   |                           | $      | 20,491 |   |
| Savings                  accounts        |   |                      | 37,181  |   |                           |   | 43,127 |   |
| NOW                  accounts            |   |                      | 28,952  |   |                           |   | 30,519 |   |
| Money                  market accounts   |   |                      | 76,194  |   |                           |   | 56,107 |   |
| Certificates                  of deposit |   |                      | 167,774 |   |                           |   | 149,811 |   |
| Retirement                  accounts     |   |                      | 27,612  |   |                           |   | 25,547 |   |
|                                     |   |                      |    |   |                           |   |   |   |
|                                     |   | $                         | 359,254 |   |                           | $      | 325,602 |   |

|   | The                Bank is a party to financial instruments with off-balance-sheet risk                in                the normal course of business to meet the financing needs of its                customers. These financial instruments are commitments to extend                credit.                Those instruments involve, to varying degrees, elements of credit                and                interest rate risk in excess of the amounts recognized in the balance                sheets. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                          |   | June                  30, |   |   | September                  30, |   |
|---------------------------------------------------------------|--------|---------------------------|--------|--------|--------------------------------|--------|
|                                                          |   | 2007                      |   |   | 2006                           |   |
|                                                          |   | (Unaudited)               |   |   |                           |   |
|                                                          |   |                      |   |   |                           |   |
| Financial                  instruments whose contract amounts |   |                      |   |   |                           |   |
| represent                  credit risk (in thousands)         |   |                      |   |   |                           |   |
| Unused                  lines of credit                       |   | $                         | 33,173 |   |                           | $      | 30,977 |   |
| Fixed                  rate loan commitments                  |   | $                         | 11,489 |   |                           | $      | 6,499 |   |
| Variable                  rate loan commitments               |   | $                         | 41,488 |   |                           | $      | 32,634 |   |

----

*Table          of Contents*

m

**Forward-Looking      Statements**

**Critical      Accounting Policies**

----

*Table          of Contents*

**Comparison      of Financial Condition at June 30, 2007 and September 30,      2006**

----

*Table          of Contents*

**Average      Balance Sheets for the Three and Nine Months Ended June 30, 2007 and      2006**

----

*Table          of Contents*

----

*Table          of Contents*

| **MAGYAR                BANCORP, INC. AND SUBSIDIARY**                           |
|---------------------------------------------------------------------------------------------------------------------------------------------------|
| Comparative                Average Balance Sheets                 |
| (Dollars                In Thousands)                   |
|                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                              |   | For                the Three Months Ended June 30,       |   |
|                                                                                                                                              |   | 2007       |   |   | 2006       |   |
|                                                                                                                                              |   | AverageBalance |   |   | InterestIncome/Expense |   |   | Yield/Cost |   |   | AverageBalance |   |   | InterestIncome/Expense |   |   | Yield/Cost |   |
|                                                                                                                                              |   | (Unaudited)                |   |
|                                                                                                                                              |   | (Dollars                in thousands)             |   |
| Interest-earning                assets:                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-earning                deposits                                                                                                          |   | $ | 273 |   |   | $ | 3 |   |   |   | 4.61 | % |   | $ | 341 |   |   | $ | 4 |   |   |   | 4.29 | % |
| Loans                receivable, net                                                                                                              |   |   | 379,854 |   |   |   | 6,923 |   |   |   | 7.31 | % |   |   | 314,338 |   |   |   | 5,624 |   |   |   | 7.18 | % |
| Securities                                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                                                                                                           |   |   | 40,357 |   |   |   | 432 |   |   |   | 4.29 | % |   |   | 45,910 |   |   |   | 442 |   |   |   | 3.86 | % |
| Tax-exempt                                                                                                                                        |   |   | 3,321 |   |   |   | 44 |   |   |   | 5.31 | % |   |   | 2,050 |   |   |   | 20 |   |   |   | 3.98 | % |
| FHLB                of NY stock                                                                                                                   |   |   | 3,453 |   |   |   | 68 |   |   |   | 7.90 | % |   |   | 2,208 |   |   |   | 30 |   |   |   | 5.41 | % |
| Total                interest-earning assets                                                                                                      |   |   | 427,258 |   |   |   | 7,470 |   |   |   | 7.01 | % |   |   | 364,847 |   |   |   | 6,119 |   |   |   | 6.73 | % |
| Noninterest-earning                assets                                                                                                         |   |   | 42,155 |   |   |   |   |   |   |   |   |   |   |   | 38,679 |   |   |   |   |   |   |   |   |   |
| Total                assets                                                                                                                       |   | $ | 469,413 |   |   |   |   |   |   |   |   |   |   | $ | 403,526 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing                liabilities:                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings                accounts (1)                                                                                                               |   | $ | 38,212 |   |   |   | 99 |   |   |   | 1.04 | % |   | $ | 51,324 |   |   |   | 159 |   |   |   | 1.24 | % |
| NOW                accounts (2)                                                                                                                   |   |   | 102,383 |   |   |   | 934 |   |   |   | 3.66 | % |   |   | 68,524 |   |   |   | 432 |   |   |   | 2.53 | % |
| Time                deposits (3)                                                                                                                  |   |   | 187,401 |   |   |   | 2,185 |   |   |   | 4.68 | % |   |   | 172,549 |   |   |   | 1,651 |   |   |   | 3.84 | % |
| Total                interest-bearing deposits                                                                                                    |   |   | 327,996 |   |   |   | 3,218 |   |   |   | 3.94 | % |   |   | 292,397 |   |   |   | 2,242 |   |   |   | 3.08 | % |
| Federal                Home Loan Bank borrowings                                                                                                  |   |   | 65,112 |   |   |   | 832 |   |   |   | 5.13 | % |   |   | 38,673 |   |   |   | 458 |   |   |   | 4.75 | % |
| Loan                payable                                                                                                                       |   |   | - |   |   |   | - |   |   |   |   |   |   |   | - |   |   |   | - |   |   |   |   |   |
| Total                interest-bearing liabilities                                                                                                 |   |   | 393,108 |   |   |   | 4,050 |   |   |   | 4.13 | % |   |   | 331,070 |   |   |   | 2,700 |   |   |   | 3.27 | % |
| Noninterest-bearing                liabilities                                                                                                    |   |   | 27,552 |   |   |   |   |   |   |   |   |   |   |   | 24,761 |   |   |   |   |   |   |   |   |   |
| Total                liabilities                                                                                                                  |   |   | 420,660 |   |   |   |   |   |   |   |   |   |   |   | 355,831 |   |   |   |   |   |   |   |   |   |
| Retained                earnings                                                                                                                  |   |   | 48,369 |   |   |   |   |   |   |   |   |   |   |   | 47,695 |   |   |   |   |   |   |   |   |   |
| Total                liabilities and retained earnings                                                                                            |   | $ | 469,029 |   |   |   |   |   |   |   |   |   |   | $ | 403,526 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tax-equivalent                basis adjustment                                                                                                    |   |   |   |   |   |   | (11 | ) |   |   |   |   |   |   |   |   |   |   | - |   |   |   |   |   |
| Net                interest income                                                                                                                |   |   |   |   |   | $ | 3,409 |   |   |   |   |   |   |   |   |   |   | $ | 3,419 |   |   |   |   |   |
| Interest                rate spread                                                                                                               |   |   |   |   |   |   |   |   |   |   | 2.88 | % |   |   |   |   |   |   |   |   |   |   | 3.46 | % |
| Net                interest-earning assets                                                                                                        |   | $ | 34,150 |   |   |   |   |   |   |   |   |   |   | $ | 33,777 |   |   |   |   |   |   |   |   |   |
| Net                interest margin                (4)                                                                                             |   |   |   |   |   |   |   |   |   |   | 3.20 | % |   |   |   |   |   |   |   |   |   |   | 3.76 | % |
| Average                interest-earning assets to average interest-bearing                liabilities                                             |   |   | 108.69 | % |   |   |   |   |   |   |   |   |   |   | 110.20 | % |   |   |   |   |   |   |   |   |
|                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (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              |   |

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*Table          of Contents*

| **MAGYAR                BANCORP, INC. AND SUBSIDIARY**                           |
|---------------------------------------------------------------------------------------------------------------------------------------------------|
| Comparative                Average Balance Sheets                 |
| (Dollars                In Thousands)                   |
|                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                              |   | For                the Nine Months Ended June 30,       |   |
|                                                                                                                                              |   | 2007       |   |   | 2006       |   |
|                                                                                                                                              |   | AverageBalance |   |   | Interest                Income/                Expense |   |   | Yield/                Cost |   |   | Average                Balance |   |   | Interest                Income/                Expense |   |   | Yield/                Cost |   |
|                                                                                                                                              |   | (Unaudited)                |   |
|                                                                                                                                              |   | (Dollars                in thousands)             |   |
| Interest-earning                assets:                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-earning                deposits                                                                                                          |   | $ | 244 |   |   | $ | 9 |   |   |   | 4.81 | % |   | $ | 3,178 |   |   | $ | 101 |   |   |   | 4.23 | % |
| Loans                receivable, net                                                                                                              |   |   | 369,127 |   |   |   | 20,120 |   |   |   | 7.29 | % |   |   | 303,658 |   |   |   | 15,267 |   |   |   | 6.72 | % |
| Securities                                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                                                                                                           |   |   | 39,430 |   |   |   | 1,283 |   |   |   | 4.35 | % |   |   | 49,460 |   |   |   | 1,402 |   |   |   | 3.79 | % |
| Tax-exempt                                                                                                                                        |   |   | 2,821 |   |   |   | 112 |   |   |   | 5.31 | % |   |   | 883 |   |   |   | 27 |   |   |   | 4.15 | % |
| FHLB                of NY stock                                                                                                                   |   |   | 3,089 |   |   |   | 168 |   |   |   | 7.27 | % |   |   | 2,136 |   |   |   | 84 |   |   |   | 5.28 | % |
| Total                interest-earning assets                                                                                                      |   |   | 414,711 |   |   |   | 21,692 |   |   |   | 6.99 | % |   |   | 359,316 |   |   |   | 16,881 |   |   |   | 6.28 | % |
| Noninterest-earning                assets                                                                                                         |   |   | 41,822 |   |   |   |   |   |   |   |   |   |   |   | 28,495 |   |   |   |   |   |   |   |   |   |
| Total                assets                                                                                                                       |   | $ | 456,533 |   |   |   |   |   |   |   |   |   |   | $ | 387,811 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing                liabilities:                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings                accounts (1)                                                                                                               |   | $ | 39,454 |   |   | $ | 317 |   |   |   | 1.07 | % |   | $ | 59,319 |   |   | $ | 492 |   |   |   | 1.11 | % |
| NOW                accounts (2)                                                                                                                   |   |   | 98,501 |   |   |   | 2,621 |   |   |   | 3.56 | % |   |   | 63,839 |   |   |   | 973 |   |   |   | 2.04 | % |
| Time                deposits (3)                                                                                                                  |   |   | 184,533 |   |   |   | 6,260 |   |   |   | 4.54 | % |   |   | 163,939 |   |   |   | 4,406 |   |   |   | 3.59 | % |
| Total                interest-bearing deposits                                                                                                    |   |   | 322,488 |   |   |   | 9,198 |   |   |   | 3.81 | % |   |   | 287,097 |   |   |   | 5,871 |   |   |   | 2.73 | % |
| Federal                Home Loan Bank borrowings                                                                                                  |   |   | 57,606 |   |   |   | 2,200 |   |   |   | 5.11 | % |   |   | 38,492 |   |   |   | 1,327 |   |   |   | 4.61 | % |
| Loan                payable                                                                                                                       |   |   | - |   |   |   | - |   |   |   |   |   |   |   | 1,079 |   |   |   | 64 |   |   |   | 7.93 | % |
| Total                interest-bearing liabilities                                                                                                 |   |   | 380,094 |   |   |   | 11,398 |   |   |   | 4.01 | % |   |   | 326,668 |   |   |   | 7,262 |   |   |   | 2.97 | % |
| Noninterest-bearing                liabilities                                                                                                    |   |   | 27,754 |   |   |   |   |   |   |   |   |   |   |   | 23,873 |   |   |   |   |   |   |   |   |   |
| Total                liabilities                                                                                                                  |   |   | 407,848 |   |   |   |   |   |   |   |   |   |   |   | 350,541 |   |   |   |   |   |   |   |   |   |
| Retained                earnings                                                                                                                  |   |   | 48,633 |   |   |   |   |   |   |   |   |   |   |   | 37,270 |   |   |   |   |   |   |   |   |   |
| Total                liabilities and retained earnings                                                                                            |   | $ | 456,481 |   |   |   |   |   |   |   |   |   |   | $ | 387,811 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tax-equivalent                basis adjustment                                                                                                    |   |   |   |   |   |   | (29 | ) |   |   |   |   |   |   |   |   |   |   | - |   |   |   |   |   |
| Net                interest income                                                                                                                |   |   |   |   |   | $ | 10,265 |   |   |   |   |   |   |   |   |   |   | $ | 9,619 |   |   |   |   |   |
| Interest                rate spread                                                                                                               |   |   |   |   |   |   |   |   |   |   | 2.98 | % |   |   |   |   |   |   |   |   |   |   | 3.31 | % |
| Net                interest-earning assets                                                                                                        |   | $ | 34,617 |   |   |   |   |   |   |   |   |   |   | $ | 32,648 |   |   |   |   |   |   |   |   |   |
| Net                interest margin                (4)                                                                                             |   |   |   |   |   |   |   |   |   |   | 3.31 | % |   |   |   |   |   |   |   |   |   |   | 3.58 | % |
| Average                interest-earning assets to average interest-bearing                liabilities                                             |   |   | 109.11 | % |   |   |   |   |   |   |   |   |   |   | 109.99 | % |   |   |   |   |   |   |   |   |
|                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (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              |   |

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*Table          of Contents*

**Comparison      of Operating Results for the Three Months Ended June 30, 2007 and      2006**

***Net      Income/Loss***

***Net      Interest and Dividend      Income.***

***Interest      Income.***
* *

***Interest      Expense.  ***

***Provision      for Loan      Losses.***

* *

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*Table          of Contents*

***Other      Income.***

***Other      Expenses.***

***Income      Tax      Expense/Benefit.***

----

*Table          of Contents*

**Comparison      of Operating Results for the Nine Months Ended June 30, 2007 and      2006**

***Net      Income/Loss.***

***Net      Interest and Dividend      Income.***

***Interest      Income.***

***Interest      Expense.***

----

*Table          of Contents*

***Provision      for Loan      Losses.***

***Other      Income.***

***Other      Expenses.***

***Income      Tax      Expense/Benefit.***

**New      Accounting Pronouncements**

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*Table          of Contents*

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*Table          of Contents*

**LIQUIDITY      AND CAPITAL RESOURCES**

**Liquidity**

**Capital      Requirements**

**QUANTITATIVE      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

**Asset      and Liability Management**

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*Table          of Contents*

l

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*Table          of Contents*

E

| Item                1. | Legal                proceedings |
|------------------------|----------------------------------|

| Item                2. | Unregistered                Sales of Equity Securities and Use of                Proceeds |
|------------------------|-------------------------------------------------------------------------------------------|

|                                                  |   |                          |   |   |                        |   |   |                                  |   |
|-------------------------------------------------------|--------|-------------------------------|--------|--------|-----------------------------|--------|--------|---------------------------------------|--------|
|                                                  |   | Total                  Number |   |   | Average                     |   |   | Remaining                  Shares     |   |
|                                                  |   | of                  Shares    |   |   | Price                  Paid |   |   | That                  May be          |   |
| Period                                                |   | Purchased(1)                  |   |   | Per                  Share  |   |   | Purchased                  Under Plan |   |
|                                                  |   |                          |   |   |                        |   |   |                                  |   |
| April                  1, 2007 through April 30, 2007 |   |                          | -      |   |                        | $      | -      |                                  |   |   | 130,927 |   |
| May                  1, 2007 through May 31, 2007     |   |                          | 82,100 |   |                        | $      | 14.78  |                                  |   |   | 48,827 |   |
| June                  1, 2007 through June 30, 2007   |   |                          | 10,000 |   |                        | $      | 14.65  |                                  |   |   | 38,827 |   |
| Total                                                 |   |                          | 92,100 |   |                        | $      | 14.76  |                                  |   |   |   |   |

| Item                3. | Defaults                Upon Senior Securities |
|------------------------|------------------------------------------------|

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*Table          of Contents*

| Item                4. | Submission                of Matters to a Vote of Security                Holders |
|------------------------|-----------------------------------------------------------------------------------|

| Item                5. | Other                Information |
|------------------------|----------------------------------|

| Item                6. | Exhibits |
|------------------------|----------|

|   | 31.1 | Certification                of Chief Executive Officer Pursuant to Rule                13a-14(a) |
|--------|------|---------------------------------------------------------------------------------------------------|

|   | 31.2 | Certification                of Chief Financial Officer Pursuant to Rule                13a-14(a) |
|--------|------|---------------------------------------------------------------------------------------------------|

|   | 32.1 | Certification                of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as                Adopted                Pursuant to Section 906 of the Sarbanes-Oxley Act of                2002. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 32.2 | Certification                of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as                Adopted                Pursuant to Section 906 of the Sarbanes-Oxley Act of                2002. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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*Table          of Contents*

g

|                                 | MAGYAR                BANCORP, INC.                              |
|--------------------------------------|------------------------------------------------------------------|
|                                 |  (Registrant)                                               |
|                                 |                                                             |
|                                 |                                                             |
|                                 |                                                             |
|                                 |                                                             |
| Date:                August 10, 2007 | /s/                Elizabeth E. Hance                            |
|                                 | Elizabeth                E. Hance                                |
|                                 | President                and Chief Executive Officer             |
|                                 |                                                             |
| Date:                August 10, 2007 | /s/                Jon R. Ansari                                 |
|                                 | Jon                R. Ansari                                     |
|                                 | Senior                Vice President and Chief Financial Officer |
|                                 |                                                             |