2009 Annual Shareholders Meeting

**February 11, 2009**

 

Forward Looking Statements

          This presentation contains statements about future events that constituteforward-looking statements within the meaning of the Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  Such forward-looking statements may be identified by reference to a future period orperiods, or by the use of forward- looking terminology, such as “may,” “will,” “believe,” “expect,” or similar terms or variations on those terms, or the negative of those terms.  Forward-looking statementsare subject to numerous risks and uncertainties, including, but not limited to, those risks previously disclosed in the Company’s filings with the SEC, general economic conditions, changes in interest rates, regulatory considerations, competition,technological developments, retention and recruitment of qualified personnel, and market acceptance of the Company’s pricing, products and services, and with respect to the loans extended by the Bank and real estate owned, the following: risksrelated to the economic environment in the market areas in which the Bank operates, particularly with respect to the real estate market in New Jersey; the risk that the value of the real estate securing these loans may decline in value; and therisk that significant expense may be incurred by the Company in connection with the resolution of these loans. The Company wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the datemade. The Company does not undertake and specifically declines any obligation to publicly release the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of such statementsor to reflect the occurrence of anticipated or unanticipated events.

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Magyar Bancorp Overview

Founded in 1922 

January 23, 2006 – Magyar Bancorp completed its reorganization into the Mutual Holding Company form   

On such date, Magyar Bancorp completed its Initial Public Offering, raising $26.2 million.  It currently has 45.7% of its outstanding shares owned by public shareholders, includingMagyarBank Charitable Foundation.  The remainder is owned by Magyar Bancorp, MHC 

Magyar operates five branch locations throughout Middlesex and Somerset Counties in New Brunswick (2), North Brunswick, South Brunswick and Branchburg 

Magyar Bancorp trades on the NASDAQ Global Market under the symbol MGYR

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Magyar Bank Branch Locations

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**Branchburg**

1000 Route 202 South

**New Brunswick**(Corporate Headquarters) 

400 Somerset Street

**North Brunswick**

582 Milltown Road

**South Brunswick**

3050 Highway 27

**Existing Locations**

**New Brunswick**

(Inside Child Health Institute) 

93 French Street

 

2008 Year in Review

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Impact of Economic Downturn on Magyar Bancorp

Depreciation of collateral values securing construction loans resulted in loan write downs and additional loan loss provisions 

Several large commercial and construction loans moved into non-performing status 

Increased loan loss provisions resulted in net loss for Fiscal Year 2008 and Fiscal First Quarter 2009

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New Jersey Housing Market

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**County**

**3Q07 Median Sales Price**

**3Q08 Median Sales Price**

**% Change**

**Homes Sold 3Q07**

**Homes Sold 3Q08**

**% Change**

Middlesex

$385,100

$375,600

-2.5%

1,499

1,203

-19.7%

Somerset

$508,400

$456,900

-10.1%

814

731

-10.2%

Source: New Jersey Association of Realtors 3rd Qtr. NJ Home Sales Report

 

Impact of Economic Downturn on Magyar Bancorp

Residential mortgage portfolio – defined as 1-4 family closed end loans 

90+ day delinquency rate as of 12/31/08: 0.91% 

90+ day delinquency rate as of 12/31/07: 0.39%

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2008 Financial Summary

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Asset Growth

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*Assets grew 8.7% in 2008*

 

Deposit Growth

$223,974

$278,090

$325,602

$368,777

$375,560

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$384,908

*Deposits grew 1.8% in 2008*

 

Growth in Non-Interest & Interest Bearing Checking

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$34,473

$42,715

$51,010

$53,672

$57,682

*Non-Interest & Interest Bearing Checking grew 13.4% in 2008*

 

Loan Portfolio Growth

$195,910

$277,026

$352,353

$385,582

$410,651

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$425,812

*Loans grew 6.5% in 2008*

 

Non-Performing Assets

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$247

$1,040

$7,400

$10,286

$24,734

$27,720

 

Asset Quality

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Maintained Net Interest Margin in 2008

 

Quarterly Earnings Per Share

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**    12/31/06    3/31/07    6/30/07    9/30/07   12/31/07    3/31/08    6/30/08    9/30/08    12/31/08**

**9/30/08 - $3.3 million loan loss provision**

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**12/31/08 - $4.0 million loan loss provision**

 

Stock Price Performance

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MGYR Stock Price & Volume Chart

Price on 2/6/09 

$3.50

 

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Market Trends 

As of February 6, 2009  

-67.50

-15.73

-37.34

-34.75

-48.07

-13.07

-5.79

-15.11

-4.01

-21.37

-14.13

-14.01

-10.98

-57.32

-75%

-60%

-45%

-30%

-15%

0%

MGYR

SNL Thrift

MHCs

NJ MHCs

Mid-Atlantic

MHCs

SNL Thrifts

Nasdaq Bank  

S&P 500

Change LTM

Change Three Month

 

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MGYR vs. MHCs 

As of February 6, 2009  

NM – Not Measureable

**MGYR**

**Average**

**Median**

**Average**

**Median**

Price 

$3.50

Price/Earnings

NM

28.2x

24.5x

27.6x

27.7x

Price/LTM EPS

NM

31.7x

27.7x

33.5x

28.1x

Price/Book

47.0%

107.6%

98.6%

118.3%

121.8%

Price/Tang Book

47.0%

117.3%

104.8%

131.7%

134.2%

**Nationwide MHCs**

**NJ MHCs**

 

Stock Buyback Update

5% Buyback of 130,927 shares, announced April 2007 

Completed November 2007 

Second 5% Buyback of 129,924 shares announced November 2007 

63,770 shares purchased through December 31, 2008

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Capital Adequacy

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**As of December 31, 2008**

 

Magyar Continues to be an Active Leader in the Community

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Community Involvement

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HARP – Housing Assistance Recovery Program 

Pilot program developed by Magyar Bank and First Baptist Community Development Corporation (CDC), Somerset, NJ 

2008 Chris Kjeldsen Award 

Presented by the Middlesex County Chamber of Commerce 

2008 Improving Financial Literacy Award 

Presented by America’s Community Bankers 

2008 Community Service Award 

Presented by the NJ League of Community Bankers 

MagyarBank Charitable Foundation made $92,000 of grants in 2008 

 

2009 Strategic Initiatives 

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Looking Ahead to 2009

Reduce non-performing assets 

Reduce exposure to construction loans 

Focus on residential and commercial lending opportunities with a conservative underwriting approach 

Gain deposit market share from dissatisfied customers of national and regional banks and brokerage houses 

Continue our commitment to support the local community

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**Enhance shareholder value by positioning the Company to take advantage of the eventual economic recovery**

 

Any Questions?

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