Magyar Bancorp, Inc. operates as the bank holding company for Magyar Bank that provides various consumer and commercial banking services to individuals, businesses, and nonprofit organizations.
The company’s principal business consists of attracting retail deposits from the general public in the areas surrounding its main office in New Brunswick, New Jersey and its branch offices located in Middlesex and Somerset Counties, New Jersey, and investing those deposits, together with funds generated...
Magyar Bancorp, Inc. operates as the bank holding company for Magyar Bank that provides various consumer and commercial banking services to individuals, businesses, and nonprofit organizations.
The company’s principal business consists of attracting retail deposits from the general public in the areas surrounding its main office in New Brunswick, New Jersey and its branch offices located in Middlesex and Somerset Counties, New Jersey, and investing those deposits, together with funds generated from operations and wholesale funding, in commercial real estate loans, residential mortgage loans, commercial business loans, Small Business Administration (SBA) loans, home equity loans, home equity lines of credit, construction and land loans and investment securities. The company’s revenues are derived principally from interest on loans and securities; its investment securities consist primarily of mortgage-backed securities and U.S. Government and government-sponsored enterprise obligations. The company also generates revenues from fees and service charges. The company’s primary sources of funds are deposits, borrowings and principal and interest payments on loans and securities. Most of the bank’s customers are individuals and small to medium-sized businesses which are dependent upon the regional economy.
Lending Activities
The company primarily originates commercial real estate loans and residential mortgage loans, and to a lesser extent home equity lines of credit, commercial business and construction and land loans.
One-to Four-Family Residential Loans: The company originates residential mortgage loans, most of which are secured by properties located in its primary market area and most of which it holds in portfolio. At September 30, 2024, 31.5% of its total loan portfolio, consisted of residential mortgage loans. Generally, residential mortgage loans are originated in amounts up to 80% of the lesser of the appraised value or purchase price of the property, with private mortgage insurance required on loans with a loan-to-value ratio in excess of 80%.
Commercial Real Estate Loans: The company also originates commercial real estate loans, most of which are secured by properties located in its primary market area. Commercial real estate loans are generally secured by five-or-more-unit apartment buildings, industrial properties and properties used for business purposes such as small office buildings, warehouses and retail facilities. The company generally originate adjustable-rate commercial real estate loans with a maximum term of 25 years.
Construction and Land Loans: The company also originates construction and land acquisition loans for the development of one-to four-family homes, apartment buildings, and commercial properties. Construction and land loans are generally offered to experience local developers operating in the company's primary market area, and to individuals for the construction of their personal residences. Construction and land loans generally have a maximum term of 24 months.
Home Equity Loans and Lines of Credit and Other Loans: The company originates home equity lines of credit secured by residences located in the company's market area. The underwriting standards the company uses for home equity lines of credit include a determination of the applicant’s credit history, an assessment of the applicant’s ability to meet existing obligations, the ongoing payments on the proposed loan, and the value of the collateral securing the loan. The maximum combined (first and second mortgage liens) loan-to-value ratio for home equity lines of credit is 80%. Home equity lines of credit have adjustable rates of interest, indexed to the prime rate, as reported in The Wall Street Journal, with terms of up to 25 years.
Commercial Business Loans: The company makes commercial business loans primarily in the company's market area to a variety of professionals, sole proprietorships, and small and mid-sized businesses. The company's commercial business loans include term loans and revolving lines of credit. The maximum term of a commercial business loan is 25 years.
Deposits
The company’s deposits are generated primarily from customers within its primary market area. The company offers a selection of deposit accounts, including demand accounts, NOW accounts, money market accounts, savings accounts, retirement accounts and certificates of deposit.
Securities
As of September 30, 2024, the company's securities included obligations of U.S. government agencies, such as mortgage-backed securities – residential and mortgage backed securities - commercial; obligations of U.S. government-sponsored enterprises, such as mortgage-backed securities-residential and debt securities; private label mortgage-backed securities-residential; obligations of U.S. states and political subdivision; and corporate securities.
Supervision and Regulation
The company is a bank holding company controlling Magyar Bank, is subject to the Bank Holding Company Act of 1956, as amended (BHCA), the rules and regulations of the Federal Reserve Bank (the FRB) under the BHCA the provisions of the New Jersey Banking Act of 1948 (the New Jersey Banking Act), and to the regulations of the Commissioner under the New Jersey Banking Act applicable to bank holding companies.
Magyar Bank derives its lending, investment and other activity powers primarily from the applicable provisions of the New Jersey Banking Act and its related regulations. Magyar Bank is a member of the Federal Home Loan Bank system, which consists of eleven regional federal home loan banks, each subject to supervision and regulation by the Federal Housing Finance Agency.
The company has established policies, procedures and systems designed to comply with the Bank Secrecy Act (BSA), Obstruct Terrorism Act of 2001 (USA PATRIOT Act) and regulations implemented thereunder.
In addition, Magyar Bank and the company is subject to other federal and state laws designed to protect consumers and prohibit unfair, deceptive or abusive business practices, including the Home Ownership Protection Act, Fair Credit Reporting Act, as amended by the Fair and Accurate Credit Transactions Act of 2003, the Gramm-Leach Bliley Act, the Truth in Lending Act, the Home Mortgage Disclosure Act, the Real Estate Settlement Procedures Act, the National Flood Insurance Act and various state law counterparts.
History
Magyar Bancorp, Inc. was founded in 1922. The company was incorporated in 2021.
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