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Magyar Bancorp, Inc. (MGYR) Stock Continues Downward Trend Following Completion of Conversion of MHC

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Magyar Bancorp, Inc. (MGYR) stock prices were down 5.00% shortly after market trading commenced on July 15th 2021, bringing the price per share down to USD$10.96 early on in the trading day.

Conversion of MHC

July 14th 2021 saw the company announce the completion of the conversion of MHC from the mutual holding company to the stock holding company form of organization, with the company having completed its related stock offering. Upon the closing of the conversion, the company ceased to exist, effective from the conversion onwards. July 12th 2021 saw the company announce the results of its stock offering, with 7,098,070 shares of the company’s common stock outstanding as a result of the conversion, excluding the consideration of fractional shares.

Net Income Reports

Net income for the quarter ended March 31st 2021 was up 394% as compared to the prior-year quarter. Q2 of fiscal 2021 reported net income in the amount of USD$1.506 million, up from the USD$305,000 reported for the second quarter of the fiscal year 2020. Net income for the six-month period ended March 31st, 2021 was up to USD$2.843 million, as compared to the USD$858,000 reported for the same six-month period over the prior year.

Contextualizing Income Improvements

The benefits of the Paycheck Protection Program in conjunction with the company’s effective management of its balance sheet resulted in a 31 basis point year-over-year increase in net interest margin, despite historically low-interest rates. The 394% increase was driven, in part, by fees recognized by MGYR from its participation in the Paycheck Protection Program, as well as its role in the recently concluded Middlesex County Small Business Relief Grant.

Maintaining Momentum

In accordance with the company’s strong earnings growth, the company’s book value is up 7% as of the end of Q2 of fiscal 2021, as compared to the prior-year quarter. The company expects to see a continuation of its positive earnings momentum through the year as its income is augmented a second round of the PPP, in addition to additional non-interest income opportunities through the sales of guaranteed portions of SBA loans.

Future Outlook for MGYR

With the completion of the recent conversion of MHC, MGYR is poised to capitalize on the expanded scope of growth afforded to it as a result. The company is keen to leverage the resources at its disposal to facilitate significant and sustained increases in shareholder value with the effective leveraging of its resources.

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