Attached files
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| 8-K - FORM 8K - Magyar Bancorp, Inc. | form8k-113091_mgyr.htm |
2011 Annual Shareholders Meeting
March 16, 2011
1
Forward Looking Statements
This presentation contains statements about future events that constitute forward-
looking statements within the meaning of the Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-
looking statements may be identified by reference to a future period or periods, or
by the use of forward- looking terminology, such as “may,” “will,” “believe,”
“expect,” or similar terms or variations on those terms, or the negative of those
terms. Forward-looking statements are subject to numerous risks and
uncertainties, including, but not limited to, those risks previously disclosed in the
Company’s filings with the SEC, general economic conditions, changes in interest
rates, regulatory considerations, competition, technological developments,
retention and recruitment of qualified personnel, and market acceptance of the
Company’s pricing, products and services, and with respect to the loans extended
by the Bank and real estate owned, the following: risks related to the economic
environment in the market areas in which the Bank operates, particularly with
respect to the real estate market in New Jersey; the risk that the value of the real
estate securing these loans may decline in value; and the risk that significant
expense may be incurred by the Company in connection with the resolution of
these loans. The Company wishes to caution readers not to place undue reliance
on any such forward-looking statements, which speak only as of the date made.
The Company does not undertake and specifically declines any obligation to
publicly release the result of any revisions that may be made to any forward-
looking statements to reflect events or circumstances after the date of such
statements or to reflect the occurrence of anticipated or unanticipated events.
looking statements within the meaning of the Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-
looking statements may be identified by reference to a future period or periods, or
by the use of forward- looking terminology, such as “may,” “will,” “believe,”
“expect,” or similar terms or variations on those terms, or the negative of those
terms. Forward-looking statements are subject to numerous risks and
uncertainties, including, but not limited to, those risks previously disclosed in the
Company’s filings with the SEC, general economic conditions, changes in interest
rates, regulatory considerations, competition, technological developments,
retention and recruitment of qualified personnel, and market acceptance of the
Company’s pricing, products and services, and with respect to the loans extended
by the Bank and real estate owned, the following: risks related to the economic
environment in the market areas in which the Bank operates, particularly with
respect to the real estate market in New Jersey; the risk that the value of the real
estate securing these loans may decline in value; and the risk that significant
expense may be incurred by the Company in connection with the resolution of
these loans. The Company wishes to caution readers not to place undue reliance
on any such forward-looking statements, which speak only as of the date made.
The Company does not undertake and specifically declines any obligation to
publicly release the result of any revisions that may be made to any forward-
looking statements to reflect events or circumstances after the date of such
statements or to reflect the occurrence of anticipated or unanticipated events.
2
Magyar Background
} Magyar Bank established in 1922
} Magyar Bancorp completed its reorganization
into the Mutual Holding Company structure
and public offering in 2006
into the Mutual Holding Company structure
and public offering in 2006
} 6 branches in Middlesex and Somerset
Counties
Counties
} Trades on NASDAQ under symbol MGYR
} Main business lines/strategy:
} Full-service Community Bank
} Commercial/Residential lending & deposits
} Community Banking is our business strategy
3
Magyar Bank Branch Locations
4
Branchburg
1000 Route 202 South
New Brunswick
(Corporate Headquarters)
(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
Coming June 2011
Bridgewater
(opened June 2010)
475 North Bridge Street
Edison
1167 Inman Avenue
1167 Inman Avenue
Deposits by Branch
5
As of 9/30/10
Fiscal Year 2010 Highlights
} Positive earnings in all four quarters (six
consecutive)
consecutive)
} FY 2010 Net Income - $3.9 million, compared to net
loss of $6.1 million in FY 2009
loss of $6.1 million in FY 2009
} Increased net interest margin by 38bps
} Checking deposits increased 4.8% of total deposits
} Reduced high cost CDs to 43.9% of total deposits
6
Fiscal Year 2010 Highlights
} Increased capital $4.2 million, (10%) year over
year
year
} Positive earnings
} Managed reduction of higher risk-weighted assets
} Expense control program
} Reduced non-performing loans year over year
} Bridgewater office - Opened June 28, 2010
} CRA - “Outstanding”
7
Fiscal Year 2010 Summary
8
Total Assets
9
Total Assets declined 5% in FY10
$325,602
$368,777
$375,560
10
$427,932
CDs as percentage of deposits decreased to 43.9% in FY10
Checking Deposit Growth
11
$51,010
$53,672
$84,677
$88,771
CAGR: Compound Annual Growth Rate
Loan Composition
$352,353
$385,582
$410,728
12
$444,780
Construction loans as percentage of loans declined from
20.9% on 9/30/09 to 14.0% on 9/30/10
20.9% on 9/30/09 to 14.0% on 9/30/10
13
Available lines declined 65% from $23M to $8M.
Construction Loans declined 38.7% in FY10
Non-Performing Loans
14
$20,068
$7,400
$8,048
$33,484
$27,417
Other Real Estate Owned
$0
$2,238
$4,666
$5,562
$12,655
Non-Performing Assets
16
Source: SNL Financial
Peer Group: MHCs with total assets $400MM- $750MM
Peer Group: MHCs with total assets $400MM- $750MM
Sale of Real Estate Owned (REO)
} Magyar Bank sold four REO properties in FY
2010 totaling $3.6 million for a net gain of
$62,000.
2010 totaling $3.6 million for a net gain of
$62,000.
} Currently have contracts of sale on four
properties with a carrying value of $7.3 million
(56% of REO at 12/31/2010). No additional
loss is expected from these sales.
properties with a carrying value of $7.3 million
(56% of REO at 12/31/2010). No additional
loss is expected from these sales.
17
18
10-year Treasury/Fed Funds
19
Net Interest Margin
Source: SNL Financial
Peer Group: MHCs with total assets $400MM- $750MM
Peer Group: MHCs with total assets $400MM- $750MM
Quarterly Net Income (Loss)
20
12/31/08 3/31/09 6/30/09 9/30/09 12/31/09 3/31/10 6/30/10 9/30/10 12/31/10
(Includes
$3.4 million
$3.4 million
Income Tax
Benefit)
Benefit)
FY09: Net Loss $6.1 Million
FY10: Net Income $3.9 million
Non-interest Expense
} Total non-interest expense increased only
$92,000 (1%) in FY 2010.
$92,000 (1%) in FY 2010.
} Non-performing asset expense increased $436,000 (+78%)
} FDIC Insurance Assessments increased $200,000 (+19%)
} Occupancy expenses increased $145,000 (+6%)
} However, compensation and benefit expense
decreased $582,000 (7%).
decreased $582,000 (7%).
} Restructuring in FYs 2009 and 2010 reduced employee
count and benefits.
count and benefits.
} Board cash compensation decreased $111,000, or 25%
21
Core Earnings Enhancements
} Net interest margin
} Resolution of non-performing assets
} Residential mortgage business returning
} Retail operations
} Expense control
} Reap benefits of restructuring
} Resolution of non-performing assets
} New FDIC insurance assessment base
22
Magyar Bank Capital Ratios
23
As of December 31, 2010
*”Well-Capitalized” threshold as defined by Sec. 38 of the Federal Deposit Insurance Act.
Stock Price Performance
24
MGYR Stock Price & Volume Chart
25
Price on
3/15/11
$4.25
Price on
2/23/10
$3.27
MGYR Stock Performance
From 2/23/10 - 3/15/11
MGYR: +29.97%
MHC Peer Group: -7.13%
SNL Thrift MHCs: -6.29%
Source: SNL Financial
Peer Group: MHCs with total
assets $400MM-$750MM
assets $400MM-$750MM
Fiscal Year 2011
27
Fiscal Year 2011
} Reduce non-performing assets
} Increase core earnings
} Growth in residential and commercial lending
} FDIC Assessment decrease April 1
} New method of calculating FDIC insurance
premium favors community banks
premium favors community banks
} Dodd-Frank Impact
} Edison Branch Grand Opening
28
Community Banking IS our Business
Strategy
Strategy
} Relationships key driver to growth
} Residential Mortgages coming back to
community banks
community banks
} Commercial Lending
} Non-Profit Organizations
} Over $2.7 million in deposits
} Great referral sources
} CRA - “Outstanding” rating
} Employees volunteer and serve on boards of local
organizations
organizations
29
Questions?
30