Note 1 - General description of the Plan:

The following brief description of the Magyar Bank 401(k) Profit Sharing Plan (the “Plan”) is provided for purposes of general information only. Participants should refer to the Plan document for more complete information.

General:

The Plan was established effective March 1, 1994. The Plan is a participant-directed defined contribution plan covering substantially all employees, as defined, with Magyar Bank and its subsidiaries (the “Bank” or “Plan Sponsor”), which elect to participate in the Plan. The Bank is a wholly-owned subsidiary of Magyar Bancorp, Incorporated. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).

Eligibility:

The Plan covers all eligible employees of the Bank who have attained 18 years of age and have been employed with the Bank for three (3) months.

Contributions:

Participants may contribute up to 80% of their gross earnings, as defined by the Plan document, up to the maximum permitted by Internal Revenue Code (“IRC”) limitations. Contributions of gross earnings may be either before-tax or after-tax dollars. Participants may also contribute amounts representing distributions from other qualified benefit or contribution plans (known as rollover contributions).

Participating employees age 50 and above may elect to make “Catch Up” contributions to the Plan up to IRC limitations. Plan provisions allow for the automatic enrollment of all eligible participants upon entry into the Plan at 6% of the participant’s eligible compensation, which will be invested into a qualified default investment option determined by the Plan Sponsor. Participants have the option to change the automatic enrollment deferral percentages.

The Bank has the option to make a discretionary contribution. During the year ended December 31, 2025, the Bank made discretionary matching contributions of 100% of the first 2% of employees’ elective contributions and 50% of the next 4% of employees’ elective contributions up to a maximum of 4% of gross earnings. Employer contributions were $268,413 in 2025. The Bank also has the option to make a non-matching profit sharing contribution. During the year ended December 31, 2025, the Bank did not make a non-matching profit sharing contribution.

Notes receivable from participants:

Participants may borrow from their individual participant accounts a minimum of $1,000 and up to a maximum of the lesser of $50,000 or 50% of the market value of their vested balance. The interest rate used in calculating repayments is the prime rate plus one percentage point at the time of the loan. The interest rates on loans ranged from 4.25% to 9.50% as of December 31, 2025 and December 31, 2024. The interest rate is fixed at the time of loan origination and remains unchanged for the life of the loan. The interest paid by the participant is credited to the participant’s retirement savings account. The loans have maturities up to five years or up to thirty years for the purchase of a principal residence. No more than one loan may be outstanding at any time.

Investments:

Employees may elect to have their contributions and the applicable matching Bank contributions invested in one of the various funds offered by the Plan.

Participant accounts:

Each participant’s account is credited with the participant’s pre-tax and after-tax contributions, the Bank’s discretionary matching contributions, non-matching profit-sharing contributions and an allocation of Plan earnings (losses). Plan earnings (losses) are allocated to participants based on each participant’s share balance within each fund as a percentage of the Plan’s total share balances within each fund. The benefit to which a participant is entitled is the benefit provided from the participant’s vested account.

Vesting:

The employees are always 100% vested with respect to their own contributions and related earnings. The Bank contributions, together with the earnings or losses on these contributions, will be available to the employees at the time of withdrawal only to the extent they are vested. All Bank contributions will become fully vested in the event of a participant’s death, early retirement at age 55, total and permanent disability, or the attainment of age 65 (normal retirement date). Bank contributions for each year begin vesting at the rate of 20% per year of service for the first five years of service. After an employee has attained five years of service, all current and future contributions are immediately vested.

Payments of benefits:

Benefits may be distributed to participants upon termination of employment by reason of retirement, disability, death or other separation from service. Distributions under the Plan may be made in lump sums.

Once reaching the age of 59-1/2, a participant can elect to withdraw contributions for any reason. A partial or total withdrawal (including vested Bank contributions) of a participant’s contributions may be made on any valuation date or as soon as administratively feasible thereafter. In addition, participants may withdraw contributions in the event of a financial hardship, such as certain medical expenses, the purchase of a principal residence, payment of tuition and related educational fees, payments to prevent eviction from or foreclosure on a principal residence, or burial or funeral expenses, in the amount equal to their immediate financial need. Hardship withdrawals will be processed as soon as administratively feasible and in most cases the withdrawal will be subject to federal income taxes.

Plan administration:

The Plan is administered by the 401(k) Investment Committee appointed by the Bank’s Board of Directors. Principal Trust Company is the Trustee and administrative service provider for the Plan.

Forfeitures:

Forfeitures of non-vested participants’ accounts can be used to pay plan expenses or reduce employer contributions. During 2025, forfeitures amounted to $15,943. The Plan used $12,445 of forfeited amounts to fund Plan administration expenses. The balance of the forfeited funds held by the Plan at December 31, 2025 and 2024 was $14,093 and $8,921, respectively.

Plan termination:

The Bank anticipates and believes that the Plan will continue without interruption but reserves the right to continue or amend the Plan, revise the rate of Bank contributions or terminate the Plan at any time. If terminated, participants would become 100% vested in their accounts and the assets of the Plan will be distributed to the participants and beneficiaries in the order and manner prescribed in ERISA.

Note 2 - Summary of significant accounting policies:

Note 3 - Investment Contract with Insurance Company:

The Plan holds a fully benefit-responsive investment contract (insurance company/general account), listed in the Statements of Net Assets Available for Benefits as Insurance company general account. The investment contract is with Principal Life Insurance Company, and contributions continue to be maintained in a general account. Contract value is the relevant measurement attributed for that portion of the net assets available for benefits of a defined-contribution plan attributable to fully benefit-responsive investment contracts because contract value is the amount participants would receive if they were to initiate permitted transactions under the terms of the contract. The fully benefit-responsive investment contracts are direct investments between the Plan and the issuer.

Contract values represent contributions made under each contract, plus earnings, less participant withdrawals and administrative expenses. Since contract value is the relevant measurement, this investment is excluded from the fair value hierarchy table.

The fully benefit-responsive investment contract held by the Plan is a guaranteed investment contract obligated to repay the principal and interest at a specified interest rate that is guaranteed by the Plan. The crediting rate is based on a formula established by the contract issuers but may not be less than 0.15%. Such interest rates are reviewed annually for resetting. The contract does not have a maturity date.

The Plan must provide six months’ notice to the contract issuer to redeem its interest in this investment at contract value, or the Plan may be subject to a surrender charge.

The Plan’s ability to received amounts due in accordance with fully benefit-responsive investment contracts is dependent on the third-party issuer’s ability to meet its financial obligations. The issuer’s ability to meet its contractual obligations may be affected by future economic and regulatory developments.

Certain events might limit the ability of the Plan to transact at contract value with the contract issuer. Such events include the follow: (1) amendments to the plan documents (including complete or partial plan termination or merger with another plan), (2) changes to the Plan’s prohibition on competing investment options or deletion of equity wash provisions, (3) bankruptcy of the plan sponsor or other plan sponsor events (for example, divestitures or spin-offs of a subsidiary) that cause a significant withdrawal from the Plan, or (4) the failure of the trust to qualify for exemption from federal income taxes or any required prohibited transaction exemption under ERISA.

No events are probable of occurring that might limit the ability of the Plan to transact at contract value with the contract issuers and that also would limit the ability of the Plan to transact at contract value with the participants.

Note 4 – Fair Value Measurements:

The Plan’s investments are recorded in accordance with FASB Accounting Standards Codification Topic 820 (“ASC 820”), which established a framework for measuring fair value. ASC 820 clarifies that fair value is an estimate of the exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants (i.e., the exit price at the measurement date). That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are described below:

Level 1: Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Plan has the ability to access.

Level 2: Inputs to the valuation methodology include:

If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability.

Level 3: Inputs to the valuation methodology that are unobservable and significant to the fair value measurement.

The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest observable level of any input that is significant to the fair value measurement. Valuation techniques were used to maximize the use of observable inputs and minimize the use of unobservable inputs.

Following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes in the methodologies used at December 31, 2025 and 2024, unless otherwise stated.

Employer stock: The Plan holds employer-related securities. This option seeks to provide long-term capital appreciation through the direct investment in the common stock of Magyar Bancorp, Inc., which is publicly traded on the NASDAQ Stock Market. The employer stock consists of 100% of the common shares of Magyar Bancorp, Inc. This stock is valued at the number of the shares held by the Plan at the closing price of the stock at year end. These investments can be redeemed daily and without any restrictions on the timing of the redemption.

Registered investment companies: Valued at the net asset value of shares held by the Plan at year end as reported on the active market on which the fund is traded and are therefore included in Level 1 investments in the fair value hierarchy table.

Pooled separate account: Valued based on the observable unit value of the underlying investment mutual fund investments held by the Plan trustee at year end and are therefore included in Level 2 investments in the fair value hierarchy table.

Note 5 – Party in Interest Transactions:

Section 3(14) of ERISA defines a party-in-interest to include, among others, fiduciaries or employees of the Plan, any person who provides services to the Plan or an employer whose employees are covered by the Plan. Accordingly, loans to participants, shares of employer stock and the management of investments held by the trustee and custodian are considered party-in-interest transactions.

At December 31, 2025 and at December 31, 2024, the Plan held common stock of the Magyar Bancorp, Inc., the parent company of the sponsoring employer, in the amount of $2,033,998 and $1,700,797, respectively. During the year ended December 31, 2025, the Plan earned dividend income of $32,927 related to the common stock.

Note 6 - Tax status of the Plan:

The Company adopted a “pre-approved” plan document of Principal Life Insurance Company. The Internal Revenue Service (“IRS”) has determined by letter dated June 30, 2020 that the pre-approved plan document adopted by the plan sponsor is designed in accordance with applicable sections of the Internal Revenue Code (“IRC”). Pre-approved defined contribution plan documents must be restated in their entirety to include language for changes in applicable laws or regulations every six years. This restatement process incorporates all amendments made to the plan during the past six years into a new plan document. The plan administrator believes that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC and therefore believes that the Plan is qualified.

Accounting principles generally accepted in the United States of America require Plan management to evaluate tax positions taken by the Plan and recognize a tax liability if the Plan has taken an uncertain position that more likely than not would not be sustained upon examination by the Internal Revenue Service. The Plan Administrator has analyzed the tax positions taken by the Plan, and has concluded that as of December 31, 2025 and 2024, there are no uncertain positions taken or expected to be taken that would require recognition of a liability or disclosure in the financial statements. The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. In addition, there have been no tax-related interest or penalties for periods presented in these financial statements.

Note 7 - Concentration of risks and uncertainties:

The assets of the Plan are primarily financial instruments which are monetary in nature and concentrated in investment securities. As a result, interest rates have a more significant impact on the Plan’s performance than the effects of general levels of inflation. Interest rates do not necessarily move in the same direction or in the same magnitude as the prices of goods and services as measured by the Consumer Price Index. Investments in funds are subject to risk conditions of the individual investment or fund objectives, stock market fluctuations, interest rates, economic conditions and world affairs. Due to uncertainties inherent in the estimations and assumptions process, it is at least reasonably possible that changes in these estimates and assumptions in the near-term would be material to the financial statements.

Note 8 – Subsequent Events:

The Plan Administrator has evaluated subsequent events through the date the financial statements were issued.

Magyar Bank 401(k) Profit Sharing Plan

EIN No.: 22-1085787, Plan No. 002

Schedule H, Part IV, Line 4i - Schedule of Assets (Held at End of Year)

December 31, 2025

Column (d) “Cost” section of this table is omitted for participant-directed accounts

See Report of Independent Registered Public Accounting Firm