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INCOME TAXES (Tables)

12 Months Ended

Sep. 30, 2021

Income Tax Disclosure [Abstract]

Schedule of components of income tax expense

The Company’s income tax expense is comprised of the following components for the years ended September 30, 2021 and 2020:

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Table of Contents

MAGYAR BANCORP, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

September 30, 2021 and 2020

		For the Year Ended
		September 30,
		2021				2020
		(In thousands)
Income tax expense at the statutory federal tax rate of 21%
for the year ended September 30, 2021 and 2020		$	1,832			$	653
State tax expense			772				323
Other			1				(55	)
Income tax expense		$	2,605			$	921

Schedule of reconciliation of income tax at the statutory rate to effective tax rate

A reconciliation of income tax at the statutory tax rate to the effective income tax expense for the years ended September 30, 2021 and 2020 is as follows:

		September 30,
		2021				2020
		(In thousands)
Income tax expense at statutory rate		$	1,832			$	653
Increase (decrease) resulting from:
State income taxes, net of federal income tax benefit			772				323
Tax-exempt income, net			(68	)			(68	)
Nondeductible expenses			26				18
Employee stock ownership plan			1				(5	)
Other, net			42				—
Total income tax expense		$	2,605			$	921

Schedule of major sources of temporary differences and their deferred tax effect

The major sources of temporary differences and their deferred tax effect at September 30, 2021 and 2020 are as follows:

		September 30,
		2021				2020
		(In thousands)
Allowance for loan losses		$	2,270			$	1,799
Deferred loan fees			416				731
Unrealized loss, minimum pension liability			351				620
OREO			123				73
Straight line rent			101				110
Gross deferred tax asset			3,261				3,333
Depreciation			(874	)			(872	)
Discount accretion on investments			—				(61	)
Employee benefits			(183	)			(37	)
Mortgage servicing rights			(1	)			(3	)
Gross deferred tax liability			(1,058	)			(973	)
Net deferred tax asset, included in other assests		$	2,203			$	2,360

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Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

+ References

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 9
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Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

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-Topic 740
-SubTopic 10
-Section 50
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- Definition

Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

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-SubTopic 10
-Section 50
-Paragraph 12
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