SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 6, 2004
Pathfinder Bancorp, Inc.
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(Exact name of registrant as specified in its charter)
Federal 000-23601 16-1540137
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(State or other jurisdiction (Commission File No.) (I.R.S. Employer
of incorporation) Identification No.)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (315) 343-0057
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NOT APPLICABLE
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(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
Item 1-6. Not Applicable.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits
( c ) The following exhibits are filed with this Report:
Exhibit No. Description
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EXHIBIT 99.1 Earnings Release issued by Pathfinder Bancorp, Inc. on February 6,
2004, furnished in accordance with Item 12 of this Current Report on Form 8-K.
Item 8. Not Applicable.
Item 9. Regulation FD
The following information is furnished under this Item 9 in satisfaction of Item
12, "Disclosure of Results of Operations and Financial Condition."
On February 6, 2004 the Company announced its earnings for the fourth quarter of
the 2003 fiscal year. A copy of the press release dated February 6, 2004,
describing the fourth quarter earnings is attached as Exhibit 99.1.
Item 10-11. Not Applicable.
Item 12. Disclosure of Results of Operations and Financial Condition
See Item 9 per SEC Release 33-8216, March 27, 2003.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
PATHFINDER BANCORP, INC.
Date: March 16, 2004 By: /s/ Thomas W. Schneider
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Thomas W. Schneider
President and Chief Executive Officer
EXHIBIT INDEX
The following Exhibit is filed as part of this report:
Exhibit 99.1 Press Release dated February 6, 2004
EXHIBIT 99.1
CONTACT: Thomas W. Schneider - President, CEO
James A. Dowd - Vice President, CFO
Telephone: (315) 343-0057
Pathfinder Bancorp, Inc. Announces Fourth Quarter Earnings
Oswego, New York, February 6, 2004 Pathfinder Bancorp, Inc., the mid-tier
holding company of Pathfinder Bank, (NASDAQ SmallCap Market; symbol: PBHC,
listing PathBcp) reported net income of $309,000, or $0.13 per share, for the
quarter ended December 31, 2003 as compared to a net loss of $110,000, or
$(0.04) per share, for the same period in 2002.
The Company reported net income of $1.7 million, or $0.68 per share, for the
year ended December 31, 2003 as compared to net income of $1.2 million, or $0.45
per share, for the year ended December 31, 2002. The increase in net income for
the year is primarily attributable to a $548,000 increase in net interest
income, a $777,000 decrease in the provision for loan losses and a $514,000
increase in other income, partially offset by a 14% or $1.1 million increase in
other expenses.
"The Company's per share earnings of $0.68 represents a 51% increase over the
prior year and our best per share earnings since the Company's initial public
offering," according to Thomas W. Schneider, President and Chief Executive
Officer. "We are pleased with our progress over the past 12 months but also
realize there is significant room for improvement. Revenue growth, net of gains
and losses from the sale of securities, increased by 11% while expenses grew by
14%. Expense growth was primarily the result of the operation of a new branch
and increased employee pension and health care costs."
Net interest income for the three months ended December 31, 2003, increased 4%
to $2.3 million when compared to the same period during 2002. Interest expense
decreased $347,000 while interest income decreased $261,000. Net interest rate
spread increased 15 basis points to 3.45% for the quarter ended December 31,
2003 compared to 3.30% for the same period in 2002. Average interest-earning
assets increased 2% to $260.4 million as compared to $256.2 million at December
31, 2002 while the yield on those assets decreased 66 basis points to 5.74%
compared to 6.40% for the same period in 2002. The increase in average earning
assets is primarily attributable to a $16.0 million increase in loans receivable
and a $5.0 million increase in investment securities, partially offset by a
$17.0 million decrease in interest earning deposits. At December 31, 2002, the
Company had a significant interest earning deposit balance resulting from a
fourth quarter deposit assumption and branch acquisition. The net proceeds
received from the assumption and acquisition were invested in the Company's
investment and loan portfolio during 2003. The decrease in interest expense was
primarily the result of a decrease in the average cost of interest bearing
liabilities of 81 basis points, to 2.30% as compared to 3.11% for the same
period in the prior year. The decrease in average cost was partially offset by
a 6% increase in the average balance of interest bearing deposits to $193.4
million for the quarter ended December 31, 2003 compared to $183.0 million at
December 31, 2002.
Provision for loans losses for the quarter ended December 31, 2003 decreased 37%
to $106,000 from $167,000 when compared to the same period in 2002. The
Company's ratio of allowance for loan losses to period end loans ratio has
increased to 0.91% at December 31, 2003 compared to 0.82% at December 31, 2002.
Nonperforming loans to period end loans has increased to 1.59% from 0.95%
resulted from an increase in residential real estate delinquencies at December
31, 2003.
The Company's non-interest income is principally comprised of fees on deposit
accounts and transactions, loan servicing, commissions, and net securities gains
and losses. Non-interest income, net of gains and losses from the sale of
securities, loans, and other real estate, increased 20% to $454,000 for the
quarter ended December 31, 2003, as compared to the same period in the prior
year. The increase in non-interest income is primarily attributable to a $51,000
increase in service charges on deposit accounts, a $26,000 increase in loan
servicing fees, and a $13,000 increase in the value of bank owned life
insurance, partially offset by a $14,000 decrease in other charges, commissions
and fees. Gains and losses on the sale of securities, loans and other real
estate increased $186,000 when comparing the quarter ended December 31, 2003 to
the same period in the prior year. In the fourth quarter of 2002, the Company
was required to record a $165,000, net of taxes, impairment loss for a corporate
bond investment security.
Operating expenses decreased 8% to $2.3 million for the quarter ended December
31, 2003, when compared to the same period in the prior year. The decrease in
operating expenses was due to a decrease in professional and other services of
$72,000, a $104,000 decrease in data processing expenses and a $168,000 decrease
in other expenses. The decrease in other expenses resulted from the Company
incurring $183,000 in non-recurring expenses in the fourth quarter of 2002
associated with the acquisition of the Lacona branch and the operations of a
property classified in other real estate owned. These decreases were partially
offset by a $129,000 increase in salary expenses, a $7,000 increase in building
occupancy expenses and a $16,000 increase in the amortization of the intangible
asset. The increase in salaries and employee benefits resulted from the
operation of an additional branch location, and increase in pension benefit and
health insurance benefit costs.
Pathfinder Bancorp, Inc. is the mid-tier holding company of Pathfinder Bank; a
New York chartered savings bank headquartered in Oswego, New York. The Bank has
six full service offices located in its market area consisting of Oswego County.
Financial highlights for Pathfinder Bancorp, Inc. are attached. Presently, the
only business conducted by Pathfinder Bancorp, Inc. is the 100% ownership of
Pathfinder Bank and Pathfinder Statutory Trust I.
This release may contain certain forward-looking statements, which are based on
management's current expectations regarding economic, legislative, and
regulatory issues that may impact the Company's earnings in future periods.
Factors that could cause future results to vary materially from current
management expectations include, but are not limited to, general economic
conditions, changes in interest rates, deposit flows, loan demand, real estate
values, and competition; changes in accounting principles, policies, or
guidelines; changes in legislation or regulation; and economic, competitive,
governmental, regulatory, and technological factors affecting the Company's
operations, pricing, products, and services.
PATHFINDER BANCORP, INC.
FINANCIAL HIGHLIGHTS
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
For the three months For the twelve months
ended December 31, ended December 31,
(Unaudited) (Unaudited)
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2003 2002 2003 2002
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CONDENSED INCOME STATEMENT
Interest income. . . . . . . . . . . . . . . . . . . $ 3,730 $ 3,991 $ 15,285 $ 15,812
Interest expense . . . . . . . . . . . . . . . . . . 1,388 1,735 5,948 7,023
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Net interest income. . . . . . . . . . . . . . . . . 2,342 2,256 9,337 8,789
Provision for loan losses. . . . . . . . . . . . . . 106 167 598 1,375
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Net interest income after provision for loan losses. 2,236 2,089 8,739 7,414
Other income . . . . . . . . . . . . . . . . . . . . 469 207 2,608 2,094
Other expense. . . . . . . . . . . . . . . . . . . . 2,279 2,470 9,094 7,964
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Income before taxes. . . . . . . . . . . . . . . . . 426 (174) 2,253 1,544
Provision for income taxes . . . . . . . . . . . . 117 (65) 601 388
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Net income . . . . . . . . . . . . . . . . . . . . . $ 309 $ (109) $ 1,652 $ 1,156
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KEY EARNINGS RATIOS
Return on average assets . . . . . . . . . . . . . . 0.44% -0.16% 0.59% 0.45%
RETURN ON AVERAGE ASSETS - CASH EARNINGS*. . . . . 0.51% -0.11% 0.67% 0.48%
Return on average equity . . . . . . . . . . . . . . 5.81% -1.88% 7.61% 5.01%
RETURN ON AVERAGE EQUITY - CASH EARNINGS*. . . . . 6.82% -1.27% 8.58% 5.41%
Net interest margin (tax equivalent) . . . . . . . . 3.62% 3.57% 3.68% 3.73%
SHARE AND PER SHARE DATA
Basic weighted average shares outstanding. . . . . . 2,417,318 2,583,643 2,423,966 2,577,857
Basic earnings per share . . . . . . . . . . . . . . $ 0.13 (0.04) $ 0.68 $ 0.45
Diluted earnings per share . . . . . . . . . . . . . 0.13 (0.04) 0.67 0.44
Cash dividends per share . . . . . . . . . . . . . . 0.10 0.08 0.40 0.30
Book value per share . . . . . . . . . . . . . . . . - - 8.99 8.90
December 31,. December 31, December 31, December 31,
2003 2002 2001 2000
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SELECTED BALANCE SHEET DATA
Assets . . . . . . . . . . . . . . . . . . . . . . . $ 277,940 $ 279,056 $ 244,514 $ 232,355
Earning assets . . . . . . . . . . . . . . . . . . . 254,755 253,319 255,121 214,319
Total loans. . . . . . . . . . . . . . . . . . . . . 188,717 180,482 164,267 149,636
Deposits . . . . . . . . . . . . . . . . . . . . . . 206,894 204,522 169,589 161,459
Borrowed Funds . . . . . . . . . . . . . . . . . . . 40,960 42,860 49,441 47,230
Trust Preferred Debt . . . . . . . . . . . . . . . . 5,000 5,000 - -
Shareholders' equity . . . . . . . . . . . . . . . . 21,785 23,230 22,185 20,962
ASSET QUALITY RATIOS
Net loan charge-offs to average loans. . . . . . . . 0.19% 0.90% 0.19% 0.09%
Allowance for loan losses to period end loans. . . . 0.91% 0.82% 1.03% 0.85%
Allowance for loan losses to nonperforming loans . . 57.32% 86.57% 63.66% 69.98%
Nonperforming loans to period end loans. . . . . . . 1.59% 0.95% 1.30% 1.23%
Nonperforming assets to total assets . . . . . . . . 1.15% 1.11% 1.13% 0.17%
* Cash earnings excludes noncash charges for amortization relating to
intangibles and the allocation of ESOP stock:
For the three months For the twelve months
ended Dec 31, ended Dec. 31,
2003 2002 2003 2002
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Net Income. . . . . . . . . . . . . . . $ 309 $(109) $1,651 $1,156
Add back (net of tax effect):
Amortization of intangibles 33 24 134 24
Stock-based compensation. . 21 11 77 68
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Cash earnings. . . . . . . . . . . . . . $ 363 $ (74) $1,862 $1,248
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