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): July 28, 2005
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)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
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Section 2 - Financial Information
Item 2.02
On July 28, 2005, Pathfinder Bancorp, Inc. issued a press release disclosing
second quarter 2005 financial results. A copy of the press release is included
as Exhibit 99.1 to this report.
The information in Item 2.02 to this Form 8-K and Exhibit 99.1 in accordance
with general instruction B.2 of Form 8-K, is being furnished and shall not be
deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934,
nor shall it be deemed incorporated by reference in any filing under the
Securities Act of 1933 or the Securities Exchange Act of 1934, except shall be
expressly set forth by specific in such filing.
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: July 28, 2005 By: /s/ Thomas W. Schneider
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Thomas W. Schneider
President and Chief Executive Officer
EXHBIT INDEX
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Earning release dated July 28, 2005 announcing June 30, 2005 earnings.
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
CONTACT: Thomas W. Schneider - President, CEO
James A. Dowd - Vice President, CFO
Telephone: (315) 343-0057
PATHFINDER BANCORP, INC. ANNOUNCES SECOND QUARTER EARNINGS
Oswego, New York, July 28, 2005 Pathfinder Bancorp, Inc., the mid-tier
holding company of Pathfinder Bank, (NASDAQ SmallCap Market; symbol: PBHC,
listing: PathBcp) reported net income of $234,000, or $0.10 per share, for the
three months ended June 30, 2005 as compared to $522,000, or $0.21 per share for
the same period in 2004. For the six months ended June 30, 2005, the Company
reported net income of $383,000, or $0.16 per share, compared to $845,000, or
$0.35 per share, for the same period in 2004.
"The reduction in earnings reflects higher operating expenses, primarily related
to the opening of our new branch office in Central Square, New York." according
to Thomas W. Schneider, President and CEO. "We are excited to be a part of the
growing Central Square community and encouraged by our early reception and the
branches activity. We project, however, that it will take 18 months for the
branch to achieve a breakeven deposit level."
"Earnings are being challenged by a flattening yield curve, an expanding
delivery system, and increased regulatory burden cost", Schneider further
stated. "Over the past year we have been working on enhancing fee income
sources and improving asset quality in anticipation of these challenges. We are
now actively working on strategies to streamline operations and reduce our
administrative costs while not impacting our service standards."
Net interest income for the quarter ended June 30, 2005 decreased slightly when
compared to the same period during 2004. Interest expense increased $130,000,
or 9%, partially offset by an increase in interest income of $105,000, or 3%.
Net interest rate spread decreased to 3.17% for the second quarter of 2005 from
3.22% for the same period in 2004. Average interest-earning assets increased 2%
to $281.2 million in the quarter ended June 30, 2005 as compared to $276.7
million in the quarter ended June 30, 2004, while the yield on those assets
increased 11 basis points to 5.47% compared to 5.36% for the same period in
2004. The increase in average earning assets is primarily attributable to a
$13.8 million increase in investment securities, partially offset by a $9.3
million decrease in interest-earning deposits. Average interest-bearing
liabilities increased $5.7 million, while the cost of funds increased 14 basis
points to 2.29% from 2.15% for the same period in 2004. The increase in the
average balance of interest-bearing liabilities resulted primarily from a $7.2
million, or 3%, growth in average deposits, partially offset by a $1.5 million
decrease in borrowed funds. The growth in deposits principally occurred in
short to mid-term time deposits.
Provision for loan losses for the quarter ended June 30, 2005 decreased 38% to
$66,000 from $107,000 for the same period in 2004. The Company's ratio of
allowance for loan losses to period end loans has increased to 1.00% at June 30,
2005 from 0.98% at December 31, 2004. Nonperforming loans to period end loans
have increased to 1.08% at June 30, 2005, compared to 0.99% at December 31,
2004. Overall, however, asset quality has improved significantly over the past
two years through a combination of tightened credit administration and more
robust collection activities.
Non-interest income, net of gains and losses from the sale of securities, loans
and foreclosed real estate, increased 13% to $545,000 for the quarter ended June
30, 2005 compared to $481,000 for the same period in the prior year. The
increase in non-interest income is primarily attributable to a $92,000 increase
in service charges on deposit accounts and an $8,000 increase in other charges,
commissions and fees, partially offset by a $33,000 decrease in loan servicing
fees. Net gains and losses from the sale of securities, loans and foreclosed
real estate decreased $370,000 to $1,000 for the quarter ended June 30, 2005
compared to $371,000 for the same period in the prior year.
Operating expenses increased 8% to $2.5 million for the quarter ended June 30,
2005 compared to $2.3 million for the quarter ended June 30, 2004. During the
second quarter of 2005, salary and employee benefits, data processing expenses
and professional and other services increased $73,000, $77,000 and $53,000,
respectively. These increases were offset by a $21,000 decrease in other
operating expenses. The increase in salaries and employee benefits was
primarily due to the salaries and benefits associated with the personnel at the
Central Square branch combined with the hiring of a Business Development
Officer. The increase in data processing expenses was primarily due to software
purchases and related annual maintenance charges, along with increased internet
banking and check processing charges. The increase in professional and other
services primarily resulted from costs associated with strategic planning and
process improvement initiatives.
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
seven 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 six months
ended June 30, ended June 30,
(Unaudited) (Unaudited)
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2005 2004 2005 2004
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CONDENSED INCOME STATEMENT
Interest income. . . . . . . . . . . . . . . . . . . $ 3,787 $ 3,682 $ 7,485 $ 7,243
Interest expense . . . . . . . . . . . . . . . . . . 1,526 1,396 3,025 2,753
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Net interest income. . . . . . . . . . . . . . . . . 2,261 2,286 4,460 4,490
Provision for loan losses. . . . . . . . . . . . . . 66 107 138 295
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Net interest income after provision for loan losses. 2,195 2,179 4,322 4,195
Other income . . . . . . . . . . . . . . . . . . . . 546 852 1,035 1,530
Other expense. . . . . . . . . . . . . . . . . . . . 2,510 2,327 4,930 4,577
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Income before taxes. . . . . . . . . . . . . . . . . 231 704 427 1,148
Provision for income taxes . . . . . . . . . . . . . (3) 182 44 303
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Net income . . . . . . . . . . . . . . . . . . . . . $ 234 $ 522 $ 383 $ 845
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KEY EARNINGS RATIOS
Return on average assets . . . . . . . . . . . . . . 0.30% 0.69% 0.25% 0.57%
Return on average equity . . . . . . . . . . . . . . 4.38% 9.85% 3.57% 7.79%
Return on average tangible equity (A). . . . . . . . 5.51% 12.62% 4.50% 9.90%
Net interest margin (tax equivalent) . . . . . . . . 3.30% 3.34% 3.25% 3.39%
SHARE AND PER SHARE DATA
Basic weighted average shares outstanding. . . . . . 2,452,537 2,436,878 2,449,889 2,430,468
Basic earnings per share . . . . . . . . . . . . . . $ 0.10 $ 0.21 $ 0.16 $ 0.35
Diluted earnings per share . . . . . . . . . . . . . 0.09 0.21 0.15 0.34
CASH EARNINGS PER SHARE - BASIC (B). . . . . . . . 0.12 0.24 0.20 0.39
Cash dividends per share . . . . . . . . . . . . . . 0.1025 0.10 0.205 0.20
Book value per share . . . . . . . . . . . . . . . . - - 8.67 8.60
(Unaudited). (Unaudited) (Unaudited)
June 30, December 31, June 30, June 30,
2005 2004 2004 2003
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SELECTED BALANCE SHEET DATA
Assets . . . . . . . . . . . . . . . . . . . . . . . $ 310,471 $ 302,037 $ 299,875 $ 283,128
Earning assets . . . . . . . . . . . . . . . . . . . 277,927 273,532 271,247 258,761
Total loans. . . . . . . . . . . . . . . . . . . . . 187,943 186,952 186,210 184,641
Deposits . . . . . . . . . . . . . . . . . . . . . . 237,239 236,672 233,853 204,523
Borrowed Funds . . . . . . . . . . . . . . . . . . . 43,260 35,360 36,360 48,160
Trust Preferred Debt . . . . . . . . . . . . . . . . 5,155 5,155 5,155 5,000
Shareholders' equity . . . . . . . . . . . . . . . . 21,678 21,826 21,049 21,488
ASSET QUALITY RATIOS
Net loan charge-offs (annualized) to average loans . 0.09% 0.33% 0.18% 0.33%
Allowance for loan losses to period end loans. . . . 1.00% 0.98% 0.99% 0.86%
Allowance for loan losses to nonperforming loans . . 92.61% 98.76% 60.88% 124.37%
Nonperforming loans to period end loans. . . . . . . 1.08% 0.99% 1.62% 0.69%
Nonperforming assets to total assets . . . . . . . . 0.94% 0.88% 1.11% 1.01%
(A) Tangible equity excludes intangible assets
(B) Cash earnings excludes noncash charges for amortization relating to
intangibles and the allocation of ESOP stock:
For the three months For the six months
ended June 30, ended June 30,
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2005 2004 2005 2004
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Net Income. . . . . . . . . . . . . . . $ 234 $ 522 $ 383 $ 845
Add back (net of tax effect):
Amortization of intangibles 34 34 67 67
Stock-based compensation. . 18 20 38 43
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Cash earnings. . . . . . . . . . . . . . $ 286 $ 576 $ 488 $ 955
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