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): April 28, 2008
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 April 28, 2008, Pathfinder Bancorp, Inc. issued a press release disclosing
first quarter 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: April 28, 2008 By: /s/ Thomas W. Schneider
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Thomas W. Schneider
President and Chief Executive Officer
EXHIBIT INDEX
Earnings release dated April 28, 2008 announcing March 31, 2008 earnings.
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
CONTACT: Thomas W. Schneider - President, CEO
James A. Dowd - Senior Vice President, CFO
Telephone: (315) 343-0057
Pathfinder Bancorp, Inc. Announces First Quarter Earnings
Oswego, New York, April 28, 2008 Pathfinder Bancorp, Inc., the mid-tier
holding company of Pathfinder Bank, (NASDAQ SmallCap Market; symbol: PBHC,
listing: PathBcp) announced reported net income of $332,000, or $0.13 per
diluted share, for the three months ended March 31, 2008 as compared to
$165,000, or $0.07 per diluted share for the same period in 2007. The return on
average assets and return on average shareholders' equity were 0.40% and 5.94%,
respectively, for the three months ended March 31, 2008, compared with 0.21% and
3.13%, respectively, for the three months ended March 31, 2007.
"First quarter earnings continued a favorable trend of revenue growth from both
net interest income and fee income sources." according to Thomas Schneider,
President and Chief Executive Officer. "Additionally", Schneider further
stated, "net interest income grew by 13% on a combination of volume increase and
spread expansion, while core fee income categories increased by 17% over the
first quarter of 2007. These results were slightly mitigated by higher
provisioning for loan losses to reflect the growth in the loan portfolio and
general economic conditions."
Net interest income for the three months ended March 31, 2008, increased
$286,000 when compared to the same period during 2007. Interest income
increased $231,000, or 5%, combined with decreased interest expense of $55,000,
or 3%. Net interest rate spread increased to 2.99% for the first quarter of
2008 from 2.80% for the same period in 2007. Average interest-earning assets
increased 7% to $305.8 million at March 31, 2008 as compared to $284.6 million
at March 31, 2007, while the yield on those assets decreased 10 basis points to
5.94% compared to 6.04% for the same period in 2007. The increase in average
earning assets is primarily attributable to an $18.6 million increase in the
average loan portfolio, a $1.5 million increase in average investment securities
and a $1.0 million increase in the average balance of interest earning deposits
Average interest bearing liabilities increased $17.6 million, or 7%, while the
cost of funds decreased 28 basis points to 2.95% from 3.23% for the same period
in 2007. The increase in the average balance of interest bearing liabilities
resulted primarily from a $10.4 million increase in average borrowed funds and a
$7.3 million increase in average deposits.
Provision for loan losses for the quarter ended March 31, 2008 increased to
$145,000 from $50,000 for the same period in 2007. The increased provision is
reflective of a growing loan portfolio and one more heavily weighted to
commercial term and commercial real estate, which have higher inherent risk
characteristics than a consumer real estate portfolio, as well as a general
weakening in economic conditions. The Company's ratio of allowance for loan
losses to period end loans increased to 0.83% at March 31, 2008 as compared to
0.76% at December 31, 2007. Nonperforming loans to period end loans increased
to 0.96% at March 31, 2008 from 0.71% at December 31, 2007. The increase in
total non-performing loans is primarily the result of delinquencies of three
commercial loan relationships.
Non-interest income, exclusive of gains and losses from the sale of securities,
loans and foreclosed real estate, increased to $698,000 for the quarter ended
March 31, 2008 compared to $596,000 for the same quarter 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, a $18,000 increase in the bank's Visa debit card fees and an $11,000
increase in the value of bank owned life insurance.
Net gains and losses from the sale of securities, loans and foreclosed real
estate increased to a net gain of $6,000 for the quarter ended March 31, 2008
as compared to a net loss of $10,000 when compared to the same quarter of 2007.
The increase was primarily due to the gain recognized on the sale of foreclosed
real estate in the first quarter of 2008.
Non-interest expenses remained relatively consistent at $2.5 million for the
quarter ended March 31, 2008, when compared to the same period in the prior
year. An increase in salaries and employee benefits of $110,000 was primarily
due to annual merit increases and other incentive based compensation costs.
Building occupancy expenses were $28,000 higher as a result of increased
depreciation expenses, property taxes and communication charges. A $36,000
increase in other expenses was primarily the result of higher costs associated
with foreclosed real estate properties as the number of properties increased to
8 from 5 in the comparable quarter of 2007. Audits and exams expense increased
as a result of year-end audit travel related expenses. Offsetting these
increases were reductions of $56,000 in amortization expense as the core deposit
intangibles became fully amortized in October 2007. Data processing expenses
were $33,000 lower than the comparable quarter of 2007 as a result of lower
depreciation costs and maintenance expenses on equipment. An $18,000 reduction
in professional and other services was primarily due to consulting charges for
the SOX 404 review process being lower in the first quarter of 2008 when
compared to the first quarter of 2007. This reduction was offset by increased
legal fees and investment management expenses.
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 (UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
FOR THE THREE MONTHS
ENDED MARCH 31,
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2008 2007
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CONDENSED INCOME STATEMENT
Interest income $ 4,500 $ 4,269
Interest expense 2,088 2,143
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Net interest income 2,412 2,126
Provision for loan losses 145 50
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Net interest income after provision for loan losses 2,267 2,076
Other income 698 596
Net gains (losses) on securities, loans and foreclosed real estate 6 (10)
Other expense 2,525 2,458
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Income before taxes 446 204
Provision for income taxes 114 39
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NET INCOME $ 332 $ 165
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KEY EARNINGS RATIOS
Return on average assets 0.40% 0.21%
Return on average equity 5.94% 3.13%
Net interest margin (tax equivalent) 3.21% 3.02%
SHARE AND PER SHARE DATA
Basic weighted average shares outstanding 2,483,732 2,481,572
Basic earnings per share $ 0.13 $ 0.07
Diluted earnings per share 0.13 0.07
Cash dividends per share 0.1025 0.1025
Book value per share 8.85 8.43
MARCH 31, DECEMBER 31, MARCH 31,
2008 2007 2007
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SELECTED BALANCE SHEET DATA
Assets $337,145 $320,691 $317,219
Earning assets 304,985 290,192 290,321
Total loans 223,390 222,749 204,691
Deposits 271,376 251,085 260,461
Borrowed Funds 34,310 38,410 22,010
Trust Preferred Debt 5,155 5,155 10,310
Shareholders' equity 21,972 21,704 20,932
ASSET QUALITY RATIOS
Net loan charge-offs (recoveries) to average loans -0.01% 0.08% 0.13%
Allowance for loan losses to period end loans 0.83% 0.76% 0.72%
Allowance for loan losses to nonperforming loans 86.70% 107.04% 109.70%
Nonperforming loans to period end loans 0.96% 0.71% 0.66%
Nonperforming assets to total assets 0.87% 0.77% 0.54%