form8-k.htm
UNITED
STATES
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 11,
2010
PATHFINDER
BANCORP, INC.
(Exact
name of Registrant as specified in its charter)
Commission
File Number: 000-23601
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Federal
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16-1540137
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(State
or Other Jurisdiction of Incorporation or Organization)
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(I.R.S.
Employer Identification Number)
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214 West First Street,
Oswego, NY 13126
(Address
of Principal Executive Office) (Zip Code)
(315)
343-0057
(Issuer's
Telephone Number including area code)
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:
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____
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Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
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_____
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14d-2(b))
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_____
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Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
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_____
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Pre-commencement communications pursuant to Rule 13e-4c under the
Exchange Act (17 CFR 240.13e-4c))
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Section 2
– Financial Information
Item
2.02 Results of Operations and Financial Condition
On
February 11, 2010, Pathfinder Bancorp, Inc. issued a press release disclosing
fourth quarter and year end 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, not
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.
Item
9.01 Financial Statements and Results
Exhibit
99.1. Press Release dated February 11, 2010 reporting financial results for the
fiscal quarter and year ending December 31, 2009.
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.
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Date: February
11, 2010
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By:
/s/ Thomas W. Schneider
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Thomas
W. Schneider
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President
and Chief Executive Officer
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Exhibit
No. Description
Ex-99.1 4th
Quarter and Year End 2009 Earnings Release
FOR
IMMEDIATE RELEASE
CONTACT: Thomas
W. Schneider – President, CEO
James A. Dowd – Senior Vice President,
CFO
Telephone: (315)
343-0057
Pathfinder
Bancorp, Inc. Announces Fourth Quarter and Year-End Earnings
Oswego,
New York, February 11, 2010………… Pathfinder Bancorp, Inc., the mid-tier holding
company of Pathfinder Bank, (NASDAQ SmallCap Market; symbol: PBHC, listing:
PathBcp) announced reported net income of $1.6 million or $0.61 per basic and
diluted share for the twelve months ended December 31, 2009, compared to
$368,000, or $0.15 per basic and diluted share, for the same period in
2008. For the three months ended December 31, 2009, the Company
reported net income of $438,000, or $0.15 per diluted share, compared to
$574,000, or $0.23 per diluted share for the same period in 2008.
“We are
pleased with our results for 2009, particularly given the continued challenges
of the national and regional economies”, stated Thomas W. Schneider President
and CEO. “Assets, loans, deposits and equity have all grown to record
levels while annual net income of $1.6 million produced earnings per share of
$0.61 and a return on average equity of 7.04%.”, Schneider
continued.
“Earnings
have grown on an expanded net interest margin supported by continued balance
sheet diversification and a steep, positive yield curve. Expense
increases were primarily attributable to significantly higher FDIC assessments
and pension expense valuations.” Schneider added.
“Strong
deposit growth of 10% helped support loan growth of 5% and a 31% reduction in
borrowings.” Schneider continued. “Asset quality has remained stable
with non-performing assets at 0.67% of total assets. Loan loss
reserves grew by 25% to over $3 million and 1.17% of total loans.”
Net
interest income for the year ended December 31, 2009 increased $1.1 million, or
10.3%, when compared to the same period during 2008. The increase in
net interest income was the result of a decrease in interest expense of $1.6
million, or 21.4%, partially offset by a decrease in interest income of
$544,000. Net interest rate spread increased to 3.40% for the year
ended December 31, 2009 from 3.22% for the same period in
2008. Average interest-earning assets increased 5.4%, to $332.4
million, for the year ended December 31, 2009 as compared to $315.3 million for
the year ended December 31, 2008. The yield on average interest earning assets
decreased 49 basis points to 5.38% compared to 5.87% for the same period in
2008. The increase in average interest earning assets is primarily
attributable to an $18.9 million increase in the average balance of the loan
portfolio and a $4.7 million increase in interest earning deposits offset by a
$6.4 million decrease in the average balance of security
investments. Average interest-bearing liabilities increased $14.2
million, while the cost of funds decreased 66 basis points to 1.98% from 2.64%
for the same period in 2008. The increase in the average balance of
interest-bearing liabilities resulted from a $22.1 million, or 9.2%, increase in
average deposits offset by a decrease of $7.9 million in average borrowed
funds.
Net
interest income for the quarter ended December 31, 2009 increased 12% when
compared to the same period during 2008. The increase in net interest
income was the result of a decrease in interest expense of $485,000, or 26%,
partially offset by a decrease in interest income of $141,000. Net
interest rate spread increased to 3.71% for the fourth quarter of 2009, from
3.34% for the same period in 2008. Average interest-earning assets
increased 4% to $340.5 million for the quarter ended December 31, 2009, as
compared to $326.3 million for the same quarter in 2008. The yield on
interest-earning assets decreased 31 basis points to 5.48% compared to 5.79% for
the same period in 2008. Average interest-bearing liabilities
increased $6.1 million and the associated cost of funds decreased 68 basis
points to 1.77% from 2.45% for the same period in 2008.
Provision
for loan losses for the year ended December 31, 2009 increased to $876,000 from
$820,000 for the same period in 2008. Allowance for loan losses to
period end loans increased to 1.17% at December 31, 2009, as compared to 0.99%
at December 31, 2008. Nonperforming loans to period end loans
decreased to 0.88% at December 31, 2009, from 0.93% at December 31,
2008.
Non-interest
income, exclusive of net gains and losses from the sale of securities, loans and
foreclosed real estate, decreased to $2.7 million for the year ended December
31, 2009 compared to $2.8 million for the same period in the prior year. The
decrease in non-interest income is primarily attributable to a $67,000 decrease
in income from bank owned life insurance, and a $48,000 decrease in loan
servicing fees, offset by a $44,000 increase in other charges, commissions and
fees.
Non-interest
income, exclusive of net gains and losses from securities, loans and foreclosed
real estate, and other-than-temporary impairment charges, decreased to $707,000
for the quarter ended December 31, 2009 compared to $717,000 for the same
quarter in the prior year.
Net gains
and losses on securities increased $2.3 million, to a net gain of $112,000 for
the year ended December 31, 2009, as compared to a net loss of $2.2 million for
the year ended December 31, 2008. The net gain is a result of gains
generated from the sales of securities through out the year. These
gains were offset by recording other-than-temporary impairment charges during
the fourth quarter, related primarily to the company’s holdings in the SHAY
Asset AMF Ultra Short Mortgage Fund, and AMF Large Cap Equity fund, combined
with a second quarter other-than-temporary impairment charge of $298,000
relating to the company’s holdings in CIT Group. Net gains and losses
from loans and foreclosed real estate increased to a net gain of $54,000 for the
year ended December 31, 2009, as compared to a net loss of $44,000 for the year
ended December 31, 2008.
Net gains
and losses from the sales of securities increased to net gains of $92,000 for
the quarter ended December 31, 2009, as compared to a net loss of $41,000 when
compared to the same quarter in 2008. The increase in net securities gain and
losses is due to a $487,000 net gain from the sale of investment securities
during the quarter, partially offset by other-than-temporary charges of $395,000
primarily relating to the company’s holding in the SHAY Asset AMF Ultra Short
Mortgage Fund, and the AMF Large Cap Equity Fund, as compared to the
other-than-temporary impairment charges totaling $76,000 recorded in the same
quarter of 2008. Net gains and losses from loans and foreclosed real
estate decreased to a net loss of $26,000 for the quarter ended December 31,
2009, as compared to a net gain of $35,000 when compared to the same quarter of
2008. The decrease in gains from the sale of net loans and foreclosed
real estate is the result of the loss recognized on the disposition of one
foreclosure property, compared to the gains on the sale of foreclosure property
recorded during the fourth quarter of the prior year.
Year-to-date
non-interest expenses increased 12% from the prior year to $11.1 million from
$9.9 million. During 2009, FDIC Assessment, salary and employee
benefits, and other expenses, increased $692,000, $405,000, and $120,000
respectively. The increase in FDIC Assessment is due to the levying
of a 5 basis point special assessment based on the banks assets, the increase in
assessment rates and the exhausting of available credits reduced assessment
charges in 2008. The increase in salaries and employee benefits was due to an
increase in pension expense due primarily to unfavorable plan asset performance
in the prior year, combined with annual merit based wage adjustments. The
increase in other expenses was due to an increase in both audits and exams
combined with the recording of $40,000 in reserves associated with the company’s
debit card rewards program.
Non-interest
expenses increased $345,000, or 13.7%, for the quarter ended December 31, 2009.
The increase in non-interest expense is due to an increase of $245,000 in FDIC
Assessment, a $117,000 increase in salaries and employee benefits, and a $34,000
increase in other expenses. These increases were offset by a decrease
in data processing expenses of $47,000 and $8,000 in building and
occupancy.
About Pathfinder Bancorp,
Inc
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 II.
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.
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PATHFINDER
BANCORP, INC.
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FINANCIAL
HIGHLIGHTS
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(dollars
in thousands except per share amounts)
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For
the three months
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For
the twelve months
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ended
December 31,
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ended
December 31,
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(Unaudited)
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(Unaudited)
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2009
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2008
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2009
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2008
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Condensed
Income Statement
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Interest
and dividend income
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$ |
4,544 |
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$ |
4,685 |
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$ |
17,806 |
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$ |
18,350 |
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Interest
expense
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1,355 |
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1,840 |
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6,029 |
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7,675 |
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Net
interest income
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3,189 |
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2,845 |
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11,777 |
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10,675 |
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Provision
for loan losses
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222 |
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270 |
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876 |
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820 |
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2,967 |
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2,575 |
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10,901 |
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9,855 |
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Noninterest
income excluding net gains (losses) on
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securities,
loans and foreclosed real estate
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707 |
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717 |
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2,724 |
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2,786 |
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Net
gain (losses) on securities,
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loans
and foreclosed real estate
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66 |
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(6 |
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166 |
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(2,235 |
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Noninterest
expense
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2,872 |
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2,527 |
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11,126 |
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9,935 |
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Income
before taxes
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868 |
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759 |
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2,665 |
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471 |
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Provision
for income taxes
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430 |
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185 |
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1,050 |
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103 |
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Net
Income
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$ |
438 |
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$ |
574 |
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$ |
1,615 |
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$ |
368 |
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Key
Earnings Ratios
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Return
on average assets
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0.48 |
% |
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0.65 |
% |
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0.45 |
% |
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0.11 |
% |
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Return
on average equity
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6.02 |
% |
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11.07 |
% |
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7.04 |
% |
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1.70 |
% |
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Net
interest margin (tax equivalent)
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3.88 |
% |
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3.53 |
% |
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3.56 |
% |
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3.43 |
% |
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Share
and Per Share Data
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Basic
weighted average shares outstanding
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2,484,832 |
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2,484,832 |
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2,484,832 |
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2,484,167 |
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Basic
earnings per share
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$ |
0.15 |
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$ |
0.23 |
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$ |
0.61 |
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$ |
0.15 |
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Diluted
earnings per share
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0.15 |
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0.23 |
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0.61 |
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0.15 |
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Cash
dividends per share
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0.0300 |
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0.1025 |
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0.1200 |
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0.4100 |
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Book
value per share
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11.77 |
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8.04 |
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11.77 |
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8.04 |
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December
31,
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December 31,
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December 31,
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2009 |
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2008 |
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2007 |
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Selected
Balance Sheet Data
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Assets
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$ |
371,849 |
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$ |
352,760 |
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$ |
320,691 |
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Earning
assets
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343,071 |
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324,872 |
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290,192 |
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Total
loans
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262,465 |
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249,872 |
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222,749 |
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Deposits
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296,839 |
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269,438 |
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251,085 |
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Borrowed
Funds
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36,000 |
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51,975 |
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38,410 |
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Loan
Loss Reserves
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3,078 |
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2,472 |
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1,703 |
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Trust
Preferred Debt
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5,155 |
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5,155 |
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5,155 |
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Shareholders'
equity
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29,238 |
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19,495 |
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21,704 |
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Asset
Quality Ratios
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Net
loan charge-offs (annualized) to average loans
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0.11 |
% |
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0.02 |
% |
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0.08 |
% |
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Allowance
for loan losses to period end loans
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1.17 |
% |
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0.99 |
% |
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0.76 |
% |
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Allowance
for loan losses to nonperforming loans
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133.07 |
% |
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106.41 |
% |
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107.04 |
% |
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Nonperforming
loans to period end loans
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0.88 |
% |
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0.93 |
% |
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0.71 |
% |
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Nonperforming
assets to total assets
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0.67 |
% |
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0.75 |
% |
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0.77 |
% |
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