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 21, 2003
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 5. Other Events
On July 21, 2003, Pathfinder Bancorp, Inc. issued the enclosed second quarter
earnings release.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
EXHIBIT 99 EARNINGS RELEASE DATED JULY 21, 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: July 21, 2003 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 Press Release
EXHIBIT 99
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 21, 2003 Pathfinder Bancorp, Inc., the mid-tier
holding company of Pathfinder Bank, (NASDAQ SmallCap Market; symbol: PBHC,
listing: PathBcp) reported net income of $516,000, or $0.21 per share, for the
quarter ended June 30, 2003 as compared to $360,000, or $.14, per share for the
same period in 2002. For the six months ended June 30, 2003, the Company
reported net income of $1.0 million, or $0.42 per share, compared to $911,000,
or $0.36 per share, for the same period in 2002.
"Results for the first half of the year reflect the strength of the Company's
balance sheet which allowed us to maintain a strong net interest rate spread in
this historically low interest rate environment," according to Thomas W.
Schneider, President and Chief Executive Officer. "The spread maintenance and
fee income growth have allowed us to absorb increased operating costs resulting
from branch expansion, high residential loan volumes and enhanced internal
controls."
Net interest income for the quarter ended June 30, 2003, increased 7% to $2.3
million when compared to the same period during 2002. Interest expense
decreased $197,000 partially offset by a slight decrease in interest income of
$37,000. Net interest spread increased to 3.60% for the quarter ended June 30,
2003 from 3.53% for the same period in 2002. Interest earning assets increased
2% to $258.8 million as compared to $253.3 million at December 31, 2002. The
increase in earning assets is primarily attributable to a $4.4 million increase
in investment securities, a $2.0 million increase in mortgage loans held for
sale, and a $4.1 million increase in net loans receivable, partially offset by a
$5.2 million decrease in interest earning deposits.
Provision for loan losses for the quarter ended June 30, 2003 decreased 71% to
$260,000 from $907,000 for the same period in 2002. The Company had
non-performing loans of $1.3 million at June 30, 2003. The allowance for loan
losses to non-performing loans and to total loans was 124% and .86%,
respectively, at June 30, 2003.
The Company's non-interest income is principally comprised of fees on deposit
accounts and transactions, loan servicing, commissions, and net securities and
loan sale gains and losses. Non-interest income, exclusive of net gains and
losses from the sale of securities, loans and other real estate, increased 21%
to $483,000 for the quarter ended June 30, 2003 compared to $399,000 for the
same period in the prior year. The increase in non-interest income is primarily
attributable to a $61,000 increase in service charges on deposit accounts and a
$27,000 increase in other charges commissions and fees. Net gains and losses
from the sale of securities, loans and other real estate decreased 31% to
$491,000 for the quarter ended June 30, 2003 compared to $712,000 for the same
period in the prior year.
Operating expenses increased 24% to $2.3 million for the quarter ended June 30,
2003, when compared to the same period in the prior year. The increase in
operating expenses was primarily due to a $133,000 increase in salary and
employee benefits, a $59,000 increase in building occupancy expenses, a $56,000
increase in the amortization of intangible asset and a $35,000 increase in other
expenses. The increases in operating costs are primarily attributable to the
operation of an additional branch location acquired in October 2002. Salaries
and employee benefits were also impacted by an increase in pension benefit costs
and an increase in the cost of health insurance benefits. In addition, the
Company incurred $164,000 in unusual expenses in 2003 relating to personnel
realignment. These increases were partially offset by a $31,000 decrease in
professional and other services.
On June 18, 2003, the Board of Directors of Pathfinder Bancorp, Inc. declared a
$0.10 per share cash dividend to shareholders of record as of June 30, 2003,
payable on July 15, 2003.
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 six months
ended June 30, ended June30,
(Unaudited) (Unaudited)
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2003 2002 2003 2002
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CONDENSED INCOME STATEMENT
Interest income. . . . . . . . . . . . . . . . . . . $ 3,877 $ 3,913 $ 7,878 $ 7,903
Interest expense . . . . . . . . . . . . . . . . . . 1,532 1,729 3,132 3,519
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Net interest income. . . . . . . . . . . . . . . . . 2,345 2,184 4,746 4,384
Provision for loan losses. . . . . . . . . . . . . . 260 907 366 1,070
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Net interest income after provision for loan losses. 2,085 1,277 4,380 3,314
Other income . . . . . . . . . . . . . . . . . . . . 974 1,112 1,539 1,511
Other expense. . . . . . . . . . . . . . . . . . . . 2,340 1,890 4,542 3,575
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Income before taxes. . . . . . . . . . . . . . . . . 719 499 1,377 1,250
(Benefit) provision for income taxes . . . . . . . . 203 139 367 339
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Net (loss) income. . . . . . . . . . . . . . . . . . $ 516 $ 360 $ 1,010 $ 911
====================== ==================== =========== ===========
KEY EARNINGS RATIOS
Return on average assets . . . . . . . . . . . . . . 0.75% 0.57% 0.74% 0.73%
RETURN ON AVERAGE ASSETS - CASH EARNINGS*. . . . . 0.83% 0.60% 0.82% 0.76%
Return on average equity . . . . . . . . . . . . . . 9.70% 6.21% 9.43% 7.95%
RETURN ON AVERAGE EQUITY - CASH EARNINGS*. . . . . 10.69% 6.54% 10.42% 8.27%
Net interest margin (tax equivalent) . . . . . . . . 3.75% 3.82% 3.82% 3.88%
SHARE AND PER SHARE DATA
Basic weighted average shares outstanding. . . . . . 2,416,888 2,576,766 2,431,556 1,574,158
Basic earnings per share . . . . . . . . . . . . . . $ 0.21 0.14 $ 0.42 $ 0.36
Diluted earnings per share . . . . . . . . . . . . . 0.21 0.14 0.41 0.35
CASH EARNINGS PER SHARE - BASIC* . . . . . . . . . 0.24 0.15 0.46 0.37
Cash dividends per share . . . . . . . . . . . . . . 0.10 0.07 0.20 0.14
Book value per share . . . . . . . . . . . . . . . . - - 8.84 8.64
(Unaudited). . . . . . (Unaudited) (Unaudited)
June 30, . . . . December 31, June 30, June 30,
2003 2002 2002 2001
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SELECTED BALANCE SHEET DATA
Assets . . . . . . . . . . . . . . . . . . . . . . . $ 283,128 $ 279,056 $ 258,123 $ 235,422
Earning assets . . . . . . . . . . . . . . . . . . . 258,761 253,319 237,112 216,263
Total loans. . . . . . . . . . . . . . . . . . . . . 184,641 180,482 176,150 150,875
Deposits . . . . . . . . . . . . . . . . . . . . . . 204,523 204,522 177,346 169,276
Borrowed Funds . . . . . . . . . . . . . . . . . . . 48,160 42,860 49,441 42,076
Trust Preferred Debt . . . . . . . . . . . . . . . . 5,000 5,000 5,000 -
Shareholders' equity . . . . . . . . . . . . . . . . 21,488 23,230 23,076 21,290
ASSET QUALITY RATIOS
Net loan charge-offs to average loans. . . . . . . . 0.33% 0.89% 0.64% 0.35%
Allowance for loan losses to period end loans. . . . 0.86% 0.82% 1.25% 1.01%
Allowance for loan losses to nonperforming loans . . 124.37% 86.57% 61.15% 81.58%
Nonperforming loans to period end loans. . . . . . . 0.69% 0.95% 2.01% 1.24%
Nonperforming assets to total assets . . . . . . . . 1.01% 1.11% 1.54% 1.25%
* Cash earnings excludes noncash charges for amortization relating to
intangibles and the allocation of ESOP stock