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): November 3, 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 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 November 3,
2003, 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 October 17, 2003 the Company announced its earnings for the third quarter of
the 2003 fiscal year. A copy of the press release dated November 3, 2003,
describing the third 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: November 3, 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 99.1 Press Release dated November 3, 2003
EXHIBIT 99.1
CONTACT: Thomas W. Schneider - President, CEO
James A. Dowd - Vice President, CFO
Telephone: (315) 343-0057
PATHFINDER BANCORP, INC. ANNOUNCES THIRD QUARTER EARNINGS
Oswego, New York, November 3, 2003 Pathfinder Bancorp, Inc., the mid-tier
holding company of Pathfinder Bank, (NASDAQ SmallCap Market; symbol: PBHC,
listing: PathBcp) reported net income of $333,000, or $0.14 per share, for the
quarter ended September 30, 2003 as compared to $349,000, or $.11, per share for
the same period in 2002. For the nine months ended September 30, 2003, the
Company reported net income of $1.3 million, or $0.55 per share, compared to
$1.3 million, or $0.49 per share, for the same period in 2002.
Total assets at September 30, 2003 were $287.5 million, and $29.3 million or 11%
increase over September 30, 2002. Total loans were $194.2 million, having
increased 12% over the past twelve months. Deposits increased 18% to $212.1
million at September 30, 2003.
"Despite the slow economic conditions and volatile interest rates over the past
year, the Bank has demonstrated good growth trends and stable margins,"
according to Thomas W. Schneider, President and Chief Executive Officer. "These
factors, combined with a 13% increase in non-interest income for the nine months
ended September 30, 2003 compared to the same period in the prior year, have
provided a strong revenue stream that has allowed us to absorb increasing
operating costs resulting from branch expansion, high residential loan volumes
and enhanced internal controls. Earnings per share of 55 cents for the first
nine months represents a 12% increase over last year."
Net interest income for the quarter ended September 30, 2003, increased 5% to
$2.2 million when compared to the same period during 2002. Interest expense
decreased $340,000 partially offset by a decrease in interest income of
$241,000. Net interest spread increased to 3.52% for the quarter ended September
30, 2003 from 3.31% for the same period in 2002. Interest earning assets
increased 3% to $261.6 million as compared to $253.3 million at December 31,
2002. The increase in earning assets is primarily attributable to a $577,000
increase in mortgage loans held for sale, and a $13.7 million increase in loans
receivable, partially offset by a $6.2 million decrease in interest earning
deposits.
Provision for loan losses for the quarter ended September 30, 2003 decreased 9%
to $126,000 from $138,000 for the same period in 2002. The Company had
non-performing loans of $2.4 million at September 30, 2003. The allowance for
loan losses to non-performing loans and to total loans was 71% and 0.88%,
respectively, at September 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 $446,000 for the quarter ended September 30, 2003 compared to $367,000 for
the same period in the prior year. The increase in non-interest income is
primarily attributable to a $58,000 increase in service charges on deposit
accounts, a $13,000 increase in the value of bank owned life insurance and a
$20,000 increase in other charges commissions and fees. These increases in
other income were partially offset by a $13,000 decrease in loan servicing fees.
Net gains and losses from the sale of securities, loans and other real estate
increased 153,000 to $155,000 for the quarter ended September 30, 2003 compared
to $3,000 for the same period in the prior year. The increase resulted from the
gain recognized on the sale of foreclosed commercial properties.
Operating expenses increased 19% to $2.3 million for the quarter ended September
30, 2003, when compared to the same period in the prior year. The increase in
operating expenses was primarily due to a $107,000 increase in salary and
employee benefits, a $64,000 increase in building occupancy expenses, a $36,000
in data processing expenses, a $33,000 increase in professional and other
services, a $56,000 increase in the amortization of intangible asset and a
$65,000 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.
On September 16, 2003, the Board of Directors of Pathfinder Bancorp, Inc.
declared a $0.10 per share cash dividend to shareholders of record as of
September 30, 2003, payable on October 13, 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 nine months
ended September 30, ended September 30,
(Unaudited) (Unaudited)
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2003 2002 2003 2002
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CONDENSED INCOME STATEMENT
Interest income. . . . . . . . . . . . . . . . . . . $ 3,677 $ 3,918 $ 11,555 $ 11,820
Interest expense . . . . . . . . . . . . . . . . . . 1,428 1,768 4,560 5,287
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Net interest income. . . . . . . . . . . . . . . . . 2,249 2,150 6,995 6,533
Provision for loan losses. . . . . . . . . . . . . . 126 138 492 1,208
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Net interest income after provision for loan losses. 2,123 2,012 6,503 5,325
Other income . . . . . . . . . . . . . . . . . . . . 601 370 2,139 1,888
Other expense. . . . . . . . . . . . . . . . . . . . 2,274 1,913 6,816 5,494
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Income before taxes. . . . . . . . . . . . . . . . . 450 469 1,826 1,719
Provision for income taxes . . . . . . . . . . . . 117 120 484 453
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Net income . . . . . . . . . . . . . . . . . . . . . $ 333 $ 349 $ 1,342 $ 1,266
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KEY EARNINGS RATIOS
Return on average assets . . . . . . . . . . . . . . 0.47% 0.54% 0.63% 0.68%
RETURN ON AVERAGE ASSETS - CASH EARNINGS*. . . . . 0.54% 0.57% 0.70% 0.71%
Return on average equity . . . . . . . . . . . . . . 6.29% 6.02% 8.47% 7.32%
RETURN ON AVERAGE EQUITY - CASH EARNINGS*. . . . . 7.29% 6.36% 9.46% 7.65%
Net interest margin (tax equivalent) . . . . . . . . 3.63% 3.62% 3.69% 3.79%
SHARE AND PER SHARE DATA
Basic weighted average shares outstanding. . . . . . 2,415,681 2,579,602 2,426,206 2,575,993
Basic earnings per share . . . . . . . . . . . . . . $ 0.14 0.11 $ 0.55 $ 0.49
Diluted earnings per share . . . . . . . . . . . . . 0.14 0.11 0.54 0.48
Cash dividends per share . . . . . . . . . . . . . . 0.10 0.08 0.20 0.22
Book value per share . . . . . . . . . . . . . . . . - - 8.79 8.64
(Unaudited). .. . . . . . . (Unaudited) (Unaudited)
September 30, . . . . December 31, September 30, September 30,
2003 2002 2002 2001
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SELECTED BALANCE SHEET DATA
Assets . . . . . . . . . . . . . . . . . . . . . . . $ 287,478 $ 279,056 $ 258,184 $ 237,786
Earning assets . . . . . . . . . . . . . . . . . . . 261,582 253,319 236,898 219,463
Total loans. . . . . . . . . . . . . . . . . . . . . 194,226 180,482 172,957 156,128
Deposits . . . . . . . . . . . . . . . . . . . . . . 212,094 204,522 179,819 167,467
Borrowed Funds . . . . . . . . . . . . . . . . . . . 45,060 42,860 46,644 44,773
Trust Preferred Debt . . . . . . . . . . . . . . . . 5,000 5,000 5,000 -
Shareholders' equity . . . . . . . . . . . . . . . . 21,374 23,230 23,231 22,498
ASSET QUALITY RATIOS
Net loan charge-offs (annualized) to average loans . 0.19% 0.89% 0.92% 0.24%
Allowance for loan losses to period end loans. . . . 0.88% 0.82% 0.95% 0.99%
Allowance for loan losses to nonperforming loans . . 71.19% 86.57% 99.82% 74.21%
Nonperforming loans to period end loans. . . . . . . 1.23% 0.95% 0.95% 1.34%
Nonperforming assets to total assets . . . . . . . . 0.96% 1.11% 1.20% 1.27%
* Cash earnings excludes noncash charges for amortization relating to
intangibles and the allocation of ESOP stock:
For the Three Months Ending For the Nine Months Ending
September 30, September 30,
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2003 2002 2003 2002
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Net Income. . . . . . . . . . $ 333 $ 349 $1,342 $1,266
Add back (net of tax effect):
Amortization of intangibles 33 - 101 -
Stock-based compensation. . 20 20 56 57
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Cash earnings . . . . . . . . $ 386 $ 369 $1,499 $1,323
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