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, 2004
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 April 28,
2004, 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 April 28, 2004 the Company announced its earnings for the first quarter of
the 2004 fiscal year. A copy of the press release dated April 28, 2004,
describing the fourth 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: April 28, 2004 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 April 28, 2004
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 FIRST QUARTER EARNINGS
Oswego, New York, April 28, 2004 Pathfinder Bancorp, Inc., the mid-tier
holding company of Pathfinder Bank, (NASDAQ SmallCap Market; symbol: PBHC,
listing: PathBcp) announced reported net income of $323,000, or $0.13 per share,
for the three months ended March 31, 2004 as compared to $493,000, or $0.20 per
share for the same period in 2003.
"The Company has begun to feel the effects of margin compression as asset yields
are declining," according to Thomas W. Schneider, President and Chief Executive
Officer. "Net interest income was $200,000 less than the prior year. Some of
this decline was offset by higher non-interest income production, but it is
likely that reduced margin revenue will continue to challenge earnings growth
over the near term. Deposit growth was a robust 12% for the first quarter,
primarily fueled by expanding deposits with local municipalities."
Net interest income for the three months ended March 31, 2004, decreased 8% to
$2.2 million when compared to the same period during 2003. Interest income
decreased 441,000, or 11%, partially offset by a decrease in interest expense of
$243,000, or 15%. Net interest rate spread decreased to 3.22% for the first
quarter of 2004 from 3.84% for the same period in 2003. Average
interest-earning assets increased 4% to $264.7 million at March 31, 2004 as
compared to $254.0 million at March 31, 2003, while the yield on those assets
decreased 95 basis points to 5.41% compared to 6.36% for the same period in
2003. The increase in average earning assets is primarily attributable to a
$5.3 million increase in net loans receivable and a $5.0 million increase in
investment securities. Average interest-bearing liabilities increased $8.5
million, while the cost of funds decreased 49 basis points to 2.19% from 2.68%
for the same period in 2003. The increase in the average balance of
interest-bearing liabilities resulted primarily from a $10.3 million growth in
average deposits. The growth in deposits primarily resulted from the Company's
focus on attracting new municipal deposit customers.
Provision for loan losses for the quarter ended March 31, 2004 increased 77% to
$188,000 from $106,000 for the same period in 2003. The Company's ratio of
allowance for loan losses to period end loans has increased to 0.95% at March
31, 2004 from 0.91% at December 31, 2003. Nonperforming loans to period end
loans has remained consistent at 1.59% at March 31, 2004 and December 31, 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, net of gains and losses from
the sale of securities, loans and other real estate, increased 25% to $444,000
for the quarter ended March 31, 2004 compared to $356,000 for the same period in
the prior year. The increase in non-interest income is primarily attributable to
a $74,000 increase in service charges on deposit accounts and an $18,000
increase in other charges commissions and fees. Net gains and losses from the
sale of securities, loans and foreclosed real estate increased $27,000 to
$234,000 for the quarter ended March 31, 2004 compared to $207,000 for the same
period in the prior year.
Operating expenses increased 2% to $2.3 million for the quarter ended March 31,
2004, when compared to the same period in the prior year. The increase in
operating expenses was primarily due to a $90,000 increase in salary and
employee benefits, a $20,000 increase in building occupancy expenses and a
$27,000 increase in data processing expenses. These increases were partially
offset by a $17,000 decrease in professional and other services and a $71,000
decrease in other operating expenses. The increase in salaries and employee
benefits was primarily due to the salaries and benefits associated with an
increase in personnel and an increase in employee benefit costs. The decrease
in professional and other services and other operating expenses primarily
resulted from operating costs associated with a foreclosed real estate property
not recurring in 2004 as the property was sold during 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
ended March 31,
(Unaudited)
2004 2003
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CONDENSED INCOME STATEMENT
Interest income. . . . . . . . . . . . . . . . . . . $ 3,561 $ 4,002
Interest expense . . . . . . . . . . . . . . . . . . 1,357 1,600
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Net interest income. . . . . . . . . . . . . . . . . 2,204 2,402
Provision for loan losses. . . . . . . . . . . . . . 188 106
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Net interest income after provision for loan losses. 2,016 2,296
Other income . . . . . . . . . . . . . . . . . . . . 678 563
Other expense. . . . . . . . . . . . . . . . . . . . 2,250 2,202
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Income before taxes. . . . . . . . . . . . . . . . . 444 657
Provision for income taxes . . . . . . . . . . . . . 121 164
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Net income . . . . . . . . . . . . . . . . . . . . . $ 323 $ 493
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KEY EARNINGS RATIOS
Return on average assets . . . . . . . . . . . . . . 0.45% 0.70%
RETURN ON AVERAGE ASSETS - CASH EARNINGS*. . . . . 0.53% 0.78%
Return on average equity . . . . . . . . . . . . . . 5.83% 9.42%
RETURN ON AVERAGE EQUITY - CASH EARNINGS*. . . . . 6.86% 10.42%
Net interest margin (tax equivalent) . . . . . . . . 3.36% 3.84%
SHARE AND PER SHARE DATA
Basic weighted average shares outstanding. . . . . . 2,504,238 2,446,387
Basic earnings per share . . . . . . . . . . . . . . $ 0.13 $ 0.20
Diluted earnings per share . . . . . . . . . . . . . 0.13 0.20
CASH EARNINGS PER SHARE - BASIC* . . . . . . . . . 0.15 0.22
Cash dividends per share . . . . . . . . . . . . . . 0.10 0.10
Book value per share . . . . . . . . . . . . . . . . 8.88 8.90
(Unaudited) (Unaudited) (Unaudited)
March 31, December 31, March 31, March 31,
2004 2003 2003 2002
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SELECTED BALANCE SHEET DATA
Assets . . . . . . . . . . . . . . . . . . . . . . $ 302,316 $ 277,940 $ 282,638 $ 249,814
Earning assets . . . . . . . . . . . . . . . . . . 276,421 254,755 255,157 229,657
Total loans. . . . . . . . . . . . . . . . . . . . 186,646 188,717 183,345 171,663
Deposits . . . . . . . . . . . . . . . . . . . . . 230,951 206,894 211,446 173,784
Borrowed Funds . . . . . . . . . . . . . . . . . . 40,960 40,960 41,860 50,071
Trust Preferred Debt . . . . . . . . . . . . . . . 5,155 5,000 5,000 -
Shareholders' equity . . . . . . . . . . . . . . . 22,236 21,785 20,909 22,866
ASSET QUALITY RATIOS
Net loan charge-offs (annualized) to average loans 0.27% 0.19% 0.15% 0.05%
Allowance for loan losses to period end loans. . . 0.95% 0.91% 0.83% 1.08%
Allowance for loan losses to nonperforming loans . 59.87% 57.32% 81.99% 47.42%
Nonperforming loans to period end loans. . . . . . 1.59% 1.59% 1.01% 2.20%
Nonperforming assets to total assets . . . . . . . 1.07% 1.15% 1.17% 1.76%
* Cash earnings excludes noncash charges for amortization relating to
intangibles and the allocation of ESOP stock:
For the three months ended March 31,
2004 2003
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Net Income. . . . . . . . . . . . . . . $323 $494
Add back (net of tax effect):
Amortization of intangibles 34 34
Stock-based compensation. . 23 18
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Cash earnings. . . . . . . . . . . . . . $380 $546
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