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 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 July 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 July 28, 2004, the Company announced its earnings for the second quarter of
the 2004 fiscal year. A copy of the press release dated July 28, 2004,
describing the second 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: July 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 July 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 SECOND QUARTER EARNINGS
Oswego, New York, July 28, 2004 Pathfinder Bancorp, Inc., the mid-tier
holding company of Pathfinder Bank, (NASDAQ SmallCap Market; symbol: PBHC,
listing: PathBcp) reported net income of $434,000, or $0.18 per share, for the
three months ended June 30, 2004 as compared to $517,000, or $0.21 per share for
the same period in 2003. For the six months ended June 30, 2004, the Company
reported net income of $757,000, or $0.31 per share, compared to $1.0 million,
or $0.42 per share, for the same period in 2003.
"The Company has achieved strong deposit growth of $27 million, or 13%, during
the first half of 2004, primarily in checking and municipal accounts," according
to Thomas W. Schneider, President and Chief Executive Officer. "Loan growth has
been more muted as the local economy continues to lag national growth. The
margin compression the Company experienced in the first quarter has stabilized
as asset repricing has equalized," continued Schneider. "The reduction in
earnings compared to the prior year quarter resulted from higher securities
gains in 2003."
Net interest income for the quarter ended June 30, 2004 decreased slightly when
compared to the same period during 2003. Interest income decreased $195,000, or
5%, partially offset by a decrease in interest expense of $136,000, or 9%. Net
interest rate spread decreased to 3.22% for the second quarter of 2004 from
3.60% for the same period in 2003. Average interest-earning assets increased 9%
to $276.7 million in the quarter ended June 30, 2004 as compared to $253.0
million in the quarter ended June 30, 2003, while the yield on those assets
decreased 80 basis points to 5.36% compared to 6.16% for the same period in
2003. The increase in average earning assets is primarily attributable to a
$16.4 million increase in investment securities and a $6.5 million increase in
interest-earning deposits. Average interest-bearing liabilities increased $20.9
million, while the cost of funds decreased 41 basis points to 2.15% from 2.56%
for the same period in 2003. The increase in the average balance of
interest-bearing liabilities resulted primarily from a $24.2 million, or 13%,
growth in average deposits. The growth in deposits primarily resulted from
attracting new municipal deposit customers.
Provision for loan losses for the quarter ended June 30, 2004 decreased 59% to
$107,000 from $260,000 for the same period in 2003. The Company's ratio of
allowance for loan losses to period end loans has increased to 0.99% at June 30,
2004 from 0.91% at December 31, 2003. Nonperforming loans to period end loans
remained fairly steady at 1.62% at June 30, 2004, compared to 1.59% at December
31, 2003.
Non-interest income, net of gains and losses from the sale of securities, loans
and foreclosed real estate, decreased slightly to $481,000 for the quarter ended
June 30, 2004 compared to $483,000 for the same period in the prior year. The
decrease in non-interest income is primarily attributable to an $11,000 increase
in service charges on deposit accounts, and a $5,000 increase in bank owned life
insurance, offset by an $18,000 decrease in other charges, commissions and fees.
Net gains and losses from the sale of securities, loans and foreclosed real
estate decreased $240,000 to $251,000 for the quarter ended June 30, 2004
compared to $491,000 for the same period in the prior year.
Operating expenses remained consistent at $2.3 million for the quarter ended
June 30, 2004 and June 30, 2003. During the second quarter of 2004, salary and
employee benefits, building occupancy expenses and data processing expenses
increased $97,000, $8,000 and $11,000, respectively. These increases were
offset by a $12,000 decrease in professional and other services and a $116,000
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, and expenses
relating to personnel realignment in 2003, not recurring in 2004.
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 June 30,
(Unaudited) (Unaudited)
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2004 2003 2004 2003
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CONDENSED INCOME STATEMENT
Interest income. . . . . . . . . . . . . . . . . . . $ 3,682 $ 3,877 $ 7,243 $ 7,878
Interest expense . . . . . . . . . . . . . . . . . . 1,396 1,532 2,753 3,132
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Net interest income. . . . . . . . . . . . . . . . . 2,286 2,345 4,490 4,746
Provision for loan losses. . . . . . . . . . . . . . 107 260 295 366
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Net interest income after provision for loan losses. 2,179 2,085 4,195 4,380
Other income . . . . . . . . . . . . . . . . . . . . 732 974 1,410 1,538
Other expense. . . . . . . . . . . . . . . . . . . . 2,327 2,340 4,577 4,541
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Income before taxes. . . . . . . . . . . . . . . . . 584 719 1,028 1,377
Provision for income taxes . . . . . . . . . . . . . 150 203 271 367
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Net income . . . . . . . . . . . . . . . . . . . . . $ 434 $ 516 $ 757 $ 1,010
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KEY EARNINGS RATIOS
Return on average assets . . . . . . . . . . . . . . 0.57% 0.75% 0.51% 0.74%
RETURN ON AVERAGE ASSETS - CASH EARNINGS*. . . . . 0.64% 0.83% 0.58% 0.82%
Return on average equity . . . . . . . . . . . . . . 8.19% 9.70% 6.98% 9.43%
RETURN ON AVERAGE EQUITY - CASH EARNINGS*. . . . . 9.20% 10.69% 7.99% 10.42%
Net interest margin (tax equivalent) . . . . . . . . 3.34% 3.75% 3.39% 3.85%
SHARE AND PER SHARE DATA
Basic weighted average shares outstanding. . . . . . 2,436,878 2,416,888 2,430,468 2,431,556
Basic earnings per share . . . . . . . . . . . . . . $ 0.18 $ 0.21 $ 0.31 $ 0.42
Diluted earnings per share . . . . . . . . . . . . . 0.18 0.21 0.31 0.41
CASH EARNINGS PER SHARE - BASIC* . . . . . . . . . 0.20 0.24 0.36 0.46
Cash dividends per share . . . . . . . . . . . . . . 0.10 0.10 0.20 0.20
Book value per share . . . . . . . . . . . . . . . . - - 8.60 8.84
(Unaudited). (Unaudited) (Unaudited)
June 30,. December 31, June 30, June 30,
2004 2003 2003 2002
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SELECTED BALANCE SHEET DATA
Assets . . . . . . . . . . . . . . . . . . . . . . . $ 299,875 $ 277,940 $ 283,128 $ 258,123
Earning assets . . . . . . . . . . . . . . . . . . . 271,247 254,755 258,761 237,112
Total loans. . . . . . . . . . . . . . . . . . . . . 186,210 188,717 184,641 176,150
Deposits . . . . . . . . . . . . . . . . . . . . . . 233,853 206,894 204,523 177,346
Borrowed Funds . . . . . . . . . . . . . . . . . . . 36,360 40,960 48,160 49,441
Trust Preferred Debt . . . . . . . . . . . . . . . . 5,155 5,000 5,000 5,000
Shareholders' equity . . . . . . . . . . . . . . . . 21,049 21,785 21,488 23,076
ASSET QUALITY RATIOS
Net loan charge-offs (annualized) to average loans . 0.18% 0.19% 0.33% 0.64%
Allowance for loan losses to period end loans. . . . 0.99% 0.91% 0.86% 1.25%
Allowance for loan losses to nonperforming loans . . 60.88% 57.32% 124.37% 61.15%
Nonperforming loans to period end loans. . . . . . . 1.62% 1.59% 0.69% 2.01%
Nonperforming assets to total assets . . . . . . . . 1.11% 1.15% 1.01% 1.54%
* Cash earnings excludes noncash charges for amortization relating to
intangibles and the allocation of ESOP stock:
For the three months For the six months
ended June 30, ended June 30,
2004 2003 2004 2003
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Net Income. . . . . . . . . . . . . . . $434 $516 $757 $1,010
Add back (net of tax effect):
Amortization of intangibles 34 34 67 67
Stock-based compensation. . 20 18 43 36
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Cash earnings. . . . . . . . . . . . . . $488 $568 $867 $1,113
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