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): October 29, 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)
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:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
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Section 2 - Financial Information
Item 2.02
On October 29, 2004, Pathfinder Bancorp, Inc. issued a press release disclosing
third quarter 2004 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,
nor 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.
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: October 29, 2004 By: /s/ Thomas W. Schneider
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Thomas W. Schneider
President and Chief Executive
Officer
EXHBIT INDEX
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99.1 Earning release dated October 29, 2004 announcing September 30, 2004
earnings.
Exhibit 99.1
FOR IMMEDIATE RELEASE
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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, October 29, 2004 Pathfinder Bancorp, Inc., the mid-tier
holding company of Pathfinder Bank, (NASDAQ SmallCap Market; symbol: PBHC,
listing: PathBcp) reported net income of $360,000, or $0.15 per share, for the
three months ended September 30, 2004 as compared to $333,000, or $0.14 per
share for the same period in 2003. For the nine months ended September 30,
2004, the Company reported net income of $1.2 million, or $0.50 per share,
compared to $1.3 million, or $0.55 per share, for the same period in 2003.
"The increase in quarterly earnings reflects our emphasis throughout this year
to increase sources of non-interest income," according to Thomas W. Schneider,
President and Chief Executive Officer. "Net interest margin expansion will
remain challenging as a result of both competitive and interest rate factors.
Enhancing non-margin dependent sources of revenue will remain critical. During
the past quarter, the Company engaged outside professionals to assist in this
effort. We anticipate continued growth of non-interest revenue going forward,
while the expense of this engagement is front-loaded in the second half of
2005."
Net interest income for the quarter ended September 30, 2004 decreased slightly
when compared to the same period during 2003. Interest income decreased
$82,000, or 2%, partially offset by a decrease in interest expense of $36,000,
or 3%. Net interest rate spread decreased to 3.17% for the third quarter of
2004 from 3.52% for the same period in 2003. Average interest-earning assets
increased 8% to $271.6 million in the quarter ended September 30, 2004 as
compared to $250.5 million in the quarter ended September 30, 2003, while the
yield on those assets decreased 58 basis points to 5.33% compared to 5.91% for
the same period in 2003. The increase in average earning assets is primarily
attributable to a $22.3 million increase in investment securities and a $4.9
million increase in interest-earning deposits. Average interest-bearing
liabilities increased $17.5 million, while the cost of funds decreased 22 basis
points to 2.16% from 2.38% for the same period in 2003. The increase in the
average balance of interest-bearing liabilities resulted primarily from a $25.6
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 September 30, 2004 decreased 11%
to $112,000 from $126,000 for the same period in 2003. The Company's ratio of
allowance for loan losses to period end loans has increased to 1.00% at
September 30, 2004 from 0.91% at December 31, 2003. Nonperforming loans to
period end loans remained fairly consistent at 1.56% at September 30, 2004,
compared to 1.57% at December 31, 2003.
Other income, net of gains and losses from the sale of securities, loans and
foreclosed real estate, increased to $502,000 for the quarter ended September
30, 2004 compared to $446,000 for the same period in the prior year. The
increase in other income is primarily attributable to a $38,000 increase in
service charges on deposit accounts and a $23,000 increase in other charges,
commissions and fees, partially offset by a $9,000 decrease in earnings on bank
owned life insurance. Net gains and losses from the sale of securities, loans
and foreclosed real estate increased $58,000 to $213,000 for the quarter ended
September 30, 2004 compared to $155,000 for the same period in the prior year.
Other expenses remained consistent at $2.3 million for the quarter ended
September 30, 2004 and September 30, 2003. During the third quarter of 2004,
salaries and employee benefits, building occupancy expenses and data processing
expenses increased $94,000, $6,000 and $28,000, respectively. These increases
were partially offset by a $58,000 decrease in professional and other services
and a $24,000 decrease in other operating expenses. The increase in salaries
and employee benefits primarily resulted from 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, advertising costs in 2003 relating to the
production of television commercials which did not recur in 2004 and a reduction
in outside mortgage consulting expenses which are now performed by in-house
personnel.
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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2004 2003 2004 2003
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CONDENSED INCOME STATEMENT
Interest income. . . . . . . . . . . . . . . . . . . $ 3,595 $ 3,677 $ 10,838 $ 11,555
Interest expense . . . . . . . . . . . . . . . . . . 1,392 1,428 4,145 4,560
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Net interest income. . . . . . . . . . . . . . . . . 2,203 2,249 6,693 6,995
Provision for loan losses. . . . . . . . . . . . . . 112 126 407 492
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Net interest income after provision for loan losses. 2,091 2,123 6,286 6,503
Other income . . . . . . . . . . . . . . . . . . . . 715 601 2,245 2,139
Other expense. . . . . . . . . . . . . . . . . . . . 2,320 2,274 6,897 6,816
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Income before taxes. . . . . . . . . . . . . . . . . 486 450 1,634 1,826
Provision for income taxes . . . . . . . . . . . . . 126 117 429 484
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Net income . . . . . . . . . . . . . . . . . . . . . $ 360 $ 333 $ 1,205 $ 1,342
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KEY EARNINGS RATIOS
Return on average assets . . . . . . . . . . . . . . 0.48% 0.47% 0.54% 0.63%
RETURN ON AVERAGE ASSETS - CASH EARNINGS*. . . . . 0.55% 0.54% 0.62% 0.70%
Return on average equity . . . . . . . . . . . . . . 6.62% 6.29% 7.40% 8.47%
RETURN ON AVERAGE EQUITY - CASH EARNINGS*. . . . . 7.56% 7.29% 8.40% 9.46%
Net interest margin (tax equivalent) . . . . . . . . 3.28% 3.63% 3.29% 3.69%
SHARE AND PER SHARE DATA
Basic weighted average shares outstanding. . . . . . 2,438,796 2,415,681 2,433,264 2,426,206
Basic earnings per share . . . . . . . . . . . . . . $ 0.15 $ 0.14 $ 0.50 $ 0.55
Diluted earnings per share . . . . . . . . . . . . . 0.15 0.14 0.49 0.54
CASH EARNINGS PER SHARE - BASIC* . . . . . . . . . 0.17 0.16 0.56 0.62
Cash dividends per share . . . . . . . . . . . . . . 0.1025 0.10 0.3025 0.30
Book value per share . . . . . . . . . . . . . . . . - - 9.02 8.79
(Unaudited). (Unaudited) (Unaudited)
September 30, . December 31, September 30, September 30,
2004 2003 2003 2002
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SELECTED BALANCE SHEET DATA
Assets . . . . . . . . . . . . . . . . . . . . . . . $ 303,029 $ 277,940 $ 287,478 $ 258,184
Earning assets . . . . . . . . . . . . . . . . . . . 274,207 254,755 261,582 236,898
Total loans. . . . . . . . . . . . . . . . . . . . . 187,788 188,717 194,226 172,957
Deposits . . . . . . . . . . . . . . . . . . . . . . 236,731 206,894 212,094 179,819
Borrowed Funds . . . . . . . . . . . . . . . . . . . 35,360 40,960 45,060 46,644
Trust Preferred Debt . . . . . . . . . . . . . . . . 5,155 5,000 5,000 5,000
Shareholders' equity . . . . . . . . . . . . . . . . 21,953 21,785 21,374 23,231
ASSET QUALITY RATIOS
Net loan charge-offs (annualized) to average loans . 0.17% 0.19% 0.19% 0.92%
Allowance for loan losses to period end loans. . . . 1.00% 0.91% 0.88% 0.95%
Allowance for loan losses to nonperforming loans . . 63.94% 57.32% 71.19% 99.82%
Nonperforming loans to period end loans. . . . . . . 1.57% 1.59% 1.23% 0.95%
Nonperforming assets to total assets . . . . . . . . 1.06% 1.15% 0.96% 1.20%
* Cash earnings excludes noncash charges for amortization relating to
intangibles and the allocation of ESOP stock:
For the three months For the nine months
ended Sept. 30, ended Sept. 30,
2004 2003 2004 2003
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Net Income. . . . . . . . . . . . . . . $360 $333 $1,205 $1,342
Add back (net of tax effect):
Amortization of intangibles 33 33 100 101
Stock-based compensation. . 18 20 62 56
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Cash earnings. . . . . . . . . . . . . . $411 $386 $1,367 $1,499
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