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): February 22, 2005
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 February 22, 2005, Pathfinder Bancorp, Inc. issued a press release disclosing
fourth 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: February 22, 2005 By: /s/ Thomas W. Schneider
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Thomas W. Schneider
President and Chief Executive Officer
EXHBIT INDEX
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Earning release dated October 29, 2004 announcing September 30, 2004 earnings.
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 FOURTH QUARTER EARNINGS
Oswego, New York, February 22, 2005 Pathfinder Bancorp, Inc., the mid-tier
holding company of Pathfinder Bank, (NASDAQ SmallCap Market; symbol: PBHC,
listing: PathBcp) reported net income of $1.4 million, or $0.58 per share, for
the year ended December 31, 2004 as compared to $1.7 million, or $0.68 per
share, for the same period in 2003. For the three months ended December 31,
2004, the Company reported net income of $200,000, or $0.08 per share, compared
to $309,000, or $0.13 per share, for the same period in 2003.
Total assets grew $24.1 million, or 9%, during 2004, primarily within the
investment securities portfolio. The loan portfolio decreased by just under
$2.0 million as loan sales, amortization and payoffs outpaced new loan
production of $30.0 million. Deposits grew $29.8 million, or 14%, over the past
year.
"The Company has experienced significant deposit growth over the last year and a
40% increase over the last four years as we have expanded our markets and
diversified our services," according to Thomas W. Schneider, President and Chief
Executive Officer. "We believe that deposit growth with our branch structure
and our market is a primary driver of franchise value. Earnings, however, have
been hampered by a combination of higher costs associated with that growth and
expansion of delivery channels, margin compression caused by assets repricing at
significantly lower rates over the past two years and softer loan demand not
keeping pace with deposit growth. During 2005, we will be focused on
diversifying and more actively selling our loan offerings, and controlling costs
while we look forward to entering a new market with the expected opening of our
Central Square branch in the spring."
Net interest income for the year ended December 31, 2004 decreased $432,000 when
compared to the same period during 2003. Interest income decreased $807,000, or
5%, partially offset by a decrease in interest expense of $375,000, or 6%. Net
interest rate spread decreased to 3.22% for the year ended December 31, 2004
from 3.53% for the same period in 2003. Average interest-earning assets
increased 6% to $270.6 million for the year ended December 31, 2004 as compared
to $256.0 million for the year ended December 31, 2003, while the yield on those
assets decreased 60 basis points to 5.41% compared to 6.01% for the same period
in 2003. The increase in average earning assets is primarily attributable to a
$12.1 million increase in investment securities and a $4.1 million increase in
interest-earning deposits. Average interest-bearing liabilities increased $15.1
million, while the cost of funds decreased 30 basis points to 2.18% from 2.48%
for the same period in 2003. The increase in the average balance of
interest-bearing liabilities resulted primarily from a $20.7 million, or 11%,
growth in average deposits. The growth in deposits primarily resulted from
attracting new municipal deposit customers.
Provision for loan losses for the quarter ended December 31, 2004 increased 23%
to $738,000 from $598,000 for the same period in 2003. The increase in the
provision primarily resulted from the charge-off of two commercial relationships
during the fourth quarter of 2004. The Company's ratio of allowance for loan
losses to period end loans has increased to 0.98% at December 31, 2004 from
0.91% at December 31, 2003. Nonperforming loans to period end loans decreased
to 0.99% at December 31, 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, increased to $2.0 million for the year ended
December 31, 2004 compared to $1.7 million for the same period in the prior
year. The increase in non-interest income is primarily attributable to a
$149,000 increase in service charges on deposit accounts and a $129,000 increase
in other charges, commissions and fees, partially offset by a $26,000 decrease
in loan servicing fees. The increase in service charges on deposit accounts is
attributable to an increase in the number of demand accounts and their related
fees. The increase in other charges, commissions and fees is primarily
attributable to $54,000 of New York State grant income received related to a
Company-wide leadership training initiative and an increase in debit card fee
income. The training expenses associated with the grant are recorded separately
as an operating expense. Net gains and losses from the sale of securities,
loans and foreclosed real estate increased $183,000 to $1.1 million for the year
ended December 31, 2004, compared to $868,000 for the same period in the prior
year.
Operating expenses increased only 2% from the prior year to $9.3 million from
$9.1 million. During 2004, salary and employee benefits, building occupancy,
and data processing expenses increased $343,000, $27,000 and $113,000,
respectively. These increases were offset by an $88,000 decrease in
professional and other services and an $181,000 decrease in other expenses. The
increase in salaries and employee benefits was primarily due to the salaries and
benefits associated with an increase in staffing and an increase in employee
benefit costs. The decrease in other expenses primarily resulted from costs
associated with 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 twelve months
ended December 31, ended December 31,
(Unaudited) (Unaudited)
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2004 2003 2004 2003
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CONDENSED INCOME STATEMENT
Interest income. . . . . . . . . . . . . . . . . . . $ 3,640 $ 3,730 $ 14,478 $ 15,285
Interest expense . . . . . . . . . . . . . . . . . . 1,428 1,388 5,573 5,948
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Net interest income. . . . . . . . . . . . . . . . . 2,212 2,342 8,905 9,337
Provision for loan losses. . . . . . . . . . . . . . 331 106 738 598
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Net interest income after provision for loan losses. 1,881 2,236 8,167 8,739
Other income . . . . . . . . . . . . . . . . . . . . 802 469 3,047 2,608
Other expense. . . . . . . . . . . . . . . . . . . . 2,410 2,279 9,307 9,094
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Income before taxes. . . . . . . . . . . . . . . . . 273 426 1,907 2,253
Provision for income taxes . . . . . . . . . . . . . 73 117 502 601
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Net income . . . . . . . . . . . . . . . . . . . . . $ 200 $ 309 $ 1,405 $ 1,652
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KEY EARNINGS RATIOS
Return on average assets . . . . . . . . . . . . . . 0.26% 0.44% 0.47% 0.59%
RETURN ON AVERAGE ASSETS - CASH EARNINGS*. . . . . 0.33% 0.51% 0.54% 0.67%
Return on average equity . . . . . . . . . . . . . . 3.64% 5.81% 6.45% 7.61%
RETURN ON AVERAGE EQUITY - CASH EARNINGS*. . . . . 4.64% 6.82% 7.45% 8.58%
Net interest margin (tax equivalent) . . . . . . . . 3.25% 3.62% 3.35% 3.68%
SHARE AND PER SHARE DATA
Basic weighted average shares outstanding. . . . . . 2,441,262 2,417,318 2,435,274 2,423,966
Basic earnings per share . . . . . . . . . . . . . . $ 0.08 $ 0.13 $ 0.58 $ 0.68
Diluted earnings per share . . . . . . . . . . . . . 0.08 0.13 0.57 0.67
CASH EARNINGS PER SHARE - BASIC* . . . . . . . . . 0.10 0.24 0.67 0.72
Cash dividends per share . . . . . . . . . . . . . . 0.1025 0.10 0.4050 0.40
Book value per share . . . . . . . . . . . . . . . . - - 8.91 8.99
(Unaudited)
December 31,. . . December 31, December 31, December 31,
2004 2003 2002 2001
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SELECTED BALANCE SHEET DATA
Assets . . . . . . . . . . . . . . . . . . . . . . . $ 302,037 $ 277,940 $ 279,056 $ 244,514
Earning assets . . . . . . . . . . . . . . . . . . . 273,532 254,755 253,319 255,121
Total loans. . . . . . . . . . . . . . . . . . . . . 186,952 188,717 180,482 164,267
Deposits . . . . . . . . . . . . . . . . . . . . . . 236,672 206,894 204,522 169,589
Borrowed Funds . . . . . . . . . . . . . . . . . . . 35,360 40,960 42,860 49,441
Trust Preferred Debt . . . . . . . . . . . . . . . . 5,155 5,000 5,000 -
Shareholders' equity . . . . . . . . . . . . . . . . 21,826 21,785 23,230 22,185
ASSET QUALITY RATIOS
Net loan charge-offs to average loans. . . . . . . . 0.33% 0.19% 0.90% 0.19%
Allowance for loan losses to period end loans. . . . 0.98% 0.91% 0.82% 1.03%
Allowance for loan losses to nonperforming loans . . 98.76% 57.32% 86.57% 63.66%
Nonperforming loans to period end loans. . . . . . . 0.99% 1.59% 0.95% 1.30%
Nonperforming assets to total assets . . . . . . . . 0.88% 1.15% 1.11% 1.13%
* Cash earnings excludes noncash charges for amortization relating to
intangibles and the allocation of ESOP stock:
For the three months ended Dec. 31, For the twelve months ended Dec. 31,
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2004 2003 2004 2003
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Net Income. . . . . . . . . . . . . . . $ 200 $ 309 $1,405 $1,652
Add back (net of tax effect):
Amortization of intangibles 34 34 135 134
Stock-based compensation. . 21 21 83 77
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Cash earnings. . . . . . . . . . . . . . $ 255 $ 364 $1,623 $1,863
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