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): May 5, 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 May 5, 2005, Pathfinder Bancorp, Inc. issued a press release disclosing first
quarter 2005 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: May 5, 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 May 5, 2005 announcing March 31, 2005 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 FIRST QUARTER EARNINGS
Oswego, New York, May 5, 2005 Pathfinder Bancorp, Inc., the mid-tier
holding company of Pathfinder Bank, (NASDAQ SmallCap Market; symbol: PBHC,
listing: PathBcp) announced reported net income of $149,000, or $0.06 per share,
for the three months ended March 31, 2005 as compared to $323,000, or $0.13 per
share for the same period in 2004.
"Strong deposit growth, soft loan demand, and a flattening yield curve have
combined to further compress net interest rate spread and reduce earnings",
according to Thomas W. Schneider, President and Chief Executive Officer.
"Deposit growth of 4% during the first quarter, and some significant loan
payoffs in the commercial portfolio, led to excess liquidity throughout much of
the quarter. Most of this liquidity was placed into short-term securities at
low yield levels as we expect loan demand to accelerate during the spring and
summer months."
"Expense increases associated with an expanding commercial lending sales force,
information services upgrades and internal training programs also contributed to
a decline in net earnings over the prior quarter and the prior year", stated
Schneider.
"Lower charge-offs, improved asset quality and higher revenue from fees offset
some of the adverse impact from lower margins and higher expenses. We expect
fee income to continue to grow and margins to improve from a better asset mix
during the next quarter. The addition of a new branch scheduled to open in the
latter part of the second quarter will decrease earnings on a net basis over the
near term."
Net interest income for the three months ended March 31, 2005, remained
relatively constant at $2.2 million when compared to the same period during
2004. Interest income increased $137,000, or 4%, offset by increased interest
expense of $142,000, or 10%. Net interest rate spread decreased to 3.06% for
the first quarter of 2005 from 3.23% for the same period in 2004. Average
interest-earning assets increased 6% to $280.2 million at March 31, 2005 as
compared to $264.7 million at March 31, 2004, while the yield on those assets
decreased 8 basis points to 5.34% compared to 5.42% for the same period in 2004.
The increase in average earning assets is primarily attributable to a $16.1
million increase in average investment securities and a $2.3 million increase in
average interest earning deposits, offset by a decrease in average net loans
receivable of $3.0 million. Average interest-bearing liabilities increased
$15.9 million and the cost of funds increased 8 basis points to 2.27% from 2.19%
for the same period in 2004. The increase in the average balance of
interest-bearing liabilities resulted primarily from a $22.3 million growth in
average deposits. The growth in deposits primarily resulted from the Company's
focus on attracting new municipal deposit customers, as well as expansion of our
retail deposit base.
Provision for loan losses for the quarter ended March 31, 2005 decreased to
$72,000 from $188,000 for the same period in 2004, primarily as a result of a
decrease in non performing loans and total loans. The Company's ratio of
allowance for loan losses to period end loans has increased to 1.01% at March
31, 2005 from 0.98% at December 31, 2004. Nonperforming loans to period end
loans has decreased to 0.94% at March 31, 2005 from 0.99% at December 31, 2004.
Other income, net of gains and losses from the sale of securities, loans and
other real estate, increased 13% to $501,000 for the quarter ended March 31,
2005 compared to $444,000 for the same period in the prior year. The increase in
other income is primarily attributable to a $39,000 increase in service charges
on deposit accounts and a $22,000 increase in other charges commissions and
fees. Net gains and losses from the sale of securities, loans and foreclosed
real estate decreased $246,000 to a net loss of $12,000 for the quarter ended
March 31, 2005 compared to a net gain of $234,000 for the same period in the
prior year.
Other expenses increased 8% to $2.4 million for the quarter ended March 31,
2005, when compared to the same period in the prior year. The increase in other
expenses was primarily due to an $82,000 increase in data processing expenses, a
$61,000 increase in salary and employee benefits, a $43,000 increase in
professional and other expenses and an $18,000 increase in other expenses. These
increases were partially offset by a $34,000 decrease in building occupancy
expenses. The increase in data processing expenses was primarily due to
software purchases and related annual maintenance charges, along with increased
internet banking and check processing charges. The increase in professional and
other services primarily resulted from costs associated with a leadership
training and performance management program, of which $18,000 of these costs
were reimbursed by a New York State Grant and reflected in other income.
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)
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2005 2004
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CONDENSED INCOME STATEMENT
Interest income. . . . . . . . . . . . . . . . . . . $ 3,698 $ 3,561
Interest expense . . . . . . . . . . . . . . . . . . 1,499 1,357
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Net interest income. . . . . . . . . . . . . . . . . 2,199 2,204
Provision for loan losses. . . . . . . . . . . . . . 72 188
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Net interest income after provision for loan losses. 2,127 2,016
Other income . . . . . . . . . . . . . . . . . . . . 501 444
Net (losses) gains on securities, loans and
foreclosed real estate . . . . . . . . . . . . . . (12) 234
Other expense. . . . . . . . . . . . . . . . . . . . 2,420 2,250
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Income before taxes. . . . . . . . . . . . . . . . . 196 444
Provision for income taxes . . . . . . . . . . . . . 47 121
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Net income . . . . . . . . . . . . . . . . . . . . . $ 149 $ 323
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KEY EARNINGS RATIOS
Return on average assets . . . . . . . . . . . . . . 0.19% 0.45%
Return on average equity . . . . . . . . . . . . . . 2.77% 5.83%
Return on average intangible equity (a). . . . . . . 3.49% 7.38%
Net interest margin (tax equivalent) . . . . . . . . 3.20% 3.36%
(a) tangible equity excludes intangible assets
SHARE AND PER SHARE DATA
Basic weighted average shares outstanding. . . . . . 2,447,210 2,504,238
Basic earnings per share . . . . . . . . . . . . . . $ 0.06 $ 0.13
Diluted earnings per share . . . . . . . . . . . . . 0.06 0.13
Cash dividends per share . . . . . . . . . . . . . . 0.1025 0.10
Book value per share . . . . . . . . . . . . . . . . 8.54 8.88
CASH EARNINGS
Return on average assets - cash earnings*. . . . . 0.26% 0.53%
Return on average equity - cash earnings*. . . . . 3.78% 6.85%
Cash earnings per share - basic* . . . . . . . . . 0.08 0.15
(Unaudited) (Unaudited)(Unaudited)
March 31, December 31, March 31, March 31,
2005 2004 2004 2003
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SELECTED BALANCE SHEET DATA
Assets . . . . . . . . . . . . . . . . . . . . . . $308,613 $302,037 $302,316 $282,638
Earning assets . . . . . . . . . . . . . . . . . . 278,890 273,532 276,421 255,157
Total loans. . . . . . . . . . . . . . . . . . . . 186,858 186,952 186,646 183,345
Deposits . . . . . . . . . . . . . . . . . . . . . 244,980 236,672 230,951 211,446
Borrowed Funds . . . . . . . . . . . . . . . . . . 34,360 35,360 40,960 41,860
Trust Preferred Debt . . . . . . . . . . . . . . . 5,155 5,155 5,155 5,000
Shareholders' equity . . . . . . . . . . . . . . . 20,954 21,826 22,236 20,909
ASSET QUALITY RATIOS
Net loan charge-offs (annualized) to average loans 0.04% 0.33% 0.27% 0.15%
Allowance for loan losses to period end loans. . . 1.01% 0.98% 0.95% 0.83%
Allowance for loan losses to nonperforming loans . 106.58% 98.76% 59.87% 81.99%
Nonperforming loans to period end loans. . . . . . 0.94% 0.99% 1.59% 1.01%
Nonperforming assets to total assets . . . . . . . 0.85% 0.88% 1.07% 1.17%
*Cash earnings excludes noncash charges for amortization relating to
intangibles and the allocation of ESOP stock:
For the three months ended March 31,
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2005 2004
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Net Income. . . . . . . . . . . . . . . $ 149 $ 323
Add back (net of tax effect):
Amortization of intangibles 34 34
Stock-based compensation. . 20 23
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Cash earnings. . . . . . . . . . . . . . $ 203 $ 380
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