form8-k.htm
UNITED
STATES
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 30,
2009
PATHFINDER
BANCORP, INC.
(Exact
name of Registrant as specified in its charter)
Commission
File Number: 000-23601
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Federal
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16-1540137
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(State
or Other Jurisdiction of Incorporation or Organization)
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(I.R.S.
Employer Identification Number)
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214 West First Street,
Oswego, NY 13126
(Address
of Principal Executive Office) (Zip Code)
(315)
343-0057
(Issuer's
Telephone Number including area code)
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:
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4c under the Exchange Act (17 CFR
240.13e-4c))
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Section 2
– Financial Information
Item
2.02 Results of Operations and Financial Condition
On
October 30, 2009, Pathfinder Bancorp, Inc. issued a press release disclosing
third quarter 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, not
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.
Item
9.01 Financial Statements and Results
Exhibit
99.1. Press Release dated October 30, 2009 reporting financial results for the
fiscal quarter ending September 30, 2009.
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.
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Date: October
30, 2009
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By:
/s/ Thomas W. Schneider
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Thomas
W. Schneider
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President
and Chief Executive Officer
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Exhibit
No. Description
Ex-99.1 3rd
Quarter 2009 Earnings Release
FOR
IMMEDIATE RELEASE
CONTACT: Thomas
W. Schneider – President, CEO
James A. Dowd – Senior Vice President,
CFO
Telephone: (315)
343-0057
Pathfinder
Bancorp, Inc. Announces Third Quarter Earnings
Oswego,
New York, October 30, 2009………… Pathfinder Bancorp, Inc., the mid-tier holding
company of Pathfinder Bank, (NASDAQ SmallCap Market; symbol: PBHC, listing:
PathBcp) announced reported net income of $567,000, or $0.22 per diluted share,
for the three months ended September 30, 2009 as compared to net loss of
$838,000, or $0.34 per diluted share for the same period in 2008. For
the nine months ended September 30, 2009, the Company reported net income of
$1.2 million, or $0.46 per share, compared to a net loss of $206,000, or $0.08
per share, for the same period in 2008.
“The
Company is experiencing positive trends in earnings, growth and asset quality”,
according to Thomas W. Schneider, President and CEO. “The continued
execution of our business plan has positioned the Company to take advantage of
an expanding margin while prudently managing credit, liquidity and interest rate
risk in this highly uncertain economic environment. Prior period
comparatives are hindered by losses taken in the third quarter of 2008 on other
than temporary impairment charges in our investment
portfolio. However at September 30 2009, we have attained record
levels in total deposits, total loans, and total assets, while
recording near record level earnings.”
“In
September, the Company closed on a transaction with the United States Treasury
whereby the Company received $6.8 million in capital in exchange for preferred
stock and warrants as part of the Treasury Department’s Capital Purchase Program
(CPP).” Schneider stated. “Participation in the CPP
provides the Company a reasonable and pragmatic source of capital that will be
used to continue the growth and diversification of our lending portfolio to the
residents and small businesses within our expanding market area.”
Net
interest income for the quarter ended September 30, 2009 increased 8% when
compared to the same period during 2008. The increase in net interest
income was the result of a decrease in interest expense of $486,000, or 26%,
partially offset by a decrease in interest income of $268,000. Net
interest rate spread increased to 3.51% for the third quarter of 2009, from
3.29% for the same period in 2008. Average interest-earning assets
increased 2% to $329 million for the quarter ended September 30, 2009, as
compared to $321 million for the same quarter in 2008. The yield on
interest-earning assets decreased 49 basis points to 5.35% compared to 5.84% for
the same period in 2008. The increase in average earning assets is
primarily attributable to a $13.9 million increase in the average balance of the
loan portfolio and a $9.3 million increase in the average balance of
interest-earning deposits, offset by a decrease in the average balance of the
investment securities portfolio of $15.3 million. Average
interest-bearing liabilities increased $8.8 million and the associated cost of
funds decreased 72 basis points to 1.83% from 2.55% for the same period in
2008. The increase in average interest-bearing liabilities resulted
from a $25.5 million increase in deposits, offset by a $16.7 million decrease in
the average balance of borrowed funds.
Provision
for loan losses for the quarter ended September 30, 2009 decreased to $247,000
from $270,000 for the same period in 2008. Allowance for loan losses
to period end loans increased to 1.16% at September 30, 2009, as compared to
0.99% at December 31, 2008. Nonperforming loans to period end loans
increased to 0.97% at September 30, 2009, from 0.93% at December 31,
2008. Management believes the financial strength of the individual
borrowers, combined with the related value of any underlying collateral, will
not result in any recorded loss beyond currently established
reserves.
Non-interest
income, exclusive of net gains and losses from securities, loans and foreclosed
real estate, and other-than-temporary impairment charges, increased to $726,000
for the quarter ended September 30, 2009 compared to $718,000 for the same
quarter in the prior year.
Net gains
and losses from the sales of securities, loans and foreclosed real estate
increased to net gains of $246,000 for the quarter ended September 30, 2009, as
compared to a net loss of $1.9 million when compared to the same quarter of
2008. The increase in net securities gain and losses is the result of the gains
recognized on the sale of four government and agency securities, two mortgage
backed securities and one corporate bond, compared to the other-than-temporary
impairment charges totaling $1.8 million recorded in the same quarter of
2008. The increase in gains from the sale of net loans and foreclosed
real estate is the result of the sale of fixed rate loans into the secondary
market, offset by the loss on sale of two foreclosed real estate properties,
compared to the loss on sale of three foreclosed real estate properties in the
same quarter of 2008.
Non-interest
expenses increased $402,000, or 16.3%, when compared to the same period in the
prior year. $202,000 of the increase was due to an increase in FDIC
assessments. An increase in salaries and employee benefits of
$118,000 was due to a $60,000 increase in pension plan expense with the
remaining increase primarily the result of salary
increases. Professional and other services increased $81,000, which
is due to the combination of a $50,000 increase in advertising expenses incurred
in connection with the Bank’s 150th
anniversary celebration, and $31,000 in other professional services due
to legal fees associated with the company’s participation in the US Treasury
Departments Capital Purchase Plan.
Government Sponsored
Programs
On
September 11, 2009, Pathfinder Bancorp, Inc. entered into an agreement with the
United States Department of Treasury pursuant to which Pathfinder Bancorp, Inc.
issued and sold to the Treasury 6,771 shares of fixed rate cumulative perpetual
preferred stock and warrants to purchase 154,354 shares of the Company’s common
stock for a total price of $6,771,000. The preferred stock pays
cumulative dividends at a rate of 5% per annum for the first five years and
thereafter at a rate of 9% per annum. The preferred stock is
generally non-voting. The warrants have a ten-year term and are
immediately exercisable at a price of $6.58 per share. The
board and management believe that in the present national economic risk
environment that enhancing the Company’s capital ratios is both prudent and
potentially opportunistic as we move into the next business
cycle. The increase to capital will continue to support the company’s
lending activities to individuals, families, and businesses in our
communities.
The
Company is participating in the FDIC’s Temporary Liquidity Guarantee Program,
including the transaction account guarantee program, which insures all
non-interest bearing transaction accounts regardless of dollar
amount.
About Pathfinder Bancorp,
Inc
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 seven 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 II.
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.
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PATHFINDER
BANCORP, INC.
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FINANCIAL
HIGHLIGHTS
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(dollars
in thousands except per share amounts)
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For
the three months
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For
the nine months
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ended
September 30,
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ended
September 30,
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(Unaudited)
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(Unaudited)
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2009
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2008
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2009
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2008
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Condensed
Income Statement
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Interest
and dividend income
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$ |
4,391 |
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$ |
4,659 |
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$ |
13,262 |
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$ |
13,665 |
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Interest
expense
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1,392 |
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1,878 |
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4,673 |
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5,835 |
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Net
interest income
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2,999 |
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2,781 |
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8,589 |
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7,830 |
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Provision
for loan losses
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247 |
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270 |
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654 |
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550 |
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Net
interest income after provision for loan losses
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2,752 |
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2,511 |
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7,935 |
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7,280 |
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Noninterest
income excluding net gains (losses) on
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securities,
loans and foreclosed real estate
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726 |
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718 |
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2,015 |
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2,069 |
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Net
gain (losses) on securities,
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loans
and foreclosed real estate
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246 |
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(1893 |
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101 |
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(2,229 |
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Noninterest
expense
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2,864 |
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2,462 |
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8,254 |
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7,408 |
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Income
before taxes
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860 |
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(1126 |
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1,797 |
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(288 |
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Provision
(Benefit) for income taxes
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293 |
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(288 |
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620 |
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(82 |
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Net
Income (Loss)
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$ |
567 |
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$ |
(838 |
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$ |
1,177 |
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$ |
(206 |
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Key
Earnings Ratios
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Return
on average assets
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0.63 |
% |
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-0.97 |
% |
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0.44 |
% |
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-0.08 |
% |
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Return
on average equity
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10.09 |
% |
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-15.65 |
% |
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7.52 |
% |
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-1.25 |
% |
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Net
interest margin (tax equivalent)
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3.77 |
% |
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3.50 |
% |
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3.49 |
% |
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3.38 |
% |
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Share
and Per Share Data
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Basic
weighted average shares outstanding
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2,484,832 |
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2,484,832 |
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2,484,832 |
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2,483,944 |
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Basic
earnings per share
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$ |
0.22 |
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$ |
(0.34 |
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$ |
0.46 |
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$ |
(0.08 |
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Diluted
earnings per share
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0.22 |
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(0.34 |
) |
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0.46 |
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(0.08 |
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Cash
dividends per share
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0.0300 |
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0.1025 |
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0.0900 |
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0.3075 |
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Book
value per share
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- |
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11.45 |
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8.33 |
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September
30,
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December
31,
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September
30,
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2009 |
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2008 |
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2008 |
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Selected
Balance Sheet Data
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Assets
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$ |
364,982 |
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$ |
352,760 |
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$ |
352,788 |
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Earning
assets
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333,873 |
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324,872 |
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321,397 |
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Total
loans
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254,425 |
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249,872 |
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243,223 |
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Deposits
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292,618 |
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269,438 |
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264,753 |
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Borrowed
Funds
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34,000 |
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51,975 |
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57,155 |
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Loan
Loss Reserves
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2,960 |
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2,472 |
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2,241 |
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Trust
Preferred Debt
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5,155 |
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5,155 |
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5,155 |
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Shareholders'
equity
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28,450 |
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19,495 |
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20,591 |
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Asset
Quality Ratios
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Net
loan charge-offs (annualized) to average loans
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0.09 |
% |
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0.02 |
% |
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-0.01 |
% |
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Allowance
for loan losses to period end loans
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1.16 |
% |
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0.99 |
% |
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0.92 |
% |
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Allowance
for loan losses to nonperforming loans
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120.42 |
% |
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106.41 |
% |
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83.71 |
% |
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Nonperforming
loans to period end loans
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0.97 |
% |
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0.93 |
% |
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1.10 |
% |
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Nonperforming
assets to total assets
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0.79 |
% |
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0.75 |
% |
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0.85 |
% |
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