Pathfinder Bancorp, Inc. Announces Fourth Quarter 2023 Net Income of $2.5 Million and Full Year Net Income of $9.3 Million
- Effective expense management
- Resilient operational performance
- Increase in interest and dividend income for the year
- Decrease in noninterest expenses for the quarter
- Decrease in net income for the quarter and the full year
- Reduction in net interest income
- Increase in interest expenses
- Decline in noninterest income
Insights
The financial results of Pathfinder Bancorp for the fourth quarter and full year of 2023 demonstrate a mixed financial performance. While the bank has experienced a notable increase in interest and dividend income, this has been offset by a significant rise in interest expenses, leading to a decrease in net income compared to the previous year. The increase in interest expenses can be attributed to the rising interest rate environment, which has impacted the cost of interest-bearing liabilities. The bank's net interest margin has also decreased, which may concern investors as it reflects the profitability of the bank's core activities.
The decrease in net income and net interest margin could potentially raise questions about the bank's future profitability and ability to manage interest rate risk. However, the bank's management appears to be taking proactive steps to address these challenges, such as maintaining liquidity and managing deposit balances. These actions may provide some reassurance to stakeholders that the bank is focused on navigating the current economic landscape effectively.
Pathfinder Bancorp's performance in the context of the broader banking industry reflects the challenges faced by financial institutions in a volatile interest rate environment. The bank's efforts to maintain deposit balances and manage liquidity are noteworthy, especially considering industry-wide pressures that have reduced deposit balances. The bank's emphasis on operational streamlining and technological enhancements may also be seen as strategic moves to improve efficiency and remain competitive.
The bank's conservative approach to loan growth projections for 2024 indicates a cautious outlook in anticipation of potential changes in loan demand. This conservative stance, coupled with the bank's focus on deposit growth, suggests a strategy aimed at strengthening the bank's financial position in the face of uncertain market conditions.
The reported financials of Pathfinder Bancorp provide insight into the broader economic trends affecting the banking sector, such as the impact of rising interest rates on net interest income and margins. The bank's increase in interest expenses is a direct reflection of the Federal Reserve's monetary policy actions to combat inflation, which has led to higher borrowing costs across the economy.
The bank's proactive measures to manage its balance sheet in response to these economic fluctuations, including maintaining higher levels of liquidity, are indicative of a strategic response to an environment that favors non-depository entities. The bank's performance, despite a decrease in net income, illustrates resilience in the face of economic headwinds and may offer a microcosmic view of the banking sector's adaptability.
Highlights Include Effective Expense Management and Resilient Operational Performance
OSWEGO, N.Y., Feb. 01, 2024 (GLOBE NEWSWIRE) -- Pathfinder Bancorp, Inc. (“Company”) (NASDAQ: PBHC), the holding company for Pathfinder Bank (“Bank”), announced fourth quarter 2023 net income available to common shareholders of
Performance Highlights for Three Months Ended December 31, 2023:
- Pathfinder Bancorp, Inc. reported net income for the quarter of
$2.5 million , a decrease from the$3.5 million reported in the same period of 2022. - The Company reported an increase in interest and dividend income of
22.0% to$18.3 million for the quarter ended December 31, 2023, up from$15.0 million in the same three month period of 2022. - The total interest expense for the three months ended December 31, 2023, increased to
$9.2 million from$3.8 million reported in the fourth quarter of 2022, marking an increase of138.3% . - Net interest income after provision for credit losses amounted to
$8.9 million for the quarter, a decrease from the$9.3 million after the provision reported for the corresponding quarter of 2022. - Net interest margin for the quarter decreased to
2.74% from3.42% reported in the last quarter of 2022. - Noninterest income for the quarter was reported at
$1.3 million , a decrease from the$1.9 million in the fourth quarter of 2022. - Noninterest expenses were reported at
$7.0 million for the three-month period, showing a decrease compared to$7.2 million in the same quarter of the previous year.
Performance Highlights for Twelve Months Ended December 31, 2023:
- Pathfinder Bancorp, Inc. net income for the year 2023 decreased to
$9.3 million , down from$12.9 million reported for 2022. - For the twelve months ended December 31, 2023, the Company saw a significant
32.4% increase in interest and dividend income to$67.7 million , up from$51.1 million for the year 2022. - Given the increases in interest rates over the year, total interest expense for the year 2023 grew to
$28.7 million , a marked increase from the$9.7 million in 2022. - The Company's net interest income after provision for credit losses for the year ended December 31, 2023, was reported at
$36.0 million , representing a modest decrease from the$38.6 million reported for the year 2022. - The net interest margin for the year decreased to
2.95% compared to3.24% for 2022. - Noninterest income for the year was slightly down at
$5.2 million compared to$5.9 million in 2022. - Noninterest expenses for the full year were
$29.4 million , showing a modest increase from the$28.9 million in the previous year.
James A. Dowd, President, and Chief Executive Officer of Pathfinder Bank, commented on the Bank's performance and forward-looking strategies following the fourth quarter of 2023. He underscored the Bank's increased emphasis during 2023 on bolstering both balance sheet and contingently available liquidity. He stated that achieving higher levels of liquidity was a significant priority for both the Bank and the entire industry in the past year. He further noted the Bank’s success in maintaining its deposit balances, despite the pressures that have significantly reduced deposit balances industrywide, and he emphasized the necessity of executing on strategies designed to continuously monitor and manage liquidity reserves, especially in the current interest rate environment that in many ways favors non-depository entities, such as money-market mutual funds. He additionally discussed proactive measures that the Company continues to take to counterbalance declining net interest margin through operational streamlining and the introduction of technological enhancements.
"As we conclude the fourth quarter of 2023, we reflect on a year of considerable economic fluctuations. While we faced a range of challenges, our strategic responses have enabled us to navigate these variable conditions effectively. The 2023 landscape has been dominated by a nearly unprecedented rise in interest rates and persistent market volatility, factors which have tested the mettle of financial institutions nationally. Despite these formidable challenges, Pathfinder Bancorp reported net income of
"Our core operations have demonstrated remarkable resilience, underscored by a surge in interest and dividend income to
Turning to operational metrics, Mr. Dowd noted that the provision for credit losses was
"Our quarterly return on average assets (ROAA) of
"Our financial stewardship has been meticulous, particularly in managing our interest expenses, resulting in a net interest income of
"Our concerted efforts in cost management have been deliberate and effective, cushioning the impact of escalating labor costs and operational expenses stemming from the inflationary environment that was in place during the most recent 24 months. This fiscal discipline is demonstrated by a modest
"While facing economic pressures head-on, we are poised to maintain our vigilant management of net interest margins. Equipped with a comprehensive suite of risk management tools and a team of experienced professionals, we are well-prepared to counter further potential erosion. Our portfolio structure, with a significant presence of adjustable-rate financial instruments, equips us to effectively manage the impacts of interest rate shifts. While these instruments are advantageous in a rising rate environment, we are also prepared and vigilant in the event of potentially declining rates, ensuring our stance remains robust and adaptable to changing economic conditions," Mr. Dowd affirmed.
"As we look forward, we are filled with optimism for the continuing economic resurgence of Central New York, a revival energized by an influx of substantial private capital investments. Pathfinder Bank's dedication to maintaining the highest standard of asset quality, coupled with our prudent credit decision-making and our agility to adapt to our customers' evolving needs, underscores our strategic positioning. Although direct year-over-year comparisons of our operating results may be complex due to the current unique market dynamics, our foundational strengths that include our rigorous underwriting, our robust capital position, and our dedicated team fortify our capacity to navigate present-day challenges and to capitalize on the emerging opportunities that lie ahead," Mr. Dowd concluded.
Income Statement for the Quarter and Year Ended December 31, 2023
For the quarter ended December 31, 2023, the Company reported net income of
In total, our net interest income after provision for credit losses decreased modestly to
Shifting to the annual perspective, for the year ended December 31, 2023, Pathfinder Bancorp, Inc. reported net income of
Overall, before accounting for the provision for income taxes, the net income for the year 2023 was
Components of Net Interest Income
For the fourth quarter of 2023, Pathfinder Bancorp, Inc. reported net interest income of
The year-over-year quarterly rise in interest and dividend income was propelled by a substantial increase in loan interest income, which contributed an additional
When examining the year as a whole, net interest income before the provision for credit losses stood at
Pathfinder Bancorp, Inc. continues to navigate through a period of heightened interest rate volatility, with a strategic focus on optimizing its interest-earning assets and managing its interest-bearing liabilities to sustain, to the maximum degree possible its net interest income in a manner that incorporates all appropriate elements of risk management. The company remains vigilant in its efforts to adapt to the dynamic market conditions, ensuring prudent financial management and striving to deliver value to its stakeholders.
Provision for Credit Losses
In the final quarter of 2023, while Pathfinder Bancorp, Inc. continued to navigate a complex economic terrain characterized by ongoing global economic uncertainties and sector-specific headwinds, our risk management strategies and the quality of our credit portfolio enabled us to reduce our provision for credit losses. For the fourth quarter of 2023, the Company recorded a provision for credit losses amounting to
For the full year ended December 31, 2023, the provision for credit losses was
Since the adoption of the Current Expected Credit Loss ("CECL") methodology on January 1, 2023, the Company has adhered to a more predictive approach in estimating credit losses, utilizing a combination of historical credit loss experience, current economic conditions, and reasonable and supportable forecasts. The implementation of CECL necessitated a one-time adjustment to the allowance for credit losses, recorded as an adjustment to retained earnings in the first quarter of 2023, in the amount of
Noninterest Income
In the fourth quarter of 2023, Pathfinder Bancorp, Inc. reported noninterest income of
The year-over-year decrease in annual noninterest income can largely be attributed to the aforementioned year-over-year decline in nonrecurring historical tax credits in the amount of
The Bank was able to partially offset the declines in noninterest income, noted above, with an increase in service charges on deposit accounts and expanding income from bank-owned life insurance. For the quarter ended December 31, 2023, service charges on deposit accounts rose by
The following table sets forth the differences in noninterest income recorded in the three and twelve months ended December 31, 2023, as compared to the corresponding periods in 2022:
| Unaudited | For the three months ended | For the year ended | ||||||||||||||||||||||||||||||
| (In thousands) | December 31, 2023 | December 31, 2022 | Change | December 31, 2023 | December 31, 2022 | Change | ||||||||||||||||||||||||||
| Service charges on deposit accounts | $ | 336 | $ | 250 | $ | 86 | 34.4 | % | $ | 1,249 | $ | 1,126 | $ | 123 | 10.9 | % | ||||||||||||||||
| Earnings and gain on bank owned life insurance | 164 | 148 | 16 | 10.8 | % | 630 | 589 | 41 | 7.0 | % | ||||||||||||||||||||||
| Loan servicing fees | 69 | 103 | (34 | ) | -33.0 | % | 307 | 363 | (56 | ) | -15.4 | % | ||||||||||||||||||||
| Debit card interchange fees | 161 | 228 | (67 | ) | -29.4 | % | 616 | 867 | (251 | ) | -29.0 | % | ||||||||||||||||||||
| Insurance agency revenue | 303 | 279 | 24 | 8.6 | % | 1,304 | 1,128 | 176 | 15.6 | % | ||||||||||||||||||||||
| Historical tax credit | - | 521 | (521 | ) | -100.0 | % | - | 521 | (521 | ) | -100.0 | % | ||||||||||||||||||||
| Other charges, commissions and fees | 332 | 248 | 84 | 33.9 | % | 1,096 | 1,250 | (154 | ) | -12.3 | % | |||||||||||||||||||||
| Noninterest income before gains | 1,365 | 1,777 | (412 | ) | -23.2 | % | 5,202 | 5,844 | (642 | ) | -11.0 | % | ||||||||||||||||||||
| Net gains (losses) on sales of securities, fixed assets, loans and foreclosed real estate | - | (236 | ) | 236 | -100.0 | % | 243 | (282 | ) | 525 | -186.2 | % | ||||||||||||||||||||
| (Losses) gains on marketable equity securities | (47 | ) | 313 | (360 | ) | -115.0 | % | (255 | ) | 352 | (607 | ) | -172.4 | % | ||||||||||||||||||
| Total noninterest income | $ | 1,318 | $ | 1,854 | $ | (536 | ) | -28.9 | % | $ | 5,190 | $ | 5,914 | $ | (724 | ) | -12.2 | % | ||||||||||||||
The Bank's strategic focus on maintaining a diverse portfolio of noninterest income sources continues to be a key factor in its ability to weather the fluctuations inherent in net interest margin. The growth in service charges and other income segments demonstrates the Bank's commitment to optimizing its revenue mix and sustaining its financial performance in a dynamic market environment.
Noninterest Expense
The Company concluded the fourth quarter of 2023 with noninterest expenses amounting to
For the entire year of 2023, the Company's noninterest expenses registered at
| Unaudited | For the three months ended | For the year ended | ||||||||||||||||||||||||||||
| (In thousands) | December 31, 2023 | December 31, 2022 | Change | December 31, 2023 | December 31, 2022 | Change | ||||||||||||||||||||||||
| Salaries and employee benefits | $ | 3,677 | $ | 3,992 | $ | (315 | ) | -7.9 | % | $ | 15,920 | $ | 16,022 | $ | (102 | ) | -0.6 | % | ||||||||||||
| Building and occupancy | 864 | 889 | (25 | ) | -2.8 | % | 3,563 | 3,380 | 183 | 5.4 | % | |||||||||||||||||||
| Data processing | 499 | 490 | 9 | 1.8 | % | 2,018 | 2,042 | (24 | ) | -1.2 | % | |||||||||||||||||||
| Professional and other services | 488 | 416 | 72 | 17.3 | % | 2,019 | 1,528 | 491 | 32.1 | % | ||||||||||||||||||||
| Advertising | 155 | 284 | (129 | ) | -45.4 | % | 671 | 905 | (234 | ) | -25.9 | % | ||||||||||||||||||
| FDIC assessments | 222 | - | 222 | 100.0 | % | 885 | 606 | 279 | 46.0 | % | ||||||||||||||||||||
| Audits and exams | 259 | 264 | (5 | ) | -1.9 | % | 735 | 688 | 47 | 6.8 | % | |||||||||||||||||||
| Insurance agency expense | 216 | 219 | (3 | ) | -1.4 | % | 1,033 | 906 | 127 | 14.0 | % | |||||||||||||||||||
| Community service activities | 49 | 74 | (25 | ) | -33.8 | % | 200 | 267 | (67 | ) | -25.1 | % | ||||||||||||||||||
| Foreclosed real estate expenses | 35 | 21 | 14 | 66.7 | % | 111 | 78 | 33 | 42.3 | % | ||||||||||||||||||||
| Other expenses | 580 | 560 | 20 | 3.6 | % | 2,240 | 2,452 | (212 | ) | -8.6 | % | |||||||||||||||||||
| Total noninterest expenses | $ | 7,044 | $ | 7,209 | $ | (165 | ) | -2.3 | % | $ | 29,395 | $ | 28,874 | $ | 521 | 1.8 | % | |||||||||||||
Salaries and employee benefits, constituting the largest component of noninterest expenses, saw a moderate year-over-year decrease, indicative of the Company’s commitment to cost saving measures even in a competitive labor market. An increase in occupancy and equipment expenses also contributed to the annual increase, reflecting the Bank's investment in physical infrastructure and branch network expansion.
Professional and other services expense increased
FDIC assessments expense increased
Despite significant investments in infrastructure and expansion, Pathfinder Bancorp, Inc. has effectively managed its overhead expenses, reflecting a strong focus on operational efficiency and financial discipline. This disciplined approach to cost management, particularly in a challenging environment of margin compression and increasing operational complexities, has been crucial in mitigating the overall increase in noninterest expenses. Balancing necessary investments with careful cost control, the Company has skillfully navigated economic challenges, laying a solid foundation for sustained profitability.
Statement of Financial Condition at December 31, 2023
As Pathfinder Bancorp, Inc. concluded the year on December 31, 2023, its balance sheet reflected a strong and stable condition. Total assets were
Earning assets, which include loans and investment securities, exhibited a significant rise, reaching
The deposit base showed a modest contraction, totaling
The allowance for credit losses stood at
Shareholders' equity, a critical marker of the Bank's capital strength, increased to
In summary, the financial condition of Pathfinder Bancorp, Inc. as of December 31, 2023, demonstrates a solid financial foundation, characterized by careful asset growth, disciplined risk management, and an unwavering commitment to maintaining a strong capital position. The Bank's strategic execution throughout the year has positioned it well for ongoing stability and future growth opportunities.
Asset Quality
The following table details all nonaccrual loans relationships at December 31, 2023:
| (In thousands) | ||||||||||||||||||
| Loan Type | Collateral Type | Number of Loans | Loan Balance | Average Loan Balance | Weighted LTV at Origination/ Modification | Status | ||||||||||||
| Secured residential mortgage: | ||||||||||||||||||
| Real Estate | 22 | $ | 1,770 | $ | 80 | 73 | % | Individual loans are under active resolution management by the Bank. | ||||||||||
| Secured commercial real estate: | ||||||||||||||||||
| Private Museum | 1 | 1,374 | 1,374 | 79 | % | The borrower is making interest only and escrow payments. Strategic initiatives are being implemented by the borrower that will provide cash flow for future debt requirements under a modified debt restructure, which is currently in underwriting. | ||||||||||||
| Office Space | 1 | 1,682 | 1,682 | 78 | % | The loan is secured by a first mortgage with strong tenancy and a long-term lease. The borrower is seeking outside financing and the Bank is in regular communication with the borrower. | ||||||||||||
| All other | 8 | 1,997 | 250 | 138 | % | Individual loans are under active resolution management by the Bank. | ||||||||||||
| Commercial lines of credit: | 6 | 924 | 154 | (1 | ) | Individual lines are under active resolution management by the Bank. | ||||||||||||
| Commercial and industrial loans: | 14 | 6,340 | 453 | (1 | ) | Individual loans are under active resolution management by the Bank. | ||||||||||||
| Consumer loans: | 98 | 3,140 | 32 | (1 | ) | Individual loans are under active resolution management by the Bank. | ||||||||||||
| 150 | $ | 17,227 | ||||||||||||||||
(1) These loans were originated as unsecured or with minimal collateral.
Pathfinder Bancorp, Inc. has once again demonstrated proactive vigilance in maintaining its asset quality. The Bank's conservative approach to risk management is reflected in its allowance for credit losses, which stood at
Nonperforming loans, which comprised
Reflecting on these developments, Pathfinder Bancorp, Inc. maintains a steadfast focus on the credit quality of its loan portfolio and conducts a rigorous evaluation of loan recoverability. The bank's approach ensures that the allowance for credit losses remains both current and comprehensive. Such proactive management not only safeguards the company's balance sheet but also upholds its commitment to shareholder value, even while navigating the complexities of an evolving credit landscape.
Liquidity
The liquidity position of Pathfinder Bancorp, Inc. remains robust, reflecting strategic foresight and a disciplined approach to balance sheet management and deposit pricing. As of December 31, 2023, non-brokered deposit balances have seen a modest ascent to
The Bank's stable deposit base is further supported by its alliance with the Federal Home Loan Bank of New York, which provides access to an array of advanced borrowing facilities. Additionally, the Bank's available credit lines with other lenders, including the Federal Reserve Bank, position it to manage a wide range of liquidity contingencies. Comprehensive liquidity management practices at Pathfinder Bancorp, Inc., including rigorous stress testing and internal reporting, ensure that the Bank is well-equipped to meet its financial obligations. These practices have maintained both strong immediate and projected liquidity positions, allowing the Bank to remain agile in a dynamic regulatory and economic environment.
Moving into 2024, Pathfinder Bancorp, Inc. continues its steadfast resolve to preserve the highest standards of liquidity and asset quality, ensuring that it continues to build on its legacy of trust and financial excellence.
Cash Dividend Declared
On December 26, 2023, Pathfinder Bancorp, Inc. proudly declared its quarterly cash dividend, a testament to the company’s enduring commitment to shareholder returns and financial stability. Consistent with the Company’s tradition of sharing success, the Board of Directors declared a cash dividend of
Evaluating the Company's market performance, the closing stock price as of December 31, 2023, stood at
Pathfinder Bancorp, Inc. continues to navigate through economic cycles with a prudent and disciplined approach, ensuring that its capital distribution strategy is well-calibrated to support sustained growth and long-term shareholder wealth creation.
About Pathfinder Bancorp, Inc.
Pathfinder Bank is a New York State chartered commercial bank headquartered in Oswego, whose deposits are insured by the Federal Deposit Insurance Corporation. The Bank is a wholly owned subsidiary of Pathfinder Bancorp, Inc., (NASDAQ SmallCap Market; symbol: PBHC). The Bank has eleven full-service offices located in its market areas consisting of Oswego and Onondaga Counties and one limited purpose office in Oneida County. Through its subsidiary, Pathfinder Risk Management Company, Inc., the Bank owns a
Forward-Looking Statement
Certain statements contained herein are “forward looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are generally identified by use of the words "believe," "expect," "intend," "anticipate," "estimate," "project" or similar expressions, or future or conditional verbs, such as “will,” “would,” “should,” “could,” or “may.” These forward-looking statements are based on current beliefs and expectations of the Company’s and the Bank’s management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the Company’s and the Bank’s control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from those set forth in the forward-looking statements as a result of numerous factors. Factors that could cause such differences to exist include, but are not limited to: risks related to the real estate and economic environment, particularly in the market areas in which the Company and the Bank operate; fiscal and monetary policies of the U.S. Government; inflation; changes in government regulations affecting financial institutions, including regulatory compliance costs and capital requirements; fluctuations in the adequacy of the allowance for credit losses; decreases in deposit levels necessitating increased borrowing to fund loans and investments; operational risks including, but not limited to, cybersecurity, fraud and natural disasters; the risk that the Company may not be successful in the implementation of its business strategy; changes in prevailing interest rates; credit risk management; asset-liability management; and other risks described in the Company’s filings with the Securities and Exchange Commission, which are available at the SEC’s website, www.sec.gov.
This release contains non-GAAP financial measures. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of a registrant’s historical or future financial performance, financial position, or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet, or statement of cash flows (or equivalent statements) of the registrant; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. In this regard, GAAP refers to generally accepted accounting principles in the United States. Pursuant to the requirements of Regulation G, the Company has provided reconciliations within the release of the non-GAAP financial measures to the most directly comparable GAAP financial measures.
| PATHFINDER BANCORP, INC. FINANCIAL HIGHLIGHTS (Dollars and shares in thousands except per share amounts) | |||||||||||||||
| For the three months | For the year | ||||||||||||||
| ended December 31, | ended December 31, | ||||||||||||||
| (Unaudited) | (Unaudited) | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Condensed Income Statement | |||||||||||||||
| Interest and dividend income | $ | 18,328 | $ | 15,027 | $ | 67,663 | $ | 51,098 | |||||||
| Interest expense | 9,169 | 3,848 | 28,744 | 9,695 | |||||||||||
| Net interest income | 9,159 | 11,179 | 38,919 | 41,403 | |||||||||||
| Provision for credit losses | 265 | 1,883 | 2,930 | 2,754 | |||||||||||
| 8,894 | 9,296 | 35,989 | 38,649 | ||||||||||||
| Noninterest income excluding net gains on sales of securities, loans and foreclosed real estate | 1,365 | 1,777 | 5,202 | 5,844 | |||||||||||
| Net gains (losses) on sales of securities, fixed assets, loans and foreclosed real estate | - | (236 | ) | 243 | (282 | ) | |||||||||
| (Losses) gains on marketable equity securities | (47 | ) | 313 | (255 | ) | 352 | |||||||||
| Noninterest expense | 7,044 | 7,209 | 29,395 | 28,874 | |||||||||||
| Income before income taxes | 3,168 | 3,941 | 11,784 | 15,689 | |||||||||||
| Provision for income taxes | 590 | 383 | 2,362 | 2,656 | |||||||||||
| Net income attributable to noncontrolling interest and Pathfinder Bancorp, Inc. | $ | 2,578 | $ | 3,558 | $ | 9,422 | $ | 13,033 | |||||||
| Net income attributable to noncontrolling interest | 42 | 28 | 129 | 101 | |||||||||||
| Net income attributable to Pathfinder Bancorp Inc. | $ | 2,536 | $ | 3,530 | $ | 9,293 | $ | 12,932 | |||||||
| As of and for the year ended | |||||||||||
| December 31, | December 31, | December 31, | |||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | |||||||||
| 2023 | 2022 | 2021 | |||||||||
| Selected Balance Sheet Data | |||||||||||
| Assets | $ | 1,465,798 | $ | 1,399,921 | $ | 1,285,177 | |||||
| Earning assets | 1,383,557 | 1,313,069 | 1,212,139 | ||||||||
| Total loans | 897,207 | 897,754 | 832,459 | ||||||||
| Deposits | 1,120,067 | 1,125,430 | 1,055,346 | ||||||||
| Borrowed funds | 175,599 | 115,997 | 77,098 | ||||||||
| Allowance for credit losses | 15,975 | 15,319 | 12,935 | ||||||||
| Subordinated debt | 29,914 | 29,733 | 29,563 | ||||||||
| Pathfinder Bancorp, Inc. Shareholders' equity | 119,495 | 110,997 | 110,287 | ||||||||
| Asset Quality Ratios | |||||||||||
| Net loan charge-offs to average loans | 0.47 | % | 0.04 | % | 0.12 | % | |||||
| Allowance for credit losses to period end loans | 1.78 | % | 1.71 | % | 1.55 | % | |||||
| Allowance for credit losses to nonperforming loans | 92.73 | % | 169.93 | % | 155.99 | % | |||||
| Nonperforming loans to period end loans | 1.92 | % | 1.00 | % | 1.00 | % | |||||
| Nonperforming assets to total assets | 1.19 | % | 0.66 | % | 0.65 | % | |||||
The above information is preliminary and based on the Company's data available at the time of presentation.
| PATHFINDER BANCORP, INC. FINANCIAL HIGHLIGHTS (Dollars and shares in thousands except per share amounts) | |||||||||||||||
| For the three months | For the year | ||||||||||||||
| ended December 31, | ended December 31, | ||||||||||||||
| (Unaudited) | (Unaudited) | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Key Earnings Ratios | |||||||||||||||
| Return on average assets | 0.72 | % | 1.02 | % | 0.67 | % | 0.96 | % | |||||||
| Return on average common equity | 8.72 | % | 12.89 | % | 8.09 | % | 11.77 | % | |||||||
| Return on average equity | 8.72 | % | 12.89 | % | 8.09 | % | 11.77 | % | |||||||
| Net interest margin | 2.74 | % | 3.42 | % | 2.95 | % | 3.24 | % | |||||||
| Share, Per Share and Ratio Data | |||||||||||||||
| Basic and diluted weighted average shares outstanding -Voting | 4,693 | 4,585 | 4,653 | 4,559 | |||||||||||
| Basic and diluted earnings per share - Voting | $ | 0.41 | $ | 0.58 | $ | 1.51 | $ | 2.13 | |||||||
| Basic and diluted weighted average shares outstanding - Series A Non-Voting | 1,380 | 1,380 | 1,380 | 1,380 | |||||||||||
| Basic and diluted earnings per share - Series A Non-Voting | $ | 0.41 | $ | 0.58 | $ | 1.51 | $ | 2.13 | |||||||
| Cash dividends per share | $ | 0.09 | $ | 0.09 | $ | 0.36 | $ | 0.36 | |||||||
| Book value per common share at December 31, 2023 and 2022 | $ | 19.59 | $ | 18.40 | |||||||||||
| Tangible book value per common share at December 31, 2023 and 2022 | $ | 18.83 | $ | 17.63 | |||||||||||
| Tangible common equity to tangible assets at December 31, 2023 and 2022 | 7.86 | % | 7.62 | % | |||||||||||
| Tangible common equity to tangible assets at December 31, 2023 and 2022, adjusted | 7.86 | % | 7.62 | % | |||||||||||
Throughout the accompanying document, certain financial metrics and ratios are presented that are not defined under generally accepted accounting principles (GAAP). Reconciliations of the non-GAAP financial metrics and ratios, presented elsewhere within this document, are presented below:
| As of and for the year | |||||||
| ended December 31, | |||||||
| (Unaudited) | |||||||
| Non-GAAP Reconciliation | 2023 | 2022 | |||||
| Tangible book value per common share | |||||||
| Total equity | $ | 119,495 | $ | 110,997 | |||
| Intangible assets | (4,621 | ) | (4,637 | ) | |||
| Tangible common equity | 114,874 | 106,360 | |||||
| Common shares outstanding | 6,100 | 6,032 | |||||
| Tangible book value per common share | $ | 18.83 | $ | 17.63 | |||
| Tangible common equity to tangible assets | |||||||
| Tangible common equity | $ | 114,874 | $ | 106,360 | |||
| Tangible assets | 1,461,177 | 1,395,284 | |||||
| Tangible common equity to tangible assets ratio | 7.86 | % | 7.62 | % | |||
| Tangible common equity to tangible assets, adjusted | |||||||
| Tangible common equity | $ | 114,874 | $ | 106,360 | |||
| Tangible assets | 1,461,177 | 1,395,284 | |||||
| Less: Paycheck Protection Program (PPP) loans | - | (203 | ) | ||||
| Total assets excluding PPP loans | $ | 1,461,177 | $ | 1,395,081 | |||
| Tangible common equity to tangible assets ratio, excluding PPP loans | 7.86 | % | 7.62 | % | |||
* Basic and diluted earnings per share are calculated based upon the two-class method for the years ended December 31, 2023 and 2022.
Weighted average shares outstanding do not include unallocated ESOP shares.
The above information is preliminary and based on the Company's data available at the time of presentation.
PATHFINDER BANCORP, INC.
FINANCIAL HIGHLIGHTS
(Dollars and shares in thousands except per share amounts)
The following table sets forth information concerning average interest-earning assets and interest-bearing liabilities and the yields and rates thereon. Interest income and resultant yield information in the table has not been adjusted for tax equivalency. Averages are computed on the daily average balance for each month in the period divided by the number of days in the period. Yields and amounts earned include loan fees. Nonaccrual loans have been included in interest-earning assets for purposes of these calculations.
| For the three months ended December 31, | |||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||
| 2023 | 2022 | ||||||||||||||||||||||
| (Dollars in thousands) | Average Balance | Interest | Average Yield/Cost | Average Balance | Interest | Average Yield/Cost | |||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||||
| Loans | $ | 896,439 | $ | 12,429 | 5.55 | % | $ | 889,431 | $ | 10,761 | 4.84 | % | |||||||||||
| Taxable investment securities | 403,411 | 5,324 | 5.28 | % | 361,973 | 3,604 | 3.98 | % | |||||||||||||||
| Tax-exempt investment securities | 27,941 | 506 | 7.24 | % | 41,020 | 561 | 5.47 | % | |||||||||||||||
| Fed funds sold and interest-earning deposits | 11,630 | 69 | 2.37 | % | 16,716 | 101 | 2.42 | % | |||||||||||||||
| Total interest-earning assets | 1,339,421 | 18,328 | 5.47 | % | 1,309,140 | 15,027 | 4.59 | % | |||||||||||||||
| Noninterest-earning assets: | |||||||||||||||||||||||
| Other assets | 102,940 | 100,484 | |||||||||||||||||||||
| Allowance for credit losses | (17,359 | ) | (13,656 | ) | |||||||||||||||||||
| Net unrealized losses on available-for-sale securities | (15,653 | ) | (16,554 | ) | |||||||||||||||||||
| Total assets | $ | 1,409,349 | $ | 1,379,414 | |||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||
| NOW accounts | $ | 87,210 | $ | 223 | 1.02 | % | $ | 95,205 | $ | 85 | 0.36 | % | |||||||||||
| Money management accounts | 12,518 | 3 | 0.10 | % | 16,169 | 6 | 0.15 | % | |||||||||||||||
| MMDA accounts | 231,957 | 2,156 | 3.72 | % | 274,511 | 955 | 1.39 | % | |||||||||||||||
| Savings and club accounts | 115,984 | 76 | 0.26 | % | 136,447 | 60 | 0.18 | % | |||||||||||||||
| Time deposits | 505,554 | 4,922 | 3.89 | % | 445,796 | 1,960 | 1.76 | % | |||||||||||||||
| Subordinated loans | 29,883 | 494 | 6.61 | % | 29,704 | 465 | 6.26 | % | |||||||||||||||
| Borrowings | 124,780 | 1,295 | 4.15 | % | 72,100 | 317 | 1.76 | % | |||||||||||||||
| Total interest-bearing liabilities | 1,107,886 | 9,169 | 3.31 | % | 1,069,932 | 3,848 | 1.44 | % | |||||||||||||||
| Noninterest-bearing liabilities: | |||||||||||||||||||||||
| Demand deposits | 169,340 | 185,835 | |||||||||||||||||||||
| Other liabilities | 15,858 | 14,123 | |||||||||||||||||||||
| Total liabilities | 1,293,084 | 1,269,890 | |||||||||||||||||||||
| Shareholders' equity | 116,265 | 109,524 | |||||||||||||||||||||
| Total liabilities & shareholders' equity | $ | 1,409,349 | $ | 1,379,414 | |||||||||||||||||||
| Net interest income | $ | 9,159 | $ | 11,179 | |||||||||||||||||||
| Net interest rate spread | 2.16 | % | 3.15 | % | |||||||||||||||||||
| Net interest margin | 2.74 | % | 3.42 | % | |||||||||||||||||||
| Ratio of average interest-earning assets to average interest-bearing liabilities | 120.90 | % | 122.36 | % | |||||||||||||||||||
The above information is preliminary and based on the Company's data available at the time of presentation.
| PATHFINDER BANCORP, INC. FINANCIAL HIGHLIGHTS (Dollars and shares in thousands except per share amounts) | |||||||||||||||||||||||
| For the year ended December 31, | |||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||
| 2023 | 2022 | ||||||||||||||||||||||
| (Dollars in thousands) | Average Balance | Interest | Average Yield/Cost | Average Balance | Interest | Average Yield/Cost | |||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||||||
| Loans | $ | 899,605 | $ | 47,348 | 5.26 | % | $ | 869,591 | $ | 38,322 | 4.41 | % | |||||||||||
| Taxable investment securities | 379,600 | 18,073 | 4.76 | % | 351,898 | 11,454 | 3.25 | % | |||||||||||||||
| Tax-exempt investment securities | 30,318 | 1,947 | 6.42 | % | 38,456 | 1,173 | 3.05 | % | |||||||||||||||
| Fed funds sold and interest-earning deposits | 11,730 | 295 | 2.51 | % | 19,134 | 149 | 0.78 | % | |||||||||||||||
| Total interest-earning assets | 1,321,253 | 67,663 | 5.12 | % | 1,279,079 | 51,098 | 3.99 | % | |||||||||||||||
| Noninterest-earning assets: | |||||||||||||||||||||||
| Other assets | 100,319 | 89,391 | |||||||||||||||||||||
| Allowance for credit losses | (17,870 | ) | (13,196 | ) | |||||||||||||||||||
| Net unrealized losses on available-for-sale securities | (13,600 | ) | (9,580 | ) | |||||||||||||||||||
| Total assets | $ | 1,390,102 | $ | 1,345,694 | |||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||
| NOW accounts | $ | 92,223 | $ | 538 | 0.58 | % | $ | 102,223 | $ | 319 | 0.31 | % | |||||||||||
| Money management accounts | 14,116 | 15 | 0.11 | % | 16,201 | 18 | 0.11 | % | |||||||||||||||
| MMDA accounts | 239,182 | 6,695 | 2.80 | % | 260,594 | 1,941 | 0.74 | % | |||||||||||||||
| Savings and club accounts | 124,617 | 274 | 0.22 | % | 138,954 | 210 | 0.15 | % | |||||||||||||||
| Time deposits | 480,867 | 15,743 | 3.27 | % | 412,536 | 4,584 | 1.11 | % | |||||||||||||||
| Subordinated loans | 29,815 | 1,941 | 6.51 | % | 29,639 | 1,749 | 5.90 | % | |||||||||||||||
| Borrowings | 105,471 | 3,538 | 3.35 | % | 71,152 | 874 | 1.23 | % | |||||||||||||||
| Total interest-bearing liabilities | 1,086,291 | 28,744 | 2.65 | % | 1,031,299 | 9,695 | 0.94 | % | |||||||||||||||
| Noninterest-bearing liabilities: | |||||||||||||||||||||||
| Demand deposits | 172,950 | 192,106 | |||||||||||||||||||||
| Other liabilities | 16,037 | 12,391 | |||||||||||||||||||||
| Total liabilities | 1,275,278 | 1,235,796 | |||||||||||||||||||||
| Shareholders' equity | 114,824 | 109,898 | |||||||||||||||||||||
| Total liabilities & shareholders' equity | 1,390,102 | 1,345,694 | |||||||||||||||||||||
| Net interest income | $ | 38,919 | $ | 41,403 | |||||||||||||||||||
| Net interest rate spread | 2.47 | % | 3.05 | % | |||||||||||||||||||
| Net interest margin | 2.95 | % | 3.24 | % | |||||||||||||||||||
| Ratio of average interest-earning assets to average interest-bearing liabilities | 121.63 | % | 124.03 | % | |||||||||||||||||||
The above information is preliminary and based on the Company's data available at the time of presentation.
PATHFINDER BANCORP, INC.
FINANCIAL HIGHLIGHTS
(Dollars and shares in thousands except per share amounts)
Net interest income can also be analyzed in terms of the impact of changing interest rates on interest-earning assets and interest bearing liabilities, and changes in the volume or amount of these assets and liabilities. The following table represents the extent to which changes in interest rates and changes in the volume of interest-earning assets and interest-bearing liabilities have affected the Company’s interest income and interest expense during the years indicated. Information is provided in each category with respect to: (i) changes attributable to changes in volume (change in volume multiplied by prior rate); (ii) changes attributable to changes in rate (changes in rate multiplied by prior volume); and (iii) total increase or decrease. Changes attributable to both rate and volume have been allocated ratably. Tax-exempt securities have not been adjusted for tax equivalency.
| For the three months ended December 31, | For the year ended December 31, | ||||||||||||||||||||||
| (Unaudited) | (Unaudited) | ||||||||||||||||||||||
| 2023 vs. 2022 | 2023 vs. 2022 | ||||||||||||||||||||||
| Increase/(Decrease) due to | Increase/(Decrease) due to | ||||||||||||||||||||||
| (In thousands) | Volume | Rate | Total Increase (Decrease) | Volume | Rate | Total Increase (Decrease) | |||||||||||||||||
| Interest Income: | |||||||||||||||||||||||
| Loans | $ | 85 | $ | 1,583 | $ | 1,668 | $ | 1,361 | $ | 7,665 | $ | 9,026 | |||||||||||
| Taxable investment securities | 448 | 1,272 | 1,720 | 962 | 5,657 | 6,619 | |||||||||||||||||
| Tax-exempt investment securities | (749 | ) | 694 | (55 | ) | (292 | ) | 1,066 | 774 | ||||||||||||||
| Interest-earning deposits | (30 | ) | (2 | ) | (32 | ) | (77 | ) | 223 | 146 | |||||||||||||
| Total interest income | (246 | ) | 3,547 | 3,301 | 1,954 | 14,611 | 16,565 | ||||||||||||||||
| Interest Expense: | |||||||||||||||||||||||
| NOW accounts | (49 | ) | 187 | 138 | (34 | ) | 253 | 219 | |||||||||||||||
| Money management accounts | (1 | ) | (2 | ) | (3 | ) | (2 | ) | (1 | ) | (3 | ) | |||||||||||
| MMDA accounts | (982 | ) | 2,183 | 1,201 | (172 | ) | 4,926 | 4,754 | |||||||||||||||
| Savings and club accounts | (51 | ) | 67 | 16 | (23 | ) | 87 | 64 | |||||||||||||||
| Time deposits | 294 | 2,668 | 2,962 | 875 | 10,284 | 11,159 | |||||||||||||||||
| Subordinated loans | 3 | 26 | 29 | 10 | 182 | 192 | |||||||||||||||||
| Borrowings | 342 | 636 | 978 | 581 | 2,083 | 2,664 | |||||||||||||||||
| Total interest expense | (444 | ) | 5,765 | 5,321 | 1,235 | 17,814 | 19,049 | ||||||||||||||||
| Net change in net interest income | $ | 198 | $ | (2,218 | ) | $ | (2,020 | ) | $ | 719 | $ | (3,203 | ) | $ | (2,484 | ) | |||||||
The above information is preliminary and based on the Company's data available at the time of presentation.
Investor/Media Contacts
James A. Dowd, President, CEO
Walter F. Rusnak, Senior Vice President, CFO
Telephone: (315) 343-0057
FAQ
What is Pathfinder Bancorp, Inc.'s ticker symbol?
What was the net income for Pathfinder Bancorp, Inc. for the fourth quarter of 2023?
What was the net interest income before the provision for credit losses for the year ended December 31, 2023?
What was the provision for credit losses for the fourth quarter of 2023?
Who is the President and Chief Executive Officer of Pathfinder Bank?
