form8k.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): July 26,
2010
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 July
23, 2010, Pathfinder Bancorp, Inc. issued a press release disclosing second
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 July 23, 2010 reporting financial results for the
fiscal quarter ending June 30, 2010.
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: July
26, 2010
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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 2010
2nd Quarter Earnings Release
Exhibit
99.1
FOR
IMMEDIATE RELEASE
CONTACT: Thomas
W. Schneider – President, CEO
James A. Dowd – Senior Vice President,
CFO
Telephone: (315)
343-0057
Pathfinder
Bancorp, Inc. Announces Second Quarter Earnings
Oswego,
New York, July 23, 2010………… Pathfinder Bancorp, Inc., the mid-tier holding
company of Pathfinder Bank, (NASDAQ SmallCap Market; symbol: PBHC, listing:
PathBcp) announced reported net income of $1.2 million or $0.37 per basic and
diluted share for the six months ended June 30, 2010, compared to $610,000, or
$0.25 per basic and diluted share, for the same period in 2009. For
the three months ended June 30, 2010, the Company reported net income of
$550,000, or $0.17 per basic and diluted share, compared to $31,000, or $0.01
per basic and diluted share, for the same period in 2009.
“We are
pleased to report continued strong earnings trends, loan growth and deposit
growth”, stated Thomas W. Schneider, President and CEO. “As we
approach $400 million in total assets, we continue to experience solid deposit
growth across our retail and business platforms and strong growth in
residential, commercial and consumer loans,” Schneider
continued. “Deposits have grown 6.3% through the first six months,
while loans have grown 3.0% on almost $30 million in originations. We
are proud of the role we play in our communities in fostering economic growth
and development.”
“Earnings
of $1.2 million are 47% ahead of last year, helping to grow our capital by
5.8%.”
Net
interest income for the six months ended June 30, 2010 increased $958,000, or
17.1%, when compared to the same period during 2009. The increase in
net interest income was the result of a decrease in interest expense of
$884,000, or 26.9%, combined with an increase in interest income of
$74,000. Net interest rate spread increased to 3.56% for the six
months ended June 30, 2010, from 3.23% for the same period in
2009. Average interest-bearing liabilities increased $16.8 million,
while the cost of funds decreased 67 basis points to 1.50% from 2.17% for the
same period in 2009. The increase in the average balance of
interest-bearing liabilities resulted from a $21.7 million, or 8.4%, increase in
average deposits offset by a decrease of $4.9 million in average borrowed
funds. The increase in deposits was driven by increases of $14.2
million, $10.2 million, and $10.1 million in business deposits, retail deposits,
and municipal deposits respectively, when compared to the same period during
2009. Average interest-earning assets increased 8.3%, to $357.3 million, for the
six months ended June 30, 2010 as compared to $330.0 million for the six months
ended June 30, 2009. The increase in average interest earning assets is
primarily attributable to a $15.0 million increase in the average balance of the
loan portfolio, a $7.6 million increase in the average balance of security
investments, and a $4.7 million increase in average interest earning
deposits. The yield on interest-earning assets decreased 33 basis
points to 5.06% compared to 5.39% for the same period in 2009. The
decrease is due higher yielding loans and investments maturing and being
replaced with lower yielding assets in the current interest
environment.
Net
interest income for the quarter ended June 30, 2010, increased $401,000, or
13.9%, when compared to the same period during 2009. The increase in
net interest income was the result of a decrease in interest expense of
$357,000, or 22.8%, combined with an increase of interest income of
$44,000. Net interest rate spread increased to 3.58% for the second
quarter of 2010, from 3.24% for the same period in 2009.
The
provision for loan losses for the six months ended June 30, 2010 increased
$118,000 to $525,000, when compared to the same period in 2009. The provision
for loan losses for the quarter ended June 30, 2010, decreased to $262,000 from
$272,000 for the same period in 2009. Allowance for loan losses to
period end loans increased to 1.28% at June 30, 2010, as compared to 1.11% at
June 30, 2009. Nonperforming loans to period end loans increased to
1.85% at June 30, 2010, from 1.03% at June 30, 2009. The
increase in non-performing loans is a result of a small number of larger
commercial loan relationships moving into a non-performing status during June
2010. Management continues to closely monitor these relationships and
feels that the underlying collateral and associated guarantees, combined with
the existing loss allowances are adequate to recover the carrying amounts of
loans and provide for any potential losses.
Non-interest
income, exclusive of net gains and losses from the sale of securities, loans and
foreclosed real estate, increased to $1.4 million for the six months ended June
30, 2010, compared to $1.3 million for the same period in the prior
year. Net losses from the sales of securities, loans and foreclosed
real estate improved to a net loss of $25,000 for the six months ended June 30,
2010, as compared to a net loss of $146,000 when compared to the same period of
2009. Net gains and losses from the sale or impairment of securities
increased to a net gain of $28,000 for the six months ended June 30, 2010 as
compared to a net loss of $211,000 for the same period of 2009. The
increase is due to gains recognized on the sale of securities combined with
gains recognized from cash redemptions from the SHAY Assets large cap equity
fund and ultra short mortgage fund, as compared to the recording of an
other-than-temporary impairment charge of $298,000 related to the Company’s
holding in a CIT Group security for the same period during 2009. Net
losses from the sales of loans and foreclosed real estate totaled $53,000 for
the six months ended June 30, 2010, as compared to a net gain of $65,000 when
compared to the same period in 2009. The decrease is due to the
losses recognized on the sale of foreclosed properties in 2010 compared to the
gains that were recognized on the sale of $6.4 million of 30-year fixed rate
residential mortgages during the six months ended June 30, 2009.
Non-interest
income, exclusive of net gains and losses from the sale or impairment of
securities, loans and foreclosed real estate, increased to $683,000 for the
quarter ended June 30, 2010 compared to $658,000 for the same period in the
prior year. Net losses on securities, loans and foreclosed real
estate improved to a net loss of $17,000 for the quarter ended June 30, 2010
compared to a net loss of $313,000, for the same quarter in 2009. Net
losses from the sales of loans and foreclosed real estate increased to a net
loss of $34,000 for the quarter ended June 30, 2010, as compared to a loss of
$15,000.
Non–interest
expenses increased $365,000, or 6.8% for the six months ended June 30,
2010. The increase in non-interest expense is due to an increase of
$310,000 in salaries and employee benefits, a $64,000 increase in other
expenses, a $25,000 increase in building occupancy, and a $7,000 increase in
data processing. These increases were offset by a $36,000 decrease in
professional and other expenses and a $5,000 decrease in FDIC
assessments. The increase in salaries and employee benefits was due
to the addition of 5 full-time equivalent positions and to annual merit based
wage adjustments and other incentive based compensation costs. The
increase in other expenses is partially due to the recording of an accrued
liability associated with the company’s debit card rewards program, which was
not in place in the six-month period of 2009.
Non-interest
expenses increased $76,000, or 2.7%, for the quarter ended June 30, 2010. The
increase in non-interest expense is due to an increase of $119,000 in salaries
and employee benefits, a $47,000 increase in other expenses, a $34,000 increase
in building occupancy, and an $18,000 increase in data
processing. These increases were offset by decreases in FDIC
assessments of $86,000 and $56,000 in professional and other
expenses.
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 six months
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ended
June 30,
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ended
June 30,
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(Unaudited)
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(Unaudited)
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2010
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2009
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2010
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2009
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Condensed
Income Statement
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Interest
and dividend income
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$ |
4,485 |
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$ |
4,441 |
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$ |
8,945 |
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$ |
8,871 |
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Interest
expense
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1,208 |
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1,565 |
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2,398 |
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3,282 |
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Net
interest income
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3,277 |
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2,876 |
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6,547 |
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5,589 |
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Provision
for loan losses
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262 |
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272 |
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525 |
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407 |
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3,015 |
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2,604 |
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6,022 |
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5,182 |
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Noninterest
income excluding net losses on
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securities,
loans and foreclosed real estate
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683 |
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658 |
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1,401 |
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1,290 |
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Net
losses on securities,
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loans
and foreclosed real estate
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(17 |
) |
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(313 |
) |
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(25 |
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(146 |
) |
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Noninterest
expense
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2,892 |
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2,816 |
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5,754 |
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5,389 |
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Income
before taxes
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789 |
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133 |
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1,644 |
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937 |
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Provision
for income taxes
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239 |
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102 |
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494 |
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327 |
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Net
Income
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$ |
550 |
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$ |
31 |
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$ |
1,150 |
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$ |
610 |
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Key
Earnings Ratios
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Return
on average assets
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0.57 |
% |
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0.03 |
% |
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0.59 |
% |
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0.34 |
% |
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Return
on average equity
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7.17 |
% |
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0.61 |
% |
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7.60 |
% |
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6.08 |
% |
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Net
interest margin (tax equivalent)
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3.72 |
% |
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3.41 |
% |
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3.71 |
% |
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3.41 |
% |
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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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2,484,832 |
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Basic
earnings per share
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$ |
0.17 |
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$ |
0.01 |
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$ |
0.37 |
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$ |
0.25 |
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Diluted
weighted average shares outstanding
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2,488,041 |
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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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Diluted
earnings per share
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0.17 |
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0.01 |
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0.37 |
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0.25 |
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Cash
dividends per share
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0.03 |
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0.06 |
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0.06 |
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0.06 |
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Book
value per common share at June 30, 2010 and 2009
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9.97 |
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8.09 |
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June
30,
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December
31,
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June
30,
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2010 |
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2009 |
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2009 |
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Selected
Balance Sheet Data
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Assets
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$ |
396,332 |
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$ |
371,692 |
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$ |
347,224 |
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Earning
assets
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366,767 |
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343,071 |
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320,622 |
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Total
loans
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270,284 |
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262,465 |
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250,187 |
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Deposits
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315,647 |
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296,839 |
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280,906 |
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Borrowed
Funds
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40,236 |
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36,000 |
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36,400 |
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Allowance
for loan losses
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3,455 |
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|
3,078 |
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|
2,772 |
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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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30,948 |
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29,238 |
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20,114 |
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Asset
Quality Ratios
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Net
loan charge-offs (annualized) to average loans
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0.11 |
% |
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0.11 |
% |
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0.09 |
% |
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Allowance
for loan losses to period end loans
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1.28 |
% |
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1.17 |
% |
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1.11 |
% |
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Allowance
for loan losses to nonperforming loans
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69.20 |
% |
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133.07 |
% |
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107.48 |
% |
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Nonperforming
loans to period end loans
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1.85 |
% |
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0.88 |
% |
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1.03 |
% |
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Nonperforming
assets to total assets
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1.27 |
% |
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|
0.67 |
% |
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|
0.82 |
% |
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