Pathfinder Bancorp, Inc. (“Company”) (NASDAQ: PBHC), the holding
company for Pathfinder Bank (“Bank”), announced second quarter 2021
net income of $3.0 million compared to $1.8 million for the same
three month period in 2020. Second quarter 2021 net income
available to common shareholders was $3.0 million, or $0.50 per
basic and diluted voting common share, compared to $1.8 million, or
$0.31 per basic and diluted share, for the second quarter of 2020.
Second quarter 2021 total revenue (net interest income and total
noninterest income) of $11.6 million increased $2.5 million, or
27.0%, compared to $9.2 million for the second quarter of 2020. Net
income attributable to Pathfinder Bancorp, Inc. for the first six
months of 2021 was $5.2 million, compared to $3.5 million for the
same six-month period of 2020. Basic and diluted earnings per
voting common share for the first six months of 2021 was $0.87,
compared to $0.60 per basic and diluted share in the comparable
period in 2020.
2021 Second Quarter and Six Month
Performance Highlights
- Total
interest-earning assets at June 30, 2021 were $1.19 billion, an
increase of $94.8 million, or 8.7%, compared to $1.09 billion at
June 30, 2020, and an increase of $29.9 million compared to $1.16
billion at December 31, 2020.
- Total loans at
June 30, 2021 were $835.0 million, an increase of $28.9 million, or
3.6%, compared to $806.0 million at June 30, 2020, and an increase
of $9.5 million compared to $825.5 million at December 31,
2020.
- Total deposits
at June 30, 2021 were $1.03 billion, an increase of $61.1 million,
or 6.3%, compared to $970.6 million at June 30, 2020, and an
increase of $35.8 million compared to $995.9 million at December
31, 2020.
- Total net
interest income for the second quarter 2021 increased by $2.6
million, or 33.7%, to $10.2 million from $7.6 million for the prior
year period, and total six-month net interest income was $18.8
million, up $3.4 million, or 21.8%, compared to $15.4 million for
the prior year period.
- Funding costs
declined to 0.77%, a reduction of 49 basis points from 1.26% in the
second quarter of 2020.
- Noninterest
expense increased to $6.8 million for the second quarter of 2021,
representing an increase of $1.1 million, or 18.9%, compared to
$5.8 million in the prior year quarter. Total noninterest expense
was $13.5 million in the first half of 2021, an increase of $1.5
million, or 12.3%, compared to $12.0 million for the prior year
period. The increase in noninterest expenses in 2021, as compared
to the previous year, followed the progressive resumption of
normalized business activities during 2021 that resulted from the
gradual lessening of the severe safety and social-distancing
restrictions previously imposed during the Covid-19 pandemic.
“During the second quarter of 2021, Pathfinder
achieved strong increases in earning asset balances, corresponding
revenue growth and improved operating margins that collectively
contributed to record quarterly results and our exceptional
financial performance for the first half of the year,” said Thomas
W. Schneider, President and Chief Executive Officer. “We remain
focused on effectively managing both interest and noninterest
expenses to enhance our operating leverage. Our quarterly net
income of $3.0 million resulted from both the focused efforts of
our management team in overseeing meaningful progress towards the
attainment of our strategic objectives and the continued excellent
work of our entire staff in meeting the financial services needs of
our valued customers.”
“Effective April 1, 2021, in a strategic step
aligned with our focus on overall expense management, we redeemed a
portion of our existing subordinated debt in the amount of $10.0
million. This action will prospectively reduce annual interest
expenses by $625,000. The Company’s interest expense was also
positively impacted by the continued improvement of our deposit
mix, as noninterest-bearing deposits grew by $21.6 million, or
13.3%, through the first six months of 2021 and made up
approximately 18% of total deposits at quarter-end. This
improvement, along with the recognition of deferred fees associated
with the forgiveness of Paycheck Protection Program, or PPP, loans,
drove double-digit growth in net interest income and robust net
interest margin expansion for both the three and six months ended
June 30, 2021, compared to the prior year periods.”
“On June 28, 2021, the Company converted all of
its Series B Convertible Perpetual Preferred Stock into an equal
number of shares of newly-created Series A Non-Voting Common Stock.
This conversion was authorized by the Company’s shareholders on
June 4, 2021. Neither the Preferred shares, nor the Non-Voting
Common shares had, or will have, dividend or liquidation preference
over the Company’s existing Voting Common Stock. However, this
simplification of the Company’s capital structure, with the Voting
and Non-Voting Common Stock now incorporated into a combined
balance of tangible common equity, will help investors to better
understand the ownership structure of our business.”
“The conversion of the Convertible Preferred
shares to a form of common shares does not impact previously
reported diluted earnings per share calculations. Importantly,
however, the conversion increases reported tangible common equity
and its related ratios, including the Tangible Common Equity to
Tangible Assets ratio (the “TCE/TA ratio).” Due in large part to
the conversion of the Preferred Shares in June 2021, the TCE/TA
ratio increased to 7.85% at June 30, 2021, compared to 6.22% at
June 30, 2020. This conversion therefore represents an important
step in the evolution of our Company.”
“While new loan originations were somewhat muted
in the most recent quarter, we have a strong pipeline of potential
new commercial lending opportunities and anticipate a strong third
quarter in residential mortgage lending. We have also been active
participants in the PPP, helping small business customers access
this critically-important funding and navigate the subsequent
forgiveness process. As of June 30, 2021, we had approximately
$53.6 million in PPP loans outstanding, following the forgiveness
of $58.1 million since the inception of the PPP, resulting in the
recognition of $1.1 million of net deferred PPP loan origination
fees in 2021. It should be noted that the Bank has approximately
$1.7 million in net deferred PPP origination fees remaining at June
30, 2021 that it expects to recognize as income in future
periods.”
“We continue to closely monitor credit quality
amid a recovering, but still uncertain, economy. It is highly
important to note that no loans were classified as being in
pandemic-related payment deferral status at June 30, 2021. We
improved our ratio of non-performing loans to total loans during
the first half of the year to 1.9%, while continuing to build our
loan loss reserves appropriately, with our allowance for loan
losses standing at 1.8% of total loans and 91.3% of nonperforming
loans at quarter-end.”
“By many measures, our second quarter
performance was exceptional and included both significant capital
management and financial performance milestones. While we do not
anticipate sustaining the rate of earnings growth we achieved in
the most recent quarter going forward, our loan pipelines remain
solid heading into the second half of the year and our team stands
ready to continue supporting new and existing customers throughout
the Central New York markets that we proudly serve.”
Income Statement for the Quarter and
Year Ended June 30, 2021
Net Interest Income
|
|
For the three months ended |
|
|
For the six months ended |
|
Unaudited(In thousands, except per share
data) |
|
June 30, 2021 |
|
|
June 30, 2020 |
|
|
Change |
|
|
June 30, 2021 |
|
|
June 30, 2020 |
|
|
Change |
|
Interest and dividend income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, including fees |
|
$ |
9,784 |
|
|
$ |
8,832 |
|
|
$ |
952 |
|
|
10.8 |
% |
|
$ |
18,631 |
|
|
$ |
18,074 |
|
|
$ |
557 |
|
|
3.1 |
% |
Debt securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
|
2,152 |
|
|
|
1,549 |
|
|
|
603 |
|
|
38.9 |
% |
|
|
4,128 |
|
|
|
3,241 |
|
|
|
887 |
|
|
27.4 |
% |
Tax-exempt |
|
|
42 |
|
|
|
52 |
|
|
|
(10 |
) |
|
-19.2 |
% |
|
|
71 |
|
|
|
59 |
|
|
|
12 |
|
|
20.3 |
% |
Dividends |
|
|
87 |
|
|
|
64 |
|
|
|
23 |
|
|
35.9 |
% |
|
|
174 |
|
|
|
134 |
|
|
|
40 |
|
|
29.9 |
% |
Federal
funds sold and interest earning deposits |
|
|
1 |
|
|
|
17 |
|
|
|
(16 |
) |
|
-94.1 |
% |
|
|
4 |
|
|
|
49 |
|
|
|
(45 |
) |
|
-91.8 |
% |
Total interest and dividend income |
|
|
12,066 |
|
|
|
10,514 |
|
|
|
1,552 |
|
|
14.8 |
% |
|
|
23,008 |
|
|
|
21,557 |
|
|
|
1,451 |
|
|
6.7 |
% |
Interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on deposits |
|
|
1,144 |
|
|
|
2,204 |
|
|
|
(1,060 |
) |
|
-48.1 |
% |
|
|
2,671 |
|
|
|
4,760 |
|
|
|
(2,089 |
) |
|
-43.9 |
% |
Interest on short-term
borrowings |
|
|
3 |
|
|
|
39 |
|
|
|
(36 |
) |
|
-92.3 |
% |
|
|
6 |
|
|
|
96 |
|
|
|
(90 |
) |
|
-93.8 |
% |
Interest on long-term
borrowings |
|
|
296 |
|
|
|
439 |
|
|
|
(143 |
) |
|
-32.6 |
% |
|
|
591 |
|
|
|
884 |
|
|
|
(293 |
) |
|
-33.1 |
% |
Interest on subordinated loans |
|
|
408 |
|
|
|
192 |
|
|
|
216 |
|
|
112.5 |
% |
|
|
965 |
|
|
|
398 |
|
|
|
567 |
|
|
142.5 |
% |
Total interest expense |
|
|
1,851 |
|
|
|
2,874 |
|
|
|
(1,023 |
) |
|
-35.6 |
% |
|
|
4,233 |
|
|
|
6,138 |
|
|
|
(1,905 |
) |
|
-31.0 |
% |
Net interest income |
|
|
10,215 |
|
|
|
7,640 |
|
|
|
2,575 |
|
|
33.7 |
% |
|
|
18,775 |
|
|
|
15,419 |
|
|
|
3,356 |
|
|
21.8 |
% |
Provision for loan losses |
|
|
929 |
|
|
|
1,146 |
|
|
|
(217 |
) |
|
-18.9 |
% |
|
|
1,957 |
|
|
|
2,213 |
|
|
|
(256 |
) |
|
-11.6 |
% |
Net interest income after provision for loan losses |
|
$ |
9,286 |
|
|
$ |
6,494 |
|
|
$ |
2,792 |
|
|
43.0 |
% |
|
$ |
16,818 |
|
|
$ |
13,206 |
|
|
$ |
3,612 |
|
|
27.4 |
% |
As noted in the table above, second quarter 2021
net interest income was $10.2 million, an increase of $2.6 million,
or 33.7%, compared to $7.6 million for the same quarter in 2020,
primarily a result of a $1.5 million, or 14.8%, increase in total
interest and dividend income. Interest and dividend income in the
second quarter was $12.1 million, compared to $10.5 million in the
second quarter of 2020. The increase in interest and dividend
income was a result of a $60.1 million increase in average loans
combined with a 13 basis-point increase in the average yield earned
on those loans, and a $72.9 million increase in the average balance
of taxable investment securities combined with a 16 basis-point
increase in the average yield earned on those investments. Total
interest expense for the second quarter of 2021 was $1.9 million, a
decrease of $1.0 million from $2.9 million for the prior year
quarter. The decrease in the second quarter interest expense was
primarily a result of an 87 basis-point decrease in the average
interest rate paid on time deposits. The net interest margin for
the second quarter of 2021 was 3.42%, a 67 basis-point increase
compared to 2.75% for the second quarter of 2020. This improvement
reflects both a 49 basis-point decline in the average cost for
interest-bearing liabilities, and a 25 basis-point increase in the
average yield earned on interest-earning assets.
Net interest income for the first six months of
2021 increased $3.4 million, or 21.8%, to $18.8 million compared to
$15.4 million for the first half of 2020. Interest and
dividend income for the six months ended June 30, 2021 was $23.0
million, an increase of $1.5 million, or 6.7%, compared to $21.6
million for the same period in 2020. The increase was primarily a
result of average loan growth of $74.3 million, or 9.5%, compared
to the prior year period, and a $67.0 million increase in taxable
investment securities. Interest expense of $4.2 million for the
six-month period decreased by $1.9 million, or 31.0%, from the
prior year period, primarily because of a 50 basis point decrease
in the interest rate paid on interest bearing
liabilities.
Paycheck Protection Program
Discussion
From April 2020 to May 2021, the Company
participated in all phases of the Paycheck Protection Program
(“PPP”) as administered by the U.S. Small Business Administration
(the “SBA”). PPP loans are substantially guaranteed as to timely
repayment by the SBA and have unique forgiveness features whereby
loan principal amounts may be discharged, for the benefit of the
borrowers, by direct payments from the SBA to the lending
institution holding the indebtedness. The Company has received both
interest (calculated at a stated rate of 1%) and various levels of
fee income related to the origination of PPP loans. Information
related to the Company’s PPP loans are included in the following
tables:
Unaudited |
|
For the three months ended |
|
|
For the six months ended, |
|
(In
thousands, except number of loans) |
|
June 30, 2021 |
|
|
June 30, 2020 |
|
|
June 30, 2021 |
|
|
June 30, 2020 |
|
Number of PPP loans originated in the period |
|
|
57 |
|
|
|
674 |
|
|
|
478 |
|
|
|
674 |
|
Funded balance of PPP loans
originated in the period |
|
$ |
1,882 |
|
|
$ |
75,040 |
|
|
$ |
36,369 |
|
|
$ |
75,040 |
|
Number of PPP loans forgiven
in the period |
|
143 |
|
|
|
- |
|
|
349 |
|
|
|
- |
|
Average balance of PPP loans
in the period |
|
$ |
68,927 |
|
|
$ |
48,029 |
|
|
$ |
69,410 |
|
|
$ |
24,015 |
|
Balance of PPP loans forgiven
in the period |
|
$ |
23,985 |
|
|
$ |
- |
|
|
$ |
42,566 |
|
|
$ |
- |
|
Deferred PPP fee income
recognized in the period |
|
$ |
735 |
|
|
$ |
289 |
|
|
$ |
1,147 |
|
|
$ |
289 |
|
|
|
June 30, 2021 |
|
|
June 30, 2020 |
|
|
Unearned PPP deferred fee
income at end of period |
|
$ |
1,720 |
|
|
$ |
2,236 |
|
|
|
|
Number |
|
|
Balance |
|
|
Total PPP loans originated
since inception |
|
|
1,177 |
|
|
$ |
111,721 |
|
|
Total PPP loans forgiven since
inception |
|
|
479 |
|
|
$ |
58,110 |
|
|
Total PPP loans remaining at
June 30, 2021 |
|
|
698 |
|
|
$ |
53,611 |
|
|
Provision for Loan Losses
The second quarter 2021 provision for loan
losses was $929,000, compared to $1.1 million for the prior year
quarter. The second quarter provision for loan losses reflects a
prudent addition to reserves considering loan growth other than PPP
loans and general pandemic-related uncertainties remaining,
particularly in certain industrial sectors. The credit sensitive
portfolios continue to be carefully monitored, and the Bank will
consistently apply its proven conservative loan classification and
reserve building methodologies to the analysis of these portfolios.
The provision for loan losses for the first six months of 2021 was
$2.0 million, compared to $2.2 million for the same period in 2020.
Please refer to the asset quality section below for a further
discussion of asset quality as it relates to the allowance for loan
loss.
Noninterest Income
Second quarter 2021 noninterest income was $1.4
million, a decrease of $97,000, or 6.3%, compared to $1.5 million
for the same three-month period in 2020. The reduction in
noninterest income primarily reflects a $972,000 reduction in gains
on sales and redemptions of investment securities, offset by a
$771,000 increase in net gains on marketable equity securities.
Noninterest income was $3.3 million for both the six months ended
June 30, 2021 and 2020.
The following table details the components of
noninterest income for the three and six months ended June 30, 2021
and 2020:
|
|
For the three months ended |
|
|
For the six months ended, |
|
Unaudited(Dollars in thousands) |
|
June 30, 2021 |
|
|
June 30, 2020 |
|
|
Change |
|
|
June 30, 2021 |
|
|
June 30, 2020 |
|
|
Change |
|
Service charges on deposit accounts |
|
$ |
357 |
|
|
$ |
303 |
|
|
$ |
54 |
|
|
|
17.8 |
% |
|
$ |
689 |
|
|
$ |
659 |
|
|
$ |
30 |
|
|
|
4.6 |
% |
Earnings and gain on bank
owned life insurance |
|
|
129 |
|
|
|
106 |
|
|
|
23 |
|
|
|
21.7 |
% |
|
|
254 |
|
|
|
222 |
|
|
|
32 |
|
|
|
14.4 |
% |
Loan servicing fees |
|
|
11 |
|
|
|
79 |
|
|
|
(68 |
) |
|
|
-86.1 |
% |
|
|
101 |
|
|
|
128 |
|
|
|
(27 |
) |
|
|
-21.1 |
% |
Debit card interchange
fees |
|
|
241 |
|
|
|
205 |
|
|
|
36 |
|
|
|
17.6 |
% |
|
|
462 |
|
|
|
368 |
|
|
|
94 |
|
|
|
25.5 |
% |
Insurance agency revenue |
|
|
234 |
|
|
|
185 |
|
|
|
49 |
|
|
|
26.5 |
% |
|
|
514 |
|
|
|
522 |
|
|
|
(8 |
) |
|
|
-1.5 |
% |
Other
charges, commissions and fees |
|
|
323 |
|
|
|
255 |
|
|
|
68 |
|
|
|
26.7 |
% |
|
|
565 |
|
|
|
478 |
|
|
|
87 |
|
|
|
18.2 |
% |
Noninterest income before gains (losses) |
|
|
1,295 |
|
|
|
1,133 |
|
|
|
162 |
|
|
|
14.3 |
% |
|
|
2,585 |
|
|
|
2,377 |
|
|
|
208 |
|
|
|
8.8 |
% |
Net gains on sales and
redemptions of investment securities |
|
|
51 |
|
|
|
1,023 |
|
|
|
(972 |
) |
|
|
-95.0 |
% |
|
|
51 |
|
|
|
1,049 |
|
|
|
(998 |
) |
|
|
-95.1 |
% |
Gains/(losses) on marketable
equity securities |
|
|
49 |
|
|
|
(722 |
) |
|
|
771 |
|
|
|
106.8 |
% |
|
|
283 |
|
|
|
(916 |
) |
|
|
1,199 |
|
|
|
-130.9 |
% |
Net gains on sales of loans
and foreclosed real estate |
|
|
39 |
|
|
|
97 |
|
|
|
(58 |
) |
|
|
-59.8 |
% |
|
|
159 |
|
|
|
769 |
|
|
|
(610 |
) |
|
|
-79.3 |
% |
Gains
on sale of premises and equipment |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
201 |
|
|
|
- |
|
|
|
201 |
|
|
>100% |
|
Total noninterest income |
|
$ |
1,434 |
|
|
$ |
1,531 |
|
|
$ |
(97 |
) |
|
|
-6.3 |
% |
|
$ |
3,279 |
|
|
$ |
3,279 |
|
|
$ |
- |
|
|
|
0.0 |
% |
Noninterest Expense
Total noninterest expense for the second quarter
of 2021 was $6.8 million, an increase of $1.0 million, or 18.9%, in
comparison to $5.8 million for the same three-month period in 2020.
The increase was primarily a result of higher salaries and employee
benefits expense, building and occupancy costs, data processing
expenses, and professional and other services. Total
noninterest expense for the six-month period of 2021 was $13.5
million, an increase of $1.5 million, or 12.3%, compared with $12.0
million for the prior year period, and driven by increases in the
same expense areas discussed above.
The following table details the components of
noninterest expense for the three and six months ended June 30,
2021 and 2020:
|
|
For the three months ended |
|
|
|
|
For the six months ended, |
|
Unaudited(Dollars in thousands) |
|
June 30, 2021 |
|
|
June 30, 2020 |
|
|
Change |
|
|
June 30, 2021 |
|
|
June 30, 2020 |
|
|
Change |
|
Salaries and employee
benefits |
|
$ |
3,501 |
|
|
$ |
2,972 |
|
|
$ |
529 |
|
|
|
17.8 |
% |
|
$ |
6,842 |
|
|
$ |
6,219 |
|
|
$ |
623 |
|
|
|
10.0 |
% |
Building and occupancy |
|
|
870 |
|
|
|
707 |
|
|
|
163 |
|
|
|
23.1 |
% |
|
|
1,663 |
|
|
|
1,461 |
|
|
|
202 |
|
|
|
13.8 |
% |
Data processing |
|
|
654 |
|
|
|
552 |
|
|
|
102 |
|
|
|
18.5 |
% |
|
|
1,330 |
|
|
|
1,152 |
|
|
|
178 |
|
|
|
15.5 |
% |
Professional and other
services |
|
|
451 |
|
|
|
301 |
|
|
|
150 |
|
|
|
49.8 |
% |
|
|
868 |
|
|
|
617 |
|
|
|
251 |
|
|
|
40.7 |
% |
Advertising |
|
|
259 |
|
|
|
261 |
|
|
|
(2 |
) |
|
|
-0.8 |
% |
|
|
505 |
|
|
|
437 |
|
|
|
68 |
|
|
|
15.6 |
% |
FDIC assessments |
|
|
232 |
|
|
|
150 |
|
|
|
82 |
|
|
|
54.7 |
% |
|
|
430 |
|
|
|
339 |
|
|
|
91 |
|
|
|
26.8 |
% |
Audits and exams |
|
|
177 |
|
|
|
125 |
|
|
|
52 |
|
|
|
41.6 |
% |
|
|
379 |
|
|
|
250 |
|
|
|
129 |
|
|
|
51.6 |
% |
Insurance agency expense |
|
|
194 |
|
|
|
212 |
|
|
|
(18 |
) |
|
|
-8.5 |
% |
|
|
400 |
|
|
|
404 |
|
|
|
(4 |
) |
|
|
-1.0 |
% |
Community service
activities |
|
|
34 |
|
|
|
12 |
|
|
|
22 |
|
|
|
183.3 |
% |
|
|
122 |
|
|
|
119 |
|
|
|
3 |
|
|
|
2.5 |
% |
Foreclosed real estate
expenses |
|
|
16 |
|
|
|
5 |
|
|
|
11 |
|
|
|
220.0 |
% |
|
|
22 |
|
|
|
35 |
|
|
|
(13 |
) |
|
|
-37.1 |
% |
Other
expenses |
|
|
457 |
|
|
|
461 |
|
|
|
(4 |
) |
|
|
-0.9 |
% |
|
|
920 |
|
|
|
970 |
|
|
|
(50 |
) |
|
|
-5.2 |
% |
Total noninterest expenses |
|
$ |
6,845 |
|
|
$ |
5,758 |
|
|
$ |
1,087 |
|
|
|
18.9 |
% |
|
$ |
13,481 |
|
|
$ |
12,003 |
|
|
$ |
1,478 |
|
|
|
12.3 |
% |
During the most restrictive periods following
the inception of the Covid-19 pandemic, which began in March 2020,
the Company experienced material declines in substantially all
forms of noninterest expenses. These reductions in noninterest
expenses were the result of the curtailment or elimination of a
significant portion of non-critically-essential business and
business development activities during that time. These activities
were reduced or eliminated for the duration of the substantial
restrictions imposed by governmental officials and as a consequence
of the internal safety and social distancing protocols initiated by
the Company and/or its customers. These effects were most
pronounced in the second and third quarters of 2020 and extended,
to lessening degrees, at least through the end of the first quarter
of 2021. Accordingly, as the Company progressively returned to less
restricted operations, noninterest expenses progressively returned
to the levels considered by its management to be prudent for the
effective long-term management of the Company. Management has
elected to provide a supplemental comparison between 2021
noninterest expenses and the same three and six month periods in
2019, which were the most recent three and six month periods not
affected by the pandemic. The following table details the
components of noninterest expense for the three and six months
ended June 30, 2021 and 2019:
Unaudited |
|
For the three months ended |
|
|
For the six months ended, |
|
(Dollars in thousands) |
|
June 30, 2021 |
|
|
June 30, 2019 |
|
|
Change |
|
|
June 30, 2021 |
|
|
June 30, 2019 |
|
|
Change |
|
Salaries and employee
benefits |
|
$ |
3,501 |
|
|
$ |
3,454 |
|
|
$ |
47 |
|
|
|
1.4 |
% |
|
$ |
6,842 |
|
|
$ |
7,104 |
|
|
$ |
(262 |
) |
|
|
-3.7 |
% |
Building and occupancy |
|
|
870 |
|
|
|
632 |
|
|
|
238 |
|
|
|
37.7 |
% |
|
|
1,663 |
|
|
|
1,287 |
|
|
|
376 |
|
|
|
29.2 |
% |
Data processing |
|
|
654 |
|
|
|
587 |
|
|
|
67 |
|
|
|
11.4 |
% |
|
|
1,330 |
|
|
|
1,162 |
|
|
|
168 |
|
|
|
14.5 |
% |
Professional and other
services |
|
|
451 |
|
|
|
380 |
|
|
|
71 |
|
|
|
18.7 |
% |
|
|
868 |
|
|
|
716 |
|
|
|
152 |
|
|
|
21.2 |
% |
Advertising |
|
|
259 |
|
|
|
242 |
|
|
|
17 |
|
|
|
7.0 |
% |
|
|
505 |
|
|
|
481 |
|
|
|
24 |
|
|
|
5.0 |
% |
FDIC assessments |
|
|
232 |
|
|
|
130 |
|
|
|
102 |
|
|
|
78.5 |
% |
|
|
430 |
|
|
|
241 |
|
|
|
189 |
|
|
|
78.4 |
% |
Audits and exams |
|
|
177 |
|
|
|
100 |
|
|
|
77 |
|
|
|
77.0 |
% |
|
|
379 |
|
|
|
200 |
|
|
|
179 |
|
|
|
89.5 |
% |
Insurance agency expense |
|
|
194 |
|
|
|
229 |
|
|
|
(35 |
) |
|
|
-15.3 |
% |
|
|
400 |
|
|
|
428 |
|
|
|
(28 |
) |
|
|
-6.5 |
% |
Community service
activities |
|
|
34 |
|
|
|
144 |
|
|
|
(110 |
) |
|
|
-76.4 |
% |
|
|
122 |
|
|
|
282 |
|
|
|
(160 |
) |
|
|
-56.7 |
% |
Foreclosed real estate
expenses |
|
|
16 |
|
|
|
59 |
|
|
|
(43 |
) |
|
|
-72.9 |
% |
|
|
22 |
|
|
|
296 |
|
|
|
(274 |
) |
|
|
-92.6 |
% |
Other
expenses |
|
|
457 |
|
|
|
582 |
|
|
|
(125 |
) |
|
|
-21.5 |
% |
|
|
920 |
|
|
|
1,053 |
|
|
|
(133 |
) |
|
|
-12.6 |
% |
Total noninterest expenses |
|
$ |
6,845 |
|
|
$ |
6,539 |
|
|
$ |
306 |
|
|
|
4.7 |
% |
|
$ |
13,481 |
|
|
$ |
13,250 |
|
|
$ |
231 |
|
|
|
1.7 |
% |
Balance Sheet at June 30,
2021
The Company’s total assets at June 30, 2021 were
$1.26 billion, an increase of $32.2 million, or 2.6%, from $1.23
billion at December 31, 2020. This increase was primarily driven by
higher investment securities and loan balances. Investment
securities totaled $322.1 million, an increase of $20.8 million
compared to $301.3 million at December 31, 2020, and an increase of
$63.4 million compared to $258.7 million on June 30, 2020. Total
loans of $835.0 million grew by $9.5 million, or 1.15%, compared
with $825.5 million at December 31, 2020, and by $28.9 million, or
3.6%, compared to June 30, 2020.
Total deposits at June 30, 2021 were $1.03
billion, an increase of $35.8 million, or 3.6%, from $995.9 million
at December 31, 2020, and an increase of $61.1 million, or 6.29%,
compared to June 30, 2020. Noninterest-bearing deposits totaled
$183.7 million at June 30, 2021, an increase of $21.6 million, or
13.3%, from the 2020 year end, and an increase of $23.5 million, or
14.7%, compared to June 30, 2020. Interest-bearing deposit growth
was a result of municipal deposit inflows related to seasonal tax
collections, as well as increases in retail and commercial
deposits. The increase in noninterest-bearing deposits
was primarily a result of the Bank’s participation in the PPP, as
well as ongoing growth in business banking relationships.
Subordinated loans were $29.5 million at June
30, 2021, a 25.2% decrease from $39.4 million as of the 2020 year
end. On April 1, 2021, the Company exercised its option to redeem
$10.0 million of the loans that were outstanding on December 31,
2020. This redemption of outstanding debt will reduce interest
expense related to subordinated loans by $625,000 annually and
reduced interest expense related to subordinated loans in the
second quarter of 2021 by $156,000, in comparison to the first
quarter of 2021.
Shareholders’ equity was $103.2 million at June
30, 2021, compared with $97.5 million on December 31, 2020. The
increase was primarily a result of a $4.3 million increase in
retained earnings, a $1.0 million decrease in the accumulated other
comprehensive loss, a $427,000 increase in additional paid in
capital, and a $90,000 increase due to ESOP shares earned.
Asset Quality
The Bank’s asset quality metrics, as measured by
net loan charge-offs to average loans, remained stable for second
quarter 2021. Net loan charge-offs to average loans were 0.03% for
the second quarter 2021, compared with 0.08% for the second quarter
of 2020 and 0.05% for the quarter ended March 31, 2021.
Nonperforming loans to total loans were 1.92% at June 30, 2021, a
decrease of 66 basis points compared to 2.58% at December 31,
2020.
The decrease in nonperforming loan portfolio at
June 30, 2021, as compared to December 31, 2020 was primarily the
result of one commercial real estate loan being removed from
nonaccrual as of June 30, 2021 due to the resumption of timely
principal and interest payments for six consecutive months.
Management is monitoring all nonaccrual loans closely and has
incorporated our current estimate of the ultimate collectability of
these loans into the reported allowance for loan losses at June 30,
2021. No loans were classified as being on pandemic-related payment
deferral at June 30, 2021.
The following table summarizes nonaccrual loans by category and
status at June 30, 2021:
Unaudited(Dollars 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 |
|
33 |
|
|
$ |
2,881 |
|
|
$ |
87 |
|
|
|
88 |
% |
|
Under active resolution management by the Bank. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Secured
commercial real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private Museum |
|
1 |
|
|
|
1,385 |
|
|
|
1,385 |
|
|
|
79 |
% |
|
The Bank is working on a
modification with the borrower. The borrower has substantial
deposits with the Bank. |
|
Recreational |
|
1 |
|
|
|
1,234 |
|
|
|
1,234 |
|
|
|
50 |
% |
|
The loan is currently
classified as a Troubled Debt Restructuring (TDR). Next payment is
due August 1, 2021. |
|
All other |
|
14 |
|
|
|
2,210 |
|
|
|
158 |
|
|
|
79 |
% |
|
Under active resolution
management by the Bank. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
lines of credit |
|
4 |
|
|
|
172 |
|
|
|
43 |
|
|
N/A |
|
|
Under active resolution
management by the Bank. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
and industrial: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate |
|
1 |
|
|
|
4,485 |
|
|
|
4,485 |
|
|
|
41 |
% |
|
The Bank modified the loan and
the next payment is due August 1, 2021. Repayment is expected from
operations, pledges and collateral value. |
|
All Others |
|
11 |
|
|
|
2,317 |
|
|
|
211 |
|
|
N/A |
|
|
Under active resolution
management by the Bank. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer loans |
|
31 |
|
|
|
1,310 |
|
|
|
42 |
|
|
N/A |
|
|
Under
active resolution management by the Bank. |
|
|
|
96 |
|
|
$ |
15,994 |
|
|
|
|
|
|
|
|
|
|
|
The allowance for loan losses to non-performing
loans at June 30, 2021 was 91.30%, compared with 59.89% at December
31, 2020 and 125.86% at June 30, 2020. The change in the allowance
for loans losses to non-performing loans is reflective of the
changes in nonaccrual loans discussed above.
COVID-19 Additional Discussion
Pathfinder Bank has participated in all rounds
of the PPP to date. The Program was initially established by the
Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, and
is a specialized low-interest loan program funded by the U.S.
Treasury Department and administered by the U.S. Small Business
Administration (“SBA”). The PPP was renewed under the Consolidated
Appropriations Act, 2021 and the American Rescue Plan Act of 2021.
While these legislative actions, and the programs that resulted
therefrom, appear to have significantly reduced the negative
near-term economic impact of the pandemic, the future trajectory of
the economy and the economy’s effect on the financial condition and
results of the Company’s operations cannot be predicted with
certainty.
Non-Voting Common Stock
Issued
During the second quarter of 2021, the Company
converted 1,380,283, or 100%, of its previously-outstanding shares
of Series B Convertible Perpetual Preferred Stock to an equal
number of newly-created Series A Non-Voting Common
Stock. Neither the previously-issued Series B Perpetual
Preferred Stock, nor the newly-issued Series A Non-Voting Common
Stock had, or will have, dividend or liquidation preference over
the Company’s existing Voting Common Stock. Holders of the new
Series A Non-Voting Common Stock will be entitled to receive
dividends, if and when declared by the Company’s Board of
Directors, in the same per share amount as paid on Company’s Voting
Common Stock.
Cash Dividend
Declared
On June 28, 2021, the Company announced that its
Board of Directors has declared a cash dividend of $0.07 per share
on the Company's voting common and non-voting common stock, and a
cash dividend of $0.07 per notional share for the issued warrant
relating to the fiscal quarter ending June 30, 2021. The dividend
will be payable to all shareholders of record on July 16, 2021 and
will be paid on August 13, 2021. Based on the closing
price of the Company’s common stock of $16.00 on July 30, 2021, the
implied dividend yield is 1.75%. The quarterly cash dividend of
$0.07 equates to a dividend payout ratio of 14.0%.
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 ten
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 51% interest in the
FitzGibbons Agency, LLC. At June 30, 2021, there were
4,562,301 shares of common stock issued and outstanding, as well as
1,380,283 shares of non-voting common stock issued and
outstanding. The Company's common stock trades on the
NASDAQ market under the symbol "PBHC." At June 30, 2021,
the Company and subsidiaries had total consolidated assets of $1.26
billion, total deposits of $1.03 billion and shareholders' equity
of $103.2 million.
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.” 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.
As the result of the COVID-19 pandemic and the
related adverse local and national economic consequences, we could
be subject to any of the following additional risks, any of which
could have a material, adverse effect on our business, financial
condition, liquidity, and results of operations:
-
demand for our products and services may decline, making it
difficult to grow assets and income;
-
if the economy is unable to substantially reopen, and high levels
of unemployment continue for an extended period of time, loan
delinquencies, problem assets, and foreclosures may increase,
resulting in increased charges and reduced income;
-
collateral for loans, especially real estate, may decline in
value, which could cause loan losses to increase;
-
our allowance for loan losses may have to be increased if borrowers
experience financial difficulties beyond forbearance periods, which
will adversely affect our net income;
-
the net worth and liquidity of loan guarantors may decline,
impairing their ability to honor commitments to us;
-
as the result of the decline in the Federal Reserve Board’s target
federal funds rate to near 0%, the yield on our assets may decline
to a greater extent than the decline in our cost of
interest-bearing liabilities, reducing our net interest margin and
spread and reducing net income;
-
a material decrease in net income or a net loss over several
quarters could result in a decrease in the rate of our quarterly
cash dividend;
-
our cyber security risks are increased as the result of an increase
in the number of employees working remotely;
-
we rely on third party vendors for certain services and the
unavailability of a critical service due to the COVID-19 outbreak
could have an adverse effect on us; and
-
Federal Deposit Insurance Corporation premiums may increase if the
agency experiences additional resolution costs.
The Company disclaims any obligation to revise
or update any forward-looking statements contained in this press
release to reflect future events or developments.
PATHFINDER BANCORP,
INC.FINANCIAL HIGHLIGHTS(Dollars
and shares in thousands except per share amounts)
|
For the three months |
|
|
For six months |
|
|
ended June 30, |
|
|
ended June 30, |
|
|
(Unaudited) |
|
|
(Unaudited) |
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
Condensed Income
Statement |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and dividend income |
$ |
12,066 |
|
|
$ |
10,514 |
|
|
$ |
23,008 |
|
|
$ |
21,557 |
|
Interest expense |
|
1,851 |
|
|
|
2,874 |
|
|
|
4,233 |
|
|
|
6,138 |
|
Net interest income |
|
10,215 |
|
|
|
7,640 |
|
|
|
18,775 |
|
|
|
15,419 |
|
Provision for loan losses |
|
929 |
|
|
|
1,146 |
|
|
|
1,957 |
|
|
|
2,213 |
|
|
|
9,286 |
|
|
|
6,494 |
|
|
|
16,818 |
|
|
|
13,206 |
|
Noninterest income excluding net gains on sales of securities,
fixed assets, loans and foreclosed real estate |
|
1,295 |
|
|
|
1,133 |
|
|
|
2,585 |
|
|
|
2,377 |
|
Net gains on sales of securities, fixed assets, loans and
foreclosed real estate |
|
90 |
|
|
|
1,120 |
|
|
|
411 |
|
|
|
1,818 |
|
Gains (losses) on marketable equity securities |
|
49 |
|
|
|
(722 |
) |
|
|
283 |
|
|
|
(916 |
) |
Noninterest expense |
|
6,845 |
|
|
|
5,758 |
|
|
|
13,481 |
|
|
|
12,003 |
|
Income before income taxes |
|
3,875 |
|
|
|
2,267 |
|
|
|
6,616 |
|
|
|
4,482 |
|
Provision for income taxes |
|
851 |
|
|
|
439 |
|
|
|
1,400 |
|
|
|
894 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to noncontrolling interest
and Pathfinder Bancorp, Inc. |
$ |
3,024 |
|
|
$ |
1,828 |
|
|
$ |
5,216 |
|
|
$ |
3,588 |
|
Net income (loss) attributable to noncontrolling interest |
|
15 |
|
|
|
(13 |
) |
|
|
53 |
|
|
|
57 |
|
Net income attributable to Pathfinder Bancorp
Inc. |
$ |
3,009 |
|
|
$ |
1,841 |
|
|
$ |
5,163 |
|
|
$ |
3,531 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Periods Ended |
|
|
(Unaudited) |
|
|
June 30, |
|
|
December 31, |
|
|
June 30, |
|
|
2021 |
|
|
2020 |
|
|
2020 |
|
Selected Balance Sheet
Data |
|
|
|
|
|
|
|
|
|
|
|
Assets |
$ |
1,259,691 |
|
|
$ |
1,227,443 |
|
|
$ |
1,167,024 |
|
Earning assets |
|
1,189,711 |
|
|
|
1,159,778 |
|
|
|
1,094,896 |
|
Total loans |
|
834,952 |
|
|
|
825,495 |
|
|
|
806,009 |
|
Deposits |
|
1,031,670 |
|
|
|
995,907 |
|
|
|
970,593 |
|
Borrowed funds |
|
83,734 |
|
|
|
82,050 |
|
|
|
75,397 |
|
Allowance for loan losses |
|
14,603 |
|
|
|
12,777 |
|
|
|
10,553 |
|
Subordinated loans |
|
29,482 |
|
|
|
39,400 |
|
|
|
15,145 |
|
Pathfinder Bancorp, Inc.
Shareholders' equity |
|
103,235 |
|
|
|
97,456 |
|
|
|
92,315 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset Quality Ratios |
|
|
|
|
|
|
|
|
|
|
|
Net loan charge-offs
(annualized) to average loans |
|
0.03 |
% |
|
|
0.08 |
% |
|
|
0.08 |
% |
Allowance for loan losses to
period end loans |
|
1.75 |
% |
|
|
1.55 |
% |
|
|
1.31 |
% |
Allowance for loan losses to
nonperforming loans |
|
91.30 |
% |
|
|
59.89 |
% |
|
|
125.86 |
% |
Nonperforming loans to period
end loans |
|
1.92 |
% |
|
|
2.58 |
% |
|
|
1.04 |
% |
Nonperforming assets to total
assets |
|
1.27 |
% |
|
|
1.74 |
% |
|
|
0.72 |
% |
PATHFINDER BANCORP,
INC.FINANCIAL HIGHLIGHTS(Dollars
and shares in thousands except per share amounts)
|
For the three months |
|
|
For six months |
|
|
ended June 30, |
|
|
ended June 30, |
|
|
(Unaudited) |
|
|
(Unaudited) |
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
Key Earnings Ratios |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets |
|
0.95 |
% |
|
|
0.63 |
% |
|
|
0.81 |
% |
|
|
0.62 |
% |
Return on average common equity |
|
14.17 |
% |
|
|
9.69 |
% |
|
|
12.36 |
% |
|
|
9.18 |
% |
Return on average equity |
|
11.73 |
% |
|
|
8.06 |
% |
|
|
10.19 |
% |
|
|
7.65 |
% |
Net interest margin |
|
3.42 |
% |
|
|
2.75 |
% |
|
|
3.13 |
% |
|
|
2.88 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share, Per Share and
Ratio Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares outstanding- Voting |
|
4,464 |
|
|
|
4,639 |
|
|
|
4,453 |
|
|
|
4,623 |
|
Basic earnings per share- Voting |
$ |
0.50 |
|
|
$ |
0.31 |
|
|
$ |
0.87 |
|
|
$ |
0.60 |
|
Basic weighted average shares outstanding- Series A Non-Voting |
|
197 |
|
|
|
- |
|
|
|
99 |
|
|
|
- |
|
Basic earnings per share- Series A Non-Voting |
$ |
0.51 |
|
|
$ |
- |
|
|
$ |
0.87 |
|
|
$ |
- |
|
Diluted weighted average shares outstanding- Voting |
|
4,464 |
|
|
|
4,639 |
|
|
|
4,453 |
|
|
|
4,623 |
|
Diluted earnings per share- Voting |
$ |
0.50 |
|
|
$ |
0.31 |
|
|
$ |
0.87 |
|
|
$ |
0.60 |
|
Diluted weighted average shares outstanding- Series A
Non-Voting |
|
197 |
|
|
|
- |
|
|
|
99 |
|
|
|
- |
|
Diluted earnings per share- Series A Non-Voting |
$ |
0.51 |
|
|
$ |
- |
|
|
$ |
0.87 |
|
|
$ |
- |
|
Cash dividends per share |
$ |
0.07 |
|
|
$ |
0.06 |
|
|
$ |
0.14 |
|
|
$ |
0.12 |
|
Book value per common share at June 30, 2021 and 2020 |
|
|
|
|
|
|
|
|
$ |
17.37 |
|
|
$ |
16.19 |
|
Tangible book value per common share at June 30, 2021 and 2020 |
|
|
|
|
|
|
|
|
$ |
16.59 |
|
|
$ |
15.20 |
|
Tangible common equity to tangible assets at June 30, 2021 and
2020 |
|
|
|
|
|
|
|
|
|
7.85 |
% |
|
|
6.22 |
% |
Tangible common equity to tangible assets at June 30, 2021 and
2020, adjusted |
|
|
|
|
|
|
|
|
|
8.20 |
% |
|
|
6.64 |
% |
Non-GAAP Reconciliation |
|
|
|
|
|
|
|
|
|
Tangible book value per common share |
|
|
|
|
|
|
|
|
|
Total equity |
|
|
$ |
103,235 |
|
|
$ |
92,315 |
|
Intangible assets |
|
|
|
(4,661 |
) |
|
|
(4,677 |
) |
Convertible preferred equity |
|
|
|
- |
|
|
|
(15,369 |
) |
Common tangible equity |
|
|
$ |
98,574 |
|
|
$ |
72,269 |
|
Common shares outstanding |
|
|
|
5,943 |
|
|
|
4,754 |
|
Tangible book value per common share |
|
|
$ |
16.59 |
|
|
$ |
15.20 |
|
|
|
|
|
|
|
|
|
|
|
Tangible common equity to tangible assets |
|
|
|
|
|
|
|
|
|
Tangible common equity |
|
|
$ |
98,574 |
|
|
$ |
72,269 |
|
Tangible assets |
|
|
|
1,255,030 |
|
|
|
1,162,347 |
|
Tangible common equity to
tangible assets ratio |
|
|
|
7.85 |
% |
|
|
6.22 |
% |
|
|
|
|
|
|
|
|
|
|
Tangible common equity to tangible assets,
adjusted |
|
|
|
|
|
|
|
|
|
Tangible common equity |
|
|
$ |
98,574 |
|
|
$ |
72,269 |
|
Tangible assets |
|
|
|
1,255,030 |
|
|
|
1,162,347 |
|
Less: Paycheck Protection
Program (PPP) loans |
|
|
|
(53,610 |
) |
|
|
(73,774 |
) |
Total assets excluding PPP loans |
|
|
$ |
1,201,420 |
|
|
$ |
1,088,573 |
|
Tangible common equity to
tangible assets ratio, excluding PPP loans |
|
|
|
8.20 |
% |
|
|
6.64 |
% |
* Basic and diluted earnings per share are
calculated based upon the two-class method for the three and six
months ended June 30, 2021 and 2020.
Weighted average shares outstanding do not
include unallocated ESOP
shares.
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 June 30, |
|
|
|
|
2021 |
|
|
|
|
|
|
2020 |
|
|
|
|
|
|
|
|
|
|
Average |
|
|
|
|
|
|
|
|
|
|
Average |
|
Unaudited |
Average |
|
|
|
|
|
|
Yield / |
|
|
Average |
|
|
|
|
|
|
Yield / |
|
(Dollars in thousands) |
Balance |
|
|
Interest |
|
|
Cost |
|
|
Balance |
|
|
Interest |
|
|
Cost |
|
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
$ |
856,380 |
|
|
$ |
9,784 |
|
|
|
4.57 |
% |
|
$ |
796,267 |
|
|
$ |
8,832 |
|
|
|
4.44 |
% |
Taxable investment securities |
|
303,858 |
|
|
|
2,239 |
|
|
|
2.95 |
% |
|
|
230,943 |
|
|
|
1,613 |
|
|
|
2.79 |
% |
Tax-exempt investment securities |
|
11,226 |
|
|
|
42 |
|
|
|
1.50 |
% |
|
|
9,552 |
|
|
|
52 |
|
|
|
2.18 |
% |
Fed funds sold and interest-earning deposits |
|
24,948 |
|
|
|
1 |
|
|
|
0.02 |
% |
|
|
76,203 |
|
|
|
17 |
|
|
|
0.09 |
% |
Total interest-earning assets |
|
1,196,412 |
|
|
|
12,066 |
|
|
|
4.03 |
% |
|
|
1,112,965 |
|
|
|
10,514 |
|
|
|
3.78 |
% |
Noninterest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other assets |
|
80,159 |
|
|
|
|
|
|
|
|
|
|
|
73,721 |
|
|
|
|
|
|
|
|
|
Allowance for loan losses |
|
(14,016 |
) |
|
|
|
|
|
|
|
|
|
|
(10,076 |
) |
|
|
|
|
|
|
|
|
Net unrealized gains on available-for-sale securities |
|
1,872 |
|
|
|
|
|
|
|
|
|
|
|
(1,804 |
) |
|
|
|
|
|
|
|
|
Total assets |
$ |
1,264,427 |
|
|
|
|
|
|
|
|
|
|
$ |
1,174,806 |
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOW accounts |
$ |
92,412 |
|
|
$ |
74 |
|
|
|
0.32 |
% |
|
$ |
80,712 |
|
|
$ |
35 |
|
|
|
0.17 |
% |
Money management accounts |
|
15,988 |
|
|
|
4 |
|
|
|
0.10 |
% |
|
|
15,826 |
|
|
|
4 |
|
|
|
0.10 |
% |
MMDA accounts |
|
238,791 |
|
|
|
241 |
|
|
|
0.40 |
% |
|
|
202,136 |
|
|
|
355 |
|
|
|
0.70 |
% |
Savings and club accounts |
|
121,584 |
|
|
|
40 |
|
|
|
0.13 |
% |
|
|
94,684 |
|
|
|
22 |
|
|
|
0.09 |
% |
Time deposits |
|
372,807 |
|
|
|
785 |
|
|
|
0.84 |
% |
|
|
418,722 |
|
|
|
1,788 |
|
|
|
1.71 |
% |
Subordinated loans |
|
32,643 |
|
|
|
408 |
|
|
|
5.00 |
% |
|
|
15,139 |
|
|
|
192 |
|
|
|
5.07 |
% |
Borrowings |
|
88,109 |
|
|
|
299 |
|
|
|
1.36 |
% |
|
|
87,415 |
|
|
|
478 |
|
|
|
2.19 |
% |
Total interest-bearing liabilities |
|
962,334 |
|
|
|
1,851 |
|
|
|
0.77 |
% |
|
|
914,634 |
|
|
|
2,874 |
|
|
|
1.26 |
% |
Noninterest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
|
187,877 |
|
|
|
|
|
|
|
|
|
|
|
156,001 |
|
|
|
|
|
|
|
|
|
Other liabilities |
|
11,598 |
|
|
|
|
|
|
|
|
|
|
|
12,828 |
|
|
|
|
|
|
|
|
|
Total liabilities |
|
1,161,809 |
|
|
|
|
|
|
|
|
|
|
|
1,083,463 |
|
|
|
|
|
|
|
|
|
Shareholders' equity |
|
102,618 |
|
|
|
|
|
|
|
|
|
|
|
91,343 |
|
|
|
|
|
|
|
|
|
Total liabilities & shareholders' equity |
$ |
1,264,427 |
|
|
|
|
|
|
|
|
|
|
$ |
1,174,806 |
|
|
|
|
|
|
|
|
|
Net
interest income |
|
|
|
|
$ |
10,215 |
|
|
|
|
|
|
|
|
|
|
$ |
7,640 |
|
|
|
|
|
Net interest rate spread |
|
|
|
|
|
|
|
|
|
3.26 |
% |
|
|
|
|
|
|
|
|
|
|
2.52 |
% |
Net
interest margin |
|
|
|
|
|
|
|
|
|
3.42 |
% |
|
|
|
|
|
|
|
|
|
|
2.75 |
% |
Ratio of average interest-earning assets to average
interest-bearing liabilities |
|
|
|
|
|
|
|
|
|
124.32 |
% |
|
|
|
|
|
|
|
|
|
|
121.68 |
% |
PATHFINDER BANCORP,
INC.FINANCIAL HIGHLIGHTS(Dollars
and shares in thousands except per share amounts)
|
|
For the six months ended June 30, |
|
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
Average |
|
|
|
|
|
|
|
|
|
|
Average |
|
Unaudited |
|
Average |
|
|
|
|
|
|
Yield / |
|
|
Average |
|
|
|
|
|
|
Yield / |
|
(Dollars in thousands) |
|
Balance |
|
|
Interest |
|
|
Cost |
|
|
Balance |
|
|
Interest |
|
|
Cost |
|
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
|
$ |
852,972 |
|
|
$ |
18,631 |
|
|
|
4.37 |
% |
|
$ |
778,709 |
|
|
$ |
18,074 |
|
|
|
4.64 |
% |
Taxable investment securities |
|
|
306,278 |
|
|
|
4,302 |
|
|
|
2.81 |
% |
|
|
239,297 |
|
|
|
3,375 |
|
|
|
2.82 |
% |
Tax-exempt investment securities |
|
|
11,495 |
|
|
|
71 |
|
|
|
1.24 |
% |
|
|
5,458 |
|
|
|
59 |
|
|
|
2.16 |
% |
Fed funds sold and interest-earning deposits |
|
|
28,660 |
|
|
|
4 |
|
|
|
0.03 |
% |
|
|
45,943 |
|
|
|
49 |
|
|
|
0.21 |
% |
Total interest-earning assets |
|
|
1,199,405 |
|
|
|
23,008 |
|
|
|
3.84 |
% |
|
|
1,069,407 |
|
|
|
21,557 |
|
|
|
4.03 |
% |
Noninterest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other assets |
|
|
81,248 |
|
|
|
|
|
|
|
|
|
|
|
75,263 |
|
|
|
|
|
|
|
|
|
Allowance for loan losses |
|
|
(13,539 |
) |
|
|
|
|
|
|
|
|
|
|
(9,390 |
) |
|
|
|
|
|
|
|
|
Net unrealized losses on available for sale securities |
|
|
1,595 |
|
|
|
|
|
|
|
|
|
|
|
(843 |
) |
|
|
|
|
|
|
|
|
Total assets |
|
$ |
1,268,709 |
|
|
|
|
|
|
|
|
|
|
$ |
1,134,437 |
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOW accounts |
|
$ |
93,598 |
|
|
$ |
130 |
|
|
|
0.28 |
% |
|
$ |
78,247 |
|
|
$ |
65 |
|
|
|
0.17 |
% |
Money management accounts |
|
|
15,794 |
|
|
|
8 |
|
|
|
0.10 |
% |
|
|
15,005 |
|
|
|
9 |
|
|
|
0.12 |
% |
MMDA accounts |
|
|
237,050 |
|
|
|
496 |
|
|
|
0.42 |
% |
|
|
198,298 |
|
|
|
756 |
|
|
|
0.76 |
% |
Savings and club accounts |
|
|
116,479 |
|
|
|
72 |
|
|
|
0.12 |
% |
|
|
90,901 |
|
|
|
48 |
|
|
|
0.11 |
% |
Time deposits |
|
|
385,918 |
|
|
|
1,965 |
|
|
|
1.02 |
% |
|
|
410,967 |
|
|
|
3,882 |
|
|
|
1.89 |
% |
Subordinated loans |
|
|
36,009 |
|
|
|
965 |
|
|
|
5.36 |
% |
|
|
15,135 |
|
|
|
398 |
|
|
|
5.26 |
% |
Borrowings |
|
|
86,598 |
|
|
|
597 |
|
|
|
1.38 |
% |
|
|
87,217 |
|
|
|
980 |
|
|
|
2.25 |
% |
Total interest-bearing liabilities |
|
|
971,446 |
|
|
|
4,233 |
|
|
|
0.87 |
% |
|
|
895,770 |
|
|
|
6,138 |
|
|
|
1.37 |
% |
Noninterest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
|
|
184,180 |
|
|
|
|
|
|
|
|
|
|
|
134,179 |
|
|
|
|
|
|
|
|
|
Other liabilities |
|
|
11,769 |
|
|
|
|
|
|
|
|
|
|
|
12,446 |
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
1,167,395 |
|
|
|
|
|
|
|
|
|
|
|
1,042,395 |
|
|
|
|
|
|
|
|
|
Shareholders' equity |
|
|
101,314 |
|
|
|
|
|
|
|
|
|
|
|
92,042 |
|
|
|
|
|
|
|
|
|
Total liabilities & shareholders' equity |
|
$ |
1,268,709 |
|
|
|
|
|
|
|
|
|
|
$ |
1,134,437 |
|
|
|
|
|
|
|
|
|
Net
interest income |
|
|
|
|
|
$ |
18,775 |
|
|
|
|
|
|
|
|
|
|
$ |
15,419 |
|
|
|
|
|
Net interest rate spread |
|
|
|
|
|
|
|
|
|
|
2.97 |
% |
|
|
|
|
|
|
|
|
|
|
2.66 |
% |
Net
interest margin |
|
|
|
|
|
|
|
|
|
|
3.13 |
% |
|
|
|
|
|
|
|
|
|
|
2.88 |
% |
Ratio of average interest-earning assets to average
interest-bearing liabilities |
|
|
|
|
|
|
|
|
|
|
123.47 |
% |
|
|
|
|
|
|
|
|
|
|
119.38 |
% |
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.
|
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
|
|
2021 vs. 2020 |
|
|
2021 vs. 2020 |
|
|
|
Increase/(Decrease) Due to |
|
|
Increase/(Decrease) Due to |
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
|
|
Total |
|
Unaudited |
|
|
|
|
|
|
|
|
|
Increase |
|
|
|
|
|
|
|
|
|
|
Increase |
|
(In
thousands) |
|
Volume |
|
|
Rate |
|
|
(Decrease) |
|
|
Volume |
|
|
Rate |
|
|
(Decrease) |
|
Interest Income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
|
$ |
686 |
|
|
$ |
266 |
|
|
$ |
952 |
|
|
$ |
2,966 |
|
|
$ |
(2,409 |
) |
|
$ |
557 |
|
Taxable investment securities |
|
|
531 |
|
|
|
95 |
|
|
|
626 |
|
|
|
965 |
|
|
|
(38 |
) |
|
|
927 |
|
Tax-exempt investment securities |
|
|
43 |
|
|
|
(53 |
) |
|
|
(10 |
) |
|
|
81 |
|
|
|
(69 |
) |
|
|
12 |
|
Interest-earning deposits |
|
|
(7 |
) |
|
|
(9 |
) |
|
|
(16 |
) |
|
|
(14 |
) |
|
|
(31 |
) |
|
|
(45 |
) |
Total interest income |
|
|
1,253 |
|
|
|
299 |
|
|
|
1,552 |
|
|
|
3,998 |
|
|
|
(2,547 |
) |
|
|
1,451 |
|
Interest Expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOW accounts |
|
|
5 |
|
|
|
34 |
|
|
|
39 |
|
|
|
15 |
|
|
|
50 |
|
|
|
65 |
|
Money management accounts |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1 |
|
|
|
(2 |
) |
|
|
(1 |
) |
MMDA accounts |
|
|
325 |
|
|
|
(439 |
) |
|
|
(114 |
) |
|
|
332 |
|
|
|
(592 |
) |
|
|
(260 |
) |
Savings and club accounts |
|
|
7 |
|
|
|
11 |
|
|
|
18 |
|
|
|
17 |
|
|
|
7 |
|
|
|
24 |
|
Time deposits |
|
|
(178 |
) |
|
|
(825 |
) |
|
|
(1,003 |
) |
|
|
(224 |
) |
|
|
(1,693 |
) |
|
|
(1,917 |
) |
Subordinated loans |
|
|
235 |
|
|
|
(19 |
) |
|
|
216 |
|
|
|
559 |
|
|
|
8 |
|
|
|
567 |
|
Borrowings |
|
|
26 |
|
|
|
(205 |
) |
|
|
(179 |
) |
|
|
(7 |
) |
|
|
(376 |
) |
|
|
(383 |
) |
Total interest expense |
|
|
420 |
|
|
|
(1,443 |
) |
|
|
(1,023 |
) |
|
|
693 |
|
|
|
(2,598 |
) |
|
|
(1,905 |
) |
Net change in net interest income |
|
$ |
833 |
|
|
$ |
1,742 |
|
|
$ |
2,575 |
|
|
$ |
3,305 |
|
|
$ |
51 |
|
|
$ |
3,356 |
|
The above information is preliminary and based
on the Company's data available at the time of presentation.
Investor/Media Contacts
Thomas W. Schneider, President, CEOWalter F. Rusnak, Senior Vice
President, CFOTelephone: (315) 343-0057
Pathfinder Bancorp (NASDAQ:PBHC)
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