Pathfinder Bancorp, Inc. (“Company”) (NASDAQ: PBHC), the holding
company for Pathfinder Bank (“Bank”), announced an increase in
first quarter 2022 net income of $796,000, or 37.0%, as compared to
the first quarter of 2021. Net income for the quarter ended March
31, 2022 was $3.0 million, or $0.49 per basic and diluted common
share, compared to $2.2 million, or $0.36 per basic and diluted
common share, for the first quarter of 2021. First quarter 2022
total revenue (net interest income and total noninterest income) of
$11.1 million increased $665,000, or 6.4%, compared to the first
quarter of 2021.
First Quarter 2022 Performance
Highlights
- Total interest-earning assets on
March 31, 2022 of $1.25 billion increased by $12.2 million, or
1.0%, from $1.24 million at March 31, 2021 and $37.8 million, or
3.1%, from $1.21 billion at December 31, 2021.
- Total loans were $855.6 million at
the end of the first quarter of 2022 compared to $865.3 million one
year prior and $832.5 million at the end of December 31, 2021.
Excluding PPP-related loans, total loans grew by $56.7 million, or
7.2%, from March 31, 2021 and $29.2 million, or 3.6%, from year-end
2021.
- Total deposits on March 31, 2022
were $1.11 billion, an increase of $45.2 million, or 4.2%, compared
to $1.07 billion one year prior and $58.7 million, or 5.6%, from
$1.06 billion at December 31, 2021.
- A more beneficial deposit mix
contributed to a 28 basis point reduction in deposit funding costs
to 0.43% for the first quarter 2022, as compared to 0.71% in the
prior year’s first quarter. Total funding costs decreased 36 basis
points to 0.61% from the prior year’s first quarter.
- Total first quarter 2022 net
interest income of $9.5 million increased by $907,000, or 10.6%,
from the prior year period, while net interest margin expanded to
3.06%, up 21 basis points over the prior year period.
- Tangible book value per common
share of $17.45 is up 2.4% from $17.04 one year prior.
“Our Company delivered a solid performance in
the first quarter of 2022, achieving continued loan growth, further
improvement in profitability and strong asset quality,” said James
A. Dowd, President and CEO. “Coming off of record earnings in 2021,
Pathfinder is well-positioned for continued success and I am both
humbled and honored to lead our incredible team in our next phases
of growth.”
“For the first quarter of 2022, we grew total
revenue to $11.1 million, up 6.4% from the year-ago period. We also
further improved key earnings ratios, with a first quarter 2022
return on average assets of 0.90% and an annualized return on
average equity of 10.63%. These profitability metrics grew by 22
basis points and 201 basis points, respectively, from the prior
year quarterly period.”
“In light of our continued solid performance and
increased profitability, our Board of Directors raised our
quarterly cash dividend to $0.09 from the previous quarterly cash
dividend of $0.07. This $0.02, or 28.6% increase from the current
quarter compared to March 2021, reflects our ongoing commitment to
rewarding our shareholders.”
“Our improved profitability is in large part due
to the excellent performance of our team in serving both new and
existing customers throughout our Central New York footprint. Their
efforts drove loan growth during the three months ended March 31,
2022. At the same time, we have continued to improve our funding
mix and, as a result, believe that we are well-positioned for the
currently-forecasted rising interest rate environment.”
“As we have expected, noninterest expenses did
increase from the prior year period as we responded to inflationary
and wage pressures within our markets. We will maintain our focus
on effective expense management, while ensuring that we are
continuing to make prudent investments to unlock our longer-term
growth potential. Among those investments is our newest branch
location in the City of Syracuse, which we now expect to open early
in the third quarter of this year. The new branch in Syracuse’s
Southwest Corridor area will soon bring a broad range of community
banking services to an area that we believe is currently
underserved. In addition, this new branch will provide an
additional point of convenient service access for our growing
customer base in downtown Syracuse, where we already have
established a successful presence.”
“It is important that I take this opportunity to
thank Tom Schneider, our President and CEO for the past 22 years,
for his dedication and leadership in positioning the Company for
our improved level of operating performance while we continued to
both maintain and enhance our high standards for credit quality and
customer service. I would also like to thank Tom, on behalf of all
of the members of our senior team, for his guidance and friendship
that was extended to each of us during his tenure as our President
and CEO. We look forward to his continued contributions to our
corporate growth and development in the coming years, as Tom
assumes his new role as Pathfinder’s Director of Capital Markets
and Corporate Strategy.”
“Looking ahead, we are excited by the growth
opportunities we see for both the Company and the regions that we
serve. With strong loan and deposit pipelines and a highly capable
team that is committed to serving our Central New York customers
and communities, we are optimistic about our potential to continue
growing our Company and enhancing shareholder returns over the
long-term.”
Income Statement for the Quarter Ended
March 31, 2022
First quarter 2022 net interest income was $9.5
million, an increase of $907,000, or 10.6%, compared to $8.6
million for the same quarter in 2021. The increase in net interest
income between comparable quarters was primarily due to a 36 basis
point reduction in rates paid on interest-bearing liabilities,
reflecting the Company’s improved funding mix, which reduced total
interest expense for the first quarter of 2022 by $867,000, or
36.4%, to $1.5 million, from $2.4 million for the prior year
quarter. Interest and dividend income in the 2022 first quarter was
$11.0 million, compared to $10.9 million in the first quarter of
2021. The net interest margin for the first quarter of 2022 was
3.06%, reflecting a 21 basis point increase compared to 2.85% for
the first quarter of 2021. This improvement primarily reflects a 36
basis point decline in the average cost for interest-bearing
liabilities as well as a larger interest-earning asset base, which
partially offset the effects of a 10 basis point decline in the
average yield.
The following table details the components of
net interest income for the three months ended March 31, 2022 and
2021:
Components of Net Interest
Income
Unaudited |
|
For the three months ended |
|
(In
thousands, except per share data) |
|
March 31, 2022 |
|
|
March 31, 2021 |
|
|
Change |
|
Interest and dividend income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, including fees |
|
$ |
8,692 |
|
|
$ |
8,847 |
|
|
$ |
(155 |
) |
|
-1.8 |
% |
Debt securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
|
2,120 |
|
|
|
1,976 |
|
|
|
144 |
|
|
7.3 |
% |
Tax-exempt |
|
|
118 |
|
|
|
29 |
|
|
|
89 |
|
|
306.9 |
% |
Dividends |
|
|
48 |
|
|
|
87 |
|
|
|
(39 |
) |
|
-44.8 |
% |
Federal
funds sold and interest earning deposits |
|
|
4 |
|
|
|
3 |
|
|
|
1 |
|
|
33.3 |
% |
Total interest and dividend income |
|
|
10,982 |
|
|
|
10,942 |
|
|
|
40 |
|
|
0.4 |
% |
Interest expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on deposits |
|
|
965 |
|
|
|
1,527 |
|
|
|
(562 |
) |
|
-36.8 |
% |
Interest on short-term
borrowings |
|
|
5 |
|
|
|
3 |
|
|
|
2 |
|
|
66.7 |
% |
Interest on long-term
borrowings |
|
|
133 |
|
|
|
295 |
|
|
|
(162 |
) |
|
-54.9 |
% |
Interest on subordinated loans |
|
|
412 |
|
|
|
557 |
|
|
|
(145 |
) |
|
-26.0 |
% |
Total interest expense |
|
|
1,515 |
|
|
|
2,382 |
|
|
|
(867 |
) |
|
-36.4 |
% |
Net interest income |
|
|
9,467 |
|
|
|
8,560 |
|
|
|
907 |
|
|
10.6 |
% |
Provision for loan losses |
|
|
102 |
|
|
|
1,028 |
|
|
|
(926 |
) |
|
-90.1 |
% |
Net interest income after provision for loan losses |
|
$ |
9,365 |
|
|
$ |
7,532 |
|
|
$ |
1,833 |
|
|
24.3 |
% |
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 |
|
(In
thousands, except number of loans) |
|
March 31, 2022 |
|
|
March 31, 2021 |
|
Number of PPP loans originated in the period |
|
|
- |
|
|
|
421 |
|
Funded balance of PPP loans
originated in the period |
|
$ |
- |
|
|
$ |
34,487 |
|
Number of PPP loans forgiven
in the period |
|
93 |
|
|
|
206 |
|
Balance of PPP loans forgiven
in the period |
|
$ |
6,096 |
|
|
$ |
18,581 |
|
Deferred PPP fee income
recognized in the period |
|
$ |
278 |
|
|
$ |
412 |
|
|
|
|
|
|
|
|
|
|
(In
thousands, except number of loans) |
|
March 31, 2022 |
|
|
March 31, 2021 |
|
Unearned PPP deferred fee
income at end of period |
|
$ |
440 |
|
|
$ |
1,468 |
|
(In
thousands, except number of loans) |
|
Number |
|
|
Balance |
|
Total PPP loans originated since inception |
|
|
1,177 |
|
|
$ |
111,721 |
|
Total PPP loans forgiven since
inception |
|
|
1,025 |
|
|
$ |
98,429 |
|
Total PPP loans remaining at
March 31, 2022 |
|
|
152 |
|
|
$ |
13,292 |
|
Provision for Loan Losses
The Company reported a provision for loan losses
of $102,000 for the first quarter of 2022, reflective of improving
asset quality metrics, partially offset by the effects on required
reserves related to year-over-year loan growth. This compares to a
provision for loan losses of $1.0 million for the first quarter of
2021. 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.
Noninterest Income
First quarter 2022 noninterest income was $1.6
million, a decrease of $242,000, or 13.1%, compared to $1.8 million
for the same three-month period in 2021. The decrease in
noninterest income, as compared to the same quarter of the previous
year, was primarily due to a $201,000 non-recurring gain, recorded
in the first quarter of 2021, related to the Bank’s sale of land
previously held for development. Noninterest income categorized as
recurring was $1.5 million for the first quarter of 2022,
reflecting a $188,000, or 14.6%, improvement over the first quarter
of the prior year. Recurring noninterest income excludes unrealized
gains on equity securities, gains on sales of loans, foreclosed
real estate, and premises and equipment, as well as losses on
investment securities.
The following table details the components of
noninterest income for the three months ended March 31, 2022 and
2021:
Unaudited |
|
For the three months ended |
|
(Dollars in thousands) |
|
March 31, 2022 |
|
|
March 31, 2021 |
|
|
Change |
|
Service charges on deposit accounts |
|
$ |
259 |
|
|
$ |
331 |
|
|
$ |
(72 |
) |
|
-21.8 |
% |
Earnings and gain on bank
owned life insurance |
|
|
162 |
|
|
|
125 |
|
|
|
37 |
|
|
29.6 |
% |
Loan servicing fees |
|
|
117 |
|
|
|
90 |
|
|
|
27 |
|
|
30.0 |
% |
Debit card interchange
fees |
|
|
228 |
|
|
|
221 |
|
|
|
7 |
|
|
3.2 |
% |
Insurance agency revenue |
|
|
299 |
|
|
|
280 |
|
|
|
19 |
|
|
6.8 |
% |
Other
charges, commissions and fees |
|
|
413 |
|
|
|
243 |
|
|
|
170 |
|
|
70.0 |
% |
Noninterest income before (losses) gains |
|
|
1,478 |
|
|
|
1,290 |
|
|
|
188 |
|
|
14.6 |
% |
Net gains on sales of
securities, fixed assets, loans and foreclosedreal estate |
|
|
57 |
|
|
|
321 |
|
|
|
(264 |
) |
|
-82.2 |
% |
Gains
on marketable equity securities |
|
|
68 |
|
|
|
234 |
|
|
|
(166 |
) |
|
-70.9 |
% |
Total noninterest income |
|
$ |
1,603 |
|
|
$ |
1,845 |
|
|
$ |
(242 |
) |
|
-13.1 |
% |
Noninterest Expense
Total noninterest expense for the first quarter
of 2022 was $7.3 million, an increase of $616,000, or 9.3%,
compared to $6.6 million for the same three-month period in 2021.
The increase was primarily driven by increases in salaries and
employee benefits expense of $708,000, or 21.2%.
The $708,000 year-over-year increase in salaries
and employee benefits expense was comprised of a $239,000 reduction
in deferrals of personnel-related loan origination costs, a
$207,000, or 7.9%, increase in salaries, a $206,000 increase in
incentives expense and a $56,000 net increase in all other salaries
and employee benefits expenses.
The $239,000 reduction in personnel-related
costs deferred under generally accepted accounting principles in
the first quarter of 2022, as compared to the same quarter in 2021,
related to reduced levels of PPP loans loan originated in 2022 as
compared to the previous year. The Company originated $-0- PPP
loans in the first quarter of 2022, as compared to $34.5 million in
the first quarter of 2021.
The $207,000 increase in salaries expense was
primarily due to increases in individual salaries, effective in the
first quarter of 2022, as well as modest additions to staff
headcount. The Company increased its salary structure for
employees, where deemed to be appropriate, in late 2021 and early
2022 in order to effectively respond to inflationary and
competitive pressures within our marketplace relative to the
recruitment and retention of talent. The $206,000 increase in
incentives expense in the first quarter of 2022, as compared to the
same quarter in 2021, was primarily due to the relative timing of
incentive distributions made in 2021 and 2022 and overall
adjustments made to the Bank’s performance incentive plans. The
level of incentive expense in the first quarter of 2022 is
indicative of the quarterly level of such expenses expected for the
remainder of 2022.
Partially offsetting the increase in salaries
and employee benefits expense was a $126,000, or 18.6%, reduction
in data processing expenses, primarily the result of a reduction in
ATM processing fees that was in turn primarily driven by
third-party vendor refunds obtained through contract renegotiation
activities.
The following table details the components of
noninterest expense for the three months ended March 31, 2022 and
2021:
Unaudited |
|
For the three months ended |
|
|
|
(Dollars in thousands) |
|
March 31, 2022 |
|
|
March 31, 2021 |
|
|
Change |
|
Salaries and employee benefits |
|
$ |
4,049 |
|
|
$ |
3,341 |
|
|
$ |
708 |
|
|
|
21.2 |
% |
Building and occupancy |
|
|
826 |
|
|
|
793 |
|
|
|
33 |
|
|
|
4.2 |
% |
Data processing |
|
|
550 |
|
|
|
676 |
|
|
|
(126 |
) |
|
|
-18.6 |
% |
Professional and other
services |
|
|
393 |
|
|
|
417 |
|
|
|
(24 |
) |
|
|
-5.8 |
% |
Advertising |
|
|
187 |
|
|
|
246 |
|
|
|
(59 |
) |
|
|
-24.0 |
% |
FDIC assessments |
|
|
222 |
|
|
|
198 |
|
|
|
24 |
|
|
|
12.1 |
% |
Audits and exams |
|
|
141 |
|
|
|
202 |
|
|
|
(61 |
) |
|
|
-30.2 |
% |
Insurance agency expense |
|
|
204 |
|
|
|
206 |
|
|
|
(2 |
) |
|
|
-1.0 |
% |
Community service
activities |
|
|
62 |
|
|
|
88 |
|
|
|
(26 |
) |
|
|
-29.5 |
% |
Foreclosed real estate
expenses |
|
|
13 |
|
|
|
6 |
|
|
|
7 |
|
|
|
116.7 |
% |
Other
expenses |
|
|
605 |
|
|
|
463 |
|
|
|
142 |
|
|
|
30.7 |
% |
Total noninterest expenses |
|
$ |
7,252 |
|
|
$ |
6,636 |
|
|
$ |
616 |
|
|
|
9.3 |
% |
Balance Sheet on March 31,
2022
The Company’s total assets on March 31, 2022 were $1.33 billion,
an increase of $43.2 million, or 3.4%, from $1.29 billion on
December 31, 2021. This increase was primarily driven by an
increase in loans, along with increased available-for-sale and
held-to-maturity securities. Total loans of $855.6 million
increased by $23.1 million, or 2.8%, compared with $832.5 million
on December 31, 2021, as organic loan growth was partially offset
by PPP loan forgiveness. Investment securities totaled $367.4
million, an increase of $15.2 million, or 4.3%, compared to $352.2
million on December 31, 2021.
Total deposits on March 31, 2022 were $1.11
billion, an increase of $58.7 million, or 5.6%, from $1.06 billion
at December 31, 2021. Interest-bearing deposits of $909.3 million
at March 31, 2022 were up by $45.9 million, or 5.3% from year-end
2021, a result of municipal deposit inflows related to seasonal tax
collections, as well as increases in retail deposits.
Noninterest-bearing deposits totaled $204.7 million at March 31,
2022, an increase of $12.9 million, or 6.7%, from year-end 2021,
resulting from continued growth in business banking
relationships.
Shareholders’ equity was $109.1 million at March
31, 2022 compared to $110.3 million at December 31, 2021. The
modest $1.2 million, or 1.1%, decrease was primarily a result of a
$3.8 million increase in accumulated other comprehensive loss which
is due to unrealized loss on investment securities categorized as
available-for-sale, partially offset by a $2.4 million increase in
retained earnings.
Asset Quality
The Bank maintained strong asset quality metrics
for the first quarter of 2022. Annualized net loan charge-offs to
average loans were 0.01% for the first quarter 2022, compared with
0.05% for the first quarter of 2021 and 0.10% for the year ended
December 31, 2021. Nonperforming loans as a percentage of total
loans continued to improve, totaling 0.81% at March 31, 2022,
compared to 1.00% at December 31, 2021 and 2.47% at March 31, 2021.
The decrease in the nonperforming loan portfolio at March 31, 2022,
as compared to March 31, 2021, was primarily the result of loans
held in portfolio that resumed regular payment status following the
improvement in general business conditions in the second half of
2021.
The following table summarizes nonaccrual loans by category and
status at March 31, 2022:
(In
thousands) |
LoanType |
CollateralType |
NumberofLoans |
|
|
LoanBalance |
|
|
AverageLoanBalance |
|
|
WeightedLTV atOrigination/Modification |
|
|
Status |
Secured residential mortgage: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate |
|
14 |
|
|
$ |
1,098 |
|
|
$ |
78 |
|
|
|
77 |
% |
|
Under active resolution management by the Bank. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Secured
commercial real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PrivateMuseum |
|
1 |
|
|
|
1,384 |
|
|
|
1,384 |
|
|
|
79 |
% |
|
The Bank is working on a
modification with the borrower. The borrower has substantial
deposits with the Bank. |
|
Recreational |
|
1 |
|
|
|
1,233 |
|
|
|
1,233 |
|
|
|
49 |
% |
|
The loan is currently
classified as a Troubled Debt Restructuring (TDR). The due date for
this loan payment was September 1, 2021. |
|
All other |
|
10 |
|
|
|
1,618 |
|
|
|
162 |
|
|
|
61 |
% |
|
Under active resolution
management by the Bank. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
lines of credit: |
|
4 |
|
|
|
141 |
|
|
|
35 |
|
|
N/A |
|
|
Under active resolution
management by the Bank. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
and industrial: |
|
10 |
|
|
|
1,191 |
|
|
|
119 |
|
|
N/A |
|
|
Under active resolution
management by the Bank. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer loans: |
|
9 |
|
|
|
1,283 |
|
|
|
143 |
|
|
N/A |
|
|
Under
active resolution management by the Bank. |
|
|
|
49 |
|
|
$ |
7,948 |
|
|
$ |
162 |
|
|
|
|
|
|
|
The allowance for loan losses to non-performing
loans at March 31, 2022 was 163.8%, compared with 64.2% at March
31, 2021. The change in the allowance for loans losses to
non-performing loans is reflective of the significant reductions in
nonaccrual loans discussed above.
Cash Dividend Declared
On March 28, 2022, the Company announced that
its Board of Directors declared a cash dividend of $0.09 per share
on the Company's voting common and non-voting common stock, and a
cash dividend of $0.09 per notional share for the issued warrant
relating to the fiscal quarter ended March 31, 2022. The dividend
represents an increase of $0.02 per share, or 28.6% over the
dividend declared for the quarter ended December 31, 2021. The
dividend will be payable to all shareholders of record on April 22,
2022 and will be paid on May 6, 2022. Based on the closing price of
the Company’s common stock of $21.98 on March 31, 2022, the implied
dividend yield is 1.6%. The quarterly cash dividend of $0.09
equates to a dividend payout ratio of 18.4%.
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
County and one limited purpose office in Oneida County.
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 |
|
|
|
ended March 31, |
|
|
|
(Unaudited) |
|
|
|
2022 |
|
|
2021 |
|
Condensed Income Statement |
|
|
|
|
|
|
|
|
Interest and dividend income |
|
$ |
10,982 |
|
|
$ |
10,942 |
|
Interest expense |
|
|
1,515 |
|
|
|
2,382 |
|
Net interest income |
|
|
9,467 |
|
|
|
8,560 |
|
Provision for loan losses |
|
|
102 |
|
|
|
1,028 |
|
|
|
|
9,365 |
|
|
|
7,532 |
|
Noninterest income excluding net gains on sales of securities,
fixed assets, loans and foreclosed real estate |
|
|
1,478 |
|
|
|
1,290 |
|
Net gains on sales of securities, fixed assets, loans and
foreclosed real estate |
|
|
57 |
|
|
|
321 |
|
Gains on marketable equity securities |
|
|
68 |
|
|
|
234 |
|
Noninterest income |
|
|
1,603 |
|
|
|
1,845 |
|
|
|
|
|
|
|
|
|
|
Noninterest expense |
|
|
7,252 |
|
|
|
6,636 |
|
Income before income taxes |
|
|
3,716 |
|
|
|
2,741 |
|
Provision for income taxes |
|
|
721 |
|
|
|
549 |
|
|
|
|
|
|
|
|
|
|
Net income attributable to noncontrolling interest
and Pathfinder Bancorp, Inc. |
|
$ |
2,995 |
|
|
$ |
2,192 |
|
Net income attributable to noncontrolling interest |
|
|
45 |
|
|
|
38 |
|
Net income attributable to Pathfinder Bancorp
Inc. |
|
$ |
2,950 |
|
|
$ |
2,154 |
|
Convertible preferred stock dividends |
|
|
- |
|
|
|
97 |
|
Warrant dividends |
|
|
11 |
|
|
|
9 |
|
Undistributed earnings allocated to preferred stock shares |
|
|
- |
|
|
|
439 |
|
Net income available to common shareholders |
|
$ |
2,939 |
|
|
$ |
1,609 |
|
|
|
(Unaudited) |
|
|
|
March 31, |
|
|
December 31, |
|
|
March 31, |
|
|
|
2022 |
|
|
2021 |
|
|
2021 |
|
Selected Balance Sheet Data |
|
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
$ |
1,328,415 |
|
|
$ |
1,285,177 |
|
|
$ |
1,307,156 |
|
Earning assets |
|
|
1,249,941 |
|
|
|
1,212,139 |
|
|
|
1,237,704 |
|
Total loans |
|
|
855,601 |
|
|
|
832,459 |
|
|
|
865,307 |
|
Deposits |
|
|
1,114,077 |
|
|
|
1,055,346 |
|
|
|
1,068,908 |
|
Borrowed funds |
|
|
62,521 |
|
|
|
77,098 |
|
|
|
86,500 |
|
Allowance for loan losses |
|
|
13,017 |
|
|
|
12,935 |
|
|
|
13,693 |
|
Subordinated loans |
|
|
29,604 |
|
|
|
29,563 |
|
|
|
39,443 |
|
Pathfinder Bancorp, Inc.
Shareholders' equity |
|
|
109,055 |
|
|
|
110,287 |
|
|
|
99,939 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset Quality Ratios |
|
|
|
|
|
|
|
|
|
|
|
|
Net loan charge-offs
(annualized) to average loans |
|
|
0.02 |
% |
|
|
0.12 |
% |
|
|
0.05 |
% |
Allowance for loan losses to
period end loans |
|
|
1.52 |
% |
|
|
1.55 |
% |
|
|
1.58 |
% |
Allowance for loan losses to
nonperforming loans |
|
|
163.78 |
% |
|
|
155.99 |
% |
|
|
64.16 |
% |
Nonperforming loans to period
end loans |
|
|
0.93 |
% |
|
|
1.00 |
% |
|
|
2.47 |
% |
Nonperforming assets to total
assets |
|
|
0.60 |
% |
|
|
0.65 |
% |
|
|
1.63 |
% |
PATHFINDER BANCORP,
INC.FINANCIAL HIGHLIGHTS(Dollars
and shares in thousands except per share amounts)
|
|
For the three months |
|
|
|
ended March 31, |
|
|
|
(Unaudited) |
|
|
|
2022 |
|
|
2021 |
|
Key Earnings Ratios |
|
|
|
|
|
|
|
|
Return on average assets |
|
|
0.90 |
% |
|
|
0.68 |
% |
Return on average common equity |
|
|
10.63 |
% |
|
|
10.50 |
% |
Return on average equity |
|
|
10.63 |
% |
|
|
8.62 |
% |
Net interest margin |
|
|
3.06 |
% |
|
|
2.85 |
% |
|
|
|
|
|
|
|
|
|
Share, Per Share and
Ratio Data |
|
|
|
|
|
|
|
|
Basic weighted average shares outstanding* |
|
|
4,535,967 |
|
|
|
4,442,231 |
|
Basic earnings per share* |
|
$ |
0.49 |
|
|
$ |
0.36 |
|
Diluted weighted average shares outstanding* |
|
|
4,535,967 |
|
|
|
4,442,231 |
|
Diluted earnings per share* |
|
$ |
0.49 |
|
|
$ |
0.36 |
|
Cash dividends per share |
|
$ |
0.09 |
|
|
$ |
0.07 |
|
Book value per common share at March 31, 2022 and 2021 |
|
$ |
18.23 |
|
|
$ |
18.07 |
|
Tangible book value per common share at March 31, 2022 and
2021 |
|
$ |
17.45 |
|
|
$ |
17.04 |
|
Tangible equity to tangible assets at March 31, 2022 and 2021 |
|
|
7.89 |
% |
|
|
7.31 |
% |
Tangible equity to tangible assets at March 31, 2022 and 2021,
adjusted |
|
|
7.97 |
% |
|
|
7.79 |
% |
|
|
|
|
|
|
|
|
|
Non-GAAP
Reconciliation |
|
|
|
|
|
|
|
|
Tangible book value per common share |
|
|
|
|
|
|
|
|
Total equity |
|
$ |
109,055 |
|
|
$ |
99,939 |
|
Intangible assets |
|
|
(4,648 |
) |
|
|
(4,665 |
) |
Convertible preferred equity |
|
|
- |
|
|
|
(17,901 |
) |
Common tangible equity |
|
|
104,407 |
|
|
|
77,373 |
|
Common shares outstanding |
|
|
5,983 |
|
|
|
4,541 |
|
Tangible book value per common share |
|
$ |
17.45 |
|
|
$ |
17.04 |
|
|
|
|
|
|
|
|
|
|
Tangible common equity to tangible assets |
|
|
|
|
|
|
|
|
Tangible common equity |
|
$ |
104,407 |
|
|
$ |
95,274 |
|
Tangible assets |
|
$ |
1,323,767 |
|
|
$ |
1,302,491 |
|
Tangible common equity to
tangible assets ratio |
|
|
7.89 |
% |
|
|
7.31 |
% |
|
|
|
|
|
|
|
|
|
Tangible common equity to tangible assets,
adjusted |
|
|
|
|
|
|
|
|
Tangible common equity |
|
$ |
104,407 |
|
|
$ |
95,274 |
|
Tangible assets |
|
$ |
1,323,767 |
|
|
$ |
1,302,491 |
|
Less: Paycheck Protection Program (PPP) loans |
|
$ |
(13,292 |
) |
|
$ |
(79,674 |
) |
Total assets excluding PPP loans |
|
$ |
1,310,475 |
|
|
$ |
1,222,817 |
|
Tangible common equity to
tangible assets ratio, excluding PPP loans |
|
|
7.97 |
% |
|
|
7.79 |
% |
* Basic and diluted earnings per share are
calculated based upon the two-class method for the three months
ended March 31, 2022 and 2021.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 March 31, |
|
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
Average |
|
|
|
|
|
|
|
|
|
Average |
|
|
|
Average |
|
|
|
|
|
Yield / |
|
|
Average |
|
|
|
|
|
Yield / |
|
(Dollars in thousands) |
|
Balance |
|
|
Interest |
|
Cost |
|
|
Balance |
|
|
Interest |
|
Cost |
|
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
|
$ |
845,461 |
|
|
$ |
8,692 |
|
|
4.11 |
% |
|
$ |
849,676 |
|
|
$ |
8,847 |
|
|
4.16 |
% |
Taxable investment securities |
|
|
329,291 |
|
|
|
2,168 |
|
|
2.63 |
% |
|
|
308,259 |
|
|
|
2,063 |
|
|
2.68 |
% |
Tax-exempt investment securities |
|
|
32,721 |
|
|
|
118 |
|
|
1.44 |
% |
|
|
12,234 |
|
|
|
29 |
|
|
0.95 |
% |
Fed funds sold and interest-earning deposits |
|
|
31,830 |
|
|
|
4 |
|
|
0.05 |
% |
|
|
32,414 |
|
|
|
3 |
|
|
0.04 |
% |
Total interest-earning assets |
|
|
1,239,303 |
|
|
|
10,982 |
|
|
3.54 |
% |
|
|
1,202,583 |
|
|
|
10,942 |
|
|
3.64 |
% |
Noninterest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other assets |
|
|
91,622 |
|
|
|
|
|
|
|
|
|
|
82,353 |
|
|
|
|
|
|
|
|
Allowance for loan losses |
|
|
(13,031 |
) |
|
|
|
|
|
|
|
|
|
(13,057 |
) |
|
|
|
|
|
|
|
Net unrealized (losses) gains on available-for-sale securities |
|
|
(1,334 |
) |
|
|
|
|
|
|
|
|
|
1,314 |
|
|
|
|
|
|
|
|
Total assets |
|
$ |
1,316,560 |
|
|
|
|
|
|
|
|
|
$ |
1,273,193 |
|
|
|
|
|
|
|
|
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOW accounts |
|
$ |
106,894 |
|
|
$ |
71 |
|
|
0.27 |
% |
|
$ |
94,951 |
|
|
$ |
57 |
|
|
0.24 |
% |
Money management accounts |
|
|
16,072 |
|
|
|
4 |
|
|
0.10 |
% |
|
|
15,597 |
|
|
|
4 |
|
|
0.10 |
% |
MMDA accounts |
|
|
261,898 |
|
|
|
246 |
|
|
0.38 |
% |
|
|
235,289 |
|
|
|
255 |
|
|
0.43 |
% |
Savings and club accounts |
|
|
138,585 |
|
|
|
48 |
|
|
0.14 |
% |
|
|
111,317 |
|
|
|
33 |
|
|
0.12 |
% |
Time deposits |
|
|
377,907 |
|
|
|
596 |
|
|
0.63 |
% |
|
|
399,176 |
|
|
|
1,178 |
|
|
1.18 |
% |
Subordinated loans |
|
|
29,578 |
|
|
|
387 |
|
|
5.23 |
% |
|
|
39,412 |
|
|
|
557 |
|
|
5.65 |
% |
Borrowings |
|
|
63,528 |
|
|
|
163 |
|
|
1.03 |
% |
|
|
85,070 |
|
|
|
298 |
|
|
1.40 |
% |
Total interest-bearing liabilities |
|
|
994,462 |
|
|
|
1,515 |
|
|
0.61 |
% |
|
|
980,812 |
|
|
|
2,382 |
|
|
0.97 |
% |
Noninterest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
|
|
199,164 |
|
|
|
|
|
|
|
|
|
|
180,442 |
|
|
|
|
|
|
|
|
Other liabilities |
|
|
11,904 |
|
|
|
|
|
|
|
|
|
|
11,944 |
|
|
|
|
|
|
|
|
Total liabilities |
|
|
1,205,530 |
|
|
|
|
|
|
|
|
|
|
1,173,198 |
|
|
|
|
|
|
|
|
Shareholders' equity |
|
|
111,030 |
|
|
|
|
|
|
|
|
|
|
99,995 |
|
|
|
|
|
|
|
|
Total liabilities & shareholders' equity |
|
$ |
1,316,560 |
|
|
|
|
|
|
|
|
|
$ |
1,273,193 |
|
|
|
|
|
|
|
|
Net
interest income |
|
|
|
|
|
$ |
9,467 |
|
|
|
|
|
|
|
|
|
$ |
8,560 |
|
|
|
|
Net interest rate spread |
|
|
|
|
|
|
|
|
|
2.93 |
% |
|
|
|
|
|
|
|
|
|
2.67 |
% |
Net
interest margin |
|
|
|
|
|
|
|
|
|
3.06 |
% |
|
|
|
|
|
|
|
|
|
2.85 |
% |
Ratio of average interest-earning assets to average
interest-bearing liabilities |
|
|
|
|
|
|
|
|
|
124.62 |
% |
|
|
|
|
|
|
|
|
|
122.61 |
% |
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 March 31, |
|
|
|
2022 vs. 2021 |
|
|
|
Increase/(Decrease) Due to |
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
Increase |
|
(In
thousands) |
|
Volume |
|
|
Rate |
|
|
(Decrease) |
|
Interest Income: |
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
|
$ |
(47 |
) |
|
$ |
(108 |
) |
|
$ |
(155 |
) |
Taxable investment securities |
|
|
312 |
|
|
|
(207 |
) |
|
|
105 |
|
Tax-exempt investment securities |
|
|
68 |
|
|
|
21 |
|
|
|
89 |
|
Interest-earning deposits |
|
|
- |
|
|
|
1 |
|
|
|
1 |
|
Total interest income |
|
|
333 |
|
|
|
(293 |
) |
|
|
40 |
|
Interest Expense: |
|
|
|
|
|
|
|
|
|
|
|
|
NOW accounts |
|
|
8 |
|
|
|
6 |
|
|
|
14 |
|
Money management accounts |
|
|
- |
|
|
|
- |
|
|
|
- |
|
MMDA accounts |
|
|
116 |
|
|
|
(125 |
) |
|
|
(9 |
) |
Savings and club accounts |
|
|
9 |
|
|
|
6 |
|
|
|
15 |
|
Time deposits |
|
|
(60 |
) |
|
|
(522 |
) |
|
|
(582 |
) |
Subordinated loans |
|
|
(137 |
) |
|
|
(8 |
) |
|
|
(145 |
) |
Borrowings |
|
|
(64 |
) |
|
|
(96 |
) |
|
|
(160 |
) |
Total interest expense |
|
|
(128 |
) |
|
|
(739 |
) |
|
|
(867 |
) |
Net change in net interest income |
|
$ |
461 |
|
|
$ |
446 |
|
|
$ |
907 |
|
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, CEOWalter F. Rusnak,
Senior Vice President, CFOTelephone: (315) 343-0057
Pathfinder Bancorp (NASDAQ:PBHC)
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