Pathfinder Bancorp, Inc. (“Company”) (NASDAQ: PBHC), the holding
company for Pathfinder Bank (“Bank”), announced net income for the
quarter ended September 30, 2022 of $3.2 million, or $0.52 per
basic and diluted common share, compared to $3.4 million, or $0.56
per basic and diluted common share, for the third quarter of 2021.
Third quarter 2022 total revenue (net interest income and total
noninterest income) of $11.9 million increased $604,000, or 5.3%,
compared to the third quarter of 2021.
Third Quarter 2022 and Nine Month Performance
Highlights
- Total interest-earning assets of $1.31 billion increased $129.6
million, or 11.0%, from $1.18 billion at September 30, 2021 and
$95.3 million, or 7.9%, from $1.21 billion at December 31,
2021.
- Total loans were $886.2 million at the end of the third quarter
of 2022 compared to $788.2 million at September 30, 2021, and
$832.5 million at December 31, 2021. Excluding Paycheck Protection
Program (PPP) loans, total loans grew by $124.7 million, or 16.4%,
from September 30, 2021, and $72.4 million, or 8.9%, from year end
2021.
- Total deposits of $1.18 billion, increased $134.4 million, or
12.8%, compared to September 30, 2021 and $125.2 million, or 11.9%,
compared to December 31, 2021.
- Increased competition for deposits in the current rising rate
environment contributed to the 26 basis point increase in deposit
funding costs of 0.81% for the third quarter 2022, as compared to
0.55% in the third quarter of 2021. Total funding costs increased
21 basis points to 0.99% from the prior year’s third quarter of
0.78%.
- Net interest income of $10.8 million for the third quarter 2022
increased by $989,000, or 10.1%, from the prior year period, and
net interest margin expanded to 3.32% for the third quarter 2022,
up 1 basis point from the prior year period.
- Tangible book value per common share of $17.11 at September 30,
2022 increased $0.04 from $17.07 at September 30, 2021. See
accompanying Non-GAAP Reconciliation.
"We are very pleased by the success of our
lending teams that have continued to build both new and existing
relationships with customers in our Central New York footprint and
drive significant growth, especially in commercial real estate
lending,” said James A. Dowd, President and Chief Executive
Officer.
"Strong annualized loan growth of 9.2% led to
net interest income growth and margin expansion during the third
quarter of 2022. The relatively modest increase in operating
expenses in the third quarter was primarily due to inflationary
pressures on salaries and benefits, which were partially mitigated
by the impact of our disciplined expense management in many other
areas. Our underlying asset quality and balance sheet strength
keeps us well-positioned for additional success in the expected
continuing rising interest rate environment.”
“We grew total revenue 5.3% in the third
quarter, to $11.9 million. Overall profitability continues to be
solid as demonstrated by our return on average assets of 0.93% and
annualized return on average equity of 11.49%. Net interest
margin for the third quarter of 2022 was 3.32%, reflecting an 18
basis point increase compared to 3.14% in the second quarter of
2022. This primarily reflected a 34 basis point increase in average
loan yields which was partially offset by the 30 basis point
increase in the average cost for interest-bearing liabilities from
the second quarter of 2022.”
“Our Board of Directors approved a quarterly
cash dividend of $0.09 per share, a $0.02, or 28.6% increase
compared to the dividend declared in September 2021, which reflects
our ongoing commitment to creating value for our investors by
returning an appropriate level of capital to our
shareholders.”
“We continue to make investments that will
better position us to serve our customers now and in the
future. As an example, we look forward to the opening of our
newest strategically located branch in Syracuse before year end.
This branch will offer a broad range of community banking services
to areas that we believe are currently underserved as well as
provide an enhanced level of convenience for many of our existing
customers. We will continue to explore additional opportunities in
the future to expand our successful presence within our footprint
both via traditional branch operations and the introduction of
enhanced customer-facing technologies.”
“Our dedicated team of top talent is positioned
to continue solid loan production and deposit growth through robust
pipelines and expanding opportunities within the Central New York
communities that we serve. We support this growth strategy through
investments in talent and digital initiatives to better serve our
customers and enable us to expand our presence while continuing to
deliver long-term shareholder value.”
Income Statement for the Quarter and
Nine Months Ended September 30, 2022
Third quarter 2022 net interest income increased
10.1% to $10.8 million, compared to $9.8 million for the same
quarter in 2021. The increase in net interest income between
comparable quarters was primarily due to the 15.1% increase in
interest and dividend income in the third quarter of 2022 to $13.4
million, compared to $11.6 million in the third quarter of
2021. Net interest income was also improved due to the 20
basis point increase in average yield on interest-earning
assets. The change in the average balance of interest-earning
assets for the three months ended September 30, 2022 was due to an
increase in the aggregate of loans, taxable investment securities
and tax-exempt securities in the amount of $114.2 million when
compared to the same prior year period. These improvements in net
interest income were partially offset by an increase in interest
expense for the third quarter of 2022 of $762,000, or 41.4%, to
$2.6 million, from $1.8 million for the prior year quarter.
Compared to the third quarter of 2021, average
loan yields decreased 10 basis points during the three months ended
September 30, 2022 and was primarily due to a $451,000 reduction in
deferred Paycheck Protection Program (PPP) deferred fee income
recognized in the quarter ended September 30, 2022, as compared to
the same quarter in 2021. Absent the effects of PPP revenue
recognition, loan yields in aggregate would have increased 12 basis
points to 4.43% in the three months ended September 30, 2022 from
4.31% for the same three month period in 2021.
Net interest income for the nine months ended
September 30, 2022 increased $1.7 million or 5.8%, to $30.2 million
compared to $28.6 million for the nine months ended September 30,
2021. Interest and dividend income for the nine months ended
September 30, 2022 was $36.1 million, an increase of $1.4 million
or 4.1%, compared to $34.6 million for the same period in 2021. The
increase was primarily due to the $38.4 million increase in the
average balance of taxable investment securities and the increase
in average yields on these securities of 23 basis points, compared
to the prior year period, which in combination added $1.4 million
to interest income. Interest expense of $5.8 million for the same
nine-month period decreased by $227,000, or 3.7%, from the prior
year period, primarily because of a 7 basis point decrease in the
interest rate paid on interest bearing liabilities. This
decline in rates paid on interest bearing liabilities reflects the
extremely low level of interest rates that were prevalent in the
later months of 2021 and the first half of 2022. Changes in the
Company's liability costs typically lag changes in interest rates
in both timing and magnitude. It is therefore expected that the
Company's liability costs will increase in the near term, perhaps
significantly, as a result of the substantial increases in
interest rates that have taken place over the most recent six month
period.
The 18 basis point decline in average loan
yields during the nine months ended September 30, 2022, as compared
to the same nine month period in 2021, was due to a variety of
factors, most notably a $1.1 million reduction in deferred PPP fee
income recognized in the first nine months of 2022 as compared to
the same nine month period in the previous year. Absent the effects
of PPP revenue recognition, loan yields in aggregate would have
decreased one basis point to 4.15% in the nine months ended
September 30, 2022 from 4.16% for the same nine month period in
2021.
Management relies on both internally-prepared
and externally-supplied modeling to forecast and manage both net
interest margin and associated interest rate risks. As a
result of this modeling, the Bank's management team believes that
the Company will benefit modestly from expanding net interest
margins within the current interest rate environment during the
fourth quarter of 2022 and into the first half of 2023. However,
the amount and duration of this potential benefit is highly
dependent upon many factors, including but not limited to changes
in depositor behaviors over time. These factors cannot be
predicted with certainty in the currently volatile interest rate
environment.
Components of Net Interest
Income
The following table details the components of
net interest income for the three and nine months ended September
30, 2022 and 2021:
Unaudited |
|
For the three months ended |
|
|
For the nine months ended |
|
(In
thousands, except per share data) |
|
September 30, 2022 |
|
|
September 30, 2021 |
|
|
Change |
|
|
September 30, 2022 |
|
|
September 30, 2021 |
|
|
Change |
|
Interest and dividend
income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, including fees |
|
$ |
9,895 |
|
|
$ |
9,465 |
|
|
$ |
430 |
|
|
4.5 |
% |
|
$ |
27,561 |
|
|
$ |
28,096 |
|
|
$ |
(535 |
) |
|
-1.9 |
% |
Debt securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
Taxable |
|
|
3,052 |
|
|
|
2,049 |
|
|
|
1,003 |
|
|
49.0 |
% |
|
|
7,695 |
|
|
|
6,177 |
|
|
|
1,518 |
|
|
24.6 |
% |
Tax-exempt |
|
|
351 |
|
|
|
28 |
|
|
|
323 |
|
|
1153.6 |
% |
|
|
612 |
|
|
|
99 |
|
|
|
513 |
|
|
518.2 |
% |
Dividends |
|
|
56 |
|
|
|
87 |
|
|
|
(31 |
) |
|
-35.6 |
% |
|
|
155 |
|
|
|
261 |
|
|
|
(106 |
) |
|
-40.6 |
% |
Federal
funds sold and interest earning deposits |
|
|
29 |
|
|
|
3 |
|
|
|
26 |
|
|
866.7 |
% |
|
|
48 |
|
|
|
7 |
|
|
|
41 |
|
|
585.7 |
% |
Total interest and dividend income |
|
|
13,383 |
|
|
|
11,632 |
|
|
|
1,751 |
|
|
15.1 |
% |
|
|
36,071 |
|
|
|
34,640 |
|
|
|
1,431 |
|
|
4.1 |
% |
Interest
expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on deposits |
|
|
1,907 |
|
|
|
1,154 |
|
|
|
753 |
|
|
65.3 |
% |
|
|
4,006 |
|
|
|
3,825 |
|
|
|
181 |
|
|
4.7 |
% |
Interest on short-term
borrowings |
|
|
123 |
|
|
|
2 |
|
|
|
121 |
|
|
6050.0 |
% |
|
|
152 |
|
|
|
8 |
|
|
|
144 |
|
|
1800.0 |
% |
Interest on long-term
borrowings |
|
|
131 |
|
|
|
274 |
|
|
|
(143 |
) |
|
-52.2 |
% |
|
|
405 |
|
|
|
865 |
|
|
|
(460 |
) |
|
-53.2 |
% |
Interest on subordinated debt |
|
|
442 |
|
|
|
411 |
|
|
|
31 |
|
|
7.5 |
% |
|
|
1,284 |
|
|
|
1,376 |
|
|
|
(92 |
) |
|
-6.7 |
% |
Total interest expense |
|
|
2,603 |
|
|
|
1,841 |
|
|
|
762 |
|
|
41.4 |
% |
|
|
5,847 |
|
|
|
6,074 |
|
|
|
(227 |
) |
|
-3.7 |
% |
Net interest income |
|
|
10,780 |
|
|
|
9,791 |
|
|
|
989 |
|
|
10.1 |
% |
|
|
30,224 |
|
|
|
28,566 |
|
|
|
1,658 |
|
|
5.8 |
% |
Provision for loan losses |
|
|
710 |
|
|
|
104 |
|
|
|
606 |
|
|
582.7 |
% |
|
|
871 |
|
|
|
2,061 |
|
|
|
(1,190 |
) |
|
-57.7 |
% |
Net interest income after provision for loan losses |
|
$ |
10,070 |
|
|
$ |
9,687 |
|
|
$ |
383 |
|
|
4.0 |
% |
|
$ |
29,353 |
|
|
$ |
26,505 |
|
|
$ |
2,848 |
|
|
10.7 |
% |
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 nine months ended |
|
(In
thousands, except number of loans) |
|
September 30, 2022 |
|
|
September 30, 2021 |
|
|
September 30, 2022 |
|
|
September 30, 2021 |
|
Number of PPP loans originated in the period |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
478 |
|
Funded balance of PPP loans
originated in the period |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
36,369 |
|
Number of PPP loans forgiven
in the period |
|
54 |
|
|
|
287 |
|
|
|
243 |
|
|
|
636 |
|
Balance of PPP loans forgiven
in the period |
|
$ |
4,184 |
|
|
$ |
26,621 |
|
|
$ |
12,601 |
|
|
$ |
68,726 |
|
Deferred PPP fee income
recognized in the period |
|
$ |
144 |
|
|
$ |
595 |
|
|
$ |
691 |
|
|
$ |
1,742 |
|
(In
thousands) |
|
September 30, 2022 |
|
|
September 30, 2021 |
|
Unearned PPP deferred fee income at end of period |
|
$ |
28 |
|
|
$ |
1,124 |
|
(In
thousands, except number of loans) |
|
Number |
|
|
Balance |
|
Total PPP loans originated since inception |
|
|
1,177 |
|
|
$ |
111,721 |
|
Total PPP loans forgiven since
inception |
|
|
1,164 |
|
|
$ |
111,028 |
|
Total PPP loans remaining at
September 30, 2022 |
|
|
13 |
|
|
$ |
693 |
|
Provision for Loan Losses
The Company reported a provision for loan losses
of $710,000 for the third quarter of 2022, as compared to a
provision for loan losses of $104,000 for the third quarter of
2021. The provision for loan losses for the first nine
months of 2022 was $871,000, compared to $2.1 million for the same
period in 2021. The increase in provision for loan losses in the
third quarter of 2022, as compared to the same three month period
in 2021, primarily reflected required reserves related to
year-over-year loan growth and management's decision to downgrade a
specifically-identified commercial real estate and commercial loan
borrower relationship with an aggregate total related outstanding
credit balance of $7.2 million. Certain credit sensitive portfolios
continue to be carefully monitored, and the Bank will consistently
apply its loan classification and reserve building methodologies to
the analysis of these portfolios. Please refer to the asset quality
section below for a further discussion of asset quality as it
relates to the allowance for loan losses.
Noninterest Income
Third quarter 2022 noninterest income was $1.2
million, a decrease of $385,000, or 24.9%, compared to $1.5 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 due to (1) a loss on sales and redemptions of investment
securities in the current quarter, compared to a net gain in the
third quarter of 2021, (2) no activity with sales of
marketable equity securities in the current quarter compared to the
net gain on marketable equity securities recorded in the third
quarter of 2021, and (3) a decrease in service charges for
overdraft, ATM fees and insufficient funds on deposit accounts for
the current quarter compared to the third quarter of 2021.
Noninterest income was $4.1 million for the nine
months ended September 30, 2022, a decrease of $765,000, or 15.9%,
compared to $4.8 million for the same nine-month period in
2021. The decrease in noninterest income, as compared to the
nine-month period of the previous year was primarily due to the net
loss on sales and redemptions of investment securities and a
decline in the gains on marketable securities.
The following table details the components of
noninterest income for the three and nine months ended September
30, 2022 and 2021:
Unaudited |
|
For the three months ended |
|
|
For the nine months ended |
|
(Dollars in thousands) |
|
September 30, 2022 |
|
|
September 30, 2021 |
|
|
Change |
|
|
September 30, 2022 |
|
|
September 30, 2021 |
|
|
Change |
|
Service charges on deposit accounts |
|
$ |
334 |
|
|
$ |
393 |
|
|
$ |
(59 |
) |
|
|
-15.0 |
% |
|
$ |
876 |
|
|
$ |
1,082 |
|
|
$ |
(206 |
) |
|
|
-19.0 |
% |
Earnings and gain on bank
owned life insurance |
|
|
156 |
|
|
|
164 |
|
|
|
(8 |
) |
|
|
-4.9 |
% |
|
|
441 |
|
|
|
418 |
|
|
|
23 |
|
|
|
5.5 |
% |
Loan servicing fees |
|
|
74 |
|
|
|
54 |
|
|
|
20 |
|
|
|
37.0 |
% |
|
|
260 |
|
|
|
155 |
|
|
|
105 |
|
|
|
67.7 |
% |
Debit card interchange
fees |
|
|
180 |
|
|
|
236 |
|
|
|
(56 |
) |
|
|
-23.7 |
% |
|
|
639 |
|
|
|
698 |
|
|
|
(59 |
) |
|
|
-8.5 |
% |
Insurance agency revenue |
|
|
258 |
|
|
|
303 |
|
|
|
(45 |
) |
|
|
-14.9 |
% |
|
|
849 |
|
|
|
817 |
|
|
|
32 |
|
|
|
3.9 |
% |
Other
charges, commissions and fees |
|
|
310 |
|
|
|
235 |
|
|
|
75 |
|
|
|
31.9 |
% |
|
|
1,002 |
|
|
|
800 |
|
|
|
202 |
|
|
|
25.3 |
% |
Noninterest income before
(losses) gains |
|
|
1,312 |
|
|
|
1,385 |
|
|
|
(73 |
) |
|
|
-5.3 |
% |
|
|
4,067 |
|
|
|
3,970 |
|
|
|
97 |
|
|
|
2.4 |
% |
Net (losses) gains on sales of
securities, fixed assets, loans and foreclosed real
estate |
|
|
(151 |
) |
|
|
72 |
|
|
|
(223 |
) |
|
|
-309.7 |
% |
|
|
(46 |
) |
|
|
483 |
|
|
|
(529 |
) |
|
|
-109.5 |
% |
Gains
on marketable equity securities |
|
|
- |
|
|
|
89 |
|
|
|
(89 |
) |
|
|
-100.0 |
% |
|
|
39 |
|
|
|
372 |
|
|
|
(333 |
) |
|
|
89.5 |
% |
Total
noninterest income |
|
$ |
1,161 |
|
|
$ |
1,546 |
|
|
$ |
(385 |
) |
|
|
-24.9 |
% |
|
$ |
4,060 |
|
|
$ |
4,825 |
|
|
$ |
(765 |
) |
|
|
-15.9 |
% |
Noninterest Expense
Total noninterest expense for the third quarter
of 2022 was $7.3 million, an increase of $444,000, or 6.5%,
compared to $6.8 million for the third quarter of 2021. The
increase was primarily a result of higher salaries and employee
benefits expense of $572,000, or 15.8%, and a net decrease of
$128,000, or 4.0%, in all other expense categories. The $572,000
increase in salaries and benefits expense for the three months
ended September 30, 2022 was primarily due to increases in
individual staff salaries and certain commissions paid related to
insurance and investment services business lines activities.
Additionally, salaries and benefits expenses increased due to
additions to staff headcount concentrated primarily in the loan
servicing areas and within the Bank's branch system. Staffing
increases within the Bank's branch system were made in anticipation
of the imminent opening of the Bank's eleventh branch. During 2022,
the Company increased its overall salary structure where it was
deemed appropriate in order to effectively respond to inflationary
and competitive pressures within our marketplace to recruit and
retain talent.
Total noninterest expense for the nine-month
period of 2022 was $21.7 million, an increase of $1.4 million, or
6.7%, compared with $20.3 million for the prior year period. The
increase was primarily a result of higher salaries and employee
benefits expense of $1.6 million, or 14.9%, that was primarily
comprised of a $1.0 million, or 10.7%, increase in salaries, a
$379,000 reduction in the level of deferred employee-related
expenses related to loan origination volume declines following the
cessation of the PPP, a $136,000 increase in employee benefits and
a $85,000 net increase in all other salaries and employee benefit
expenses.
The $1.0 million increase in salaries expense
for the nine months ended September 30, 2022 was primarily due to
increases in individual salaries, enacted early in 2022 and
continuing through the year, as well as additions to staff
headcount primarily in the loan servicing areas and within the
Bank's branch system, as discussed above. Additionally,
under generally accepted accounting principles (GAAP), certain
direct costs related to loan originations are deferred and recorded
as an adjustment to yield over the life of the loan. The $379,000
reduction in the total deferred employee related expenses in the
nine months ended September 30, 2022, as compared to the same nine
month period in 2021, was primarily due to the termination of the
PPP loan program in 2022, which returned loan origination volume to
normalized levels. The $136,000 increase in employee benefit
expenses is consistent with increased staffing levels and
additionally reflects increases in per-employee benefit costs,
including health insurance premiums.
The following table details the components of
noninterest expense for the three and nine months ended September
30, 2022 and 2021:
Unaudited |
|
For the three months ended |
|
|
For the nine months ended |
|
(Dollars in thousands) |
|
September 30, 2022 |
|
|
September 30, 2021 |
|
|
Change |
|
|
September 30, 2022 |
|
|
September 30, 2021 |
|
|
Change |
|
Salaries and employee benefits |
|
$ |
4,196 |
|
|
$ |
3,624 |
|
|
$ |
572 |
|
|
|
15.8 |
% |
|
$ |
12,030 |
|
|
$ |
10,466 |
|
|
$ |
1,564 |
|
|
|
14.9 |
% |
Building and occupancy |
|
|
835 |
|
|
|
724 |
|
|
|
111 |
|
|
|
15.3 |
% |
|
|
2,491 |
|
|
|
2,387 |
|
|
|
104 |
|
|
|
4.4 |
% |
Data processing |
|
|
485 |
|
|
|
686 |
|
|
|
(201 |
) |
|
|
-29.3 |
% |
|
|
1,552 |
|
|
|
2,016 |
|
|
|
(464 |
) |
|
|
-23.0 |
% |
Professional and other
services |
|
|
267 |
|
|
|
385 |
|
|
|
(118 |
) |
|
|
-30.6 |
% |
|
|
1,112 |
|
|
|
1,253 |
|
|
|
(141 |
) |
|
|
-11.3 |
% |
Advertising |
|
|
199 |
|
|
|
191 |
|
|
|
8 |
|
|
|
4.2 |
% |
|
|
621 |
|
|
|
696 |
|
|
|
(75 |
) |
|
|
-10.8 |
% |
FDIC assessments |
|
|
162 |
|
|
|
222 |
|
|
|
(60 |
) |
|
|
-27.0 |
% |
|
|
606 |
|
|
|
652 |
|
|
|
(46 |
) |
|
|
-7.1 |
% |
Audits and exams |
|
|
141 |
|
|
|
193 |
|
|
|
(52 |
) |
|
|
-26.9 |
% |
|
|
424 |
|
|
|
572 |
|
|
|
(148 |
) |
|
|
-25.9 |
% |
Insurance agency expense |
|
|
229 |
|
|
|
227 |
|
|
|
2 |
|
|
|
0.9 |
% |
|
|
687 |
|
|
|
627 |
|
|
|
60 |
|
|
|
9.6 |
% |
Community service
activities |
|
|
58 |
|
|
|
59 |
|
|
|
(1 |
) |
|
|
-1.7 |
% |
|
|
193 |
|
|
|
181 |
|
|
|
12 |
|
|
|
6.6 |
% |
Foreclosed real estate
expenses |
|
|
17 |
|
|
|
8 |
|
|
|
9 |
|
|
|
112.5 |
% |
|
|
57 |
|
|
|
30 |
|
|
|
27 |
|
|
|
90.0 |
% |
Other
expenses |
|
|
678 |
|
|
|
504 |
|
|
|
174 |
|
|
|
34.5 |
% |
|
|
1,892 |
|
|
|
1,424 |
|
|
|
468 |
|
|
|
32.9 |
% |
Total
noninterest expenses |
|
$ |
7,267 |
|
|
$ |
6,823 |
|
|
$ |
444 |
|
|
|
6.5 |
% |
|
$ |
21,665 |
|
|
$ |
20,304 |
|
|
$ |
1,361 |
|
|
|
6.7 |
% |
Balance Sheet on September 30,
2022
The Company’s total assets on September 30, 2022
were $1.40 billion, an increase of $111.8 million, or 8.7%, from
$1.30 billion on December 31, 2021. This increase was primarily
driven by an increase in commercial loans, and held-to-maturity
securities that represented a re-deployment of the net cash flows
received primarily as a result of the PPP loan forgiveness
activities and, to a lesser degree, other pandemic-related economic
stimulus. Total loans of $886.2 million at September 30, 2022
increased by $53.7 million, or 6.5%, compared with $832.5 million
on December 31, 2021 and $98.1 million, or 12.4%, compared with
$788.1 million on September 30, 2021, as organic loan growth was
partially offset by $680,000 of PPP loan forgiveness. Investment
securities totaled $388.6 million at September 30, 2022, an
increase of $36.4 million, or 10.4%, compared to $352.2 million on
December 31, 2021 and $337.9 million on September 30, 2021.
Total deposits on September 30, 2022 were $1.18
billion, an increase of $125.2 million, or 11.9%, from $1.06
billion at December 31, 2021 and an increase of $134.4 million, or
12.8%, compared to September 30, 2021. Interest-bearing deposits of
$993.4 million on September 30, 2022 were up by $130.0 million, or
15.1% from year-end 2021, and up by $153.4 million, or 18.3%, from
September 30, 2021, a result of net inflows of municipal deposits
due primarily to seasonal timing of tax collections. Additionally,
brokered deposits increased $145.1 million at September 30, 2022
when compared to December 31, 2021, and $173.8 million when
compared to September 30, 2021. This increase in brokered
deposits was due in part to management's efforts to lock in certain
interest rate spreads, primarily related to both purchased loans
and investment securities, in the first two quarters of 2022.
Noninterest-bearing deposits totaled $187.2 million on September
30, 2022, a decrease of $4.7 million, or 2.4%, from year-end 2021
and a decrease of $19.0 million, or 9.2%, from September 30, 2021,
which was the result of the drawdown of customer funds related to
economic stimulus and PPP.
Shareholders’ equity was $107.3 million at
September 30, 2022, a decrease of $3.0 million, as compared to
$110.3 million at December 31, 2021. The $3.0 million decline in
shareholders' equity was primarily due to an increase of $11.3
million in accumulated other comprehensive loss, due to unrealized
temporary losses on investment securities categorized as
available-for-sale, and $740,000 in declared dividend
distributions, partially offset by an increase in retained earnings
for the nine months ended September 30, 2022 of $7.6 million, or
12.5%.
The $11.3 million tax-effected increase in
accumulated other comprehensive loss from December 31, 2021 to
September 30, 2022, was primarily due to the decline in the fair
value of the Company's available-for-sale investment securities
portfolio during that period. The available-for-sale investment
securities portfolio, with an aggregate amortized historical cost
of $214.4 million, had an aggregate fair value that was less than
its aggregate amortized historical cost by $11.4 million, or 5.32%,
at September 30, 2022. The available-for-sale investment securities
portfolio, with an aggregate amortized historical cost of $190.0
million, had an aggregate fair value that exceeded its aggregate
amortized historical cost by $579,000, or 0.30%, at December 31,
2021. The resultant $12.0 million total decline in the fair
value of the available-for-sale investment portfolio's aggregate
fair value relative to its aggregate amortized historical cost, in
the nine months ended September 30, 2022, was due to the
significant increase in general interest rates that occurred in
that period and did not represent any other-than-temporary
impairment within the portfolio at September 30, 2022.
Asset Quality
The Bank maintained strong asset quality metrics
for the third quarter of 2022. Annualized net loan charge-offs to
average loans improved to 0.03% for the third quarter 2022,
compared with 0.12% for the third quarter of 2021 and 0.12% for the
year ended December 31, 2021. Nonperforming loans as a percentage
of total loans were 1.20% on September 30, 2022, compared to 1.00%
on December 31, 2021, and 1.11% on September 30, 2021. The
increase in the nonperforming loan portfolio on September 30, 2022,
as compared to December 31, 2021, was primarily the result of the
placement into nonaccrual status of a group of loans within one
large commercial loan and commercial real estate borrower
relationship in the amount of $7.2 million. This relationship is
under active resolution management at September 30, 2022.
The following table summarizes nonaccrual loans by category and
status at September 30, 2022:
(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 |
|
10 |
|
|
$ |
848 |
|
|
$ |
85 |
|
|
|
79 |
% |
|
Individual loans are under active resolution management by the
Bank. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Secured commercial real estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private Museum |
|
1 |
|
|
|
1,380 |
|
|
|
1,380 |
|
|
|
79 |
% |
|
Monthly
payments for interest and escrow requirements are being made with
the formal modification of the existing mortgage loan expected to
be finalized during the fourth quarter of 2022. The borrower
is also expected to receive specific government grant funding in
the fourth quarter of 2022. In combination, these activities
will allow for a reduction of the outstanding loan balance upon
their finalization. |
|
Recreational |
|
1 |
|
|
|
1,233 |
|
|
|
1,233 |
|
|
|
49 |
% |
|
The loan is currently
classified as a Troubled Debt Restructuring (TDR). The due
date for the loan payment was September 1, 2021. The Bank is
currently working with a local economic development agency in order
to assist a potential buyer of the property with financing. |
|
All other |
|
9 |
|
|
|
1,875 |
|
|
|
208 |
|
|
|
122 |
% |
|
Individual loans are under
active resolution management by the Bank. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial lines of credit: |
|
5 |
|
|
|
1,511 |
|
|
|
302 |
|
|
N/A |
|
|
Individual loans are under
active resolution management by the Bank. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and industrial: |
|
11 |
|
|
|
2,202 |
|
|
|
200 |
|
|
N/A |
|
|
Individual loans are under
active resolution management by the Bank. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer loans: |
|
11 |
|
|
|
1,576 |
|
|
|
143 |
|
|
N/A |
|
|
Individual loans are under active resolution management by the
Bank. |
|
|
|
48 |
|
|
$ |
10,625 |
|
|
|
|
|
|
|
|
|
The allowance for loan losses to non-performing
loans on September 30, 2022 was 128.3%, compared with 160.1% on
September 30, 2021. The change in the allowance for loans losses to
non-performing loans is reflective of the increases in nonaccrual
loans detailed in the table above.
On September 30, 2022, nonperforming loans as a
percentage of total loans were 1.20%, totaling 48 loans with an
aggregate outstanding balance of $10.6 million, as compared to 53
loans with an aggregate outstanding balance of $11.7 million at
June 30, 2022. This decrease of $1.1 million was the result
of various commercial and residential loans that met criteria
measurements for removal from nonaccrual status. The Bank's
management is actively working with each of the nonaccrual loan
borrowers and believes that the ultimate resolution of these loans
will not have material effect on the results of the Company's
operations in future periods.
Cash Dividend Declared
On September 26, 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 September 30, 2022.
The dividend will be payable to all shareholders of record on
October 14, 2022 and will be paid on November 11, 2022. Based on
the closing price of the Company’s common stock of $20.34 on
September 30, 2022, the implied dividend yield is 1.77%. The
quarterly cash dividend of $0.09 equates to a dividend payout ratio
of 18.51%.
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.” These
forward-looking statements are based on current beliefs and
expectations of the Company’s and the Bank’s management and are
inherently subject to significant business, economic and
competitive uncertainties and contingencies, many of which are
beyond the Company’s and the Bank’s control. In addition, these
forward-looking statements are subject to assumptions with respect
to future business strategies and decisions that are subject to
change. Actual results may differ materially from those set forth
in the forward-looking statements as a result of numerous factors.
Factors that could cause such differences to exist include, but are
not limited to: risks related to the real estate and economic
environment, particularly in the market areas in which the Company
and the Bank operate; fiscal and monetary policies of the U.S.
Government; inflation; changes in government regulations affecting
financial institutions, including regulatory compliance costs and
capital requirements; fluctuations in the adequacy of the allowance
for loan losses; decreases in deposit levels necessitating
increased borrowing to fund loans and investments; the effects of
the COVID-19 pandemic; operational risks including, but not limited
to, cybersecurity, fraud and natural disasters; the risk that the
Company may not be successful in the implementation of its business
strategy; changes in prevailing interest rates; credit risk
management; asset-liability management; and other risks described
in the Company’s filings with the Securities and Exchange
Commission, which are available at the SEC’s website,
www.sec.gov.
The Company and the Bank caution prospective investors not to
place undue reliance on any such forward-looking statements, which
speak only as of the date made. The Company disclaims any
obligation to revise or update any forward-looking statements
contained in this press release to reflect future events or
developments.
Investor/Media Contacts
James A. Dowd, President, CEOWalter F. Rusnak, Senior Vice
President, CFOTelephone: (315) 343-0057
PATHFINDER BANCORP,
INC.FINANCIAL HIGHLIGHTS(Dollars
and shares in thousands except per share amounts)
|
For the three months |
|
|
For the nine months |
|
|
ended September 30, |
|
|
ended September 30, |
|
|
(Unaudited) |
|
|
(Unaudited) |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Condensed Income
Statement |
|
|
|
|
|
|
|
|
|
|
|
Interest and dividend income |
$ |
13,383 |
|
|
$ |
11,632 |
|
|
$ |
36,071 |
|
|
$ |
34,640 |
|
Interest expense |
|
2,603 |
|
|
|
1,841 |
|
|
|
5,847 |
|
|
|
6,074 |
|
Net interest income |
|
10,780 |
|
|
|
9,791 |
|
|
|
30,224 |
|
|
|
28,566 |
|
Provision for loan losses |
|
710 |
|
|
|
104 |
|
|
|
871 |
|
|
|
2,061 |
|
|
|
10,070 |
|
|
|
9,687 |
|
|
|
29,353 |
|
|
|
26,505 |
|
Noninterest income excluding net gains on sales of securities,
fixed assets, loans and foreclosed real estate |
|
1,312 |
|
|
|
1,385 |
|
|
|
4,067 |
|
|
|
3,970 |
|
Net (losses) gains on sales of securities, fixed assets, loans and
foreclosed real estate |
|
(151 |
) |
|
|
72 |
|
|
|
(46 |
) |
|
|
483 |
|
Gains on marketable equity securities |
|
- |
|
|
|
89 |
|
|
|
39 |
|
|
|
372 |
|
Noninterest expense |
|
7,267 |
|
|
|
6,823 |
|
|
|
21,665 |
|
|
|
20,304 |
|
Income before income taxes |
|
3,964 |
|
|
|
4,410 |
|
|
|
11,748 |
|
|
|
11,026 |
|
Provision for income taxes |
|
772 |
|
|
|
1,005 |
|
|
|
2,273 |
|
|
|
2,405 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to noncontrolling interest
and Pathfinder Bancorp, Inc. |
$ |
3,192 |
|
|
$ |
3,405 |
|
|
$ |
9,475 |
|
|
$ |
8,621 |
|
Net income attributable to noncontrolling interest |
|
12 |
|
|
|
40 |
|
|
|
73 |
|
|
|
93 |
|
Net income attributable to Pathfinder Bancorp
Inc. |
$ |
3,180 |
|
|
$ |
3,365 |
|
|
$ |
9,402 |
|
|
$ |
8,528 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Periods Ended |
|
|
(Unaudited) |
|
|
September 30, |
|
|
December 31, |
|
|
September 30, |
|
|
2022 |
|
|
2021 |
|
|
2021 |
|
Selected Balance Sheet
Data |
|
|
|
|
|
|
|
|
Assets |
$ |
1,396,946 |
|
|
$ |
1,285,177 |
|
|
$ |
1,262,198 |
|
Earning assets |
|
1,307,430 |
|
|
|
1,212,139 |
|
|
|
1,177,821 |
|
Total loans |
|
886,206 |
|
|
|
832,459 |
|
|
|
788,148 |
|
Deposits |
|
1,180,583 |
|
|
|
1,055,346 |
|
|
|
1,046,216 |
|
Borrowed funds |
|
65,621 |
|
|
|
77,098 |
|
|
|
67,054 |
|
Allowance for loan losses |
|
13,632 |
|
|
|
12,935 |
|
|
|
14,065 |
|
Subordinated loans |
|
29,689 |
|
|
|
29,563 |
|
|
|
29,522 |
|
Pathfinder Bancorp, Inc.
Shareholders' equity |
|
107,301 |
|
|
|
110,287 |
|
|
|
106,312 |
|
|
|
|
|
|
|
|
|
|
Asset Quality Ratios |
|
|
|
|
|
|
|
|
Net loan charge-offs
(annualized) to average loans |
|
0.03 |
% |
|
|
0.12 |
% |
|
|
0.12 |
% |
Allowance for loan losses to
period end loans |
|
1.54 |
% |
|
|
1.55 |
% |
|
|
1.78 |
% |
Allowance for loan losses to
nonperforming loans |
|
128.30 |
% |
|
|
155.99 |
% |
|
|
160.10 |
% |
Nonperforming loans to period
end loans |
|
1.20 |
% |
|
|
1.00 |
% |
|
|
1.11 |
% |
Nonperforming assets to total
assets |
|
0.78 |
% |
|
|
0.65 |
% |
|
|
0.70 |
% |
PATHFINDER BANCORP,
INC.FINANCIAL HIGHLIGHTS(Dollars
and shares in thousands except per share amounts)
|
For the three months |
|
|
For the nine months |
|
|
ended September 30, |
|
|
ended September 30, |
|
|
(Unaudited) |
|
|
(Unaudited) |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Key Earnings
Ratios |
|
|
|
|
|
|
|
|
|
|
|
Return on average assets |
|
0.93 |
% |
|
|
1.07 |
% |
|
|
0.94 |
% |
|
|
0.90 |
% |
Return on average common equity |
|
11.49 |
% |
|
|
12.71 |
% |
|
|
11.39 |
% |
|
|
11.05 |
% |
Return on average equity |
|
11.49 |
% |
|
|
12.71 |
% |
|
|
11.39 |
% |
|
|
11.05 |
% |
Net interest margin |
|
3.32 |
% |
|
|
3.31 |
% |
|
|
3.18 |
% |
|
|
3.19 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Share, Per Share and
Ratio Data |
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted weighted average shares outstanding -Voting |
|
4,564 |
|
|
|
4,488 |
|
|
|
4,550 |
|
|
|
4,465 |
|
Basic and diluted earnings per share - Voting |
$ |
0.52 |
|
|
$ |
0.56 |
|
|
$ |
1.55 |
|
|
$ |
1.43 |
|
Basic and diluted weighted average shares outstanding - Series A
Non-Voting |
|
1,380 |
|
|
|
1,380 |
|
|
|
1,380 |
|
|
|
531 |
|
Basic and diluted earnings per share - Series A Non-Voting |
$ |
0.52 |
|
|
$ |
0.56 |
|
|
$ |
1.55 |
|
|
$ |
1.43 |
|
Cash dividends per share |
$ |
0.09 |
|
|
$ |
0.07 |
|
|
$ |
0.27 |
|
|
$ |
0.21 |
|
Book value per common share at September 30, 2022 and 2021 |
|
|
|
|
|
|
$ |
17.88 |
|
|
$ |
17.85 |
|
Tangible book value per common share at September 30, 2022 and
2021 |
|
|
|
|
|
|
$ |
17.11 |
|
|
$ |
17.07 |
|
Tangible common equity to tangible assets at September 30, 2022 and
2021 |
|
|
|
|
|
|
|
7.37 |
% |
|
|
8.08 |
% |
Tangible common equity to tangible assets at September 30, 2022 and
2021, adjusted |
|
|
|
|
|
|
|
7.38 |
% |
|
|
8.26 |
% |
Throughout the accompanying document, certain
financial metrics and ratios are presented that are not defined
under generally accepted accounting principles (GAAP).
Reconciliations of the non-GAAP financial metrics and ratios,
presented elsewhere within this document, are presented below:
|
|
|
|
|
For the nine months |
|
|
|
|
|
|
ended September 30, |
|
|
|
|
|
|
(Unaudited) |
|
Non-GAAP
Reconciliation |
|
|
|
|
2022 |
|
|
2021 |
|
Tangible book value per common share |
|
|
|
|
|
|
|
|
|
Total equity |
|
|
|
|
$ |
107,301 |
|
|
$ |
106,312 |
|
Intangible assets |
|
|
|
|
|
(4,640 |
) |
|
|
(4,657 |
) |
Common tangible equity |
|
|
|
|
$ |
102,661 |
|
|
$ |
101,655 |
|
Common shares outstanding |
|
|
|
|
|
6,001 |
|
|
|
5,956 |
|
Tangible book value per common share |
|
|
|
|
$ |
17.11 |
|
|
$ |
17.07 |
|
|
|
|
|
|
|
|
|
|
|
Tangible common equity to tangible assets |
|
|
|
|
|
|
|
|
|
Tangible common equity |
|
|
|
|
$ |
102,661 |
|
|
$ |
101,655 |
|
Tangible assets |
|
|
|
|
|
1,392,306 |
|
|
|
1,257,541 |
|
Tangible common equity to tangible assets ratio |
|
|
|
|
|
7.37 |
% |
|
|
8.08 |
% |
|
|
|
|
|
|
|
|
|
|
Tangible common equity to tangible assets,
adjusted |
|
|
|
|
|
|
|
|
|
Tangible common equity |
|
|
|
|
$ |
102,661 |
|
|
$ |
101,655 |
|
Tangible assets |
|
|
|
|
|
1,392,306 |
|
|
|
1,257,541 |
|
Less: Paycheck Protection Program (PPP) loans |
|
|
|
|
|
(693 |
) |
|
|
(27,293 |
) |
Total assets excluding PPP loans |
|
|
|
|
$ |
1,391,613 |
|
|
$ |
1,230,248 |
|
Tangible common equity to tangible assets ratio, excluding PPP
loans |
|
|
|
|
|
7.38 |
% |
|
|
8.26 |
% |
|
|
|
|
|
|
|
|
|
|
* Basic and diluted earnings per share are
calculated based upon the two-class method for the nine months
ended September 30, 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 September 30, |
|
|
(Unaudited) |
|
|
2022 |
|
|
|
|
|
2021 |
|
|
|
|
|
|
|
|
Average |
|
|
|
|
|
|
|
|
|
|
|
Average |
|
|
Average |
|
|
|
|
|
Yield / |
|
|
Average |
|
|
|
|
|
|
|
|
Yield / |
|
(Dollars in thousands) |
Balance |
|
|
Interest |
|
|
Cost |
|
|
Balance |
|
|
|
|
|
Interest |
|
|
Cost |
|
Interest-earning
assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
$ |
880,097 |
|
|
$ |
9,895 |
|
|
|
4.50 |
% |
|
$ |
822,547 |
|
|
|
|
|
$ |
9,465 |
|
|
|
4.60 |
% |
Taxable investment securities |
|
363,877 |
|
|
|
3,108 |
|
|
|
3.42 |
% |
|
|
317,612 |
|
|
|
|
|
|
2,136 |
|
|
|
2.69 |
% |
Tax-exempt investment securities |
|
42,855 |
|
|
|
351 |
|
|
|
3.28 |
% |
|
|
14,863 |
|
|
|
|
|
|
28 |
|
|
|
0.75 |
% |
Fed funds sold and interest-earning deposits |
|
10,383 |
|
|
|
29 |
|
|
|
1.12 |
% |
|
|
27,984 |
|
|
|
|
|
|
3 |
|
|
|
0.04 |
% |
Total interest-earning assets |
|
1,297,212 |
|
|
|
13,383 |
|
|
|
4.13 |
% |
|
|
1,183,006 |
|
|
|
|
|
|
11,632 |
|
|
|
3.93 |
% |
Noninterest-earning
assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other assets |
|
90,482 |
|
|
|
|
|
|
|
|
|
83,028 |
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses |
|
(13,050 |
) |
|
|
|
|
|
|
|
|
(14,794 |
) |
|
|
|
|
|
|
|
|
|
Net unrealized (losses) gains on available-for-sale
securities |
|
(10,983 |
) |
|
|
|
|
|
|
|
|
2,209 |
|
|
|
|
|
|
|
|
|
|
Total assets |
$ |
1,363,661 |
|
|
|
|
|
|
|
|
$ |
1,253,449 |
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOW accounts |
$ |
101,907 |
|
|
$ |
85 |
|
|
|
0.33 |
% |
|
$ |
94,654 |
|
|
|
|
|
$ |
81 |
|
|
|
0.34 |
% |
Money management accounts |
|
16,097 |
|
|
|
4 |
|
|
|
0.10 |
% |
|
|
16,583 |
|
|
|
|
|
|
5 |
|
|
|
0.12 |
% |
MMDA accounts |
|
244,884 |
|
|
|
427 |
|
|
|
0.70 |
% |
|
|
241,374 |
|
|
|
|
|
|
241 |
|
|
|
0.40 |
% |
Savings and club accounts |
|
140,425 |
|
|
|
52 |
|
|
|
0.15 |
% |
|
|
126,511 |
|
|
|
|
|
|
42 |
|
|
|
0.13 |
% |
Time deposits |
|
440,227 |
|
|
|
1,339 |
|
|
|
1.22 |
% |
|
|
358,634 |
|
|
|
|
|
|
785 |
|
|
|
0.88 |
% |
Subordinated loans |
|
29,655 |
|
|
|
442 |
|
|
|
5.96 |
% |
|
|
29,496 |
|
|
|
|
|
|
411 |
|
|
|
5.57 |
% |
Borrowings |
|
78,232 |
|
|
|
254 |
|
|
|
1.30 |
% |
|
|
78,892 |
|
|
|
|
|
|
276 |
|
|
|
1.40 |
% |
Total interest-bearing liabilities |
|
1,051,427 |
|
|
|
2,603 |
|
|
|
0.99 |
% |
|
|
946,144 |
|
|
|
|
|
|
1,841 |
|
|
|
0.78 |
% |
Noninterest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
|
189,317 |
|
|
|
|
|
|
|
|
|
189,951 |
|
|
|
|
|
|
|
|
|
|
Other liabilities |
|
12,248 |
|
|
|
|
|
|
|
|
|
11,441 |
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
1,252,992 |
|
|
|
|
|
|
|
|
|
1,147,536 |
|
|
|
|
|
|
|
|
|
|
Shareholders' equity |
|
110,669 |
|
|
|
|
|
|
|
|
|
105,913 |
|
|
|
|
|
|
|
|
|
|
Total liabilities & shareholders' equity |
$ |
1,363,661 |
|
|
|
|
|
|
|
|
$ |
1,253,449 |
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
|
$ |
10,780 |
|
|
|
|
|
|
|
|
|
|
|
$ |
9,791 |
|
|
|
|
Net interest rate spread |
|
|
|
|
|
|
|
3.14 |
% |
|
|
|
|
|
|
|
|
|
|
|
3.15 |
% |
Net
interest margin |
|
|
|
|
|
|
|
3.32 |
% |
|
|
|
|
|
|
|
|
|
|
|
3.31 |
% |
Ratio
of average interest-earning assets to average interest-bearing
liabilities |
|
|
|
|
|
|
|
123.38 |
% |
|
|
|
|
|
|
|
|
|
|
|
125.03 |
% |
PATHFINDER BANCORP,
INC.FINANCIAL HIGHLIGHTS(Dollars
and shares in thousands except per share amounts)
|
For the nine months ended September 30, |
|
|
(Unaudited) |
|
|
2022 |
|
|
|
|
|
2021 |
|
|
|
|
|
|
|
|
Average |
|
|
|
|
|
|
|
|
|
|
|
Average |
|
|
Average |
|
|
|
|
|
Yield / |
|
|
Average |
|
|
|
|
|
|
|
|
Yield / |
|
(Dollars in thousands) |
Balance |
|
|
Interest |
|
|
Cost |
|
|
Balance |
|
|
|
|
|
Interest |
|
|
Cost |
|
Interest-earning
assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
$ |
863,191 |
|
|
$ |
27,561 |
|
|
|
4.26 |
% |
|
$ |
842,850 |
|
|
|
|
|
$ |
28,096 |
|
|
|
4.44 |
% |
Taxable investment securities |
|
348,499 |
|
|
|
7,850 |
|
|
|
3.00 |
% |
|
|
310,098 |
|
|
|
|
|
|
6,438 |
|
|
|
2.77 |
% |
Tax-exempt investment securities |
|
37,593 |
|
|
|
612 |
|
|
|
2.17 |
% |
|
|
12,631 |
|
|
|
|
|
|
99 |
|
|
|
1.05 |
% |
Fed funds sold and interest-earning deposits |
|
19,950 |
|
|
|
48 |
|
|
|
0.32 |
% |
|
|
28,433 |
|
|
|
|
|
|
7 |
|
|
|
0.03 |
% |
Total interest-earning assets |
|
1,269,233 |
|
|
|
36,071 |
|
|
|
3.79 |
% |
|
|
1,194,012 |
|
|
|
|
|
|
34,640 |
|
|
|
3.87 |
% |
Noninterest-earning
assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other assets |
|
85,652 |
|
|
|
|
|
|
|
|
|
81,779 |
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses |
|
(13,040 |
) |
|
|
|
|
|
|
|
|
(13,962 |
) |
|
|
|
|
|
|
|
|
|
Net unrealized (losses) gains on available-for-sale
securities |
|
(7,230 |
) |
|
|
|
|
|
|
|
|
1,802 |
|
|
|
|
|
|
|
|
|
|
Total assets |
$ |
1,334,615 |
|
|
|
|
|
|
|
|
$ |
1,263,631 |
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOW accounts |
$ |
104,874 |
|
|
$ |
234 |
|
|
|
0.30 |
% |
|
$ |
94,018 |
|
|
|
|
|
$ |
212 |
|
|
|
0.30 |
% |
Money management accounts |
|
16,212 |
|
|
|
12 |
|
|
|
0.10 |
% |
|
|
16,059 |
|
|
|
|
|
|
13 |
|
|
|
0.11 |
% |
MMDA accounts |
|
255,933 |
|
|
|
985 |
|
|
|
0.51 |
% |
|
|
238,507 |
|
|
|
|
|
|
737 |
|
|
|
0.41 |
% |
Savings and club accounts |
|
139,798 |
|
|
|
150 |
|
|
|
0.14 |
% |
|
|
119,859 |
|
|
|
|
|
|
115 |
|
|
|
0.13 |
% |
Time deposits |
|
401,297 |
|
|
|
2,625 |
|
|
|
0.87 |
% |
|
|
376,724 |
|
|
|
|
|
|
2,748 |
|
|
|
0.97 |
% |
Subordinated loans |
|
29,617 |
|
|
|
1,284 |
|
|
|
5.78 |
% |
|
|
33,814 |
|
|
|
|
|
|
1,376 |
|
|
|
5.43 |
% |
Borrowings |
|
70,833 |
|
|
|
557 |
|
|
|
1.05 |
% |
|
|
84,001 |
|
|
|
|
|
|
873 |
|
|
|
1.39 |
% |
Total interest-bearing liabilities |
|
1,018,564 |
|
|
|
5,847 |
|
|
|
0.77 |
% |
|
|
962,982 |
|
|
|
|
|
|
6,074 |
|
|
|
0.84 |
% |
Noninterest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
|
194,220 |
|
|
|
|
|
|
|
|
|
186,125 |
|
|
|
|
|
|
|
|
|
|
Other liabilities |
|
11,808 |
|
|
|
|
|
|
|
|
|
11,660 |
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
1,224,592 |
|
|
|
|
|
|
|
|
|
1,160,767 |
|
|
|
|
|
|
|
|
|
|
Shareholders' equity |
|
110,023 |
|
|
|
|
|
|
|
|
|
102,864 |
|
|
|
|
|
|
|
|
|
|
Total liabilities & shareholders' equity |
$ |
1,334,615 |
|
|
|
|
|
|
|
|
$ |
1,263,631 |
|
|
|
|
|
|
|
|
|
|
Net interest income |
|
|
|
$ |
30,224 |
|
|
|
|
|
|
|
|
|
|
|
$ |
28,566 |
|
|
|
|
Net interest rate spread |
|
|
|
|
|
|
|
3.02 |
% |
|
|
|
|
|
|
|
|
|
|
|
3.03 |
% |
Net
interest margin |
|
|
|
|
|
|
|
3.18 |
% |
|
|
|
|
|
|
|
|
|
|
|
3.19 |
% |
Ratio
of average interest-earning assets to average interest-bearing
liabilities |
|
|
|
|
|
|
|
124.61 |
% |
|
|
|
|
|
|
|
|
|
|
|
123.99 |
% |
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.
|
(Unaudited) |
|
|
(Unaudited) |
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
|
2022 vs. 2021 |
|
|
2022 vs. 2021 |
|
|
Increase/(Decrease) due to |
|
|
Increase/(Decrease) due to |
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
Increase |
|
|
|
|
|
|
|
|
|
|
|
Increase |
|
(In
thousands) |
Volume |
|
|
Rate |
|
|
(Decrease) |
|
|
Volume |
|
|
|
|
|
Rate |
|
|
(Decrease) |
|
Interest
Income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
$ |
1,607 |
|
|
$ |
(1,177 |
) |
|
$ |
430 |
|
|
$ |
941 |
|
|
|
|
|
$ |
(1,476 |
) |
|
$ |
(535 |
) |
Taxable investment securities |
|
341 |
|
|
|
631 |
|
|
|
972 |
|
|
|
840 |
|
|
|
|
|
|
572 |
|
|
|
1,412 |
|
Tax-exempt investment securities |
|
116 |
|
|
|
207 |
|
|
|
323 |
|
|
|
333 |
|
|
|
|
|
|
180 |
|
|
|
513 |
|
Interest-earning deposits |
|
(13 |
) |
|
|
39 |
|
|
|
26 |
|
|
|
(4 |
) |
|
|
|
|
|
45 |
|
|
|
41 |
|
Total interest income |
|
2,051 |
|
|
|
(300 |
) |
|
|
1,751 |
|
|
|
2,110 |
|
|
|
|
|
|
(679 |
) |
|
|
1,431 |
|
Interest
Expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOW accounts |
|
13 |
|
|
|
(9 |
) |
|
|
4 |
|
|
|
25 |
|
|
|
|
|
|
(3 |
) |
|
|
22 |
|
Money management accounts |
|
- |
|
|
|
(1 |
) |
|
|
(1 |
) |
|
|
- |
|
|
|
|
|
|
(1 |
) |
|
|
(1 |
) |
MMDA accounts |
|
4 |
|
|
|
182 |
|
|
|
186 |
|
|
|
56 |
|
|
|
|
|
|
192 |
|
|
|
248 |
|
Savings and club accounts |
|
4 |
|
|
|
6 |
|
|
|
10 |
|
|
|
22 |
|
|
|
|
|
|
13 |
|
|
|
35 |
|
Time deposits |
|
207 |
|
|
|
347 |
|
|
|
554 |
|
|
|
241 |
|
|
|
|
|
|
(364 |
) |
|
|
(123 |
) |
Subordinated loans |
|
2 |
|
|
|
29 |
|
|
|
31 |
|
|
|
(216 |
) |
|
|
|
|
|
124 |
|
|
|
(92 |
) |
Borrowings |
|
(2 |
) |
|
|
(20 |
) |
|
|
(22 |
) |
|
|
(123 |
) |
|
|
|
|
|
(193 |
) |
|
|
(316 |
) |
Total interest expense |
|
228 |
|
|
|
534 |
|
|
|
762 |
|
|
|
5 |
|
|
|
|
|
|
(232 |
) |
|
|
(227 |
) |
Net
change in net interest income |
$ |
1,823 |
|
|
$ |
(834 |
) |
|
$ |
989 |
|
|
$ |
2,105 |
|
|
|
|
|
$ |
(447 |
) |
|
$ |
1,658 |
|
The above information is preliminary and based
on the Company's data available at the time of presentation.
Pathfinder Bancorp (NASDAQ:PBHC)
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Pathfinder Bancorp (NASDAQ:PBHC)
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